WashingtonExec had the opportunity to interview Steve Kelman, Professor of Public Management at the Harvard Kennedy School of Government. Kelman also spent time in the federal government, including during the Clinton Administration under Vice President Gore’s National Performance Review. Kelman provided predictions about the effect of spending cuts on government contractors and also talked about what issues Steve Van Roekel should consider in his new position as federal CIO.
An insightful read from a former public sector executive and now academic.
Kelman gave some “tough love” to small business contractors, with hopes to see more innovation instead of “body shops” from the sector in the future. The issue of protests from contractors, as well as what he believes is the one thing government contractors do not understand about the federal government, were also discussed.
WashingtonExec: What advice would you give to the new Federal CIO, Steve VanRoekel?
Steve Kelman: Too many newly appointed political executives believe that “making their mark” involves tearing up anything their predecessor did and starting with their own “signature initiatives.” My advice to the new CIO is: Vivek Kundra has left some very important but uncompleted initiatives on your plate, your job is not to abandon them or feel you need to come up with something new. Your job should be to execute and to make those happen.
At a more tactical level I’ve been somewhat concerned that the atmosphere at these Tech Stat meetings has been too confrontational with the agencies, which in turn encourages them to hide information and not really approach this as a learning exercise so I would urge the new CIO to change the atmosphere at these Tech Stat meetings and make them less confrontational, less “gotcha” and more learning exercises.
WashingtonExec: Given the inevitable cuts in government and federal spending, where do you see federal procurement in the next five years?
Steve Kelman: The most reachable version is that some nominal dollar decreases throughout the whole government will occur. The contracting community needs to be ready for that. I think it is simply a fact of life. I also think that there’s going to be a lot of emphasis and priority on choosing initiatives or choosing projects that have a good ROI and that save the government money and/or within any given project looking for ways to save money. In this budget environment, for example citizen service area programs are going to be regarded as nice to have but not essential. We are already seeing significant cutbacks in money for e-government initiatives and so forth. I think that more and more of the proportion of the government’s money is going to be spent on either things that have to be done to fulfill the mission and there is no way around it and/or are investments to save money.
I also think the government will be taking initiatives to look for ways to save money, including negotiating more aggressively with contractors. If a contractor has a lot of work with different parts of an agency, looking for ways to get quantity discounts on labor rates reflecting the entire spend that the agency has with the contractor, not just a specific contract. Officials are going to be open to suggestions from contractors about ways to save money.
WashingtonExec: We have a lot of small business CEO readers. Do you see a specific role for small business in the new economic government climate?
Steve Kelman: Yes, and I make several observations. I think the small business government contracting community needs to do a better job imitating its private sector counterparts – that is to say small businesses grow and get business in the private sector by building a better “mousetrap” innovations. I think that too much of the small business contracting community in the government space has been either some sort of version of a body shop, just providing warm bodies for fairly generic requirements, or reselling a lot of people’s products. I am somewhat disappointed by the level of innovativeness coming out of the small business government contracting community as a whole, not to say there are not many specific examples of innovative small businesses. The growth model for small businesses in the government space is different from the growth model for small businesses in the private sector space. Small business government contractors are less oriented towards innovation and building a better mousetrap.
If I were a small business marketing executive, I would go to the government customer and say small businesses can provide a cost advantage if you structure the contract in such a way that we can bid as primes and don’t need to be subs. A third piece of advice, related to Vivek Kundra’s 25 Point Plan Initiative, is that as IT projects are more done in chunks where you perhaps have an overall architecture with some basic plug-in modules that are bolted on to an overall architecture. That opens up opportunities for small businesses that probably didn’t exist before, because in the larger projects the government would typically want one or sometimes two very large business contractors, perhaps some small business subs but wanted large business to take on a large job. In this new environment more of the work is going to be divided up into modules, and I think that opens up opportunities for nimble and performance, oriented small businesses to get more work in IT development.
WashingtonExec: What is something you think most government contracting executives don’t understand about government procurement?
Steve Kelman: You know, I was intrigued by that question. It would have been an easy question to answer if you had asked me “what are some things the American public does not understand about the government-wide contracting system.” That would have been an easy one, such as the government does not pay $600 for hammers, the system is honest, Vice President Cheney did not choose Halliburton as a contractor. Those are things the public misunderstands about the contracting system.
When a contractor sees something the government does that either they don’t like or they perceive as unfavorable to them, like an RFP that they think that it is biased against them or something like that – there is a real tendency to look for conspiracies, to become paranoid, to think that the government is out to get them, and so forth. I think that nine times out of ten there is a very innocent explanation. The contractor should try to find out what is going on and then try to remedy it from there. I think that if you assume it is a conspiracy, you start thinking the only way to remedy it is by going around the contracting officer, the program manager, or going through a Congressman, when the easiest way to deal with a problem may have just been to talk with the government to find out a little bit more about what is going on.
WashingtonExec: Do you think that is why we have seen a lot more protests in recent years?
Steve Kelman: It is funny that you should mention protests, because I think that although most contractors know that government people don’t like protests, I don’t think they understand just how much government people really hate protests and how much poison it introduces into the procurement system. I think we are seeing an increase in protests for several reasons. One is that the budget environment becomes tighter, there is just more competition for work. I also think that during the last decade or so the cooperativeness of the environment between the government and industry compared to the ‘90s has declined. I think by the end of the ‘90s a lot of contractors thought that it was indecent to protest, not illegal, but that nice people didn’t protest. That sort of cultural disapproval of protests that grew up during the ‘90s when there was a more cooperative era between the government and industry dissipated in the last decade as the contracting environment became less cooperative between government and industry.