CIOs mull plan to rein inmaverick agency buys

In what may be the first pullback from large-scale procurement reform the Office of Management and Budget is considering regulations that will prohibit agencies from embarking on a procurement if the purchase would threaten other agencies from obtaining low prices through volume-discounted buys.

"We want agencies to understand the full implications of the actions they take " John Koskinen deputy director of management at OMB told FCW last week. "As we segment markets and [procurement] approaches we have to preserve the best value for the taxpayer in general. We don't want to be penny-wise and pound-foolish."

The Interagency Management Council last month presented a vivid example of this dilemma when it asked members of the Chief Information Officers Council to endorse a proposal that would require agencies buying local telecommunications services to take into account whether the procurement would cause an increase in telecom prices other agencies could receive.

Consultant Warren Suss president of Warren H. Suss Associates Jenkintown Pa. said the IMC's move illustrates the ongoing "tension" between those in government who want to give agencies more control and those who favor the economies of scale available when agencies combine their requirements.Handle With Care"A policy like this needs to be handled carefully " Suss said of the IMC's proposal. "If it ends up reducing agency control it's a bad thing but if it forces them to consider trade-offs more carefully then it's fine. It's really all in the implementation."

IMC chairman Dave Bittenbender telecom chief at the Justice Department said the proposal was prompted by one agency's plan to remove its traffic from a General Services Administration Centrex system so that it could buy its own PBX.

Bob Woods commissioner of GSA's Federal Telecommunications Service said Bittenbender was referring to the National Transportation Safety Board and added that other agencies have moved to buy their own systems at greater expense than they would pay as GSA customers. He said agencies often erroneously believe that GSA charges inflated prices for local service and some simply do not want to give up control of their networks.

Bittenbender said the IMC proposal would require agencies to perform cost benefit analyses that would weigh the benefits of a local-service procurement on the agency's internal budget against how the procurement would affect service costs at other agencies.

"It starts with the organization doing a business case analysis to determine the best course of action " he said. "Then they let everybody else know about the plans and give everybody else an opportunity to analyze the action in regard to the rest of the government."

Woods said the question of agencies' procurement autonomy extends far beyond telecom purchasing."It applies to almost everything we buy " Woods said. "If the government loses its capability to aggregate its buying power then everybody loses. This is an issue of telling people that the repeal of the Brooks Act did not repeal the laws of economics or common sense."

But the balancing act between giving an agency the freedom to seek its own solution to an information technology problem and issuing a requirement that the agency must buy off one contract to create discounts for all agencies is a delicate one procurement experts said.

Koskinen said agencies may in some cases have enough buying clout on their own to remove the need for a centralized procurement. But he acknowledged that the government will not be able to impose mandatory rules designating when it is appropriate for an agency to conduct its own procurements.Al Pesachowitz CIO at the Environmental Protection Agency and vice chairman of the CIO Council said he does not think CIOs need more regulations to follow especially in areas such as procurement of large systems built specifically for a particular agency. But he said agencies are "becoming more introspective" as to whether procurements are necessary or can be conducted through another agency.

Pesachowitz said CIO Council members did not vote on Bittenbender's recommendation at last month's meeting. He said members requested briefings on the recommendation from their IMC representatives and will decide during the Dec. 18 meeting whether to endorse it.