Time to put competition back in task-order contracts

The Federal Acquisition Streamlining Act gave us all a great victory by recognizing in a statute a new contract vehicle— the multiple-award task-order contract. FASA further helped by allowing the executive branch to establish simplified procedures for competing individual task orders— or, as the statute put it, to provide a "fair opportunity for consideration" for vendors holding the underlying contract.

These simplified procedures have drastically reduced the time to award a contract and have excluded award decisions from bid protests. Simplified procedures for multiple-award task-order contracting, and the governmentwide acquisition contracts (GWACs) that have grown up in their wake, have been a great boon for the information technology community and for creating the preconditions for more effective use of IT in government. But sole-source task orders are a problem that is both substantive and political. They are a substantive problem because agencies, and thus taxpayers, are unlikely to get as good a deal in a world dominated by sole-source task orders as in a world where task orders are typically competed using the simplified procedures established by FASA. They are a political problem because, rightfully upset at the spread of sole-source task orders, Congress could easily remove the FASA authority and plop agencies back into the bad old days when getting somebody onto a contract took ages. And just as sole-source task orders aren't good public policy, neither would be a return to the old ways of doing business.

The General Accounting Office recently testified before Congress on the widespread use of sole-source task orders that were awarded under major GWACs. But no one in the executive branch or outside government has seen or had a chance to comment on the GAO data. Odds are that it may be somewhat exaggerated or misleading. For example, the number of "directed" task orders may be very high, but those orders typically are lower in dollar value than those task orders that are competed. Directed task orders are formally limited to one source using one of the statutory exceptions in FASA permitting sole-source awards.

Many of the directed task orders under the Transportation Department's Information Technology Omnibus Procurement have arisen from the overly generous minimum guarantees that the original contract provided to winners, combined with the ability to issue sole-source task orders to meet those minimum guarantees. The recently issued solicitation for ITOP II lowers those minimum guarantees and takes away the ability to direct task-order awards for that purpose.

However, I think this problem is serious enough that bold measures are in order. A recent Office of Management and Budget memo on eliminating "preferred vendor" designations is an excellent step, but more is needed, especially because the National Institutes of Health's Chief Information Officer Solutions and Partners (CIO-SP) contract is the only GWAC that currently uses this technique. I call on GWAC managers to agree to a one-year moratorium on all directed task orders over $2,500. Doing so would go beyond what the statute and regulations permit; they designate a number of legitimate exceptions to the requirement for fair consideration. Doubtless such a blanket moratorium would turn out to be inappropriate in some cases; surely there are examples of legitimately directed task orders. But I believe that a dramatic gesture is in order to demonstrate the commitment of the GWAC managers to the policy of streamlined competition for task orders and to get agencies cold turkey off what appears to be a burgeoning reliance on sole-source awards before it becomes an addiction.

In connection with such a voluntary gesture, GWAC managers should also agree to set a common minimum time— for example, 14 days, perhaps somewhat longer for larger task orders— for task order requests for proposals (RFPs) to be broadcast on agency World Wide Web sites; to give potential bidders, other than those who have marketed to the agency (including small businesses), a legitimate chance to prepare a bid; to think about what steps could be taken to make it easier for vendors holding GWACs to get earlier insight into customer agency ordering plans— perhaps by establishing an icon on their Web sites into which agencies could easily enter advance information.

These steps are unlikely to be effective if only one or two of the GWACs participate. This should be a joint action undertaken on an urgent basis through the GWAC Council established by last fall's "Mayflower Compact." A joint action would send a loud-and-clear signal to the entire community— government, industry and Congress— of the willingness and ability of the government to continue to serve as a prudent steward of the procurement reform gains of the last five years.

I believe that an additional positive potential of GWACs— so far only incompletely realized— is to use their governmentwide visibility to promote value-creating approaches to IT acquisition. CIO-SP has organized some excellent training on writing performance-based work statements. The General Services Administration's Virtual Data Center contract provides help in writing RFPs. Some GWACs keep a task-order past-performance database for their contracts. Last fall, the major GWAC managers agreed to develop a series of "template" performance-based work statements in a number of recurring areas for IT task orders— such as local-area network management— which could then be disseminated to agency customers to help them transition to performance-based contracting. In the current environment, prompt completion and joint issuance of a series of such templates by the GWAC Council would provide a timely signal of the value-added GWACs provide.

Losing the benefits of multiple-award task-order contracting would be a crying shame. Going back to the old days would be a disaster. Let's not let that disaster happen.

-- Kelman was the administrator of the Office of Federal Procurement Policy from 1993 to 1997. He is now Weatherhead Professor of Public Management at Harvard's Kennedy School of Government.