Contractual Results and Risks

Recently I was invited to deliver a presentation on government procurement to a group of program managers and other very carefully selected officials who had been carefully selected from the business units of a very large and well known-corporation. Many of the officials who sat in on my session work in capacities related to DoD contracting.

During the session I asked those who work in areas related to DoD contracting, if they believed that, despite their presence on the supply side, they saw themselves as public servants with responsibility for assuring the public interest. The room went silent; then, several people said “No, our first responsibility is to assure the interests of our company.” As I probed, it became clear that there was no recognition (or at least, no acknowledgment) that these two goals are not mutually exclusive; that they can and should be compatible.

Of course, I am not so naïve as to believe that making these two goals compatible would be easy. However, there are some things that we as public procurement officials can do to optimize the results and minimize the risks associated with the procurement of goods and services, and especially the procurement of technology solutions and public infrastructure. I wrote my dissertation in the mid-1980s on a topic related to contracting-out for local government services. All the local officials I interviewed for the case studies that were part of my research said that the ability to maintain what they called “control” over the production of the services. By control they meant the ability to be able to manage results and risks as well as possible.

As I write this column, the world is still learning more about the tragedy that occurred yesterday (Aug. 14, 2018) when several sections of an enormous, highly-traveled bridge in Genoa, Italy, causing scores of people to plunge to their deaths in their cars and trucks. One of the potential causes that has been identified at this early point is insufficient maintenance of this piece of public infrastructure, which was constructed in the 1960s. Responsibly for maintaining the old bridge belongs contractually to a private firm that manages the Italian highway system under a privatization contract.

As this story has developed, I have been taken back in time to when I was the Purchasing Agent for the Metropolitan Government of Nashville and Davidson County and a European firm with strong support from local lobbyists made a strong push to privatize the operations of Metro’s very substantial Water Services Department. Among the points the administration advanced in opposition to privatization of the department’s operations was a concern that maintenance and product/service quality would be sacrificed for profit. The push for privatization failed

What can and should we as professional public officials do to assure the ongoing quality of governmental operations, service delivery, and infrastructure in an age when governments have contracted out so many activities and services and our nation’s infrastructure ages?