Competing Contracting Offices: Working Better, Costing Less
Sorber, Karen, Straight, Ronald, Public Administration Quarterly
Acquiring supplies and services is one function common to most government organizations.(1) Generally, customers submit their requirements to a designated contracting office, which then follows a set of complex rules and regulations while taking action to execute a contract eventually to satisfy the requirements. This process is often frustrating to customers who have no choice but to accept whatever quality of service is provided by their designated (i.e., monopoly) contracting office. Even the people who are doing the contracting have themselves expressed frustration with the system. According to Kelman (1990:10), 29 percent of those providing he service said that the process takes too long.
In spite of these problems, contracting offices in the public sector are routinely being asked to take on more and more responsibilities. Today there is much emphasis on contracting out services that government organizations have traditionally performed. According to Osborne and Gaebler (1992:87), procurement of services is challenging primarily because of the difficulty in writing and monitoring contracts for services. Despite the difficulty, Osborne and Gaebler found that customers have tended to be highly satisfied with contracted services (Ibid., 89).
The authors believe that establishing competitive contracting offices (CCOs) that succeed or fail on their own performance will reduce much of the frustration associated with the federal government's contracting process. Adopting the CCO concept can lead to reductions in costs and improvements in performance--key goals for the current administration.
OVERVIEW OF CCOs
The authors presented the concept of CCOs at the 1989 Acquisition Research Symposium (Straight and Sorber, 1989:287). Under that concept, project officers (customers) would have a free hand in selecting any CCO to prepare and award their contracts. Customers would pay the CCO for its services and the chief of each office would be responsible for its financial "bottom line." The project officer's freedom to select the best CCO, and the resultant financial pressure on CCOs to provide timely and effective support, should naturally lead to a more effective and efficient contracting process. In the 1989 paper, the authors discussed the advantages to the customer when dealing in a competitive environment rather than with a monopoly, given the latter's tendency toward inadequate service, inflexibility, and indifference to customer requirements.
An important feature of the CCO concept is the provision of financial awards to managers and employees when the organization exceeds its financial operational goals (i.e., revenues exceed expenses). In conjunction with the pressure to compete for contracting business, those awards should motivate both managers and employees to develop a keener customer focus.
In a subsequent paper, presented at the 1991 symposium, the authors examined several implementation issues associated with CCO establishment, many of which focused on customer satisfaction (Straight and Dean, 1991:171). Drawing upon the results of a survey of people in the acquisition community, the authors concluded that the proposed CCO system should result in greater customer satisfaction. However, many respondents were concerned that contracting personnel would face a conflict of interest in that they might be tempted to satisfy the customer at the expense of regulatory and legal compliance.
Several thoughts on the morality of contracting personnel are offered. First, and most important, contracting personnel are held to a high standard of ethical behavior. They routinely have to disclose financial interests, certify compliance with various procurement integrity laws and regulations, and receive ethics training. When scandals do occur, senior government officials, inspectors general, and others scrutinizing the procurement process generally find that, with the exception of the bad apples involved in the scandal, the procurement workforce is highly ethical. …