Following up on the podcast, here’s a bonus Q&A with the gracious Victor Deal:
Eric: During the podcast, you said: “There’s this sense that perhaps the contracting [officer] is not the right individual to be leading the business transactions, and that’s really one of the major pivot points playing out today in the acquisition workforce.”
I should have followed that up with more questions. Let me provide an interpretation and get your reaction:
Authority is split between the program manager — responsible for approved program success — and the contract officer — the legal representative who’s responsible for the propriety of the contract (and, I suppose a third is the plant rep at DCMA cost & pricing).
Now the problem becomes that OTAs/CSOs are primarily for innovation. So you have this very subjective and open competition based on merit, not cost-realism or whatever else, making the contract officer basically unqualified to do evaluations.
You need a program manager who is competent in the technology area and its affect on military requirements, and all that, which is a very different skill set than we traditionally provide contracting officers.
And this brings us back to whether the program manager takes charge of the program or whether she/he is merely a caretaker.
How does that sound? Let me know where I’m off.
Victor: I want to clarify: the program manager is always the single ultimately responsible/accountable official and contracting officer is always only a business advisor/facilitator. Program managers are the ones who own the evaluation process; and it’s the program manager or an individual in the program manager’s chain of command that makes the award decision, not the contracting officer or any individual in the contracting officer’s chain of command.
Integrated program teams (IPTs) are from a historical perspective, a new and important development that helped maximize benefits from tradecraft specializations. Because other transactions (OT) authority allows professionals to re-imagine almost every aspect of a transaction, the process of forming and structuring IPTs can’t escape questioning.
In saying that, the “OT for prototype project” statute does not actually specify who is empowered to bind the government into an OT agreement, but it does make Senior Procurement Executives responsible for certain determinations, which is why OTs for protype projects fall within the general purview of contracting today. A natural consequence of this is that agreements officers in DoD have in the past been required to also be warranted contracting officers. (Note: As an aside, “OTs for research projects” are awarded by warranted grants officers and are a separate matter altogether). There are some who feel this requirement should be changed.
Because OT statutes do not specifically segregate powers, some have pointed that it is statutorily permissible to imagine slimmer IPT models where someone besides the contracting officer performs an agreements officer’s duties (e.g., the program manager). I don’t disagree, but counter that if this is a worthwhile change to consider seriously, then that individual should still be held to the same standards, levels of accountability, acumen, etc. that was expected of a professional “busines advisor.” This in essence means that the program manager has to pass a contracting officer’s warrant board and become a de facto contracting officer (note: NASA awards OT agreements through their legal office, not their contracting office, but I’m not sure many would prefer this variant until some culture changes occur). In my opinion, this limits the program manager/agreements officer combination to low-dollar, yet still very important, acquisitions where the benefits of a slimmer IPT can be truly realized and the education, training, business risk, and technical complexities may be more reasonably managed.
The world of procurement contracts provides a parallel thought-exercise worth working through: the signature on the bottom of an awarded agreement serves a different purpose from the signature on the bottom of the “acquisition strategy” and the “source selection decision document” (SSDD). This has meant that signing a procurement contract is largely an administrative matter left to a contracting officer, while documents signed by those who are not contracting officers are primarily for recording a leader’s decision. If in the world of OTs, one conflates the two by making administrative signing-authority synonymous with the signature of a decision-maker, one could argue that this is the definition of accountability, but this would likely decrease real accountabiity because it’s not feasible to expect one individual to possess the needed expertise, etc.
Furthermore, the person who signs the binding legal document has had to consider and do a lot of work unrelated to the source selection decision itself, and the person who makes the award decision is not likely to spend time on process and may have also had to consider aspects unrelated to the transaction itelf that may in fact at times be somewhat conflicting, which means that combining the two roles could lead to creating irreconciliable differences. In maintaining the status quo, potential conflicts do not have to be reconciled for an award to occur and the GAO has intervened when the OT process is not followed.
If you look back at the reason why the institution and the business-side of acquisitions is complex, a natural, balanced outcome would be to create a separate warranting process for agreements officers that in many ways align with the current one for contracting officers, but still would have differences, too. To do otherwise by appointing program managers to serve as agreements officers without a warranting process ignores history (see intro to CSOs on DAU about trust/contracting bonds in the 1800’s and research why DAWIA was passed into law in the first place), and the acquisition tradecraft would take a step back in time to re-experience what the world was like when there was no professional business advisor around.
Eric: When I think of an IPT, usually I think the leader is the Program Manager. So this person coordinates the approved program requirements and is the most important element in the SSDD, while the contracting officer administers the legal agreement.
I understand the checks-and-balance point, and the fact that if the PM is also the Agreements Officer, then he has double-duty. So this makes it rational to (1) have a specialized contracting officer; and (2) take him/her out of the PM’s chain of command.
But Ronald Fox mentions without explaining the potential problems that can arise from the separation power, such as on the A-12 (pp. 20-22). Here is a Bloomberg article:
Part of the problem is that the procurement system operates in disjointed silos. “Right now the contracting officer does not report to the program manager,” Evans says. “The program manager is the one who worries about meeting the needs. … But the contracting officer doesn’t report to him, so you have a tendency at times to see behaviors based on different performance goals that must be met to progress in his field.” A contracting officer puts emphasis on getting the best price and on making sure there is competition, she explains. “That’s a lot less of a concern to the program manager who wants to make sure he gets the need met at the end of the day.” Sometimes there are “disconnects, if you will, between those two communities,” says Evans. “So the program manager ends up with less than what he needed or wanted, and I know there’s an increasing amount of tension about that.”
Victor: I’d say that contracting officers that over emphasize price don’t have context for their role/job within the research & development setting. There should be no space between a program manager and contracting officer with regard to meeting mission needs.
Eric: From what you said above, it sounds like you don’t see much benefit to dual hatting the PM as Agreements Officer, but what about just sticking the warranted contracting officer under the PM’s chain of command? Does that make the contract officer conflicted between following regulations/laws and following the PM? I would think that’s a non-issue because regulations/law is the rules of the game for the PM too, just as the laws of physics bounds what the PM can tell the systems engineer to do.
Victor: Aligning programs by functional organization is a positive development and necessary for any modern enterprise of scale. Any reversion is a step back in time.
Eric: What do you make of the following interpretation? If the transaction costs due to CO/PM conflicts are large, then you want to put the contract officer underneath the PM’s authority, and if the damages due to waste, fraud, and abuse are large, then you want to separate the contract officer from the PM.
Victor: I don’t see the utility in putting a contracting officer under a PM’s authority. Rather, call that person a project or admin coordinator instead. But scale demands specialization and that’s when you want a CO. If transaction costs are “low”, then the PM can be the CO.
Eric: Am I conflating this question of the contract officer with other sources that constrain the PMs authority? This has been a perennial issue. The original “full-blown” program office concept from the 1950s had a single manager with a “substantial degree of control over resources [and] a substantial technical staff attached to them.” That time makes me think about letter contracts, etc. But perhaps that was only achieved on exceptional programs like Atlas and Polaris.
Victor: I haven’t looked up or studied the full history, but it would seem to me that the separation of responsibilities was driven by a combination of regulation (in advance of expected legislation) and legislation.
https://www.gao.gov/assets/700/692749.pdf
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.464.2868&rep=rep1&type=pdf
Eric: It seems that from the 1956 Robertson Committee, to the 1971 DOD 5000.1, to the Packard Commission in 1986, and on to today, we’ve always been looking to strengthen program manager authority and lengthen their tour of duty. But neither has happened. What’s going on here? Is that mostly about JCIDS requirements, milestone approvals, and funding authorizations, rather than issues around the contract process?
Victor: Strengthening PM authority has a lot of issues to unpack. Lengthening tours of duties has more to do with the military issues rather than acquisition issues. Here’s slides that may be of interest.
https://www.cpms.osd.mil/Content/Documents/SWP_DoD_PlanningforSuccess.pdf
Thanks again Victor for great insights.
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