In an enlightening Speed to Contract, Speed to Market podcast episode, host Tim Templeton talks with David Drabkin, former Official within the DoD, GSA, and Homeland Security and Government Affairs Committee of the US Senate. At the top of their topics: the long-term positive effects of rewriting FAR sections, the criticality of appointing full-time people for efficient regulation implementation, and the benefits of using FAR power and flexibility to affect change.
Below are excerpts from the interview, edited for brevity and clarity.
Efficient regulation change through FAR revision
If I had to pick one government process change that has been very effective, I think I'd have to go back to 1995 when we decided to rewrite FAR Part 15— the instructions for negotiated procurement. Prior to that change, the process was very stultified, and by that I mean it was really robust, with many hoops you had to jump through. And there was actually a preference for using FAR Part 14, which is sealed bidding.
Agencies still use FAR Part 14 for construction contracts. And the idea was pretty much driven by then Vice President Gore's review of the government procurement process. In it, he said we needed a system that worked faster and was more commercial, so we could deliver capability to the hands of government and end users to get their jobs done and to serve the taxpayer. Particularly of interest to Vice President Gore at the time—and to the government as a whole—was buying computers, especially the government process for buying computers prior to the changes in FAR Part 15.
The additions to FAR Part 12, resulting from FSA and the Federal Acquisition Streamlining Act, would have the government place an order for a computer today and not get delivery of that computer until next year or 18 months from now. So the computer was already obsolete—by the time it arrived, there were two new generations, maybe three new generations of computers.
And so the idea was to make the process more flexible and to give people the ability to do things faster, using FAR Part 12 for commercial item buying. By the way, we didn't have FAR Part 12 prior to January 1995. We had to use either FAR Part 14, FAR Part 15, or FAR Part 13 for small purchases under the Simplified Acquisition Threshold.
This significant change was due to leadership—leadership from the White House, and leadership from the Secretary of Defense, who at the time was Bill Perry; his undersecretary was John Kaminski. And between them, they wanted change that would help the government buy things faster so they weren't obsolete by the time we took delivery of them.
Changing the process for changing the FAR is a very tempered, deliberate process. And the rules for making a change like this require at a minimum publication of a proposed rule, a period of time for public comment, then a review and addressing of those comments before you can issue a final rule. Normally that's the process and that could take, at that time, anywhere between 12 and 24 months.
That's not how businesses make changes when they're trying to compete in the marketplace. Their changes are maybe not overnight, but they are much faster in their ability to manipulate the system. In this case, we were able to do a proposed rule, have public meetings on that rule, entertain comments, resolve the comments, and in a little under 12 months issue a final rule, which was generally well-received.
Buy instead of build. Save taxpayer dollars.
But there's always somebody who's not happy in the rulemaking process. Both inside the government because they get a chance to make comments, and then also outside the government. But generally, that rule, over time, has proven to do what was intended in the case of computers. The real impact was in FAR Part 12—the creation of the commercial-item portion. Actually, it was first commercial products, then it was commercial products and services.
Now it's really commercial items—implementing the direction in the Federal Acquisition Streamlining Act of 1994, for the government to start buying commercial items. For a very long time, Congress had been telling the government, and in particular, the DoD, to buy non-developmental items.
Don't tell companies how to build things. Tell companies what you want to buy, and find out what's available. Avoid having to invest in their R&D and the whole process of going through who has the rights.
How and why do you buy things that are already developed? In no small part because it's faster. And much of what the government wants of those kinds of items—not of aircraft carriers, not of airplanes, not of air defense systems—but of the stuff that we use to run the government on a day-to-day basis, much of that is available already in the marketplace.
In 1950 or so, 90% of the research and development done in the country was done by the DoD, in the 1990s it was down to 10 to 20%, and now it's below 10% in terms of the investment in research and development dollars. So buying something that's already been developed that can be adapted for the government's use, allows you to provide services to the taxpayers more quickly and for the government to run more efficiently. And from the perspective of the DoD, it allows its agencies to get out ahead of their near-peer competitors and those non-state actors who don't want to do nice things to us. And I'm talking specifically about China and Russia.
Well, for FAR Part 12, there was a team headed up by the DAR Council—the Defense Acquisition Regulatory Council. On that team were people from each of the major agencies within DoD, GSA, NASA, and some others. I would say at any given time there were 15 to 20 people who were involved in the deliberative process for FAR Part 12. For FAR Part 15 —Melissa Ray led that team. I was the program manager for implementing FAR Part 15. But Melissa led the team that actually wrote the language, and it had representatives from GSA, NASA, all four services, DLA, and DCMA.
At the time, DCMA wasn't yet fully stood up, but DLA was, such that there were about 20 people in the room as the actual regulatory language was debated and written. And then the comments were reviewed and received. But we got lots of feedback from industry, lots of companies, and individuals. Lots of associations collectively submitted comments for consideration. And we had public meetings at which there were at least 30 to 50 people who showed up to listen and contribute as we discussed the path we were going to go down.
Appoint full-time people to execute regulation change
I don't want you to think there's no way the government can act more quickly than a year to 18 months. There are ways. In the case of an emergency, there are provisions in the FAR that allow for deviations to be issued by an appropriate authority—depending on what the subject matter is—and would allow the government to take a single action or a class of actions much more quickly while they go about the regulatory process to make sure that there's a transparency and an opportunity for industry and other government agencies to comment on the process. All of the people I talked about that were involved in the commercial rule, the FAR Part 15 rewrite—were assigned this duty as an extra duty. It wasn't their job eight hours a day, five days a week. Although many of them worked over the weekends and evenings to get the work done.
Again, it wasn't their full-time job; they all had other full-time jobs. If we really wanted to make a change and if there was leadership from the top—the White House, the office of the Secretary of Defense, or the head of a particular agency—and they were willing to put the resources on it, full-time employees could probably cut the time in half. There's a certain amount of time that comments have to go out so the public can review them. I think it's 60 days on a proposed rule, and that's so that people have a real chance to respond. You can cut the time down, but then you run afoul of the statutory requirement for people to be able to comment on the rule. But you could probably cut the time in half if you decided that you wanted to deploy full-time people.
So for example, when we implemented the Federal Acquisition Streamlining Act of 1994, we put together 12 teams of dedicated people who took the statute and then within 12 months went through the entire process from drafting proposed rules to obtaining comments to issuing the final rules. But that was because the President, Bill Clinton, didn't do it directly, it was his administrator of O F P P, which by the way is empty and has not been filled in this administration. But Steve Kelman and he worked with Bill Perry. And they worked with their subordinates to put together teams who were dedicated to getting the job done. And so in 12 months, they fully implemented FSA, which was the biggest statutory change to government procurement since, well, Zika was a big one, but it wasn't as big as FSA was in terms of its breadth.
The government is aware, as a result of many reports, that time to award is really important, particularly to small and mid-size businesses who can’t afford to wait a year to find out whether or not they've been awarded a contract. They have much shorter time periods within which they have to deal with staff and financing. The government's aware of it. I'm not sure that they're as sensitive as they should be to it, but they absolutely are aware of it.
The second thing is I'm not sure that in every case faster is better. If you're buying computers, administrative computers, how much time should that take? If there are some issues in terms of connectivity and security and making sure that everything will talk to one another, that’s one thing. Or it's knocked out some Huawei software in IT that'll share sensitive information with the Chinese or the like—that’s another. But with those exceptions, we should be able to acquire on behalf of the government very quickly.
Lack of understanding that our system is inflexible
That said, there's still a lack of understanding that our system isn't flexible enough. Our process is, basically: We publish a requirement in Fed Bus Ops. And if you don't know what Fed Bus Ops is, then that's the first thing you need to learn about if you want to do business with the government. And then we wait to see who's going to submit an offer. And when we open up the offers that we receive. And then we proceed to pick a winner from those offers. We don't go and look to see, “Did somebody not submit, that should have submitted? Is there a company out there that we know about and that we'd really like to have in the competition?” We don't do that. We don't do it because to do that, we'd have to cancel that action and start a new action and the company still might not submit a bid.
The FAR’s flexibility should be used as a sword, not a shield
Being fast isn't always good. But there’s no reason to do things that add time and no value to the process. The average contracting officer is processing 10 to 20 requests every week, and they can't afford to not keep that mill going. And so they do follow the rules and do what's in front of them. They don't have the time to go look—and they should— to see what else might be out there. There might be a different solution that would actually perform better, and might even cost less money, but they can't do that.
The time pressure on them, the amount of work they have, and the throughput—some of them aren't very experienced, so they're not comfortable in their own skin in terms of the authority they have. But by the way, the FAR gives them incredible flexibility. The FAR should be a sword, but many people use it as a shield to protect them from criticism. “Well, the FAR said I had to do it this way.” Most of the time the FAR doesn't say you have to do anything. It tells you what you can't do. And there are very few of those things and it gives you lots of options, but you have to be comfortable enough to know how to use them.
Government Contracting Pricing Summit: Achieving Pricing Excellence During Uncertain Times
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See fascinating keynote sessions and a live-panel discussion on Speed to Contract, Speed to Market with David Drabkin; Soraya Correa, former Chief Procurement Officer of DHS; David Cade, VP of Government Business Transformation - Boeing; and Joy White, Executive Director - Space Systems Command, USSF.
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