Effective acquisition practices = successful government PMO

Introduction

The challenges confronting the government acquisition workforce stem from the convergence of three forces: increasing numbers of workers reaching retirement age, political objectives to shrink the size of government, and the need to acquire an increasing number of increasingly complex systems. Shortfall in capacity has led to heightened cost, schedule, and technical performance risk. Increasing the efficiency and effectiveness of the overburdened government acquisition workforce may be the factor that differentiates between success and failure. That workforce must do a better job of structuring and awarding complex contracts and managing an increasingly outsourced workload. Government Program Management Offices (GPMO) play a central and critical role in successful acquisition, and must assume responsibility for enhancing the acquisition workforce's capabilities.

Recognizing that government organizations exhibit unique qualities in the way they manage programs, the Software Engineering Institute (SEI) built upon the acquisition practices of its contractor-focused Capability Maturity Model® Integration (CMMI®) to produce the GPMO-focused CMMI®-Acquisition Module (CMMI®-AM), published in February 2004 and revised in May 2005. Government departments and agencies—some of them assisted by The MITRE Corporation, a not-for-profit federally funded research and development center (FFRDC) working in the public interest and supporting those departments and agencies as a trusted advisor in their enterprise modernization efforts—continue to deploy CMMI®-AM.

This paper provides:

  • A general discussion of challenges that the acquisition workforce faces and the growing reliance on the GPMO to meet those challenges
  • Insight into the application of CMMI®-AM disciplines to address those challenges

Background on the Crisis in the Acquisition Workforce

Since 1955, the federal government's policy has been to avoid performing a service or producing a product for its own use if such a product or service can be acquired from the private sector (Bureau of the Budget, 1955). The premise is that the private sector can produce these goods and services less expensively. This policy became known as A-76 when the U.S. Bureau of the Budget issued Circular A-76 in 1966. Because the federal government spends about $300 billion annually on contracts for goods and services, a large acquisition workforce is required to establish and manage these contracts.

Theoretically, contracting out should make the government more efficient and better able to perform. In reality, extensive contracting has led to extensive contract management performance problems, as documented by dozens of Government Accountability Office (GAO) reports. According to Donald F. Kettl, “Reliance on contracting out has not so much solved the problems of efficiency in American government as aggravated them…. The more the government contracts out its core functions, the more it worsens its problem of capacity building” (Kettl, 1993, p. 16).

While the dollar amount spent on federal contracts is large and growing, the federal acquisition workforce, both civilian and defense, has been shrinking. Department of Defense (DoD) acquisition workforce reductions may have been appropriate early in the 1990s to match the decline in the post-Cold War defense budget, but the situation has changed. There has been an upswing in the defense budget to fight the war on terrorism and to defend the homeland, but not in the size of the defense acquisition workforce. Over the past 10 to 15 years, DoD has downsized its acquisition workforce by almost half, while defense contract dollars have approximately doubled.

Resulting DoD contracting problems include overpriced contracts and lack of attention to contract management. A recent U.S. Senate Armed Services Committee report accompanying the Senate FY 2006 defense authorization bill assigned a significant part of the blame for recent DoD contracting problems to continuing reductions in the defense acquisition workforce (Barr, 2005). The Senate report on contracting laws and rules was critical of DoD's excessive reliance on contractors to perform acquisition functions that the DoD no longer has the in-house capability to perform itself. To remedy this situation, the Senate report called for an increase in DoD acquisition staff by 15 percent over the next two years.

A combination of reduced contracting staff and increased workload is not unique to DoD; most agencies are facing the same challenge (Light, 1999, p. 161).

Ralph C. Nash, George Washington University School of Law professor emeritus and a prominent observer of federal acquisition, stated back in 1999: “We were in favor of personnel reductions (in the acquisition workforce) at the beginning of the decade (1990s) because we perceived that many agencies had more acquisition personnel than they needed…. It seems to us it is time to call a halt to this particular type of ‘reform.’…It makes little sense to continue to reduce the acquisition workforce at the same time that agencies are contracting out more and more of their work…. In particular, almost all agencies need to spend more time administering the contracts they have written” (Nash, 1999).

During the 1990s the federal procurement system was radically reformed. In theory, new efficiencies could offset any adverse impacts from staffing reductions. The use of credit cards, re-engineered contracting procedures, and government-wide acquisition contracts resulted in a more efficient procurement system that could produce more with less. But it is not clear if the efficiencies gained could compensate for the workforce cuts. Downsizing initiatives, such as cash buyouts and hiring freezes, shrank the pool of institutional knowledge and expertise in most federal agency acquisition offices.

The DoD Inspector General (IG) was not persuaded that efficiencies achieved by procurement reforms would offset the impact of workforce reductions. The IG claimed that workforce reductions outpaced productivity increases and warned that the staffing reductions would adversely affect the ability of that workforce to handle its formidable procurement workload: “These improvements helped offset the impact of acquisition workforce reductions…. Nevertheless, concern is warranted because staffing reductions have clearly outpaced productivity increases and the acquisition workforce's capacity to handle its formidable workload” (DoD IG, 2000).

As the government has increased its reliance on contracting out, it also has decreased its investment in its own capacity, especially in the area of overseeing its contractors. As the federal acquisition workforce is reduced, its ability to oversee its contractors is reduced, and the government may have greater difficulty fulfilling its missions. The chain from policy making to policy implementation is complicated by the involvement of contractors over whom policy makers have less control. At his confirmation hearing, Pete Aldridge, President Bush's nominee for Under Secretary for Acquisition, testified: “I am concerned about the effects of the reductions on the acquisition workforce. As DoD continues to emphasize contracting out and competitive sourcing, the skills, training and experience of the acquisition workforce will be critical in effectively managing these contracts” (Cahlink, 2001).

In testimony before a U.S. House of Representatives committee, a GAO official stated: “It is becoming increasingly evident that agencies are at risk of not having enough of the right people with the right skills to manage service procurements. Consequently, a key question we face in government is whether we have today, or will have tomorrow, the ability to acquire and manage the procurement of increasingly sophisticated services the government needs” (GAO, 2001). A strong argument can be made that the current federal procurement workforce is not up to the challenges it faces to support various agency mission requirements. Moreover, the Bush administration's competitive outsourcing initiative will place even greater workload demands on a downsized procurement workforce.

The tables below graphically depict the mismatch between the acquisition workload and the acquisition workforce.

U.S. Contract Dollars Obligated in Millions of Dollars (FPDC, 1992-2003)

Exhibit 1: U.S. Contract Dollars Obligated in Millions of Dollars (FPDC, 1992-2003)

Number of U.S. Federal Acquisition Employees (FAI, 2005)

Exhibit 2: Number of U.S. Federal Acquisition Employees (FAI, 2005)

CMMI®-AM

Given the challenges faced by the overburdened acquisition workforce, the issues of efficiency and effectiveness of that workforce have become central to discussions surrounding the business of government. Directors and administrators have established program, project, and contract management offices in an attempt to manage governance frameworks, acquisition activities, and internal partnership arrangements. Structured relationships and job partitioning and specialization for government personnel and GPMO support contractors facilitate acquisition activities and appear to be permanents construct in acquisition organizations. And the GPMOs themselves have come to recognize that they must assist the acquisition workforce with tools and processes that increase their effectiveness and efficiency and, in turn, the probability of successful programs. Although a GPMO is not a quality framework, the government has, for over a decade, required successful bidders of some system solutions to demonstrate effectiveness in accordance with industry-accepted quality frameworks. One such framework is SEI's Capability Maturity Model® (CMM®). Until recently, SEI products focused on the processes of the solution provider, but today's CMMI®-AM addresses the processes of the solution acquirer and is becoming a tool for process improvement for the overwhelmed GPMO.

Background

Founded in 1984 as an FFRDC sponsored by the DoD and operated by Carnegie Mellon University (CMU), SEI was intended to assist software developers by defining methods and guidelines that, when implemented, would produce high-quality, reliable software in accordance with established cost and schedule expectations (SEI CMU 2005). SEI recognized that some software developing organizations demonstrated more “mature” methods of software development than other organizations. The mature organizations produced better products delivered within acceptable schedule and cost variances. In 1991, SEI articulated this evolution of software process maturity in a quality framework known as the CMM® for Software (SW-CMM®). Then SEI broadened its focus from software development to other disciplines. In 1994, SEI began work on the Software Acquisition CMM® (SA-CMM®), a model that promotes efficient and effective management of an acquisition project from pre-award activities through operations and maintenance (SEI CMU, 2005). This model describes the processes for organizations that acquire solutions such as hardware, software, services, and systems, and focuses on the processes of the buyer's organization.

CMMI® and CMMI®-AM

Government and industry welcomed as models for best practices the multiple maturity models for various disciplines developed and evolved by SEI and other organizations. But when implemented, these multiple models often overlapped key processes such as project management and resulted in redundancies and discrepancies. Attempting to adopt separate, discrete models proved complex and costly. SEI launched the CMMI® project to provide a single integrated set of models (SEI CMU 2001). SEI and other participating organizations adopted a framework that promotes the addition and integration of new disciplines and allows for staged model representations for achieving maturity as well as continuous model representations. CMMI® describes best practices from the perspective of the solution provider and not the perspective of the buyer, as is the case with SA-CMM®. This presents a challenge to the buying organization that chooses to apply the newer CMMI® as the model for acquisition process improvement. To address the need to interpret, tailor, and apply CMMI® for other anticipated uses, SEI has developed another product type—the CMMI® modules.

SEI produces documents that provide guidance—unique to the particular application domain—on the implementation of the CMMI® model. One such document, “CMMI® Acquisition Module (CMMI-AM), Version 1.0” (CMU/SEI-2004-TR-001), released in February 2004 and revised in May 2005 as Version 1.1, focuses on acquisition practices (Bernard, Gallagher, Bate & Wilson, 2005). CMMI®-AM leverages practices from CMMI®, SA-CMM®, the Federal Aviation Administration Integrated Capability Maturity Model, Section 804 of the National Defense Authorization Act, and industry experts. CMMI®-AM presents the practices from the perspective of the acquirer and creates a basis for acquisition process discipline.

Structure and Process Areas of CMMI®-AM

CMMI®-AM defines the practices that, when managed appropriately, enable a GPMO to implement effective acquisition activities. It addresses practices that are directed both internally to the acquisition project organization and externally toward the supplier (Gallagher & Shrum, 2004). The following exhibit illustrates the organization of the model.

The Structure of CMMI®-AM

Exhibit 3. The Structure of CMMI®-AM

The tables below list the acquisition process areas and briefly describe the purpose of each area and the use to which the processes in that area can be put (Bernard, Gallagher, Bate, & Wilson, 2005). A set of generic practices that cut across these higher-level process areas is presented in Exhibit 7 (Bernard, Gallagher, Bate, & Wilson, 2005).

Project Management Process Areas

The project management process areas listed in the table below address the activities of planning, monitoring, and controlling the acquisition project.

Project Management Process Areas

Exhibit 4. Project Management Process Areas

Engineering Process Areas

The engineering process areas listed in the table address the activities necessary for establishing a consistent set of requirements derived from stakeholder needs and operational capability statements.

Engineering Process Areas

Exhibit 5. Engineering Process Areas

Support Process Areas

The support process areas listed in the following table address the establishment of processes and tools required to allow projects to apply measurement and decision techniques effectively.

Support Process Areas

Exhibit 6. Support Process Areas

Generic Practices

The support process areas identified above deal with establishing processes and tools required to allow projects to effectively apply measurement and decision techniques in order to manage the project. The generic practices listed below enable the successful implementation of the project management process areas, engineering process areas, and support process areas by providing for planning, support, and stakeholder involvement in process improvement.

Exhibit 7. Generic Practices

Generic Practices

Deployment of the CMMI®-AM

CMMI®-AM is currently available for government and non-government acquisition-oriented organizations desiring to use an acquisition-focused process improvement framework. MITRE is participating in the DoD's pilot rollout and assessment of CMMI®-AM prior to the sunsetting of SA-CMM®. Since the CMMI®-AM continues to be refined, MITRE believes that the following characteristics need to be highlighted:

  • CMMI®-AM is not currently a “stand-alone” framework. It depends heavily on an understanding and use of CMMI® version 1.1.
  • The CMMI®-AM module continues to be evaluated and is not currently planned for inclusion in CMMI® version 1.2.
  • The Standard CMMI® Appraisal Method for Process Improvement (SCAMPISM), an appraisal methodology designed for and used by solution providers to assess the implementation of CMMI®, is being piloted to assess its applicability to selected programs. Its usefulness as an assessment tool for CMMI®-AM will be evaluated.
  • The process areas “Solicitation and Contract Monitoring” and “Transition to Operations and Support”, unique to CMMI®-AM, provide useful amplification of CMMI®.
  • The effectiveness of CMMI®-AM continues to be monitored for software and hardware acquisitions.

Mitigating the Impact of the Workforce Crisis by Applying CMMI®-AM

Though a number of alternatives exist to address the workforce challenge, this paper, it should be noted, speaks only to applying CMMI®-AM as a solution. Recently, the federal government has formally recognized that the acquisition workforce needs to be increased. Even if all available personnel resources, both current and future, were well-trained, highly capable acquisition experts, there would still be a need for process improvement. As the situation stands now, fewer resources allocated to an increasing workload make it absolutely essential to develop and implement repeatable processes. CMMI®-AM, by providing structure and guidance and establishing a methodology, allows a GPMO to streamline acquisition, eliminate duplicative effort, and prove effectiveness and efficiency to oversight.

As acquisitions become more complex, the government must do a better job of awarding and monitoring contracts. The acquisition workforce must be successful in three relevant and critical areas of CMMI®-AM—Strategy and Planning, Requirements Development, and Monitoring—in order to improve a GPMO's overall probability of achieving success.

Strategy and Planning

In order to be successful, a GPMO must have proper plans in place prior to contract award. These plans establish the strategic direction and goals of the GPMO and the basis for how the GPMO interacts with the contractor and with other government organizations. CMMI®-AM describes the necessary plans that the GPMO should develop and provides guidance regarding their content. By creating templates and processes for developing these plans, the government organization establishes standards and guidance for the GPMO, which increase the likelihood that the GPMO will create a useful and acceptable document on the first attempt as opposed to struggling through multiple versions in order to produce an acceptable one. Agency standards and templates are especially helpful to a new GPMO. For example, CMMI®-AM recommends that the Acquisition Strategy be completed first. The Acquisition Strategy describes the acquisition objectives, constraints, acquisition methods considered, type of contract, stakeholder involvement, risk factors, and program support for the program's life cycle. Other CMMI®-AM process areas that address Strategy and Planning are:

  • Project Planning
  • Solicitation and Contract Monitoring
  • Integrated Project Management
  • Risk Management
  • Requirements Development
  • Transition to Operations and Support

Requirements Development

For contractors to submit relevant proposals, the acquisition team must first clearly define what is to be bought. The more complex the acquisition, the more difficult it is to define the requirements. Because agency heads face political pressure to demonstrate improvements within two to four years, GPMOs often feel pressure to award contracts before requirements are well defined. It is critical that the proper stakeholders are involved in requirements definition and that the requirements are well defined before the contracts are awarded. If requirements are not well-defined, scope creep, schedule slips, and budget overruns are highly probable. Establishing processes and procedures to guide a GPMO through requirements definition reduces the risk of an incomplete statement of work or an inadequate Request for Proposal package. CMMI®-AM process areas that support requirements development are:

  • Requirements Development
  • Requirements Management
  • Verification
  • Validation
  • Decision Analysis and Resolution
  • Transition to Operations and Support

Monitoring

After the contract has been awarded, a GPMO must actively monitor the contractor's progress in order to report accurately to oversight and to identify potential problem areas before significant cost or schedule overruns impact the program. Again, the more complex the acquisition, the more difficult this becomes, and a reduced staff only increases the level of difficulty. Compressed schedules are very common in large scale system acquisitions, making early identification of risks, issues, and corrective actions critical to program success. A GPMO should establish standards and methods for monitoring the contractor's progress and reporting the results of its analysis to the appropriate levels of management and governance in a timely manner. CMMI®-AM, in the following process areas, supports and provides guidance for developing processes and procedures for monitoring the contractor:

  • Project Planning
  • Project Monitoring and Control
  • Solicitation and Contract Monitoring
  • Risk Management
  • Requirements Management
  • Verification
  • Validation
  • Measurement and Analysis

Conclusion

In a time of limited resources for managing an increasing amount of increasingly complex work, the government must function efficiently to be effective. There is little room for waste, re-work, and extra steps. CMMI®-AM provides a framework to follow, as well as standard processes and procedures that provide guidance and stability for the organization, but it does not provide explicit steps for developing processes. By following that framework, a GPMO can establish roles and responsibilities, create configuration management practices, define measurements of progress and success, and involve stakeholders in program management, all of which increase the probability of program success.

It is also important to recognize that written processes and procedures are living documents that should evolve with the organization and be adjusted to reflect organizational changes and lessons learned. While CMMI®-AM helps the government establish repeatable processes that enable it to learn and become more effective, each new GPMO tends to create its own processes. The government would benefit from a central organization that facilitates establishment of GPMOs while functioning as a clearing house to capture best practices and lessons learned. This would enable the entire government acquisition community to benefit from these processes.

References

Barr, S. (2005, May) Defense Bills Push for Stricter Contract Procedures. Washington Post, May 30, 2005, B2

Bernard, T., Gallagher, B., Bate, R., & Wilson, H. (2005, May) CMMI Acquisition Module (CMMI-AM), Version 1.1 [Electronic Version]. Retrieved on July 4, 2005 from http://www.sei.cmu.edu/publications/documents/05.reports/05tr011.html

Bureau of the Budget, Bulletin 55-4 (1955)

Cahlink, G. (2001, April) Pentagon Nominee Aims to Rejuvenate Acquisition Workforce. Retrieved on June 25, 2005 from http://www.govexec.com

Federal Acquisition Institute, (2005, April) Report on the Federal Acquisition Workforce

Federal Procurement Data Center Annual Reports, (fiscal years 1992 through 2003)

Gallagher, B. & Shrum, S. (2004, August) Applying CMMI-AM to Systems Acquisition. Crosstalk the Journal of Defense Software Engineering [Electronic Version]. Retrieved on June 24, 2005 from http://www.stsc.hill.af.mil/crosstalk/2004/08/0408Gallagher.pdf

GAO (2001, May) Contract Management: Trends and Challenges in Acquiring Services, GAO-01-753T, 1

Kettl, D. F. (1993) Sharing Power: Public Governance and Private Markets Washington, D.C: The Brookings Institution, 16-19

Light, P. (1999) The True Size of Government Washington, D.C. Brookings Institution Press, 188

Nash, R. C. & Cibinic J. (1999, November) Dateline November 1999. The Nash and Cibinic Report 13(11), 161

OIG DoD, (February, 2000) DoD Acquisition Workforce Reduction Trends and Impacts Report Number000-088, ii

OMB, Budget of the United States Government, Historical Tables, Fiscal Year 2005, 102-105

SEI CMU (2005, April) About the SEI – Welcome: Introduction. Retrieved on June 30, 2005 from http://www.sei.cmu.edu/about/about.html#intro

SEI CMU (2005, May) Software Acquisition Improvement. Retrieved on June 24, 2005 from http://www.sei.cmu.edu/arm/acq.home.html

SEI CMU (2001, January) Concept of Operations for the CMMI®. Retrieved on July 4, 2005 from http://www.sei.cmu.edu/cmmi/background/conops.html

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2005, Lisa M. De Mello
Originally published as a part of 2005 PMI Global Congress Proceedings – Toronto, Canada

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