Issa: Federal government should buy IT as if it were a single organization


A basic assumption behind a draft federal information technology acquisition and organization reform bill is that all federal agencies should buy IT as if the federal government were a single entity, said its primary backer, Rep. Darrell Issa (R-Calif.).

"We don't buy that way now. We buy as if we are different companies, and we pay different prices," Issa said during a Feb. 27 hearing of the House Oversight and Government Reform Committee, of which he is chairman.

Issa in September posted online a draft (.pdf) version of the bill, the Federal Information Technology Acquisition Reform Act; the committee is now evaluating responses, Issa said.

Among the draft bill's proposals is creation of a Federal Commodity Information Technology Acquisition Center that would "serve as a focal point for coordinated acquisition practices and...obtain lowest costs for the Government in the acquisition of commodity IT."

Overall, the federal government could potentially generate 10 to 20 percent per procurement through consolidated purchasing known as strategic sourcing, said Cristina Chaplain, Government Accountability Office director of acquisition and sourcing management. "Federal agencies act more like unrelated medium-sized businesses and often rely on hundreds of separate contracts for many commonly used items," Chaplain said.

Strategic sourcing has been a long-called-for change to federal IT acquisition, but although some agencies and military services have managed to consolidate buying power internally, it remains difficult in many decentralized agencies whose components have their own appropriations and difficult to impossible across multiple agencies. Among the challenges are the discipline required for aggregating purchases--and the concomitant waiting periods associated with it--concern that small businesses continue to receive a share of purchases, diverse technology environments and different spending pressures that result in some agencies needing to put money on contract sooner rather than later.

Private sector companies, for their part, have balked at providing steep discounts in exchange for an unguaranteed promise of large orders. They've also noted that a bulk order delivered to multiple locations loses many of the economies of scale involved in distribution and shipping that bulk ordering is meant to invoke--and so because of the higher costs involved, results in a higher price.

Another section of the draft bill would mandate that prices on negotiated blanket purchase agreements would be treated as public information.

"I find it baffling that a company would claim that the price it is charging a federal agency for a good, or a service for that matter, would be proprietary. In any event, we need transparency across BPAs," said Dan Gordon, former head of the Office of Federal Procurement Policy, during the hearing. Gordon now teaches government contract law at George Washington University.

Stan Soloway, president of Arlington, Va.-based industry association Professional Services Council, said during the hearing that price transparency shouldn't include cost data such as labor rates. "The underlying cost elements are highly proprietary," he said.

For more:
- go to the hearing webpage (prepared testimonies and webcast available)

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