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How are we managing $500 billion in contracts? Does anybody know?

How are we managing $500 billion in contracts?  Does anybody know?

In FY 2013, the Federal Government will spend about $500 billion on contracts with private sector firms.  This number is down somewhat over the past few years as the Obama administration has sought to consolidate contracting activities and bring back some of this work in house.  Yet $500 billion is a huge amount of spending, and indeed, the US federal government is the largest single buyer in the world.

The sheer volume of federal contracts, and the vast sums of money, point to the need for effective oversight and sound contract management.  Yet across the government, there is very little known about how well contracts are being managed.  We may know how many contracts there are as well as how much is being spent, but this doesn’t tell us anything about the quality of federal contract management.  And some may not even dare to ask, not knowing what they’d find.

How could the federal government get at this information?  Well, first, you need a data source that has data on every contract and contract manager (COR) that goes far beyond what is provided by the procurement systems government is using today.  Managers don’t just need to know how many contracts are out there, or how much has been spent, they also need to understand and ensure that every step along the procurement lifecycle, all the way from presolicitation to closeout, is being conducted according to regulation and in the most efficient way possible.

Second, you need this information on an ongoing basis — a type of time lapse photography, if you will.  With snapshots taken at regular intervals, federal managers will be able to pinpoint the problems along the way, identify the bottlenecks or disconnects, and identify the workers who need the most help.

Third, you shouldn’t have to go looking for this data; it should come to you automatically, in a format that is useful to you.

This is true business intelligence and it is time to start putting modern BI tools to work in federal contract management.  With comprehensive, time-lapse data brought directly to you in a useful format, managers can finally start to answer the question of how well contracts are being managed.  Managers can also take the right steps to solve the real problems, because now those specific problems have been identified, with the data to back it up.   Only with this information can we be assured that the $500 billion the government spends annually on contracts is spent properly and gets the very best value for taxpayers.

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