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Practitioner Perspectives

April 2023 – Vol. 12; Issue 𝜋

Procurement Reform Takes Center Stage in 2024 Budget Request

Current State of Affairs

We have seen the struggles. They are real. Since the advent of COVID-19 and with the move to remote work, procurement shops are having more and more difficulty getting their work done. These procurement shops are often understaffed and the technical teams that help them write and release RFPs are also working remotely, with their job and procurement demands far exceeding hours in the day. This has driven contract delays as procurement shops struggle to release RFPs on time and to release them with consistently high quality. Delays are compounded by the Sisyphean attempts to slow down and “protest proof” procurements, only to have many protested anyway. According to the FY22 GAO report, the number of protests has gone down year-over-year, likely as a result of delays. At the same time, the effectiveness rate where the protestor obtains some sort of relief has reached an all-time high of 51%. Nobody is happy.

Efficiency Gains

To combat these challenges, the government has attempted to drive efficiencies. Contract consolidations and scorecard evaluations are response to the need to lessen the burden on procurement teams, but these are mere band-aids over bullet holes. The 2024 Presidential Budget Request includes several initiatives aimed at achieving real efficiency gains. To combat the attrition in the contracting officer community, the 2024R budget proposes broad use of ChatGPT and other emerging AI/ML tools to automate RFP generation. While this promises to dramatically decrease RFP cycle times and improve writing quality, efficiency gains are most sorely needed in the proposal evaluation process. Where early OCR efforts to automate scoring met with mixed results, the 2024R budget proposes sweeping reforms to the evaluation process, to include crowd sourcing, web-based polling approaches, and – a particular favorite of the Biden administration – borrowing the Social Credit System that the PRC has proven to be a best practice.

Force reconstitution by source chart

Protest Reform

As no real procurement process improvement can be had without protest reform, the 2024R budget promises the most sweeping changes since establishing the OFPP in 1974. For starters, introducing “loser pays” terms to the protest ecosystem would dramatically cut down on the number of frivolous protests. Similarly, changing the default setting from allowing incumbents to continue performing work in the wake of a timely protest would erase the overwhelmingly positive net present value of a protest and make incumbents think twice. The 2024R budget goes further still, borrowing some commercial innovation from Roger Goodell and limiting bidders to a maximum of two “challenges” per fiscal year. Taking a page out of the Fairfax County Public Schools handbook, the 2024R budget proposes to cut down on protests by no longer notifying winning bidders, so as not to hurt the self-esteem of losing bidders and would-be protestors.

Reconstituting the Force

The third leg of the procurement improvement troika is immediately reconstituting the force. Unlike the false claim that the IRS would be hiring 87,000 agents, this surge is real. Procurement staffing is at 1970s levels and the 2024R budget calls out the need to hire nearly 100,000 contracting officers, COTRs, and legal specialists. Attracting this talent in a tight labor market – and ensuring they are the most diverse work force – will require tapping non-traditional talent pools. While Buy American mandates forbid offshoring, opportunities abound in sourcing procurement talent from the ranks of recently displaced tech workers and treasury managers at SVB. Relaxing citizenship requirements and prohibitions on felonies will also enable procurement nearshoring opportunities along the southern border, in Martha’s Vineyard, and from prison populations. Finally, the Administration will harness the power of the Gig Economy with on-demand staffing from the new procurement app, “Güber.”

2024R Initiatives to Improve Procurement

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