Structured empowerment

The loosening of the tyranny of rules that has occurred in the procurement system during the past decade has involved a trade-off. When you loosen up, it's likely there will be some increase in practices most would find unhealthy.

If the practices are illegal, such as using government credit cards for personal use, they can and should be dealt with mostly through the criminal justice system.

But there may also be an increase in practices that aren't illegal but simply don't represent good business practices by the government. The most prevalent example is the persistent use of the General Services Administration's services schedule contracts and other governmentwide contracts to make de facto sole-source awards. One should deal with these problems through a mixture of training and cautious regulation.

It is important to remember that these potential problems were accepted for a reason. Empowering the procurement and program workforces creates the ability to produce important benefits, as those closest to the action become free to refocus their energies from following the rules to developing ways to structure business relationships with vendors to produce better value for the government.

During the 1990s, this trade-off produced very good results. The Defense Department's Joint Direct Attack Munitions program was adjusted in midprocurement to match procurement reform principles. The result was $1 billion in savings and a technology that was the hero of military efforts in Afghanistan and Iraq.

New approaches, such as oral presentations pioneered by the Energy and Treasury departments and use of blanket purchase agreements for information technology hardware to shave prices off GSA schedule contracts pioneered by the Internal Revenue Service, spread from the grass-roots throughout the government.

The problem is that innovation, which is the benefit from the great trade-off of reform, needs continued topside encouragement, especially until an innovative mind-set becomes institutionalized in the system.

Unfortunately, the Bush administration's senior procurement leadership did nothing to encourage — in fact, they did a good bit to discourage — people on the front lines from coming up with better ways of doing business. Instead, the message has been, "Keep your noses clean." The result has been a very visible slowdown in innovation and better business ideas.

With the departure of Office of Federal Procurement Policy Administrator Angela Styles, the administration has a chance to turn a new procurement policy leaf. Tops on the new administrator's procurement agenda must be encouraging people at the grass-roots level to use their heads on behalf of making contracting deliver better value to the government.

Kelman is a professor of public management at Harvard University's Kennedy School and former administrator of the Office of Federal Procurement Policy. He can be reached at steve_kelman@harvard.edu.