REPORT TO THE CONGRESS - An Organized IImproving Fe During the past decade, Federal procurement and acquisition practices have been under extensive review: --Numerous congressional hearings. --Studies by Commi<6ons and other groups. --Continuing overview by the Office of Federal Procurement Policy. Basic new directions in policies are beginning to take shape. A new Government-wide modern statutory foundation is under active consideration by the Congress. In this report GAO urges, as have some others, establishment of a continuing research program to create better Federal procure- ment practices and to design and test the best ways to carry out new policies. Specific uses of such research are discussed, current Federal activities are summarized, and an organized approach to a Government-wide program is illustrated. PSAD-77-128 SEPTEMBER 30, 1977 COMPTROLLER GENERAL OF THE UNll-ED STATES WASNINWVN. OS. ZODU 8-160'125 To the President of the Senate and the Speaker of the House of Representatives This report recommends the use of a continuing research program to create better Federal procurement practices and design and test the best ways to carry out new policies. It summarizes current Federal activities in this area and illus- trates an organized approach to a Government-wide program. We made our review pursuant to the Budget and Account- ing Act, 1921 (31 U.S.C. 53) , and the Accounting and Audit- ing Act of 1950 (31 U.S.C. 67). We are sending copies of this report to the Director, Office of Management and Budget , and to the heads of the various departments and agencies who rely on nrocurement and acquisition to accomplish their primary missions. Comptroller General of the United States i COMPTROLLER GENERAL'S AN ORGANIZED APPROACH TO REPORT TO THE CONGRESS IMPROVING FEDERAL PRXUREMENT AND ACQUISITION PRACTlCES DIGEST -w--w- Large Government agencies--such as Defense, Energy, Transportation, Space, General Serv- ices--depend on systems, PiOdUCtS, and serv- ices obtained from private enterprise to do their job. These activities cost about $70 billion a year and involve abou. 60,000 Federalworkers. (See p. 1.) Over the past 30 years, procurement has ex- panded and become more complex. Efforts to solve problems have resulted in a complex patchwork of laws, methods, regulations, pro- cedures, and administrative requirements. Not all of the old problems have been solved and new ones continue to arise. (See pp. 9, 10, and 29.) This entire body of procurement and acquisi- tion y*olicies has been examined and reexam- ined by the Congress, the executive branch, and various study groups. New basic direc- tions in policy, including legislation, are beginning to take shape. (See pp. i, 11, and 29.) After years of supporting reform, the Con- gress will want to see substantial improve- ment in Federal procurement and acquisition practices. (See pp. 29 and 30.) Both the House Government Operations Commit- tee and the Commission on Governm?nt Procure- ment recommended a continuing program of re- search to make Federal procurement practices work better and to design and test the bc.st ways to carry out new policies: i.e., using a scientific approach to improving Federal pro- curement. (See pp. 2 and 3.) Currently, there are no procurement research programs in some agencies. In others there are a few relatively new ones. (See pp. 2 to 7.) i PSAD-77-128 e .- Civilian agencies generally are reluctant to undertake procurement research. Within some quarters of the Department of Defense, pro- curement research has been going on for about 6 years. Even so, the general condition is one of insufficient momentum. (See pp. 5 and 8.) Some agencies expect the newly emerging Fed- eral Procurement Institute to carry this bur- den. The Institute is only now being estab- 1 ished, however, and will take some time to become operationally effective. Even then it will not perform research roles for the indi-- vidual agencies. (See pp. 3 and 8.) GAO’s overall recommendation to the Office of Management and Budget is that a strong pro- gram for procurement and acquisition research be established on a Government-wide basis. Various uses of such research are discussed and a framework for organizing and operating a program is illustrated, setting forth: --Definitions of the procurement research function, narrow and broad, and urging use of the latter. (See pp. 13 and 14.) --Basic prerequisites for operating the pro- gram. (See p. 15.) --Roles of participants: i.e., Federal agen- ties, the Federal Procurement Institute, and the Office of Federal Procurement Pol- icy. (See p. 16.) --Considerations in screening research needs, selecting projects, conducting the research itself, and evaluating results. (See pp. 17 t0 25.j The Office of Management and Budget shares GAO’s concern that not enough attention has been devoted to research of procurement pol- icies and practices. It said thz summary of current activity and the organized approach outlined in this report will be useful in promoting a Government-wide research program. (See app. VI, p. 48.) ii Contents ------------ Paqe -- - DIGEST i CHAPTER 1 PURPOSE OF REPORT 2 CURRENT POSTURE Bistorical evolution Overall Federal posture FPI ! Civilian agencies Defense activities Army Air Force Navy Summary 3 WHY RESEARCH 9 Identifying and solving problems 10 Responding to policy changes 11 Achieving innovative improvements 12 Evaluating experiences, interchanging ideas 12 Contributing to education and training 12 4 AN ORGANIZED APPROACH 13 The research turf 13 Basic prerequisites 15 Executive branch roles 16 Operatins considerations 17 Identifying and screening research needs 18 Independent research 19 Choosing research projects 20 Conducting the research 22 Evaluating and using research results 24 5 MATTERS FOR EXECUTIVE/CONGRESSIONAL i . ATTENTION 29 Recommendation to the Director, OMB 30 / OHB comments 30 APPENDIX I Department of Defense Directive 31 II “Toward More and Better Procurement Rc- search” by Herbert Roback 39 I i ’ j . APPENDIX Pize III Libraries and data banks 42 IV Research guides 43 V Some expert views 44 VI Letter dated July 12, 1977, from the Administrator, Off ice of Federal . : Procurement Policy 48 L FIGURES ----a 2-1 Federal Research Posture 4 2-2 Department of Defense Research Posture 6 3-l Potential Research Projects for New Major System Policies 11 4-l Basic Research Prerequisites 15 4-2 Executive Branch Roles in Government-wide Research Programs 16 4-3 Framework for Procurement and Acquisition Research 17 4-4 Sources of Research Candidates 18 4-5 Identifying, Sc-reening Needs 19 4-6 Choosing Research Projects 21 4-7 Conducting The Research 23 4-8 Evaluating, Using Research Results 24 4-9 Improving Agency Procurement and Acquisi- tion Practices Through Research: An Organized Approach 27 ABBREVIATIONS DOD Department of Defense Department of Transportation ERDA Energy Research and Development Administration PPI Federal Procurement Institute GAO General Accounting Office GSA General Services Administration i?ASA National Aeronautics and Space Administration OFPP Office of Federal Procurement ?olicy OMB Office of Management and Budget i CRAPTER 1 PURPOSE OF REPORT Federal spending to accmire systems, goods, and services now exceeds $70 billion a year and involves about 60,000 Federal employees. Executive agencies--such as the Depart- ment of Defense (DGD) , Energy Research and Development Ad- ministration (ERDA), Department of Transportation (DOT), Na- tional Aeronautics and Space Administration (NASA), and General Services Administration (GSA)--rely on acguisition and procurement activities to accomplish their primary missions. For example, the costs of acuuirins new major systems under Federal contracts are estimate3 at $452 b:l- lion (Tivilian $203, and defense $244) and their lifetime operating costs may run several times more. I/ During the past few years, the entire Federal body of procurement and acguisition policies has been examined at great length e This examination included a study by the con- gressional Com-.lission on Government Procurement, an executive branch evaluation of its report , continuing overview by the Office of Federal Procurement Policy (OFPP), and numerous congressional hearings. Basic policy and Drocedural redircc- t iol&; are now taking shape and a new Government-wide modern statutory foundation is under active consideration in the Congress. This report is a followup to a Procurement Commission and congressional committee recommendation that a continuing program of research be used to improve Federal procurement practices and design and test procedures for new policies. L/GAO Report, “Financial Status of Major Acquisitions,” (PSAD-77-62, Jan. 1977). CHAPTER 2 CURRENT POSTURE Today a program of organized research into Federal procurement and acquisition practices dces not exist on a Government-wide basis or within an executive department. The present pattern of research efforts by executive agencies is mixed, ranging from no program to a few efforts in DOD. A/ HISTGRIC:.L EVOLUTION In late the 1960s an idea took hold within DOD that re- search, systematically applied, could be used to improve oro- curement practices. In 1969, in response to continued prob- lems with cost overrcns, Secretary of Defense Clark Clifford proposed a nProcurer.!ent Research Laboratory* as a mechanism for developing and testing new procurement ideas and applying lessons learned. The House Ccmmittee on Government Operations endorsed the idea and said the DOD research ??boratory should --develop, test, and innovate procurerent methods on a systematic basis: --coordinate sffurts within the agency; --test the effect of major new policies and procedures on Government activities and industry before their issuance; and --provide a consulting and training capability to ex- ploit significant developments. 2/ In the early 197Os, the Commission on Governmlnt Pro- curement looked into the matter on a Government-wide basis. It found that srme agencies did not favor internal agency L/The House Appropriations Committee recently noted weak- nesses in DOD efforts, including inadequate planning, du- plication, lack of data to demonstrate study costs And ben- . efits, research reporting breakdowns, and little utiliza- tion of results. “Logistics Manaqement Studies within the Department of Defense,” a stun; conducted by the Sur- veys and Investigations Staff of the House Appropriations Committee, Mar. 1973. z/House Report No. 91-1715, “Policy Changes in Weapon System Procurement, ti Dx. 1370, pp. 33 and 34. . 2 rS&Wdl: fn some cases becswe of the tgency’s low volume of procurement, and in other cases because the agency felt that --ad hoc nanagernent studies, in lieu of formal research progrr,rts, are more Fffective in salving their prob- lems; --an agency program would impose an undue burden on ?ts resources and cculd result in research dupl,ication; and --a joint interagency or Government-wide approach is more economical an3 realistic for meetirlg agency re- search needs. The Procurement Commission recommended establishment of a Federal Procurement Institute (FL‘:) with Government-wide coordination of research as one of its operating functions. L/ It did not exclude the idea that executive agencis, could usefully de researcn on their own, and it sdpport&d *he con- cept of a DOD research laboratory. g;ZRALL FEDERAL POSTURE FPI The Administrator, OFPP, created FPI in ,:uly 1976. He chairs FPI's policy board with representatives from 16 asen- ties and departments. DODI as Executive Agent, will run F21. Under the preseat FPI action ?lan, 2 of the initial 16 pro- fessionals will be assigned to the research area. FPI’s role, ken operational , Will be tcJ coordinate existing procurement research efforts; disseminate findings: and identify, promote , and conduct long-range and independ- ent research having a high impact on Government-wide procure- ment issues and prob?.ems. Dot all of this research would be transferable to eed executive agency due to differences in organization, operation, and mission. A;so, individual agencies have unique procurement problems which can best be solved by their own research efforts. f/Report of the Commission on Government Procurement, D2c. 1972, p. 52. 3 . . ,yure 2-T summarizes the current posture of research within ficc: major executive agencies which collectively account Eo: !nost of the Federal spending in procurement and acquib.Ltion. bon - -GSA DOT - ReIiance an procurement/ Almost EsseatiaLly 109 budget V;t;,m Consider- acquisition to carry out totally complete able re- missions reliuacr 1 iance Pcocutawnt/acquisitfon $46.9 $1.2 . 53.2 $1.7 $1.0 exp-,-nditutes PY 1976 (bil- licas! Proqram for procurement/ Partial No No NO acquisition research Research expenCfture8 S834,OOO none tkme None None FY 1976 Nuaber of research projects 132 I . I . started past 3 Eircol years I . . h Number of projects completed 124 llumbec of projects planned 53 . I . . for PY 1977 Wmber of researchers full- time/part-time Sources of research: In-house centers Contracts Schools Informal ad hoc channels Source: Agency responses to our _.- letter. . 4 Civilian -m agencies As shown in figure 2-1, none of the civilian agencies have a regular research program. Both ERDA and DOT use ad hoc approaches to solve immediate problems or select pro- curement and acquisition methods. The following views were expressed : . --ERDA deferred judgment on the matte? to its newly appointed acquisition executive who will be respon- sible for research to more effectively implement agency policy. --NASA feels that any research program should be a joint effort participated in and supported by OFPP and FPI. Independent agency action, it said, would fractionalize and duplicate efforts. --GSA has established an office to respond to major system policy in OMB Circular A-109. When progress is well underway, GSA will examine the possibility of establishing a research program. --DOT believes CFPP should coordinate acuuisition re- search to avoid duplication of effort and wasteful expenditure of scarce resources. DOT would partic- ipate in interagency research efforts to the ex- tent permitted by available resources. Defense activities Before a recent reorganization, the focal point for re- search efforts in the military departments was a Procurement Coordination Council reporting to the Office of the Assist- ant Secretary of Defense, Installations and Logistics. The Council had quarterly meetinqs with military department re- searchers and conducted annual research symposiums to ex- change ideas on current or proposed research project;. ‘Jn- der the new organization, the specific assigrlmont of procure- ment research responsibility had not yet been decided as of August 1977. ;/ &/Under the new organization , procurement policy responsibil- ity shifts to the Office of the Director of Defense Re- search and Engineer ing . The Director is also to be the agency’s Acquisition Executive under OMB Circular A-109. i 5 . , Figure 2-2 shows the posture bf research in the itrdividusl military departments and the Defense Logistics Agency. FIGURE 2-2 DEPARTHEN’” QP DEFENSE RESEARCH POSTURE Total Army Air Force Navy & & Ptocurcment/acquisition expenditures PY ;916 (bil- lions) $10.5 $15.1 $15.4 $5.9 $46.9 Program for procurement/ acquisition research Yes Yes Ye3 No Yes Research expenditures PY 1576 S400,,000 $167,000 $267,000 None 5834,000 Numbec of research proj- ects started past 3 fis- cal years 66 56 10 I 132 Number of projects com- pleted during past 3 fis- cal years 66 54 4 . 124 Number of projects planned for PY 1977 18 30 5 . 53 Number of researchers full-time/part-time (aver- age I 15/16 6/150 . g/l0 n 31/166 Sources of research: In-house centers X X x ” X Contracts X X . X Schools X X I (I X Informal ad hoc chan- nels x . X @ombination of full-time and part-time. Source: DOD. The data on the number of research projects should be used cautiously as each military department uses different cri- teria in determining what they count as research. In some cases, they include agency staff studies or a student thesis. In other cases, they include research by military school fac- ulty members or by full-time researchers. The numbers of re- search projects shown could not be verified by Defense Logis- tics Studies Information Exchange due tti breakdowns in agency reporting on research. This breakdown wds also noted in a study conducted by the House Appropriations Committee’s Sur- veys and Investigations Staff. 6 In 1970 the Army, the first military service to take this step, established a Procurement Research Off ice -at the Army Logistics Management Center, Fort Lee, Va. The Office has an average .ctaff of 18 researchers and does not contract out any research. It develops and tests improved procure- ment techniques, and provides consultation on emerging pro- curement problems, and graduate studies related to procure- ment. The staff has primarily a procurement background but includes a few with other disciplines, such as economists, statisticians, industrial engineers, and operations research analysts. Air Form-i I The sir Force research counterpart, the Business Re- search Management Center, was established in 1973. Policy guidance comes from an advisory board, chaired by the Direc- tor of Procurement Policy, Headquarters, USAF. In lieu of oonduc ting actual research, the professional staff acts as a catalyst or research broker of projects to be undertaken by others. The center also solicits agency sponsors who can use the research results to provide resources and data. The research is performed by --joint teams from the Air Force Academy and Contract Management Division, --graduate school faculty/students, --operating elements of major commands, and --private contractors. Navy Before 1975 faculty and graduate students of the Naval Postgraduate School in Monterey, Calif., carried on a small research effort. In 1976 the Navy estab'?;hed a new effort. It is managed by the Office of Naval Fe l.Arch through a council consisting of procurement and acquisition people from several naval commands, the Office of the Chief of Naval Operations, and the Naval Postgraduate School. The council seeks out ways to improve major system procurement management through research. To help support the new effort, the Navy, in early 1977, established a Cente; for Acquisition Research at the Naval Postgraduate School. * * * * * 7 A new DOD Directive A/ has been issued encouraging the military services to improve their acquisition and business management prz tices through research and to concentrate on “fundamental causzs rather than immediate effects,” (See app. I, p. 31,: The directive reflects to some extent pas: DOD prs;urement research practices. It also adopts some of the thoughts in this report. It includes, for example, a research guide similar to the one presented in chapter 4 for organizing and operating a research program (compare fig. 4-9, p. 27, and app. I, p- 37). Civilian agencies aztz generally reluctant to undertake procurement research, even research peculiar to their own spe- cial needs. Within DOD, procurement research has been going on ir. some quarters for about 6 years. Bui there is a gen- e;al appearance of insufficient momentum to achieve the nec- essary research capabilities for current research needs and the even larger future needs. A congressional observer noted (see app. II, p. 39): “* l * Viewed from a distance, these efforts seem tentative and diffuse, as if DOD were convinced as a matter of policy that more and better pro- curement research is needed but were not certain how to carry through. Each military service seems to be separately pondering what is embraced in procurement research, how it should be organized and conducted, the appropriate level of funding, tnti clientele to be served, and the means of dis- seminating research data.” Some agencies are expecting the emerging FPI to carry the burden of Federal procurement research. This is pre- mature as PPI is just being established and may take years to become fJlly operational. Even then, it cannot perform the research roles of the individual agencies. _--------- &/Procurement Research Directive 4105.68, June 1977. . 8 CHAPTER 3 WHY RESEARCH 'I* * * a rather widespread conviction [exists) that much is amiss in Government procurement * l * it is plausible, indeed persuasivel to argue that procurement research is a good investment promising large dividends in money savings and more efficient and effective performance. “The dilemma * * * is that until considerable re- sources are devoted to procurement research, and the efforts are sufficiently well-organized, the results will be spotty and meager; but without substantial results it is difficult to get the desired allocation and organization of resources. In this circumstance we have to fall back on America's faith that research does bring useful results." A/ Research into procurement and acquisition practices entails critical investigation and experimentation aimed at gaining new insights into current processes, making new dis- coveries, and devising and testing new methods and proce- dures. This kind of fundamental research is not within the scope of busy operating people or attainable by ad hoc com- mittees. The Procurement Commission noted that too often past attempts have addressed symptomatic problems on an individual piecemeal basis, and: "Patchwork corrective action has become counterpro- ductive, leading to more regulations to -amend reg- ulations, more people to check people, more proce- dures to correct procedures, and more organizations to correct organization prcblems." A more organized approach using proven research methods should help agencies to --identify and solve ongoing problems, --put into effect new policy changes, --innovate procedural improvements, L/Herbert Roback, "Toward More and Better Procurement Re- search,* Defense Management Journal, July 1975, included as app. II. i . 9 -- --evaluate fz:*I-,eriences and interchange ideas Government-wide, and -contribute to education and training. IDENTIFYING AND SOLVING BROBLEMS Research can be used to sort out symptoms from under- lying pr-oblems and design corrective measures. In the past, agency attention has focused on regulating the back end of the procurement process where the symptoms of problems even- tually surfaced. The underlying problems were found, how- ever, at the front end. I/ Research would first identify and validate underlying problems and then search out alternative solutions for man- agement review. Such solutions would stress more what needs to be accomplished rather than attempt to tell people how to do it. Some areas where underlying problems need to be iden- tified and solutions explored include: --Increasing quality of the work force. Ways could be sought through research to increase the latitude for decisionmaking and career development of procurement and acquisition officials. The desired outcome would be to substitute good business judgment for reliance on multiple layers of supervision, extensive regula- tions, and the overburdened disputes machinery. --Simplifying, unifying regulations. Research could be used to find out how this could be best accomplished. Should regulations be confined to just basic require- ments? What are the kinds of matters that should or should not receive regulatory treatment? What size should the regulations be (hundreds vs. thousands of pages) to permit people to comprehend them and to keep abreast of changes? Should regulations be func- t ion al, that is, tailored to small purchases, commer- cial products, or major systems? How should they be written to be readily understood and to permit using identical language for all agencies? Should they be oriented to expected results or should they include means to achieve results? Should they be written in layman or legal terms? --Increasing product performance, reducing cost growth. * Research could be used to identify in new products and , systems, the causes of undue complexity and low !I I L/Report of the Commission on Government Procurement, vol. 2, pp. 69 to 70 and 166 to 167. 10 , reliability, and the causes of major unanticipated cost increases. RESPONDING TO POLICY CHANGES Some new congressional and executive policy direction may reguire research to design and explore procedures to meet their objectives and to test such procedures under operating conditions. The Congress is considering legislation that would make fundamental revisions in the statutory foundation Government-wide. (See Senate bill S. 1264.) OFPP has re- cently established new executive branch policies for major systems and commercial products. l/ These policies are caus- ing a fundamental change in how aGencies conduct their inter- nal operations and how they do business with industry. For example, historically, the functions of (1) determin- ing the kind of new major system and its basic design and (2) procuring it, were isolated from each other in the agency. The first and most important function escaped the rigor and chsl- lenge of competition. Under the new OMB Circular, the two functions work together in response to an agency statement of mission need. Alternative designs to meet the need are then explored competitively. Figure 3-l identifies potential research projects that might be useful in putting the new circular into operation. FIGURE 3-l POTENTIAL RESEARCH PROJECTS FOR NEW MAJOR SYSTEM POLICIES conducting analyses of agency missions and de- veloping statements of missions needs. Inccrporating mission needs, program goals, and agency operating constraints in a request for proposal. Contracting on a short-term, renewable basis to explore alternative design candidates. Managing competitive contracts and narrowing down alternative desiqn candidates for con- tinued funding. Evaluating alternatives and choosing the preferred solutions for entry into full-scale development. - &/OMB Circular A-109, “Major System Acquisitions,” April 1976; and OFPP Memorandum to selected agency heads, “Procurement and Supply of Commercial Products,” tiay 1976. . ACHllVING INNOVATIVE IMPROVEMENTS --- Long-range innovative improvements can be accomplished through research which advances knowledge. The techniques and insights eventually gained should help to solve basic agency problems and minimize the need for continuous congres- sional oversight, outside studies, and statutory commissions. EVALUATING EXPEWIENCES~ INTEECHANGING IDEAS A research program can gather and evaluate actual ersperi- ences on specific programs so that lessons learned may be documented for futxe use. Collectively, research can provide a means for agencies and their components to interchange ideas and research results. CONTRIb:~TING TO EDUCATfON AND THAIMING A scattering of procurement or system acquisition courses are offered in colleges or universities, but text material available for either degree or nondegree programs is very lim- . iteo. As one university professor said during our review: “Research p conducted on a continuing basis * * * could greatly enhance our understanding of the proc- esses and their effects * * * lead to more effec- tive policy development and to a broader public recognition of the impacts and benefits of sound procurement policies and practices * * * jthere is] a need for a more conceptually sound perception of procurement and for the development of a literature reflecting that conception.” ! 12 L.. . CHAPTER 4 AN ORGANIZED APPROACH We surveyed the management of various research activities and held.discussions with experts in the field. From the survey, we developed a model framework to explore (I) an organized approach to procurement and acquisition research in the Federal Government and (2) operating approaches to getting the most benefits from the research work. This chapter dis- cusses the framework. THE RESEARCHTURF The term "procurement" has been used by the Congress, the Commission, and OFPP in a broad sense to cover the en- tire spectrum of acquisition activities, starting with de- fining an agency's need and ending with disposal of whatever is obtained to fill that need. It has also been defined by these same sources to include all purchases by Federal agen- cies that range from standard commercial supplies and serv- ices to the most complex national systems, such as defense weapons, transportation systems like the Washington Metro, nuclear energy plants, and space systems. On the other hand, operating agencies have defined the procurement operating function much more narrowly. Tradi- tionally, the agency procurement process begins with prep- aration of a purchase request for a particular item and ends with delivery of that item. A major agency recently stated the problem this way: "* * * there is no clear definition of the procure- ment operation. Does the procurement function limit itself to the rather narrow confines of the contrac- tual instrument or does it encompass the acquisi- tion process? Are Source Selection, Advance Procure- ment Planning and Life Cycle Cost computations part of the procurement function or are they part of the acquisition process and thus in a separate functional area? * * l the procurement curriculum contains no mandatory courses at any level outside the technical field of contracting. * * * Has the * * * procure- ment function [been defined] too narrowly? lJ &/April 22, 1977, Memorandum from the Office of the Assist- ant Secretary of Defense, Installations and Logistics, to members of the Commission on Government Procurement recom- mendation A-18 subcommittee. 13 How broadly procurement is defined is critical because among other things it determines --the nature and extent of needed research, --the kinds of knowledge and data collected and stored in the research base, . j i --the types of disciplines and depth of needed re- searcher skills, --the scope and range of research topics, and --the organizational clients who may need or use re- search results. Construing procurement too narrowly has had adverse ef- fects, such as when contracting methods and procedures were singled out in the 1960s to remedy past ills. The Commission found that these ills were rooted in much earlier actions or inactions when defining what to procure. I/ For the purpose of this report end the framework that follows, the terms "procurement" and “acquisition” are used interchangably to comprehend --defining a need; --budgeting and financing; --soliciting and exploring alternative solutions: --conducting test demonstrations; --choosing what to procure; --selecting source&; --conducting price and cost analyses; --contract negotiation, award, and administration: and --operational tise and disposal. &/Report of the Commission on Government Procurement, vol. II, pp. 166 to 167. 14 i I .e In making procurement decisions, cost implications would include all agency mission operating and disposal costs associated with lifetime use of the particular product or aafvdce chosen to meet a given need. BASIC PREREQUISITES For any research program to operate effectively, there are certoain basic prerequisites that must be present. They are identified in figure 4-l. FIGURE 4-1 BASIC RESEARCH PREREQUISITES --People : A cadre of professionals with a mix of disciplines. --Data base: An i.?formation base--bibliographies, abstracts, studies, reports, and directories, plus a clearinghouse for identifying and sharing research data. --Access : Free access to research users and pro- curement practitioners. --Problem identifi- cation: A system for developing and refining problems requiring research. --Management supper t : Willing sponsorship from top and operating management levels. The basio prerequisites shown in figure 5-l are large11 self-explanatory. Information data banks are already in the Federal Government supporting various technical and manage- rial study efforts, such as procurement and acquisition. (See app. III., p. 42.) Also, to assist procurement re- searchers in getting data, DOD has published two guides. ‘ (See app. IV, p. 43.) 15 i EXECUTIVE BRANCU ROLES Figure 4-2 mtlines potential roles of executive branch participants in ;s Fbilerar research program and the rationale for each role. PICUPP. 4-2 PXECmIVc BDIRCH ROLCS IN COVeRIIRCHT-HIDe RESzmx Pffmm8 OFPP Government-wide lesder- OFPF opecstee under e ststutocy mandste. One of ,rhip and coordhmtion its colee I6 ‘pronoting sad conducting resverch IO procuresscnt polklea, regu2ation6, proceduree, snd Lome: OPPP, acting in concert with the new WI, repceeents * lcgicsl foe41 point for Governmenc- vidt re6earch. PPI Cr~lourage, Initidte, and FPI is guided by a multlngwcy policy board chaired eveluete long-range inno- by OFPD end opereted by en Ezocutlve Agent (DOD). v&Live reaearch Governsent- On0 Of it.6 ta6kJ 16 to: wide *Promote, monitor. and ronduct rertsrch to develop buJineP6 method and sanegcment teChnique6 that will ad,%nce the stste-of- the-art in procurement. wency Acqul- Overrll rosponeibilfty The Acquleitfon executive is aesfgned d pivotal sitlon t%ecu- for re6eSrCh vlthin en agency policy end nonltocfng role in cSch aqcncy tive individual agency for 51ajOc 6yt3teta6 by ORB Circular A-109. flc is ezpscted to coordinete agency-ulde responses to procurement and acquIs?tlon problem6 and policy Change6 and, therefore, f6 in en ~xcellsnt pOeI- tfon to judge rc6cdrch medo end prlorltles aa Il.0 the rO6Ult6. Agency operat- Client6 Of rS6eSrCh SCtiV- Agency operating elements would be the prlncipel Lng Clemmts rty a: ,ny *gency level btneficirrles of re6eerCh end would’ help activate r66e6CCh projects. For exasple, fmxd wfth prub- lem6 or with major new policy or )rocsdurel fnl- thtlves, manager6 OK the agcn-, optreting elesmts 0 could turn to their research actlviry Kor support. wency Re- entity unaqinq/coaductinq The Agency Research Mtlvlty is the entity u6ed to rerch hctiv- the rese6r‘r.h Obteln re6esrch rcsuite whether done In-house, LtY Undsr Contract with private firms, by a COEblncd in-house 6nd contrrctual effort, or through qr+nte to unlversitisa. Some of these roles are beginning to evolve, such as the first tk>--0FPP and FPI. Other roles have not yet been developed, such as the acquisition executive role of oversee- ing needs and prior! ‘:ies agencywide and actiny On rezarch results. Development of close workinq relationships between these various roZes is important; otherwise, researchers will find themselves isolated from policymakers and opera- tions. A/ L/The theme of researcher isolation and difficulties in securing agency sponsorship was e.y-- ‘ssed at the June 1477 Procurement Research Symposium helo in West Point, N.Y. t . 16 OPZRATING CONSIDERATIONS To further illustrate an orqanized approach to research four basic steps are used: --Identifying and screening rcbsearch needs. --Choosing research projects. --Conducting the research. --Evaluating and using research results. Figure 4-3 portrays the basic steps in a framework that will be gradually expanded tc show how they work and fit in with the executive branch roles previously 3iscus+;ed. FIGURE 4-3 FRAMEWORK FOR PROCUREMENT AND ACOUISlTtON RESEARCH i lDmJ?FYlNQ. CHOOSING CONDUCTlNG EVAl.UATRG. ‘fSkG SCREENlht NFEDS RESEARCH PROJECTS THE RESEARCH RESEAnCH REXLTS B-w - I .OFPP/FPt I r AQWCY OxRATlNQ I I I I RESEARCUPATA8ANK 17 Identifying and screening research needs pi The first basic step of identifying and screening research needs and setting priorities is, perhaps, the most crucial one. It starts with a systematic identification of procurement and acquisition research needs and alternative research candidates to meet those needs. Illustrations of . i criteria required to help screen and set priorities on such needs are --chronic problem areas, --major policy changes, --agencywide impazts, and --high dollars or public interest. Examples of research candidates falling. under the first two criteria are discussed in the previous chapter. (See PP~ 10 and 11. ) Research candidates need not be limited to those identified within an agency but may come from outside sources. Two primary sources for identifying research needs are OFPP and FPI. Being aware of critical policy issues and problems with broad interagency or congressional implications, they can initiate collaborative Government-wide studies. Figure 4-4 identifies various sources of research needs . and candi- date projects. FIGURE 4-4 SOURCES OF RESEARCH CANDIDATES Primary Other OFPP/FPI Universities Research activities Private research Agency top managcmen t institutes Agency operating elements Government schools/ Agency user elements faculty/students The Congress Private individuals/con- U.S. GAO tractors Industry associations Professional journals Professional societies Other media 18 Independent--w--w-research -- The researchers themselves are another source of re- search candidates. Through their literature searches, in- formation exchange programs, and contacts with operations, they become aware of opportunity breakthroughs and new areas with promising prospects for innovative research. A univer- sity professor confirmed what others said during the review: ‘A researcher may well perceive of needs for re- search which are not yet recognized as problems or subjects for change. The product of such effort could form the basis for new policy or it could sim- ply enhance the literature of the field,” The first research step just described is portrayed in figure 4-5. AGURE 4 - 5 IDENTIFYING. SCftEEIolNG NEEDS I 4 ACQlJlSlTlON AGENCY RESEARCH ACTIVITY , I RESEARCH OATA BANK 19 l ’ t l Choosing research projects The second basic step--choosing research projects-- involves doing preliminary research to exgdore the most promising candidates, soliciting operating agency view- points, and obtaining approvals of the agency’s acquisitidn executive for agencywide research projects which deal with universal problems or policy applications. The research activity would do preliminary work and, as previously in- dicated, have discretionary resources for conducting inde- pendent research. . . For new research projects, close involvement and sup- port is needed from affected operating elements. For this purpose, agency off ices of primary interest could be identified. These offices would typically have the greatest stake or interest in the research outcome. The off ice of primary interest would help the researcher achieve access to people and data and bridge the gap between operational ele- ments and the research activity. This kind of liaison sup- ports researchers and, at the same time, enables them to keep in touch with the operational implications of their on- going research. Later, the supFJrt would be present to help generate changes in agency policies, procedures, and behavior patterns. .r 20 i . * c ’ - t ___ _ - _- The criteria used for setting need priorities and screening candidates in the first basic step would again be used here to guide the final choice of projects to be re- searched. The second basic step is graphically illustrated in figure 4-6. AGENCY OPERATING ELEMENT AGEHCY RESEARCH ACTWIlY RESEARCH DATA BANK .-,**nmc- Conducking the research The third step is conductLlg the research. A few basic I considerations are highlighted. 21 i - Interdisciplinary research teams with multiple talents, disciplines, and backgrounds are Important to accomplishing complex projects. Such teams might include individuals from the research community as well ah from operating elements with a mix of technical and manaqement disciplines. This ar- rangement tends to “beef up” res: arch teams since it permits them tc interact continuously, draw upon various needed skills, and take an integrated view 02 the total process. The end result is a quicker and better research product as well as a greater possibility that the agency will act on it. Validating research results is essential to avoiding improper conclusions and seeing that what is proposed is work- able. Research products, for example, need to be subjected to realistic judgments of the Federal procurement and acguisi- tion community, including peer reviews within the research com- munity backed up by such approaches as Government-wide research symposia or conferences. FPI, by virtue of its broad charter, would be in a unique position to establish research standards and oversee a Government/university peer review system for procurement and acquisition research products. Implications of research results need to be identified in terms understandable to operating managers. If the impli- cations are not clearly conveyed by the researcher, worth- while research products may be lost without the opportunity of being tested or applied. Agency managers need to under- stand, for example: --Impacts of research recommendations on agency mission effectiveness and cost. --Risks and benefits of taking cr not taking action. --Matters transcending the immediate issue. 22 . Developing suqgested implementing procedures helps to discipline the research effortsr and when tiwd with the capabilftfes and limitations of-an agency’s operational en- vironment in mind, will help the research product gain ac- ceptance. Figure 4-7 fs a graphic illustration of the third basic step of conducting the research. , ---+.- 23 -! -8 Evaluating and using research results Portrayed in figure 4-8 are several considerations in evaluating and using research results--the fourth basic step--that are generally accepted as an integral part of any research program to realize its full potential. They include --pilot testing proposed actions, --examining agency-wide aspects, --disseminating research results, --monitoring selected applications, and --assessing improvements. FIGUBE 4 - I) EVALUATWG, USliMO I RISEARCH RESUiTS I 1 : ACQUlSfflON i EXECUTIVE y&¶-L : i NDEPEWDENT RESEARC I i RESEARCH DATA BAMK~ 1 24 Procurement research, like any research, is a calculated risk with failures to be expected. All problems are not solvable. Some results not immediately usable can provide partial solutions or serve as building blocks for future solutions. Recent findings of the Rouse Appropr ia- tions Committee show, however, that evaluating and using research results has been one of the weakest aspects of re- search studies. L/ 0 * l * * Figure 4-9 portrays the interaction of the four basic steps with each other, the research data bank, and the roles of executive brane:h participants. Some outside views we obtained on proccrement research and on this model for organizing and operating a Government-wide program, can be found in appendix V, page 44. --------------- L/The Committee found: (1) studies currently underway and completed are not reported to the data bank as required, (2) recommended actions based on research are questionable, and (3) cost and benefits of actions taken on research work are not ident if iable. “Logistics Management Studies within ’ The Department of Defense,” a study conducted by the Sur- veys and Investigations Staff of the House Appropriations Committee, Mar. 1977. i 25 l , --- . ; 8 COOROINATE INTEA.AOENC 0 CATALYST FOR NEW INlflAllVCS ) \ RESEARCN EFFORTS -SCREEN ALTERNATIVE CQ#FIRM MEDSIPRlORITIES RESEARCtl CdWOlOAfEb IDENTIFY OFFICE(S) OF 0 SET PRlORIlI PRIUARY INTEREST a SJ#?ORT LITERATLIRE SEL OCONDUCT RESEARCH FOR . COWSlDER GOVT.WIDE USE INTER-AGENCY NEEDS ‘\ I - l \0 CONSIDER AGENCY-WIDE USE t , . @ i PROJECTS 1 VALUATE RESEARCH -PERFORM ORlENTATlON rE RESOURCES’ OIYPLEMENT OMONITOR APPLICATlOrlS 0 ASSESS IMPROVEMENTS -3 ’ n OCONOUCT RESEARCH , 0 PARTICIPATE IN 0 “PIME TUNING- RESEARCH I OVALIDATE RESULTS I PILOT TESTS AS NECESSARY 0 IDENTIFY MANAGEMENT IMPLICATIONS 3 c 0 DEVELOP. PLAN IMPLEMENTING 6 I PROCEWRES IT RESEARCH OSUPPORT FtESEARCH ASREOUESTED I t DATA BANK 0 INTEGRATE REPORT INTO DATA BANX l OISSEMINATIONOF @FOLLOW ON SUPPORT 0 DISSEMINATE REPORT RESEARCH RESULTS AS NECESSARY lllc -- i 27 - -.. -.- l _--- CHAPTER 5 MATTERS FOR EXECUTXVE/CONGRESSIOMAL ATTEPITIQN Over the past several decades a vast network of laws, directives, regulations, layers of implementing procedures, and supervision have been accumulating in the procurement and acquisition field. In retrospect, the net benefits have been both elusive and disappointing, and often counter- productive. It is now generally conceded that P’edersl agency reliance on ad hoc management fixes, new regulations, and other limited solutions has not done’ the job. L/ In recent years the Congress has taken-a ser& of ini- tiatives to helg executive agencies deal more effectively with their procurement and acquisition problems. It first created a major commission with strong executive branch par-= ticipation. Later it established a focal point--OFPP--for executive policy leadership. Finally, the Congress has under consideration legislation that would consolidate and restruc- ture the entire body of procurement-related laws and build a new modern statutory foundation for the future. The desired outccmes of these combined legislative and executive jnitiatives are to: --Refocus and intensify agency management attention on the early formative stages of new procurement and acquisition programs, with particular emphasis on mis- sion needs and exploring alternative solutions. --Seek greater Federal agency reliance on the private sector for the acquisition of systens, goods and serv- ices, while stressing maximum use of competition, innovation, and new technology. --Sustain competitive challenge at least through a crit- ical demonstration phase. --Rely on commercial product specifications and supply systems that have gained public acceptance in lieu of using Government specifications and supply systems. --Cut down and simplify Federal regulations, red tape, and paperwork. lJFor further discussion of problems with past management fixes, see Report of the Commission on Government Procure- ment, vol. 2, pp. 69, 70, 166, 167, and 172. 29 Successfully csrrying otit these policy redirections, while also correcting chfonic procurement and acquisition problems, is a major chsllenge. Also, the Congress, after years of SuppOftiilg f@fofm , will want to see substantial iq~f ovement in Yotefal gsfocufement and acquisition prac- tices. RECOHMENDWTIOW To dKE DIRECTOR, am We recommmend that a program for procurement and acguf- sition research be established within the Pederal Government. As part of this pfogfm# those agencies dependent on procure- ment and acquisition processes to carry out their primary responsibilities shouPd sstablfsh a continuing research effort in order tot --Correct and refine procedures on a continuous basis -- and cope with procurement pcoblems peculiar to their agency operations as they arise. --Design the best ways of giving effect to new Govern- ment procurement/acquisition policies and expose them to operational testing. --Evaluate their experiences, achieve innovative im- proveme*ats, develop training materials, and partici- pate in research of a Government-wide nature. . OMB CHMENTS OWE?shares the concern that not enough attention has been devoted in the past tc research of procurement problems. It said the summary of cur rent research activity and the organized approach outlined in the report wit1 be useful in promoting a Government-wide pro5fani. (See app. VI, p. 48.) (95G351) 30 APPENDIX I APPENCLX I June 22, 3917 NUk.USR 4105.68 DDRbE BUBJBCT Procurement Re8urch Referencea: (a) Armed Servicea Prccuremrat Regulatlon (b) DOD Inatructloa 5150.!3, “Defense Logistics Studies Infometioa Exchange (DLSIE).” Juj 13 1972 (c) DOD Mrtctfvc 5010.22. “The Hmagement and Conduc: of Studies and Analyses,” November 22, 1976 A. ?vRFosE Thhfo Directive preacrfbea procedures to be followed In initiating, conducting, and admfahtering elments for procure- ment research. 8. APPLICABILITY AVD SCOPE -- The provf~fona of this Directive apply to the Office of the Secretary cf Defcase, the Military Departments. and the Defense Agencies (hereafter referred to as “DOD Components”) whose prxurment mission involves a need for procurement research. C. DEFINIfIONS 1. A Procurement &search Element -- is a functional or academic organlzatlon whose principal function ia to collect. review, digest, analyze, appraise, or sumarlze data or infor- matlo related to the procurement-acquisition process for the purpose of developing new manageaent concepts and/or more effcceive bw:nrzae methods fcr ecquiring systems materrel or L)cF’xes or iwroviag the DoD procurement practices. Procure- mat Research El-te arc primarily coccerned with the accu- uzulation and analpam of knowledge for input to DoD Component staff elements whose functions are primarily concerned with ldmtifplng and solving policy and operational problems. The Component policy staffs determlne the practicality an: desirability of using the output of the Procurement Research Elements. 31 .4 i c APPENDIX I APPENDIX I I 2. Procuresent Research involves proceee accivitiee vhicb cwer functions throughout the procuressme process, from development of need to dieposel, when thoee actions impact on the dec1sion-wkin.g procese of vhst - hav - uheu a aolicitetion ie issued, the policies and procedures used, and the managmt of the contract. These activitfee mny include, but are not limited to, advance procurem!M planning, contracting raethode, isprwcnmea in day-to=&ay btmissse operations, cost end pricing techntquco, performnce mmaux~tr source selection, product (qmllty) fsmureme epplicationer pmduc- tion a~?thode or contract requirexfante. 0. POLICY It is Departmmt of Defereee policy to engage in procurment research to hprwe practices in obtaining supplies, services, sod Def enae 6yetes3. E. PB RESMa CODRDINAmG COUNCIL (PgCC) The PRCC shell provide research guidance and ewmre a coordinuted effort. 1. The Council is cmzpoeed of a eeoior procuresmt policy mmber from each DOD Component and may, upon the determination of the Deputy Assfetant secretary of Defeme (Procurement)r include ee members, representatives fro6 those Secretary of Dcfeose charcemd l choole which have a procuress& research t&salon. 2. The Council ie chaired by the Director for Contract Mtistra- tion end Support, Office of the &pap &sefstant Secretary of Defenec <Procurement). 3. The Couucil will function ae the DoD eteeting group in l ccordxnce with DOD Directive 5010.22 (reference fc)). 4. The Council may request DOD &mponent reeearch elment8 to perform research on aatters of concern to DoD top moegement. P. BESFONSXBILITIES 1. The Heads of DoD Wenta a. Axe encouraged to develop an orgauisational capabilitp to pezfona procurement: research by establishing a Procurement Research Element or by designated existing eteff elemente whose prisarp mission ia to conduct remcsrch to hprwe that Cozponent's acquisition-business management practices, and b. Sbrll be reapooeible for the pr~gramiag. budgeting, t c 32 . t APPENDIX I APPENDIX I Jucc 22. 1972 4105.68 fmdSsg, and other reloted support for their respective research efforts. 2. Ibe Procuresent Iteeearcb El-ts shall: a. Develop research program.8 designed to match a rcsesrch need w%th an existing research cepabilitg, either In-house or through sn ootside organization. b. Zcmege or monitor performan ce of eecb reeearcb project. 3. The Roaroa Research Prom= ahaIl be d&l@ed to: a. Identify and document thoee procesees or proceduree that require research to dwelop a nev or inproved technique of procurmt or any phase of the acquieftion cycle or to apply m improved burineee method to procumt abenegemnt. Procurement Research vi11 cooelet of a balance between loog-range and aid-range fmproveaenta end be cooceatrated oa fundmental cauaea rather than iawdiate effect to differentiate research from nomal staff studies. b. Continuously assess the current atatua of, and maintain a profile of, ecooosic or bueinese Bethoda reeearch being perforwd in and alt of Gove-at. In eddftiun, the Procurment Reseercb Elacnts will aafatain the lieieon required with industry. the acadeaic comaa- nlty, and the other Military Deportnrenta to eooftor and collect infonnattion on uethod8 research. c. Reviev and temt the products of procurement research for practkslity of implementation. d. Assist in the development of implemntation plans for nev conceLpts. As part of this impleeentetion. the Procurement Research Elesents may prepare directive or training material needed to tuple- merit research reaulta. 4. The Procurement Research Elements may: a. Either singly or jointly perform research, as requested by the PRCC, on matters of concern to DOD top management. b. Serve as the focal potnts within the DOD Component8 for the dissemination of procurement research infomatfon and data. This includes the disseninetlon of research findlngs to other Covermwnt activities, industry associations, and the academic community. E. ?he PrOCUrtZi%entbseerch Elements shall conduct 8 DOD Procurreent Research Smpodum annually under the auspices of the Deputy ilssfntant Secretary of Defense (Procurement) and invite the presentation ‘ 33 - 0 * - r * , APPENDIX I APPENDfX 1 of .?e%earch p%per%, to share the research with DOD procuraDentjacqui%itiun perrmnel and with the academic and industrial comcunitie%. a. Arrangesente for hosting this annual research emporium ahalf rotate ammg the PRCC ner&ere. b. The bmic purpoee of thin eympoaiwn shall be to ensure an exchange of research infowaeion. c. The PRCC will determiue the program fomat cm3 rev&v the oubjecte of reeearch to be presented at the symposium. c. PRoCEDUaEs 1.The PRCC %lm.ll meet at the call of the Qmimae, but not lea% often thmn quarterly. The Council shall review the DoD Cmpoeenesr current and future ruearch program. provide the uece%%apg guidance, and maintain con%t%nt liaison with the DOD Procureueut lle%e.+rcb Elements a% well a% the Federal Procuremmt Institute @PI). The 'Ciaairman, PRCC. may direct the dieeribution of any Defeuse procurement research report(%), a% required. 2.6 Normally, reoearch should be conducted IQ a syetemtic uaunei. Euclo%ure 1 provide% a oystemtic approach to the procuresent researct. process. Enclosure 1 may be u%ed by DoD Ccmpoeents a% a guide in their iraplenmting docmeute. . 3. An annual eumnary of the procurment research effort%, with a quarterly updating, %hall be published. This 8muaax-y shall include the research performed by DOD Procurement Research Elements and other research effort% identified in the Defense Logistics Informrio% Exchange (DLSIE) a% procuremeot research. d 8. Report8: (1) Submit report% shoving studies, planned and in process, of procurement research and eub~~it revisions to these repottn of each significant change. (2) Submit copies of each study completed, as developed by the Procur-t Re%earch Element, aud approved by the DOD Co%poaeut. b. All procurement research projects shall be regietered with the Defehae Logi%tic% Studies 1~5~ naatiou Exchange (DLSIE) to %%surc it% availability to all interested parties. Registration shall be in .. 34 APPENDIX I APPENDIX I . Jurle 22, 77 4105.68 . accord with tbe prow&ares mat forth in DOD Instruction 5154.19 .ireference (b)) . H. EF’RXTPWE DATE AND IW-ATIOM ’ T&s Directfoe &la effective immediately. Pomard two copies of implewnting imtructionr to the Director of Defense Research and Engfraeerfng within 90 days. Encloeurc - i Chart of. Procur-t Research Proceee . APPENDIX I 1 r’ I I I . APPENDIX I 1 t I I I I COPIIICTCI‘OT IErr . ,I .-.-a- I ! .----I .ULI-naa 1 .--mmum I I --W 1 I * I I I mr a&--0LII l .- ; 37 -4 I APPENDIX II APPENDIX IX any people in the ecientific community that much is amie.8 in Government procure- believe that research, like virtue, ia ita own ment. With a Federal procurement bill of at reward. Procurement research is not quite lea& $66 billion a year. it is plausible, indeed that e--&d. Harried adminietratore and im- persuasive. to argue that procure ment research pat: CongreeemeI: want to see results- is P good investment promieing large dividenda practical applications that will improve the in money savings end more e5icient and effec- procurement procese. The dilemma, of course, tive performance. ie that until considerable rBourcee are devoted The Department of Defense (DOD) snd its to procurement research, and the efforte are military eervicee. 88 this ierue of the Befenae sufficiently weilsrgsnized. the results will be Management JCWYZU~ m&es clear, are wry spotty and meager; but without subetantial much interested in procurement reeeerch and resulk it is difTicult to get rhe desired allaca- sponeor a vsriety of activities in the procure- tion and organization of resources. In this ment field. Viewed from a dietan-, these ef- circumstance we have tc fall back on America’s forte seem tentative and diffuse, aa if DOD faith that research doe-ebring useful resulta. were convinced a8 a matter of policy that more There is aleo a rather widespread conviction and better procurement research ie neededbut were not certain how to carry t.hrc.:gh. Each military service eeemeto be separately ponder- ing what is embraced in procurement re&arrch, how it should be organized and conducted, the appropriate Ievel of funding, the clientele to be served. and the meana of dieeeminating reeearch data. In a developing field a varietp 4 July 1975 39 i l ’ APPENDIX II APPE?r’PTY ’ T The military services, in turn, could amcen- trate advantageously on l-esearcll~dis- tinctive to their eervicee; for example. the NairJI on chip acquisition. This ie not to sug- gefat that procuremeui research be wercen- t&i24 or tied in hard and fast relationships Components within tbe Depertment of Mm or throughout the Government could be as- signed procurement research reapmudbilitiea refbxting available reeourw ape&l cap&li- tiea, demonstrable ac8ievement.eand the Ii& Civilian contracting organitatione i&m could be utilized. The important t&se immediatdy ahead are to give mherence and direction to a many- sided research effort by providing central focus, identifying relevant and promieing RTJ- search are8% eelecting priority projet@ pre- of ideas and concepts ie welcome, but the time venting unneceebary duplicatione, developing hoa come for de&done pointing toward better an adequate data beee, maintaining dir&o&s ~rgatdzation, clearer direction, more vipribility, of research performera and users, establishing firmer eupport&n ehort, a etronger inetitu- channeie of elective communicetion, and en- tiOd for procurement research suring continued funding support. As such the Department of Defense ehould Procurement re8eerch projec& properly de- conaider dwting off and exemining anew its signed and executed, will be responeive to the pkm-fallen yeateryeer by the wayeide+to needa of the procurement community. !&any eetablieh B Procurement Research L&oratory. of these needs are felt or Seen, while others Firet propoeed pub!icly in lZ69 by Clark Clif- are yet to be identified. Quick-fix research ford, then Secretary of Defense, creation of tasks hsve their place, but more important and @ucbF l&orator3 wae strongly endorsed by enduring will be the research eflorta which l the Rouee committee on Government Opera- go to root caueeeand seek basic refonna An tions 1 Bnd encompaeeedin a recommendation important consequenceof such research, par- of the Commitior: on Government Proeure- ticularly regarding major weapon systems. is ment to eatsblieh a Fede-1 Procurement Insti- to prijvide berer vieibility and understanding tute, whkb woukl, among other things, “con- duct and spons,~r res~ch in procurement ’ “Polyp Chanter in Weapm Syrtem Pmcx-i.” poke and procedure.” * Aleo noteworthy UJthe Howe Report tt-1716, December to, 1970. pp. M-i%. Congreeeional mandeW to the OfRceof Federal ‘Report of the CommIttee cm Government Prmm- menf US. Govmmcnt Printing O&e. WaLingian. Procurement Policy, written into the enabling D.C. ~010~. Vof. t. p. 66. December 167.6. Atailabfe from I,&elstion, that research in procurement policy tke SupetiLrndcRt cf Dcumwn ti, IJS. Gownmeat be performed and promate&* A portion of the Printing G&c: ode+ no. 5L5CCOOZ. prier $6.60. agency’s funde is to be made available for euch sScctim S(d)4 of Public Law RS-400, optmmd An- gwt 80. IOIL. 88 Stoat. 798. 798. Purposea. ‘Public LOP OJ-UKI (acetim 11) a&ho&cd $2 million The Office of Federal Procurement Poliw ie fez the firrt jkal year 01 OFPP apcra&im (tets), of concerned with procurement policy (presum- which not ROTC than 6tSO.006 W. to be owilabla fm abiy ae diatinguisherl from operational) re- procurenunt polvy rercarek. In it4 firat inewumi of eeerch and with Government-wide applications. fundi*g for pmt of a fkai year, tko OFPP remaiwd The Department of Defense, through the S660,OOtX Premnably a prqwrtmtalr rhare wcill be de- voted to reararch. mechanism of a Procurement Research Labora- ‘Sa 9-b Rota of OFPP: Unify and Ccmdtnnlr,” tory, could well direct ita attention to procure- by Hugh E. Wilt, Defenw Ysnagement Journal, Jaw- ment problems with Defenee-wide applicationa oty IP75. p. $6. 7-f , APPENDIX 11 APPENDIX II of the procurement proccaa aa a whole, 80 “front end” decisions sre made with more in- Once in a while 1 come across a “lesson telligent realization of their impact on cost, learn& report on the procurement of a major schedule and performance all along the way system or component; it makes me wonder why to the “hack end.” The long road from require- more such reports are not prepared and more men& determination to mainte~nce in the widely diwminated in the procurement com- field should hsve more of the pitfalIs removed. munity. In the interest of more inteljiqent and Innovative procurement research will have sophisticated procurement a vast amoilnt of to teat and challenge conventional wisdom and Wful information could be distilled from the preconeelved concepta. Incentive conbcting, experlenca and records of project managepa for eXample, seams to h firmly fixed in th8 de- It is exasperating to XX?avoidable errora con- fense prctcurement firmament, and yet there stantly repeated, an i:’ procurement practition- am analytical reporta end commoneenee or ers, like those who do not read history. are intuitlive judgments which question the efllcsrcy condemned to repezt the miatnkee of the pat. of the incentive arrangements. Can procure- Cn the simplest p!one, I can envisage a check- ment research throw more light on this diWicult liet of caveats available to the project manager rubject? I suggest it can, although the design or contracting officer which will at least of the research project may be difllcuit and its sharpen his awareness of pitfalls and h;lp execution arduous. III any case, procurement him to avoid them. This kind of information IWSW& should be a constant prod against also should serve to reduce or eliminate rote complacency and comfortabia acceptanceof the use of procurement concepta or methods which familiar way as the right way. may not be suited to the particular situation To challenge conventional wisdom is not Research in procurement is not the kind of lIcen8e to run ail ovee tbe procureme2at lot research which produces breakthroughs, quan- researching the biarre, the esoteric, or the tum jumps or magic formuIae; it deals with trivial, or simply to satisfy one’s intellectual prosaic problems of Government as buyer and curiosity. Such exercim best cBn be left to user of neededgoods and services. Nonetheless, those who are working without Federal funde. ita potential is great in helping to devise ways Procurement research will draw upon varied and meaM of doing a better job, which means intellectual disciplines, particularly the knowl- getting more for the do!!ar or getting what is edge 8nd techniques of the social sciencea,but required for less dollars. Even mare important, it must be itself disciplined to improve the it means helping to inspire public confidence procurement process. tinsequently, it is im- in the ability of Government to conduct its portant to develop and perfect analytical tech- business in an honest, prudent and businesslike niques which validate research aseumptions way. Procurement research is not iti own re- and to carefully evaluate the quality of tha ward, but it ia a rewarding effort. It deservea research output, sustained high-level attention and support. 0 My 1975 , 41 i APPENDIX III APPENDIX 111 LIBRARIES AND DATA BANKS 1. xhe Commission on Government Procurement Libr;a is maintained by GSA for all executive agencies 2. The Army Library in the Pentagon maintains sin extensive + collection of procurement literature and rererence works, including an information retrieval system. 3. Federal Depcsitory Libraries (39 agency designated li- .I braries) receive and retarn one copy of all government pub1 ica t ions. These are available to over 1,ODQ field libraries which requisition publications best suited to their particular clientele needs. 4. The National Technical Information Service (NTIS) oper- ated by the Department of Commerce, publishes Wee Government Abstracts of Techn’i& ‘RepoFt by ca-* egoryl and brmonthly Government Report Announcements with in- dexes by subject, author, Government contractor, and order number: They also-provide hard copy or microform copies of documents and custom searches of the NTIS data bank by subject. 5. The Defense Documentation Center is a repasitory and issue point for general reporLs and technical studies. LY. Phe Defense Logistics Studies Information Exchange pre- pares and prints abstracts and custom bibliographies, and acts as a repository and issue point for-studies and reports dealing with logistics and procurement. 42 t J c APPENDIX IV APPENDIX IV _.. L . RESEARCB GUIDES In 1975 the Army Procurement Research Office, acting as executive agent for DQDI published two guides for researchers: -1 1. --lists of fit pubfi- cation resources maintained within the Defense Logistics Studies Information Exchange. Et alss lists research resources, iRCludiRg( gOvePRmeRtQ1 %nd private research groups, schools, and operating organrzations. 2. A Guide to Sources of Infarmation for Procurement We- uding _-_-. graphics, legislative materials, periodicals, statistical data, lists of industry associations, and many topical references. --. -. 43 * l APPENDIX V APPENDIX V SOME EXPERT VIEWS Several research experts who reviewed preliminary material in this report expressed varying opinions as to the nature of research and its management. Their views were con- sidered and some are presented here because of the perspec- tive they may add. DIFFERENT KINDS OF RESEARCH E/ There are two important fundamental kir,ds of research. The first is research on the nature of the procurement and systems acquisition process itseli, which would rely largely on data about and analyses of past procurements. The purpose here would be straightforward, namely, to inform acquisition executives about what has worked and what has not, so that they might better guide their own policies and activities. The second kind of research is evaluative research that attemrts to assess pfogressr success, or failure of ongoing activities (what you called *experiments” in your report). Here we run into what yo:: might call the “moving target problem.” This is, when one is involved in research on cur- rent acquisitions or procurements that mz.y involve millions of dollars and for which there must be many ongoing, simul- taneous management actions, (1) it is difficult to specify an analytical quantitative basis with whicS out,-omes can be corn par ed , to ascertain the true effects of changing the variables of the problem: and (2) when one finds that a pro- curement is headed in a possibly inefficient direction, one cannot let it go forward simply for the sake of the research experiment, because of the potentially large amounts of money that may be inefficiefitfy spent. Therefore, over the lifetime of a procurement, the evaluative research will in- teract with the procurement and it may be difficult at the end to separate the contributions , alrd lessons emerqing from the research, from the results of independently made manage- ment decisions that may or may not have been formed by the research. Thus, while evaluative research in parallel with acquisition experiments is extremely important, it is likely not to be able to follow strict analytical, scientific prin- ciples. A great de&l of forebearance is therefore required of the research managers, the participants in the research, and the recipients of the results, in interpreting and assessing the meaning and value of the research or its re- sul ts. a/Views of Dr. Seymour J. Deitchman, Institute for Defense Analysis. 44 APPENDIX V APPENDIX V THE GAO MODEL d/ The impression conveyed by the GAO model (see fig. 4-5, p. 26) and the discussion in the report is that a substantial commitment of resources should be devoted to procurement research, and that it should be largely directed research into questions surrounding current policy initiatives. 1/ The model recognizes the subject of independent researcfi; but the thrust of the report is that research should be rather fully coordinated. Cne great advantage to this is that the researcher should experieilce easier access to source infor- mation for projects coordinated at the levels indicated in the model. There is an o-Zfsetting problem with the degree of in- tegration contemplated by the model, It would tend to chan- nel the researcher's efforts into support of directed study efforts. This is a valuable capability, but may tend to limit conceptual and original idea formation as a part of the research programs. z/ 9 * * * * There is no one best way to manage the conduct of re- search. The environment in the agency determines (1) the organizational, functional, and administrative structure, (2) the operating research management methods (modus operandi), (3) the types of individuals assigned to research and the mix of research disciplines titilized, and (41 the transient research opportunities. z/We offer no opinion as to the size of a resea-rch program; it would vary with importance of the procurement process to an agency‘s missions and with the extent of problems being encountered ind new policies being initiated. z/The model is both top down and bottom up; a research need and candidate can enter at any level and from any source. We did clarify the model to highliaht availability of dis- cretionary or independent research by the tesearch activ- ity. a/Views of Dr. Stanley N. Sherman, The George Washington University School of Government End Business Administra- tion, and Lt. Col. Daniel E. Strayer, Executive Director, Air Force Business Research Management Certer, respectively. 45 APPENDIX V APPENDIX V The GAO model, which is essentially a top/dovn research approach, “appears” to present a one best way to nanage pro- curement research. This perception by others, including agency top management, could be damaging to research in that the researchers might find themselves locked in to a rigid top/down research management system which, in turn, could hamper effective research. A/ The model proposed also appears to be too oriented to assigning responsibilities and producing reports as the final product at the end of the research cycle. Research is more concerned with determining what needs to be done, doing things, and getting results, rather than with issuing final reports. Also, research communications with operating managers should occur during all the research steps. It is a continuous process of incremental updates, and is also a subtle mechanism to keep operating managers informed, turned on, closely involved in the ongoing research program, and ready to provide the necessary sponsorship and support. 2,’ GETTING ------------- RESULTS a/ - Research findings from two recent studies of major pro- curement procedure change efforts support the conclusion that the human elements of the change adoption process dominate oft at least, very strongly influence the success or failure of new performance programs. Further, the findings strongly suggest that beliefs held on three important variables by people involved in change are strongly associated with their acceptance cir rejection of the change and thus with the suc- cess or failure of the project. These variables are: need, cost of implementation, and benefits of implementation. The implications of the significant human role in suc- cess or fsilure of new performance programs are great. They -------------- L/Ibid., footnote 2, p. 45. q/The above comments have considerable merit, but research work (successes and failures) needs to be documented in some fashion for the future. c/Views of Lt. Col. Daniel E. Strayer, Executive Director, Air Force Business Research Management Center. 46 APPENDIX V APPENDIX V touch everyone concerned with new performance programs: the authorizers, the developers/researchers, and the users. The following guidelines are offered: --Insure that the need for improved performance is under- stood and accepted at all levels of the affected orga- . nization. Charters from top management, a frequent initiator of change. are not necessarily sufficient to guarantee success. --To the extent possible, involve potential users in de- veloping the new performance program. This helps avoid solving the wrong problem and provides essen- tial credibility regarding the need for improvement, costs of implementation, and expected gains. --Design the performance program to minimize the costs of implementation. Be sure that performance improve- ment, not 'technical sophistication is emphasized. --Use pilot tests to establish credibility, quantify the achievable benefits and assess the costs of imple- mentation. This critical step provides meaningful hard facts to counter the detractors and emphasize t!le need for the new program and the high benefits that should accrue in relatior‘ to its cost. (If the payoffs are not significant, the project must ask the hard questions and make appropriate decisions.) --Address the implementation question at the outset and manage it as a tctal effort. Use training liberally and in advance of need. Be sure that the training materials address the needs, costs, and benerits associated with the new performance program, not just the technical innovations+nvolved. 47 l ’ * . AP2ENDIX VI EXECUTIVE OFilCE OF THE PRES~JENT OFFICE OF MANAGEMENT AND BUOYED WASHINGTQN. OS. 2OS03 OFFICE OF FEDERAL PRCCUREMENT POLICY Mr. Victor L. Lowe Director, General Government Division General Accounting Office Washington, D. C. 20548 Dear Mr. Lowe: This is in response to your letter of June 10, Honorable Bert Lance, forwarding your drafe proving Federal Procurement and Acquisitfqb Research." that have gone on to make our current system work.;' 48
An Organized Approach to Improving Federal Procurement and Acquisition Practices
Published by the Government Accountability Office on 1977-09-30.
Below is a raw (and likely hideous) rendition of the original report. (PDF)