Given the current budget environment, in which even essential programs are under scrutiny, it's only natural that agencies are pressuring their acquisition teams to put the squeeze on vendors for the best possible price. Unfortunately, they might get that price only to find out later that the joke is on them.
Experts increasingly fear that officials will develop a “lowest cost technically acceptable” attitude for their procurements. In other words, they will pick the bids that meet the minimal requirements and go for the cheapest price to demonstrate to the higher-ups that they are good stewards of the government’s money. The result could be abysmal performance.
“Think performance is bad now? Wait,” said Jaime Gracia, president and CEO of Seville Government Consulting, a federal acquisition and program management consulting firm. “Soon, these jokers will come in to start work and they’ll be like the Three Stooges.”
In some cases, experts say, the lowest bid could actually end up costing agencies more as they eat up all the savings — and more — with make-good work.
“Suddenly, the lowest cost technically acceptable isn’t the lowest cost,” said Robert Burton, former deputy administrator at the Office of Federal Procurement Policy.
But several factors work against buying the best value, which weighs both cost and quality. One problem is timing: Investing in quality might not pay off right away, which could frustrate Obama administration officials who are eager to show that they are running the government efficiently.
Another problem is that best value is inherently subjective. Buyers must factor in the probability of success and the associated risks — both of which elude hard analysis — against any differences in cost. In contrast, when success is measured on price alone, it's easier to set goals and measure progress against them. You can just watch that bottom line.
Those difficulties are compounded by the fact that shrinking budgets also mean acquisition officials are getting less support from contractors. In the past, contractors have often helped with market research and other important tasks that can help justify higher bids.
Dan Gordon, who recently stepped down as OFPP administrator, offers a more tempered view. There are times when the lowest cost is fine, he said. But on more complicated procurements, the best value deserves a close look, too.
He said he is confident that the federal acquisition workforce has the training and experience to navigate those choices. They know they are “entrusted with the discretion to find the way to best protect taxpayers’ dollars,” Gordon said.
But others are less optimistic. Larry Allen, president of Allen Federal Business Partners, said he believes the low-cost mentality might have already taken hold in some parts of the government, such as the Defense Department.
The Three Stooges just might be arriving with a "fleet of Yugos," Allen said.
Read the story on FCW.com - IT acqusition: Pay less now, more later
