Hot Topics!!! The State of Play? The Future?

1. Hot Topics!!!The State of Play?The Future? Professor Steven L. Schooner

2. Public Procurement:The Only Constant is CHANGE • Of Cycles, Waves, or Pendulum • On-going evolution, ever-changing • Priorities • Needs • Capacity • Markets

3. Best (and Worst) of Times • Massive post-2000 Federal Procurement Spending Binge • No expected reversal (in short-term) • Should prove recession proof • Recession may help acquisition workforce retention and recruitment • Workforce • The lost generation • Wrong skill set • Scandals • Protectionism • No Relief in Sight

5. Globalization • Multinational markets • Multinational firms • Harmonization of international procurement norms • WTO GPA, EU, OECD • UN-UNCITRAL Model Law • World Bank, Regional Development Banks • Outsourcing!!!!

6. Outsourcing and Privatization: Bipartisan Trend “The era of big government is over.” “Too much government crowds out…the private economy.”

9. Privatizing The Military?

10. Is the Government “Too Dependent” Upon Contractors? • That’s Irrelevant • Too many mandates, too few government employees • Pressure to suppress government headcount • Outsourced governance (and the blended workforce) is the reality, and here to stay….

11. Outsourcing Makes Sense • Maintain focus on mission - specialization • Surge capacity • Flexibility • Innovation, access to technical expertise • Continue to meet agency missions with inadequate personnel, abilities, and resources • “Attractive”to Program Managers • No troop/personnel caps • Customer Service “ethic” • Civil Service frustration

12. Penny-Wise, Pound Foolish? • Marginal cost saving (in a vacuum) is not the only metric • Best value – Paying more for: • Higher quality goods/services • Quicker delivery/response time • Unlimited surge capacity • Flexibility – changing personnel, products, approaches

13. Outsourcing Has Limits • Inherently Government Functions • Right idea • Poor decision-making rubric • Blended Workforce evolved more quickly than: • Best management practices • Ethics rules (e.g., organizational conflicts) • Contractors Need to Be Managed

15. Profiteers Mercenaries Cowboys The Military Commander’s Worst Nightmare A Political/Foreign Relations Accident Waiting to Happen An Essential Element in the U.S. Military and Diplomatic Presence in Iraq Patriots Public Servants Best Private Security Money Can Buy The Future? Blackwater Personnel are:

16. Battlefield Contracting in Iraq:“Unprecedented” RelianceUpon Contractors? • 160,000-180,000 contractors • 1:1 ratio - contractors to troops • Multi-billion dollar industry

17. 4,500+ “Total” Fatalities?What About the 1,120+ Contractors?25% of allied fatalities in 2007

18. Big Picture: Simple Story • Statutory Cuts: 1989-2000 workforce reductions Post-9/11: huge procurement spending growth

20. Federal Procurement Spending Since 2000 (in Billions)

21. Cumulative Growth in Federal Procurement Dramatically Outpaces Inflation

22. Investing in theAcquisition Workforce • Total Headcount • New Hires • Pending Losses • Training and Experience • New Hires • Existing Workforce

23. Acquisition WorkforceWorst-Case Scenario??? • Denial remains prevalent • Retirement bubble ready to burst (but, a recession may help) • Insufficient: • leadership for massive hiring/training initiative; • numbers of qualified individuals interested in working for the government (but, a recession may help); • time/resources for the existing workforce to gain sufficient training/experience

24. Salary performance incentives recruitment bonuses retention bonuses intern programs, workforce training sabbaticals (for higher education) Restoring the Acquisition Workforce?For the foreseeable future, Congress cannot spend “too much” on:

25. 1984 (CICA-FAR Era) Supply Formal Advertised/Sealed Bid Firm Fixed Price Government-specific specification Awarded by PCO Managed by DCAS (DCMC, DCMA) Today Services Employee augmentation Personal Services ID/IQ, Inter-agency vehicle Cost-Reimbursement, T&M Limited Competition Unclear responsibility for post-award contract management Current Acquisition WorkforceWrong Skill Set?

26. Current Acquisition WorkforceOpportunities, Attractions? • Civil Service (for better or for worse) • Career ladder out of secretarial pool • Long-term, stable, safe career • Fixed retirement program • Inadequate incentive structure • 1990’s – failed incentive initiative

27. Recruiting the FutureAcquisition Workforce • Gen X, Gen Y…. • “most praised generation” • Universities and Helicopter Parenting • Show me the money! • Civil Service Bureaucracy • Impenetrable, Slow, not user friendly • Job Mobility • 401(k), TSP (What, me worry?) • What is, why work in “procurement”?

29. Gansler Commission: A Plea For Responsible Outsourcing? Contract management is the essential post-award contracting function to ensure mission accomplishment, and it is an important control over fraud, waste, and abuse;... With not enough ACOs, PCOs could do this - but they are too busy and therefore it is not being done….

30. Gansler Commission: A Plea For Responsible Outsourcing? • Increase • Army military and civilian contracting personnel - 1,400+, apx 25 percent of the total • DOD post-award contract management personnel (to fill DCMA billets for Army support) - nearly 600 • Extrapolate across Government [8,000-10,000?] • Army ~ 15-25 percent of federal procurement $ • Army better staffed than other agencies

31. Scope of the Challenge: Recruiting the Future Acquisition Workforce: Back-of-the-napkin assumption: • 8,000-10,000 professional needed An Analogy: US Department of Justice < 8,200 Attorneys, including: • General Legal Activities (all) • U.S. Attorneys (all 50 States) • Antitrust Division • Trustees

38. Can NCMA Play a Leadership Role?

39. Good Luck! • Questions? • Comments? • Suggestions? • Ideas?