A16:
IMPROVE INFORMATION TECHNOLOGY ACQUISITION

CONTINUING THE REVOLUTION: INFORMATION TECHNOLOGY ACQUISITION REFORM

Imagine this: After revolutionary changes in federal acquisition and information management processes, federal managers can acquire and use commercial-off-the-shelf (COTS) items and make information technology acquisitions with efficiencies comparable to those in the private sector.

The Federal Acquisition Streamlining Act of 1994 and the Federal Acquisition Reform Act of 1995 removed many of the statutory and paperwork requirements associated with buying commercial items. But for many information technology (IT) system components, acquisition policies and procedures remained time- and manpower-intensive.

The Information Technology Management Reform Act of 1996, which along with the Federal Acquisition Reform Act is known as the Clinger-Cohen Act of 1996, specifically addressed information technology acquisition reforms. These reforms included abolishing the General Services Administration Delegation of Procurement Authority and eliminating the General Services Board of Contract Appeals hearings on protests of information technology procurements. The Act also provided federal agencies with the flexibility to acquire information technology components quickly and tailor the acquisitions to meet specific requirements.

Many agencies prefer COTS equipment used by the private sector, rather than asking for specially designed components. To further enhance the government's ability to acquire commercial items economically and effectively, the Clinger-Cohen Act authorized a three-year test of simplified procedures for purchasing commercial items up to $5 million.

Even with all these reforms and changes, continuing information technology acquisition reform is essential. The Under Secretary of Defense (Acquisition and Technology) has described the changes and improvements achieved to date as the "end of the beginning" of acquisition reform.¹

NEED FOR CHANGE

No one believes that the reform mission has been completed. Processes for acquiring COTS equipment and for evaluating contractor past performance need to be analyzed and streamlined.

The purchase of commercial items has already produced savings. However, the integration of COTS components poses management and technical challenges. The Federal Aviation Administration (FAA) recently made several recommendations to help manage these challenges.

One of the major recommendations recognized that "systems composed of commercial-off-the-shelf components will be in a continual state of enhancement because of the commercial market pressures that vendors face to improve product functionality and performance."² This continuous state of improvement needs to be recognized. Federal approval, testing, and certification practices must be improved to deal with frequent system changes in a timely manner. The Information Technology Management Reform Act requires that each agency analyze the actual costs and the benefits achieved by the system. This means that agencies must understand how continued improvements to system components will benefit the agencies, and incorporate those benefits in their analyses. These changes will enable the agencies to take advantage of product improvements and advances in technology.

Three specific approaches can enhance the government's ability to acquire commercial information technology products and services. All three move the government toward using commercial acquisition practices. Commercial firms follow the "buy a little, test a little, fix a little" approach, bringing in nine to eighteen month increments of technology which make measurable contributions to bottom line business processes. They test commercial products once to ensure their suitability and compliance with organization-wide technical standards. This compliance testing is known as "benchmarking." Finally, they consider past performance of suppliers in awarding contracts. The statutory changes of the last several years have made it possible for the government to follow these practices. The challenge now is moving forward on and reaping the benefits of implementation.

ACTIONS

1. Develop best practices for modular acquisition of standards-based open system technologies.

By July 1997, the Government Information Technology Services (GITS) Board should identify a working group to develop best practices for modular acquisitions. The group should include representatives from the procurement, standards, and technology communities.

2. Establish a "benchmark once" approach for COTS products.

By October 1997, the Chief Information Officer (CIO) Council should examine agency processes for benchmarking COTS products once and making the results available to all agencies. This could include the designation of particular agencies as "executive agents" for benchmarking certain categories of products.

3. Identify and publicize best practices for evaluating vendor past performance.

By April 1997, OMB's Office of Federal Procurement Policy (OFPP) should publish a guide to best practices in evaluating vendor past performance. OFPP should consult with the agencies and industry in developing the guide.

ENDNOTES

^1. Dr. Paul G. Kaminski, "Acquisition Reform Acceleration Day," Speech, May 31, 1996.

^2. "Use of COTS/NDI In Safety-Critical Systems," Report of the Challenge 2000 Subcommittee of the FAA Research, Engineering and Development Advisory Committee, February 14, 1996, p.lxv.