Kelman: Questions worth asking

I have spent a good deal of my life thinking about how government can most effectively buy goods and services that support important public purposes.

When judging federal contracting during post-Hurricane Katrina relief efforts, the first three questions that come to my mind are:

To what extent is the government using prenegotiated contracts to meet emergency needs?

During an emergency, the government must have immediate access to goods and services. But it should also maintain competition to find the best prices and vendors.

Agencies must balance the need for speed vs. competition's benefits.

Agencies should negotiate contracts in advance, just like the government should have prepared to send supplies to the Gulf Coast before the hurricane hit. If agencies know they will need disaster-related services, such as debris cleanup and construction, they should award contracts that activate when disaster strikes. They should set prices and establish delivery terms with the best vendors. Then agencies only need to place orders when the time comes.

To what extent is the government using innovative contract structures that reward rapid and high-quality performance?

After the 1994 Los Angeles earthquake destroyed portions of the Santa Monica Freeway, career civil servants came up with a great idea: They asked freeway reconstruction contractors to include a price and target completion date in their bids.

The contracting officials created a schedule of rewards and penalties for exceeding or failing to meet goals. They considered three factors -- cost, speed and rewards -- when comparing the bids. The winning firm worked around the clock, promised to share half of all rewards with employees and finished the job in a fraction of the time that engineers had originally estimated.

To what extent is the government using online reverse auctions to buy items not covered by contracts negotiated in advance?

Negotiating contracts in advance won't answer some unanticipated needs. But online auction technology can help avoid no-bid contracting during emergencies.

In many cases, for products and simple services, agencies can set up online reverse auctions in which vendors bid against one another in real time. They can leave an auction open for 24 hours or as few as 12 and get significant competition and world-class prices. (In the interest of full disclosure, I am a member of the board of advisors of FedBid, one of the companies that offer such services.)

I don't know how well the government's post-Katrina contracting efforts correspond to my wish list of good practices.

The reason I don't know is that despite the media's coverage about Katrina contracting issues, no one has covered those questions or similar ones, which would be the first questions a contracting expert would ask.

If the media covered themselves the way they are covering Katrina contracting, newsrooms would be filled with reporters who never tell lies or reveal sources but also never bother to learn how to uncover a good story or write it well. n

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