Procurement Solutions: Federal Role

Each year the federal government purchases over four million brand name products-including office supplies and computer equipment, and services such as accounting and technology consulting. Within civilian agencies, products and services can be purchased from thousands of commercial suppliers through the General Services Administration’s schedules, which are large scale contracts encompassing multiple vendors. Similarly, the Defense Logistics Agency within the Department of Defense is responsible for defense purchases “if our forces fight with it, wear it, eat it, burn it as fuel or otherwise use it….” Alternatively, agencies may bid out contracts or offer sole source contracts for unique equipment or services, such as a particular information technology system or service or piece of military hardware. The objective of these procurement agencies is to enable federal contracting officers within 60 federal agencies to get the best products at the best prices.

Each federal agency is responsible for its own purchases, but the agencies typically purchase from readily available contract “vehicles” that have been established by GSA or DLA. Increasingly, other agencies, such as the Department of Interior, are “competing” against the primary acquisition agencies with the belief that they can obtain better choices of products or services at better prices, although this view continues to be debated.

The Bush Administration has placed a new emphasis on Performance-Based Contracting (PBC), which emphasizes the desired outcome of a contract rather than the process for how an initiative is achieved. The Office of Management and Budget within the White House requires the use of PBC to the “maximum extent practical.” Vendors need to optimize their “performance” positioning to compete effectively.