Government Acquisition in COVID-19 Crisis

Government Acquisition
in COVID-19 Crisis

4 Steps Acquisitions Leaders Can Take to Support their Agency and their Workforce

The Procurement Process Isn’t Easy

As the Federal government moves into its "new normal" of responding to and rebuilding from COVID-19, the acquisition workforce will be in more demand than ever. Agency programs will need their acquisition colleagues to rapidly solicit and award innovative new contracts while ensuring contracts for the sustainment of program missions are recompeted. This will all need to be done while most professionals work from home

4 Recommendations

As acquisition leaders plan their organizational strategy to address these challenges, Censeo recommends focusing on four priorities

priority-1.svg

Expand Supply Base for Critical Products and Services

As the Federal government ramps up its response and recovery efforts, it will need to find new and innovative vendors to supply medical devices and personal protective equipment (PPE).

We are advising our clients to:

  • Conduct market research to identify suppliers who are not currently doing business with your agency. Only 1% of businesses in the United States have sales to the Federal government, meaning agencies do not have direct access to most of the American industrial output. Agencies should conduct targeted analysis to identify alternative sources of supply for key supplies, focusing on finding the thousands of potential suppliers who do not (and likely do not know how to) sell to the government. By proactively engaging with these suppliers, agencies can quickly expand their sources for their most needed products.
  • Establish a point of contact to field unsolicited proposals for innovative solutions related to COVID-19 response & recovery. For example, DHS recently launched a COVID-19 "Procurement & Acquisition Innovation Response ("PAIR") program to help the agency manage "the significant surge in inquiries and offers of help that we have been receiving from industry and others in response to the COVID-19 pandemic."
  • Take advantage of the procurement flexibilities made available to agencies, such as:
    • Expanded use of Other Transactional Authorities (OTAs); For example, the CARES Act includes a provision waiving the $100M limit OTA transactions conducted by HHS
    • The raising of the micro-purchase threshold to $20,000 for domestic purchases and raising of the simplified acquisition threshold to $750,000 for domestic purchases through the President’s invocation of the Stafford Act.
priority-2.svg

Ensure the Integrity of the Existing Supply Base

40% of Federal discretional budget (over $900B per year) goes to contractors. The majority of money is spent on highly skilled professionals and companies that specialize in meeting the unique needs of the Federal government. It takes years, if not decades, to build this expertise, and if these individuals and organizations exit the market they will not be easy to replace. Therefore, its essential agencies support their current contractors to ensure their goods and services are available throughout, and after, the crisis.

Specifically, we recommend that agencies:

  • Limit stop work orders and continue paying contractors whose services cannot safely be performed during this phase of the crisis. This is especially important for small businesses who cannot absorb the cost of a shutdown; in fact, our analysis suggests many small businesses are just now recovering from the budget shutdown of early 2019.
  • Support contractors whose costs to due to COVID-19. For example, OMB has provided guidance that agencies should consider equitable adjustments for contractors who took reasonable actions to protect the health of safely of contract employees.
  • Conduct good-faith negotiations with contractors whose delivery timelines are extended due to COVID-19. If timelines need to be extended, agencies should add funding to cover the contractor’s reasonable costs.
priority-3.svg

Maintain Strong Management of Current Contracts

As the Federal government ramps up its response and recovery efforts, it will need to find new and innovative vendors to supply medical devices and personal protective equipment (PPE).
Most Federal contracts can be executed during the COVID-19 crisis, albeit with some disruptions. For example, much of the $70B agencies spend on professional services can be delivered using a remote / work from home model. It is incumbent on Federal personnel to continue providing oversight of those contracts.

Federal acquisition leaders should issue guidance to their agencies on how performance management can be modified in the current work environment. For example, professional services contractors are often managed via a weekly status meeting. If this is no longer feasible due to telework arrangements or shifted work schedules, those contracts could be managed through formal written status updates.

Additionally, in a typical year more than 30% of contract recompetitions happen in the fiscal 4th quarter. Agencies should triage these planned recompetitions and identify which contracts could be extended to the first quarter of FY21. Contracts for the provision of commodity products or low-complexity administrative support services are prime candidates for extensions. These contracts, while important for sustaining agency operations, are well suited for bridge extensions as agencies typically have robust mechanisms in place to ensure cost and quality control. Putting these bridges in place now will help ensure the contracting workforce can focus on COVID-19 related contracts without negatively impacting other aspect of agency operations.

priority-4.svg

Establish Procedures to Address Long-Term Telework of the Acquisition Workforce

Leaders should put tools and procedures in place to support the acquisition workforce with the assumption that social distancing and telework guidelines will remain in place through the busy summer contracting season.

Specifically, acquisition organizations should develop strategies for:

  • Collaborating with Program Offices: This may include using virtual white boards for creative problem solving, increasing the use of document collaboration tools (such as those provided by Google and Microsoft) to more seamlessly work on acquisition documents, and setting explicit "service level agreements" expectations to all stakeholders to understand their respective roles and expectations.
  • Communicating with Industry: This may include online industry days, increased use of webcasts, and virtual oral proposals.
  • Revised Workflows: Given the reality of daily challenges such as childcare, supporting sick family members, and previously simple day-to-day activities such as grocery shopping, Productivity will be lower for professionals this trying time as we all work through challenges including childcare, supporting sick family members, and previously simple day-to-day activities such as grocery shopping. Given this reality, contracting offices should be prioritizing process resiliency vs. process efficiency. Efficient processes typically have low redundancy and are executed "just in time" but are susceptible to process breaks when something goes wrong. Resilient processes are strategically designed to include some redundancy and lag time. This often means a more expensive process, but it limits the risk of an overall process failure. For contracts that must be awarded by the end of the fiscal year, or for contracts that enable COVID-19 response of recovery, a resilient process flow may be the right choice.

Conclusion

By quickly establishing long-term teleworking policies for the acquisition workforce, agencies can enable their staff to quickly acquire urgent supplies for the COVID-19 crisis – time sensitive and critical acquisition of ventilators, PPE, and medical supplies. Once the health crisis is being dealt with, acquisition professionals have a variety of options when it comes to helping contractors manage the economic fallout from coronavirus, including making modifications to current on-site delivery work that can be reasonably performed in teleworking delivery models, allowing for flexible delivery timelines, and extending contracts for commodity goods and services. By doing so, the acquisition workforce can prepare itself to not only respond to the new demands and challenges of COVID-19 but be well-positioned as a large percentage of contract recompetitions and new requirements increase in the federal 4th fiscal quarter.

How can we help you manage acquisition during Covid-19?