Contract Management: Answers to Hearing Questions Regarding the  
Service Acquisition Reform Act (01-MAR-02, GAO-02-503R).	 
								 
GAO reviewed the proposed Service Acquisition Reform Act and	 
found that additional training for the acquisition workforce is  
needed governmentwide. Agencies could improve the capacity of the
acquisition workforce by focusing on such key areas as		 
requirements, inventory, workforce strategies and plans, and	 
progress evaluations. GAO did not examine how pay-for-performance
and pay banding would apply to acquisition personnel. However,	 
these practices are consistent with suggestions made in prior	 
testimonies.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-503R					        
    ACCNO:   A02841						        
  TITLE:     Contract Management: Answers to Hearing Questions	      
Regarding the Service Acquisition Reform Act			 
     DATE:   03/01/2002 
  SUBJECT:   Best practices					 
	     Strategic planning 				 
	     Labor force					 
	     Human resources utilization			 
	     Education or training				 
	     Procurement					 
	     Procurement law					 
	     Procurement practices				 

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GAO-02-503R
     

United States General Accounting Office Washington, DC 20548

March 1, 2002

The Honorable Tom Davis
Chairman
Subcommittee on Technology and Procurement Policy
Committee on Government Reform
House of Representatives

Subject: Contract Management: Answers to Hearing Questions Regarding the
Service

Dear Mr. Chairman:

You asked me to provide additional comments on several issues that I raised
in my November 1, 2001, testimony before your subcommittee on a proposed
Service Acquisition Reform Act. I am pleased to submit the following
comments for your consideration.

1. In OMB's testimony, it is stated that the existing agency budgeting
process is the more appropriate venue to fund training for acquisition
workforce personnel. In GAO's prior work in this area, have you found that
agencies adequately fund training?

We are currently examining agency funding and budgeting practices as part of
a review of acquisition workforce training and we expect to report back to
the subcommittee later this year on the results of that review. As a general
matter, we believe that additional training for the acquisition workforce is
needed governmentwide. There are issues, however, that require clarification
in order to more fully assess the adequacy of acquisition training funds.
First, given the rapidly changing federal environment, there is a need to
further clarify which professionals should be included in the acquisition
workforce. For example, civilian agencies by and large apply a narrow
definition of the acquisition workforce, essentially including only
contracting personnel. Second, agencies need to clearly define what training
is necessary for today's acquisition workforce to perform effectively.

Our work on federal training indicates that during the 1990s, many federal
agencies cut back on hiring new staff to reduce the number of employees on
the payroll to meet downsizing goals. As a result, these agencies also
reduced the influx of new people with new knowledge and skills that agencies
needed to help build and sustain excellence. Moreover, anecdotal evidence on
overall federal spending on training indicates that, in trying to save on
workforce-related costs, agencies cut back on training investments needed if
their smaller workforces were to make up for

Page 1 GAO-02-503R Contract Management

institutional losses in knowledge and skills. We believe agencies need to
take a fresh

1

look at their training needs today.

To design and implement effective training programs, agencies must (1)
identify the competencies needed to achieve their specific mission and
goals, and measure the extent to which their employees exhibit those
competencies; (2) identify training and development needs to be addressed;
and (3) evaluate the extent to which their programs are actually increasing
employees' individual competencies and individual and organizational
performance levels.

2. In your testimony, you state that agencies are at risk of not having
enough acquisition personnel to meet the needs of increasingly complex
procurements. Can you comment on the potential of creating a governmentwide
standard for acquisition personnel that would build on many of the practices
in place at GAO such as pay-for-performance and pay banding?

We have not examined how practices such as pay-for-performance and pay
banding would apply to acquisition personnel. However, these practices are
consistent with suggestions we have made in prior testimonies,2 as well as
with the practices that we have instituted in our own internal human capital
management. For example, we have suggested that government pay systems
should be based on performance and contributions rather than on longevity.
Similarly, in our own human capital management at GAO, we have implemented
pay-for-performance and are developing a competency-based evaluation system.
We have also suggested that government employers use more flexible
approaches to setting pay; in our own human capital management system, we
have instituted broad pay bands for mission staff.

In our current work for this and other committees, we are examining efforts
to assess and address the needs of the future acquisition workforce.
Procurement reforms and technological changes have placed unprecedented
demands on the acquisition workforce. Contracting specialists are now
expected to have a much greater knowledge of market conditions, industry
trends, and the technical details of the commodities and services they
procure.

We believe it is essential for agencies to define the future capabilities
needed by the workforce, needs dictated by the increasing complexity of the
work and the strategic direction of the agency. Assessing future
capabilities and contrasting these needs with where the workforce is today
will provide a solid basis for evaluating whether different management tools
are needed to meet the needs of the future workforce. The relationship of
the acquisition workforce to the broader civilian workforce will also need
to be considered in planning for the future workforce.

1

U.S. General Accounting Office, Human Capital: Design, Implementation, and
Evaluation of Training at Selected Agencies, T-GGD-00-131 (Washington, D.C.:
May 18, 2000). 2

U.S. General Accounting Office, Human Capital: Taking Steps to Meet Current
and Emerging Human Capital Challenges, GAO-01-965T, (Washington, D.C.: July
17, 2001); Human Capital: Managing Human Capital in the 21st Century,
GAO/T-GGD-00-77, (Washington, D.C.: Mar. 9, 2000); Human Capital: Meeting
the Governmentwide High-Risk Challenge, GAO-01-357T (Washington, D.C.: Feb.
1, 2001); and Human Capital: Building the Information Technology Workforce
to Achieve Results, GAO-01-1007T (Washington, D.C.: July 31, 2001).

                   Page 2 GAO-02-503R Contract Management

3. What can be done to improve the capacity of the acquisition workforce?

In our view, agencies could improve the capacity of the acquisition
workforce by focusing on four key areas:

Requirements-assessing the knowledge and skills needed to effectively
perform operations to support agency mission and goals.

Inventory-determining the knowledge and skills of current staff so that gaps
in needed capabilities can be identified.

Workforce strategies and plans-developing strategies and implementing plans
for hiring, training, and professional development to fill the gap between
requirements and current staffing.

Progress evaluation-evaluating progress made in improving human capital
capability, and using the results of these evaluations to continuously
improve the organization's human capital strategies.

We currently have an ongoing review of selected federal agencies' strategic
planning efforts to manage and improve the capacity of their acquisition
workforce.

4. What barriers exist to federal agencies utilizing commercial best
practices through the current FAR Part 12 definitions and existing
commercial services definitions?

We have not fully examined the various barriers that exist to federal
agencies utilizing
commercial best practices through Part 12 of the current Federal Acquisition
Regulation. However, we have work underway that will be relevant to the
subcommittee in exploring how federal agencies can use commercial best
practices
in acquiring services.

If you have any questions about this letter or need additional information,
please call
me on (202) 512-8214. Copies of this letter are also available on GAO's
homepage at
http://www.gao.gov. Key contributors to this letter included Don Bumgardner,
Ralph
Dawn, Hillary Sullivan, and Karen Zuckerstein.

Sincerely yours,

William T. Woods
Acting Director
Acquisition and Sourcing Management

(120126)

Page 3 GAO-02-503R Contract Management
*** End of document. ***