A modest proposal for improving federal procurement policy
Fair warning, severe procurement wonking ahead. I promise a shorter, less nerdy post tomorrow.
In today's Federal Register, the Office of Federal Procurement Policy (OFPP) published a proposed definition of the term “Procurement Administrative Lead Time,” also known by the acronym “PALT.” Although their definition is an improvement over existing definitions, I think it could be further improved.
Here's the proposed definition of PALT:
[T]he time between the date on which an initial solicitation for a contract or order is issued by a Federal department or agency and the date of the award of the contract or order.
Why does this definition matter? Well, let's see what OFPP says about it:
Establishing a common definition of PALT and a plan for measuring and publicly reporting PALT data are important steps in helping the Federal Government to understand and better address causes of procurement delays. PALT can help to drive continual process improvement and the pursuit of more innovative procurement practices, especially when the data are used in combination with other inputs for evaluating the overall effectiveness of the acquisition process in delivering value to the taxpayer, such as cost and the quality of the contractor's performance. PALT can also create incentives to drive greater efficiencies in the requirements development process, which has long been recognized as one of the most significant sources of delay in the acquisition lifecycle.
All good things, in theory. Understanding causes of procurement delay. Continuous improvement. Incentives in requirement-development process. These are good reasons to measure PALT, in theory.
And yet, for those not familiar with federal-procurement policy, PALT is the sort of topic that drives procurement nerds to drink. Traditionally, PALT has been defined as the time between requirement identification and the contract-award date. But defining the initial moment of requirement identification is notoriously difficult. To see the sort of debate between acquisition professionals on PALT definitions, check out the comments to this LinkedIn post.
Is the requirement identified when a the program office realizes it has a need? When it submits the “requisition” document? When funding has been identified and the funding document submitted? When the acquisition plan is finalized? Something else? The answer to this question varies from agency to agency (and, in practice, sometimes varies by contracting office by contracting officer). Perhaps because of these inconsistencies, and also because managers do not adapt PALT related to the “complexity” of procurements, PALT is widely seen as a dangerous, vanity metric.
The OFPP proposal avoids this complexity and instead simply focuses on “post-solicitation” lead time. Anything that happens before the solicitation is released is not counted. To those familiar with procurement, this is a bit of a cop out, because most of the delays in procurement happen before the solicitation is released. As such, the argument goes, PALT becomes meaningless. It certainly doesn't meet the primary goal of understanding and addressing procurement delays.
Even accepting post-solicitation as the right abstraction, the proposed definition further suffers because it incentivizes shorter turnaround times for solicitation responses. For those on the “industry side,” we are all too familiar with response dates due the day after a holiday weekend, or on a Monday.
So, is there any hope for PALT? I think there's a better path forward, though, admittedly it's a bit Solomonic. I propose that PALT be defined as the cycle time between the solicitation response and the date award. This is a proxy metric, and I think it's a surprisingly useful one.
Why is “post-response” time a good proxy metric for PALT? Because that time involves exclusively government work, and is therefore a relatively decent proxy for the things that might happen pre-solicitation. Once vendors have responded to a solicitation, the government begins to evaluate the proposals, negotiate, and prepare documentation for the award. There are many micro-decisions involved during this process, and there are real costs to delay.
From the contracting officer's perspective, the time between response and award limits the ability to take on other procurements. Similarly, from a program’s perspective, this is usually when executive types start getting antsy about time to award. By measuring the post-response cycle time, an acquisition team can work through strategies to improve scheduling and communications. It also can provide predictability to vendors about when they should be prepared to deliver, which will improve onboarding and reduce initial costs of ramping up.
Is it a perfect metric? No. But it does a better job of capturing the intent of the definition: understanding and managing causes of delay and incentivizing strong communication and collaboration between the program office and the contracting officer.
What do you think? Is this proposal better? Should I formally respond to OFPP? Let me know! Thanks for reading this very wonky post.