Is OPM Corrupting the Procurement Process?

By on May 4, 2012 in Current Events with 3 Comments

by

Bryan Hochstein*

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It’s in the news! The General Services Administration (GSA) wastes $1 million dollars living it up in Vegas including a reported eight scouting trips with spouses to select the hotel; then adds an utter disregard to be good stewards of the people’s money. GSA even violated its own procurement rules in selecting vendors. The public outrage is palpable and Congress isn’t missing its opportunity to share the limelight by publicly flogging a couple of irresponsible bureaucrats who no doubt (in my mind at least) will, in the end, keep their jobs, their pensions and not face any prosecution for what is clearly Fraud, Waste and Abuse.

What’s the big deal? After all we’re only taking about $1 million. The Office of Personnel Management (OPM) runs a $2 Billion (that’s with a “B”) questionable fee for service operation via their “revolving fund” every year. That’s 2000 times (remember that number) of what GSA did. Only for OPM it goes on year after year after year.

For my new readers, OPM is the agency that sets policy, performs oversight and provides fee-based services in the areas they oversee. Here are my past musings (many of which are about OPM).

The latest example came a few weeks ago when OPM and the Air Force announced a new Onboarding system.

I could go through my usual mocking banter, but this is just getting out of control. First the development of the system violates the Clinger-Cohen Act as the government is not allowed to build systems when there are viable commercial options.  For the record, there are dozens of commercial Onboarding systems available and some have been used by federal agencies for years. Why OPM needs to reinvent the wheel is a question I hope gets asked at a Congressional hearing. The Air Force, of all agencies, should know about the Clinger-Cohen Act.

In fact it would be interesting to see if the Air Force even did a market survey of their own or just ignored standard procurement practices all together.

But it seems to get worse. In 2006 and 2007, OPM issued Requests For Information (RFI) asking the vendor community for information about existing software packages already available.

Here is the information for 2006 and the information for 2007.

Why would an agency issue RFIs only to build the system in-house? I would d love to have been there when those decisions were made.

As a former vendor, I would have jumped at such an opportunity. And I would have disclosed quite a bit of information to help make the case that my company should be invited to compete for the opportunity.

RFI’s are much more than simple marketing brochures. They are practically the equivalent of Request For Proposals (RFP) only without formal cost information. The private sector takes RFI’s very seriously and will dedicate a lot of resources (time, money, etc.) to make great impressions. These expenditures and emotions are lost on OPM.

They will also provide information that is typically not readily available to the general public; such as vision, technological advantages, new features in the pipeline, other competitive advantages, and the like. All of this is done because vendors don’t get opportunities like this too often.

In general, this is a good example of the conundrum facing contractors responding to RFI’s. Vendors want to provide impressive responses about their capabilities and ideas, but are concerned with the government taking those concepts and moving forward on their own or choosing another vendor to implement the strategies they suggested. This is some serious food for thought for you Procurement wonks.

As it turns out there was no opportunity for the private sector. And this is where OPM could be asked some hard questions about their use of the procurement process. There is supposed to be a trust between our government and the private sector. But here it seems that OPM simply issued a couple RFIs; read the responses and may have even acted on some of the ideas they liked as they built a new system that already exists.

If you think about the current battles on the Hill over intellectual property rights—like the CISPA initiative—one might wonder (aloud I hope) ‘why worry about foreign governments like China stealing United States companies’ intellectual property when the United States government does this to its own companies?. 

For those of you who have heard of A-76 you might be familiar with this passage:

“In the process of governing, the Government should not compete with its citizens. The competitive enterprise system, characterized by individual freedom and initiative, is the primary source of national economic strength. In recognition of this principle, it has been and continues to be the general policy of the Government to rely on commercial sources to supply the products and services the Government needs.”

Only it gets worse. One vendor actually had their Onboarding software installed in OPM’s Macon Data Center in 2008 and was integrated into USA Staffing. The system was removed in late 2011. So OPM has not only issued RFIs, they’ve also had the luxury to pick apart at least one product for over 3 years from a vendor who already has a federal install base.

And yes, there’s more! Monster Government Solutions (MGS) sold their Onboarding solution to the U.S. Coast Guard in the 2007/2008 timeframe. Soon after, they approached OPM about integrating the MGS solution into OPM’s Enterprise Human Resources Integration (EHRI). A goal of HR LOB. OPM denied the request; presumably because it made too much sense. But somehow their new offering with the Air Force integrates to USA Staffing and EHRI.

I find it funny (not) that this new Onboarding system integrates to USA Staffing and EHRI, but USA Staffing still doesn’t integrate to USAJOBS forcing applicants to maintain separate user ids, passwords and answers to standard questions. Where are their priorities?

Not to mention, but I will, that in-house, agency-sponsored development of customized HR technology products doesn’t seem to be consistent with OPM’s own HRLOB initiative.

This is not the only time I believe OPM issued an RFI only to build a commercially available system in-house. They used this same M.O. in 2009 with USAJOBS. And the vendors responded providing tons of valuable ideas. I wonder how many features are a direct result of the information OPM received from that RFI? If only the re-launch had gone smooth.

So today the news is all a buzz about GSA, Las Vegas and a $1M scandal. But one day it will be about OPM and its $2B/year fee for service (revolving fund) business practice. Hopefully, the outrage will be 2000 times strong.

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* Bryan Hochstein was the inventor and co-founder of QuickHire. Currently, he provides consulting services in Federal Human Capital Management. Bryan currently lives in Greensboro, NC with his wife and 3 kids.

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