2023 Acquisition Policy Survey

BIENNIAL ACQUISITION

POLICY SURVEY 2023

DECISION POINTS FOR FEDERAL LEADERSHIP

Table of Contents

The Professional Services Council (PSC) is the voice of the government technology and professional services industry, representing the full range and diversity of the government services sector. PSC’s more than 400 member companies represent small, medium, and large businesses that provide federal agencies with services of all kinds, including information technology, engineering, logistics, facilities management, operations and maintenance, consulting, international development, scientific, social, environmental services, and more. Together, the trade association’s members employ hundreds of thousands of Americans in all 50 states. Follow PSC on Twitter: @PSCspeaks. To learn more, visit pscouncil.org

Executive Summary

This 11th edition of the Professional Services Council’s Biennial Acquisition Policy Survey continues a 21-year PSC tradition of candid discussions involving contractors and government acquisition officials regarding the most timely, relevant trends and policies in federal contracting. Conducted as the COVID-19 global health emergency was beginning to abate, the 2023 survey highlights key changes in acquisition policies and approaches, as well as the potential impact of those changes on federal contracting in the coming years.

Reflecting the often strong engagement between federal agencies and their contracting partners, this survey draws on nearly 200 detailed discussions and 22 post-discussion data responses from government acquisition professionals across 13 federal agencies. The survey outlines key opportunities for those agencies and their contracting partners to make improvements in the following thematic areas:

Normalizing annual appropriations for mission-critical budget planning

Aligning acquisition strategies with federal goals

Rethinking the federal workplace model to better hire, train and retain professionals

FEDERAL AGENCIES THAT PARTICIPATED:

Creating greater industrygovernment partnership and collaboration

2023 Survey in Review

Much has changed since PSC published its last Acquisition Policy Survey in December 2020. That edition rightly focused on ways in which the COVID-19 pandemic created “major stress factors” for both public and private sector operations. It highlighted government and industry adjustments, as necessitated by the global health emergency, that helped to support federal missions and workforce retention during a period of rampant uncertainty. It underscored the need to leverage COVID-19 innovations in managing workforces, communications, budget, and data.

The 2023 Acquisition Policy Survey builds on that work with the understanding that key elements of the federal marketplace—and the broader U.S. economy—are still emerging from many COVID-19-related constraints and that the federal acquisition landscape continues to evolve. In general, government officials’ responses to the 2023 survey indicate that acquisition processes have been functioning well. And of course, survey data also show confidence in the momentum of government processes. Agencies continue to award contracts for much-needed solutions.

That said, systems as large as the U.S. Government acquisition enterprise take time to evolve, especially when workforce culture and practices have changed so markedly over the last three years. In that period, the nation has also experienced dual challenges of higherthan-expected inflation and supply chain delays, both of which have impacted government contractors’ business operations. This has all occurred at a time when on-time annual federal appropriations continue to be elusive.

FOUR MAIN THEMES EMERGED FROM THE 2023 SURVEY:

Budget Challenges

With a few exceptions in the last 25 years, agencies have begun each fiscal year under a Continuing Resolution, which generally keeps an agency’s appropriations flat until Congress passes—and the President signs—an annual appropriations law for that agency. Sometimes, enactment occurs when half of the fiscal year is over, resulting in lower and slower contract obligations that present challenges to current mission accomplishment and out-year planning. With the highest inflation rates since the 1980’s, the last two years have seen significant challenges in budget execution, both for government and industry officials.

Trends in agencies’ acquisition strategies (e.g., Best-in-Class vehicles, contract consolidation, multi-award contracts) have driven companies to pursue new or differing teaming arrangements and/ or to be more selective in the opportunities they pursue. In addition, survey respondents discussed how small business goals can conflict with Category Management goals; how the government’s teaming requirements can be inconsistent across agencies and vehicles; and how “graduation” out of a small business size standard can present new challenges vis-à-vis bids and teaming.

The acquisition workforce has remained resilient throughout workplace shifts and a so-called “Great Resignation.” Will professionals—whether government or industry—return to the workplace at pre-pandemic levels? What requirements might be levied on contractors for on-site work versus remote work? Understanding that workforce cultures are among the slowest to change, how is the government thinking about hiring, retention, and training of a skilled workforce?

Communication and Collaboration with Industry 4

The government seeks partnership with industry, where each partner communicates questions, problems, and potential solutions on a regular basis. What should this communication look like? Survey respondents recommend doing homework in understanding how capabilities fit needs instead of pitching products and services broadly.

We’re the tortoise, not the hare. We don’t have bandwidth to do everything all at once: outreach, reverse industry days, new policies or updates, updating the Federal Acquisition Regulation… Reorganizing resources and how the Heads of Contracting Authority will operate…. At the end of the day, all of this is well and good, but it’s the tail of the dog. This will require cultural change.

Budget Challenges

Responses to this year’s survey indicated pessimism regarding budget challenges with 63 percent of respondents indicating that those challenges have worsened in the last 2 years and only 25 percent expressing the belief that those challenges will improve in the years to come. Some more pessimistic respondents highlighted that their budgets have been, and are expected to remain, relatively flat.

One respondent whose agency received additional appropriations in fiscal year 2022 (FY22), said that increase was:

Episodic and not a long-term increase. It is hard to win the lottery, then live the next day. Once that money is gone, you have to go back to pre-lottery days in operations. We have seen that time and time again in other programs; a project gets lots of funding but needs to be sustained without the massive funding. We have had to learn to manage to this.

A Need for Appropriations Normalization

Most respondents indicated normalization in the annual Congressional appropriations process would best allow them to properly budget for execution of agency missions.

Yearly federal budget and appropriations processes are unpredictable, adding risk to programs across the government. Respondents noted that Continuing Resolutions, which allow only straight-line appropriations often based on the last-passed fullyear appropriations bill and which prohibit (with few exceptions, known as “anomalies”) new program starts or program ends, fail to enable management of and planning for mission priorities.

This leads to an inability for the government to accept long-term challenges; instead officials create a patchwork of solutions to carry programs to the next available tranche of funding. Respondents also noted that they seek to add more structure, recruiting, and training to accomplish current missions but cannot achieve budget consistency and predictability. Worse, expenses— whether from inflation or typical program growth—often outpace programs. Agencies have operating plans for ongoing operations but scramble to find funding for increasing costs:

We are getting killed by inflation in IT costs and labor. We are very happy with the cloud and services, but over the last three years, the cost of cloud infrastructure and licenses has gone up 9 percent per year. Other companies have also increased their charges for services and labor. That is an increase of 27 percent over the last three years… with a flat budget which severely limits new work and modernization.

Oftentimes we have programs that are driven by the budget rather than budgets being based on program needs... A top-down approach versus the ideal bottom-up approach.

Even when full-year appropriations are enacted, respondents expressed frustration that the late arrival of funding constrains what their agencies can do with that funding. One respondent said the FY22 Consolidated Appropriations Act did not pass until mid-March 2022, when the window for major investments was almost closed. Another respondent noted in June 2022:

The appropriations process is slow. The FY22 appropriation was not provided until mid-March 2022. And even then, a FY22 Spend Plan was not sent to the Congress until yesterday [note: June]. The Department still doesn’t have full spend authority over its FY22 money until the Spend Plan is formally approved by the Congress.

Respondents broadly agreed with the statement: “I wish budget and planning could be done better by law makers and agency comptrollers to drive some stability and predictability into programs acquisition planning.” This includes the fact that once an appropriations bill is passed, it can take the Office of Management and Budget several weeks to “apportion” (i.e., distribute) funds to agencies. Numerous respondents said that agencies prioritize responsiveness to bureaucratic processes to use apportioned funds most effectively.

Budget Challenges: Decision Points for Federal Leadership

Rising economic pressures may squeeze funds that arrive too late in a fiscal year to allow agencies to plan and implement mission priorities in a deliberate manner. Agency respondents stated plainly the need for normalization of appropriations. Respondents say that both industry and the government have roles in pushing for a return to normal appropriations process:

Industry must be more active in advocating, forcefully, for a return to a normal budgeting process. It will benefit all constituencies.

We need a budget process to achieve a more agile procurement process.

There must be a reset to normal budget cycle.

We should never have shutdowns. Budgets should be passed timely as soon as possible. Vote for consistency to stabilize government, and it will trickle down to better industry receipt in contracts.

Acquisition Strategies

How beneficial is each of the following acquisition strategies to achieving successful mission outcomes?

(Rank - 1 is most beneficial, 8 is least beneficial)

Unpacking Key Priorities

In considering a range of acquisition strategies/tools, survey respondents ranked the most beneficial to successful acquisition outcomes. PSC described the relationships among these elements to aid this thought process: multi-agency contracts often aim to (1) fit the Category Management framework through consolidated, Best-in-Class, long-term vehicles that include on-ramps and (2) fulfill small business goals through arrangements including joint ventures (JVs) and mentor-protégé JVs.

Sixty-one percent of respondents believed multi-agency contract vehicles —ranked most beneficial to acquisition outcomes and key to the Category Management framework— grow the available vendor base. Worth noting: 39 percent believed that those contracts shrink the base, enough to indicate that while these vehicles are beneficial to acquisition outcomes, those beneficial outcomes may not necessarily result from vendor base growth.

Multi-agency contracts often result from long development cycles due to agencies’ deliberation of appropriate self-scoring qualification processes for long terms of service. Therefore, various agencies leverage larger contracts, frequently deemed “Best in Class” (BIC), to access a pool of pre-qualified vendors for consolidated categories of technology or services solutions. BIC vehicles “have been identified through a collaborative inter-agency process by acquisition category experts within the Government as offering the best pricing and terms and conditions within the Federal marketplace and reflecting the strongest contract management practices”1 and are often longerterm (5-10 years).

However, only a slight majority of survey respondents—57 percent— indicated a preference for longer-term contracts. If multi-agency contracts are the most beneficial, and long-term contracts are the second-most beneficial to acquisition strategies, then what decision points do acquisition professionals consider that deem longer-term contracts most beneficial, or shorter-term contracts as better options?

Respondents who prefer longer-term contracts say that larger, consolidated contracts build toward long-term goals, better communication of expectations, and longer relationships with partners as contractors can focus on the work, not re-competition. Moreover, according to respondents, longer-term contracts help “an understaffed procurement shop and other parts of the organization that lack skills in developing the necessary documentation for procurement of services.” In addition:

Flexibility can be baked in at the task-order level. It’s a pain in the neck to do the smaller contracts… it is cumbersome and if you need a modification to do anything, it becomes difficult.

Recompeting major contracts frequently is really expensive and hard to get in place, so our proposed ordering periods are often 10 years plus 5 years to finish up task orders after that.

5 years is too short when you think about the planning involved.

On the other hand, 43 percent of respondents indicated a preference for shorter contracts for different reasons.

If a vendor cannot provide a Minimal Viable Product built in 6 months, there is a problem. If a contractor can’t deliver in a year, we should move it out. It is incredibly frustrating to watch that those are sitting on a 5-year contract.

Five years is a long time to commit to something. Logistics and clearance reviews may become prohibitive. An ‘easy button’ does not stimulate better offerings.

The disadvantage of a 10-year ordering period is that you could have an emerging company with value that cannot participate when the market changes substantially.

From a contracting perspective, having shorter term contracts can be better so the contractors don’t get stagnant.

Frequent on-ramping can be an effective way to refresh needed capabilities on older contracts. This is especially relevant in areas where the nature of work and solutions offered change (e.g., technology). The government can be much more effective when it can pivot on effective decision points.

According to survey results, 70 percent of respondents believe Category Management/Best-in-Class/Contract Consolidation will improve in the next 2-3 years. One respondent said that BICs “are well-managed category structure types of vehicles that benefit the government. Best-in-Class contracts are easier to work with and the government gets better deals.”

The 30 percent of respondents who were more pessimistic were vocal about their disappointment in this area. One respondent said:

Tools to analyze spend are not synonymous with Best-in-Class. Best-in-Class helps you manage your spend; Category Management needs to be done better.

The Office of Management and Budget put Category Management out as this thing to be achieved, then put out an elite group of vehicles so only certain vehicles go in. Best-in-Class needs to mature; how agencies achieve maturity and Office of Management and Budget goals are not necessarily tied together. Providing data is not Best-in-class; having great terms and conditions is Best-in-Class.

Respondents had feedback on contract consolidation.

There is no one way for contract consolidation and no pattern. For large contracts, there is not enough incentive to innovate or invest in automation and the budget keeps going up, so we decide to break it up.

It is good when the government consolidates buying power for certain commodities. Smaller Agencies benefit, but larger Agencies have to force fit into strategic sourcing because they have more applications… often we try to put a square peg in a round hole, it makes us lazy.

A subset of respondents said that Best-in-Class processes are devolving to a point where they duplicate government schedules. One respondent said that large agencies’ Indefinite-Delivery Indefinite Quantity contracts “hold hundreds of companies. This is the same as using a Schedule.” Another respondent agreed:

There are way too many contracts, so we’re moving everything to Best-in-Class. We’re building a bunch of schedules to some degree. We see lots of duplicative schedules that you have to compete to get on. Is there any added value here, truly? We went from a target market to a volume market. It’s skewing the marketplace. Innovation can’t be bought this way.

Respondents noted agencies are turning to smaller Indefinite-DeliveryIndefinite-Quantity vehicles, turning away from consolidation toward use of agile contracting.

In some cases, the Administration’s increased small business goals may be ahead of current capabilities to respond to current Best-in-Class goals.

Respondents also highlighted that Best-in-Class priorities competing against Small Business priorities can create confusion within agencies, which struggle with where to put agency emphasis. One example is a January 27, 2023 memo issued by the Department of Defense’s Defense Pricing and Contracting office, which stated, “The use of Best-in-Class contracts should not impede the ability of the Department of Defense Components to meet or exceed socioeconomic small business goals.”4

BIC vs. Small Business Goals

It is worth noting that Best-in-Class utilization goals can conflict with the government’s goals for small business inclusion. While the Small Business Administration provides goals for each agency, 2 the Biden-Harris Administration has increased goals for small disadvantaged businesses to 15 percent of total government spend by 2025. 3

These goals are not without challenges. A survey respondent said, there is:

No way to mature into Best-in-Class vehicles if you are a small business or small disadvantaged business. Chances to get onto Best-in-Class vehicles are going to be difficult because there is no journey to get there.

Small Disadvantaged Business Goal Misalignment

Respondents also noted conflicting priorities in aligning Administration Small Disadvantaged Business goals with acquisition practices. A coinflip 50 percent of respondents believe diversity in its vendor base is decreasing versus 50 percent that believe access to vendor base diversity is increasing. What decision-points can be identified that would push access to the diversity base forward past the halfway mark?

Respondents expressed that meeting goals for HUBZone, ServiceDisabled Veteran-Owned Small Businesses, and Women-owned Small Businesses is a challenge. Agencies find that when focusing on ‘checking a box’ for specific socio-economic categories, small businesses that fit multiple designations get left out.

People are buying contracts instead of companies.

There are Best-in-Class and competition goals that have to be met and they all don’t go hand in hand.

Respondents also reported a lack of guidance regarding aligning multiple designations for separate small business goals: “for us, the new Small Disadvantaged Business goal was particularly significant. We think we can do it, but you can kill yourself by accomplishing it in destroying your other small business goals.” Another respondent said that government goals do not adequately reflect disadvantaged small business communities:

The only class that is tracked by the Administration is small business. We have had a number of Office of Management and Budget ‘due outs’ early on, such as an assessment. We spent a lot of time listening to various affinity groups that were underrepresented. The affinity groups are not necessarily the same groups that are in the Diversity, Equity, Inclusion and Accessibility Executive Order, law, or the Federal Acquisition Regulation, and oftentimes represent either unique groups or granular segmentation of existing groups. For example, the Executive Order on equity mentions rural communities. Yes, we have a HUBZone program, but those can be in urban communities not covered by the Executive Order.

In short, the government can demonstrate clear leadership by further engaging the Small Business Administration and agencies’ Offices of Small Business to streamline and de-conflict small disadvantaged business goals and improve alignment of disadvantaged communities, equitable policies, and small business goals.

Diversity, Equity, Inclusion and Accessibility is extremely important; focus on the Diversity: not just race and gender. Instead focus on the diversity of thought and experience. If you teach leaders how to do that, you will get the equity, inclusion and accessibility.

Teaming to Fill the Bench

Fifty percent of respondents were confident that small businesses have sufficient staff, resources, and capacity to fully support a contract award. However, respondents on the other side noted the deficit in staff, resources, and capacity is emblematic of small business exclusion within modern acquisition practices, which may be cost-prohibitive for small business competition. Large-scoped opportunities may also include qualifications so difficult to attain that only certain business types see the work. Survey respondents noted the real opportunity for small businesses to partner with each other and with large businesses to increase depth of bench to build and highlight those relationships talents.

This tracks with respondent data. Eighty-seven percent of respondents believe that teaming structures generally increase opportunities for small businesses who are willing to be part of a team or even a joint venture. Respondents believe small businesses can utilize partnerships to develop more diverse skill sets, “small businesses who do niche stuff need to be able to demonstrate what they are great at and be honest: ‘we can’t do this, but here is who we are partnering with to fill that gap.’” Through careful teaming requirements, agencies can access capabilities of small and large businesses to meet their needs:

We used to be worried that small businesses did not have the bench strength to able to support, but it has been cool to see that partnerships meet the needs of support. It is great when can call up the Vice President of a company and get action/resolution immediately regarding performance issues, which does not always happen with large businesses. This is a more realistic and organic engagement.

While government officials strongly support teaming, they note significant complexity with the rules of team making:

The challenge is that they’re overly complicated for everybody. Small Business Administration regulations are a challenge to decipher. I thought the Federal Acquisition Regulation was challenging, then I read 13 CFR and it’s like ‘oh my God,’ smart people have trouble following that. How do we simplify this a little bit so it’s not so complicated for people?

Some of the 13 percent of respondents who believe joint-ventures decrease small business opportunities indicate that joint-venture teaming is often perceived as agency risk,

A surge of joint ventures has occurred, but we cannot guarantee that any joint venture is helping small business. Joint ventures are sometimes just a front. Large businesses have multitudes of joint ventures to hedge their bets; and when they lose their status, the joint venture loses its value and purpose.

Respondents recommend holding large prime contractors accountable for fulfilling small business subcontracting plans,

Many large businesses provide small business subcontracting plans and don’t follow through. They do a bait and switch on their subcontractors from what they proposed. We have to strengthen the language in the contracts to ensure small business participation.

A Mid-Size Company Gap

Seventy-one percent of survey respondents noted that graduates from small business status do not have adequate opportunities to compete for multiple-agency contracts: “If you are a $100-300 million firm, you’re in no man’s land these days.” Companies that grow beyond small business status struggle in full and open competition because they often do not yet have sufficient economies of scale or required past performance, and they are no longer are attractive partners for large businesses.5

Recently graduated 8a companies that the agency has depended upon are finding it difficult to retain or recruit the correct level of staffing to support the agency. Some contractors are ‘burned out’ as a result of the number of hours required to support the government because of this. Small businesses are most impacted, and they are losing to large contractors.

Respondents said they are aware that once a small business graduates to other-than-small, it needs to be better supported better by government.

People ask all the time what am I doing for medium-sized businesses, and the answer is nothing. I might like to, but there’s no requirement.

We create these terrific partnerships with small businesses, and they get familiar with our mission and they’re great partners. But because they’re so good and successful, they’ll graduate out of the small business program. With our aggressive small business goals, we lose access to that talent pool that we’ve worked hard to cultivate and build. For me and our offices, that’s frustrating that our small business are so successful and then can’t support us. At the macro level, the increased idea for and the hard cutoff for small businesses—we lose capabilities as a federal agency and toss aside those businesses as they cross some threshold, and we have to start over.

Acquisition Strategies: Decision Points for Federal Leadership

Current decision points can help federal leaders align goals and grow the vendor base:

Grow vendor participation through multi-agency contract vehicles and incentivize continued vendor engagement in long-term contracts

Mature the narrative of Best-in-Class (e.g., terms and conditions, data) so agencies understand how best to fit their needs into the BIC architecture

Align Best-in-Class, small business, and cross-cutting Small Disadvantaged Business goals without compromising integrity of any goal

Clarify—and make consistent across vehicles—allowable teaming arrangements to support mutually beneficial partnerships

Support small business growth beyond set-aside-status levels

Acquisition Workforce

At the time of the PSC survey, 57 percent of respondents had a returnto-workplace policy with approaches and structures varying greatly. For example, one law enforcement respondent said their components have determined that if agents come in, everybody comes in. Other agencies have adopted a more hybrid approach, in which federal workers come in on certain days. Some have a tiered approach, depending on the role of the individual worker. One respondent said, “Working from home, as bad as it was, provided an opportunity to reimagine and rethink the working model.”

Is your greatest preference for remote work, in-office work or hybrid?

Of particular note is that only 5 percent of respondents prefer inoffice work. Most respondents said that adopting greater levels of remote work results in efficiencies and are critical to staff hiring and retention. Respondents agree that adoption of hybrid models is difficult, though acknowledge government momentum toward more fully remote policies: “in the short-term, we are adapting to hybrid workplace environment with a long-term hope of moving to a fully remote model if all is successful.” Respondents say the procurement process has shifted, and that there has been a tremendous increase in productivity, where there is less commuting and more getting work done on employees’ own time. “People don’t mind working after hours if they can work from their homes and are more willing to work the extra hours. Flexibility has helped people.”

Zoom and Teams have increased effectiveness and efficiency…you can just pick up the phone and call folks…flexibility helps a lot. The quality of procurement staff has increased over time, we have been able to accommodate people who may not have wanted to move to DC, and have resulted in better talent and better collaboration.

That said, respondents did also describe a lack of interpersonal connection for some workers: “My pulse of the staff is there is nonetheless a little bit of malaise. On the one hand, workers love the flexibility of not driving in. But they’re yearning for and missing something.” Another said, “for project work, hopping on a call is sometimes o.k., but they have so many things going on that being able to connect in the corridors provides some glue that helps makes our operations work better.” Respondents say business development personnel have been particularly affected; “Business development people want to meet in-person. I do see the sense of teamwork starts to drift over time”.

Facilities Concerns

One agency respondent said that the conversation is shifting from physical facility to connectivity outside of the workplace. Officials believe foremost that there is a challenge in implementing a proper mix of work in-office with teleworking. For example, some roles like laboratory research and scanning may require an employee to be in the office, but other work like analytics and reporting may be able to be done from home. Agencies struggle to find the right mix that feels equitable throughout their workforces.

One respondent highlighted the criticality of an agency’s IT backbone – which can be problematic in areas of unequal connectivity. This respondent described issues in accounting for costs of connectivity:

The Government Accountability Office now allows Agencies to pay for internet access with the caveat that its only used for work. How do you control who uses the internet at home with so many devices connected these days?

Another respondent said “adopting virtual onboarding and technology rollout to the workforce was very difficult. We lost personnel who were frustrated with our agency’s technical capabilities.”

One respondent offered an example of a large Federal building slated for operation in 2030: “this is a BIG issue for all of the future of work” for their agency. This facility will “house” several disparate agencies,

Budgets will be key as many Agencies will be involved, each owning some of the data: multi-tenant buildings, for example, in shared services and telecom. Will each agency need to own their version of telecom?

Another respondent said, “Our workforce has grown since 2020. If we all are to come back to office, we won’t fit”. Other respondents noted the impact of large-scale shifts of workers, such as migration of 700 employees from the National Landing to the Ronald Reagan Building. One respondent said, “What will drive them to a more permanent teleworking posture will be dollars and sense because the real-estate costs will go down. Squishing all the buildings together could save tens of millions of dollars”. Real-estate becoming an idle or empty space is becoming a challenge.

According to respondents, more than half of some agency workforces are outside the national capital region. The federal workforce spread makes it easier for recruitment and allows more distributed government effect across the nation: it’s “good to have Feds distributed across the country.” Another respondent says “For us, where are we going to allow people to work? Unless we send you to Alaska or Antarctica, you are here.”

This locational flexibility has “significantly increased the talent pool of people we could attract and retain. It would be a step back if we returnto-workplace.” Most respondents say return-to-workplace policies limit resource opportunities with implications for real estate, home needs, and career advancement. Some employees want to work from very remote locations, and the government can recruit from around the country— with a bonus of expanding their pool of expertise outside of the District of Colombia, Maryland, Virginia area:

Leveraging remote workers allows recruitment in more areas and different parts of the country for talented people. Embracing remote work force allows greater access to talent. Overall, we do see a lot of great talent and do a good job with retention, but we have to balance what people need.

A Manhattan Project for Retention

Many respondents agreed that the communication of returning to the workplace created a slip in retention: “arbitrary callback to workplaces has hurt retention. Some of these messages are getting out and have lost some people.” Another respondent said “we are going to lose a ton of people if we tell them they need to be in the office 4 days a week. We are asking ourselves, who am I going to lose people to?” One respondent said their agency now bakes attrition into their workforce risk operating model due to return-to-workplace considerations:

Return to Office (which is preferred over the negatively connoted “Return to Work”) has become an area of increasing risk and is categorized at the enterprise level as ‘Employee Engagement and Morale.’ The risk is not necessarily around working virtually, which has been done and managed, but the impact to the work and projects that could not be completed such as processing paper, and other risks that have been present such as reduced work forces and aging infrastructure. All of this is included in the enterprise risk, and this is one of the top enterprise risks.

We are losing good people to 100% telework organizations.

Over 50% of people will leave the job to go to a job that can be fully remote. If we are not listening, we are going to end up losing in that race.

PSC also notes the importance of these policies to the contractor relationships. One respondent said their agency would assume vendors mirror government (remote vs on-site). If someone needs to be on-site, the vendor should be there as well.

Contractor site doesn’t really mean anything to our agency. We are focused on the outcomes, not where people are working. We may hold some in-person meetings, which are on-camera for all meetings, no matter where they are. We agree with one respondent, who said:

Remote work will save both government and contractors. One element that has received recent attention has been the “Great Resignation.” In previous years, agency officials predicted a “great resignation” of acquisition workforces, as large proportions of acquisition professionals approached retirement. Thirty-two percent of respondents did not believe the Great Resignation happened; 23 percent believed we are on the tail-end. However, a significant number—41 percent—believe we are in the midst. As seasoned professionals retire or otherwise depart their roles, the government struggles to recruit a younger professional.

We are in the midst

Respondents estimated workforce attrition over two years at 25 percent, with staff eligible for retirement at 23 percent and median retirement age at 46.

A rebalancing is happening where lots of people are likely to retire, the workforce is getting younger with less experience. We now have an average of 10 years of experience, where we used to have an average of 20 years or more of experience.

A complicating factor is the desire of younger professionals to work remotely, at least part of the time, and perhaps a lack of desire to pursue government jobs.

We are competing for talent in a remote work environment, we need the next generation of 23 and 24 year-old talent. They don’t know what it’s like to work in an office, so they are not open to having this requirement.

The government has to fix the personnel system; Agencies must focus on workforce—cyber, acquisition, recruitment hiring, retention—top priorities—less than 7% of the workforce is under the age of 30.

of government service. However, agencies may want to incorporate into their hiring approach the fact that new employees are reported to “bounce around job positions.”

Our survey and interviews demonstrated surprising results—that while the government still has difficulty attracting a new generation of workers, employees leave mostly to other agencies and components, instead of to retirement, resignation, or private industry. One respondent said, “there is an end to this, but not I am not quite clear when— when does the music stop on this game of musical chairs?”

That leads to a discussion of normal “churn” in the workforce. An estimated 60 percent of the federal workforce may leave for other agencies; 10 percent go to industry; the remaining 30 percent may retire. One respondent’s organization “has 700 people. We have lost 300 people and hired 300 people over the past three years. We are just swapping people.” Another respondent said, “we keep recycling the same candidates across agency to agency. So, what is the best way to appeal to the general public and attract them to the candidate pool?”

Do departing workers mostly leave to:

Survey data indicate that the pipeline of government workforce is stymied by decision-point bottlenecks in hiring and incentive processes. Agencies are experiencing retirements, as well as new demands, and “old-school thinking” is to hire individuals who plan to make a career out

Respondents estimated workforce attrition over two years at 25 percent. One respondent said they are “facing from a Human Capital perspective the same churn private industry is facing. We do not necessarily have our acquisition workforce going to private sector, but people are asking themselves – do I want to work for another agency or component?” Agencies reported doing a lot of hiring to make up for gaps, but this requires a lot of training in contract programs, where they are working in light of new telework environments. Respondents said developing new entrants into the field through training is a big challenge to development of sustainable government workforce support. “We federal agencies are not very competitive in terms of salary but we are good at mission and benefits. We are all competing for the same resources. We offer very good benefits.” Respondents noted employees stay because of the government’s leadership and mission. “Leadership counts a lot in retention.”

“It is more challenging to hire, and the attrition rate has edged up year over year. We can’t do what we do without experts and recruiting and retaining has become more challenging.” This corresponded with survey data, which showed 78 percent of respondents found hiring and training within their organizations to be difficult. Retention is important: with agency competition, short-term job hopping, and the need for leadership on decision points in the next generation, the government needs “a Manhattan Project for retention.” Respondents have mentioned that maximum telework policies are a key factor in retention. In addition, government hiring processes could do better in accommodating a needed middle-segment of professionals that require additional development, with “performance metrics at the tactical level, but not higher.” “We generally still hire from the bottom. No one comes in at the mid-level. The average hire is 32 years old with a master’s degree. They come on at entrylevel salary rates. There are some specialties—security officers, medical professionals, accountants—come in at mid-level.”

We have a hollow workforce, capable of recruiting junior talent, capable of obtaining senior level expertise, but cannot keep middle management.

Our family members (government colleagues, in this case) are way overqualified for the jobs we put them in. My office assistant is a University of Virginia grad (go Cavs). Our family member workforce is a huge source of talent, and that will be the next process improvement that we will attack, when they perform at a higher level than their pay grade then they are underpaid for the work they are performing.

Respondents said a decision point for leadership would be options for additional, incentivizing workforce training for new hires.

How difficult has it been for your agency/organization to hire (or train) employees with the needed skills?

Training Needs at Crisis Level

“Organizational focus for hiring is based upon three key tenets for hiring—right skills, right experience, right fit,” to find team players and people who fit with culture. Respondents provided advice for government solutions.

Respondents said government hires need to be promoted quickly. Promotion takes training, and acquisition training takes time. Sometimes, “we turn to contractors for trained professionalism— especially for knowledge of legacy systems. This is reaching a crisis level.” Respondents said their employees need more skills to reach the right experience, right fit. Respondents most often stated they are weakest on training in program management. ”We pay our IT folks retention incentives if they get that certification.” Another respondent said, “We are encouraging people to get program management certified. We are applying it to our assistance portfolio.” The government was also seeking additional training for skill sets that apply to other applications of the acquisition process, which can be prohibitively expensive.

Is that the right skill set for new innovate non-Federal Acquisition Regulation contracts? How do we retain them when we get them?

Folks do not appreciate how expensive it is to change. We have a lot of requirements and I am asking for $30,000 to train three people and they are looking at me like I am crazy…It is just as important to know the Federal Acquisition Regulation as well as talk to and interact with people.

Acquisition Workforce: Decision Points for Federal Leadership

Decision points for federal leaders exist to hire, train and retain professionals by:

Identifying and resolving bottlenecks in hiring and incentive processes that should be flexible to attract mid-level, generalist, and younger generations.

Rethinking the workplace model to address needed shifts in agency cultures and mindset – and allowing common-sense use of remote work and thinking through second order effects, including but not limited to adequate budgeting for IT.

Communication and Collaboration with Industry

Respondents offered perspectives on communication and collaboration with industry. Sixty-seven percent believe these elements have improved over the last two years, and 70 percent believe they will get better over the next 2-3 years. What underpins this optimism?

Communication and Collaboration with Industry: Last 2 Years

Contracting Partners—Not Adversaries

Respondents said they seek long-term, strategic partnerships in collaborations with contractors.

They expressed the importance of continued communications throughout the acquisition and execution of a contract, “if you are a current contractor, do not just meet with me right before the next re-compete. I want to know the contractor and talk to them.” Respondents said partnerships with contractors also helped inter-agency communications:

I really appreciate when our contractor partners help connect us with other government Agencies to understand how they have handled situations. If left to our own devices, we often stay within our bubble. It helps and it is educational. It goes a long way with appreciation of the partners I work with.

Communication and Collaboration with Industry: Next 2 Years

Next 2-3 Years: Will Get Better

True partnerships include respectful expression of disagreement and honest expression of capabilities, “I want a contractor that will tell me ‘No.’ Many times, contractors cannot deliver, but they will not admit it.” Respondents seek candid communications from industry about what will not work or does not make sense in a procurement. For example, one respondent said that at the task-order level, requirement structures are often misaligned, and industry has opportunities to ‘lean forward’ in offering solutions for improvement. Respondents did not seek passive partners:

Question. Bring options to the table, all the time.

Bring concerns up when they arise instead of waiting and letting them fester. Sometimes the client is not listening. Industry needs to tell clients that. If you have something to say, we would rather hear the feedback than not.

Tell us before there is a problem. Just pick up the phone. A lot can be avoided. I spend way too much time with a contractor’s Senior Vice President of contracts, because they identified an issue and we are already working on it. When folks reach out, let’s figure out who they should talk to.

You can just reach out. We meet with contractors we can trust.

One respondent said of contractors, “we cannot do our mission without you. You are important. You are in a unique situation to see what the issues and problems are. Share that with our office, with your Contracting Officer Representative. Be patient. Offer solutions. Offer solutions that are advantageous to you. There is nothing wrong with that!”

On the other hand, some respondents noted that industry may feel that the government has ulterior motives or concerns that any informationsharing could be perceived as favoritism of one company over another.

Industry needs to be open and honest in their requests to acquisitions and it needs to be both ways from acquisitions back to industry. Our acquisitions team indicated that there seems to be a lack of trust from Industry, and it is not known why or where the trust has gone.

Open and honest conversations also demonstrate contractor flexibility, respondents said. “We have asked for things that were not in the contractual language, but within scope. Be willing to go beyond and meet the real intent and real need. We like having conversations with contractors in such a way that can be open and honest.” Respondents believed this flexibility can be expanded to expertise in revolving human capital,

Try to be as flexible with resources as possible. Contractors have the capability to hire people and pay them well. In many cases, you can hire people for a second career out of government and that is an incredible opportunity for all government Agencies to maintain business processes and systems.

Respondents said that honest and open relationships allow the government to access real subject matter expertise—e.g., private sector officials who have retired from government. This is helpful to longevity of missions.

We need ways to tap into these subject matter experts who have retired, and this would be extremely helpful. A way to reach back to people for knowledge transfer. This would free up government folks to focus on modernized processes and systems.

Respondents said due to their own time constraints, they also need contractors to work together more effectively to enable better workflow,

Please be prepared to work more collegiately with other vendors. We are so hamstrung on contracts that we must have vendors working on the same projects. Having conflicts between vendors is not helpful, and it is extremely difficult to share needed information with other companies.

Another respondent said:

Industry could do research and collaborate among themselves before meeting with me. I get 10 marketing emails a day. Marketing does not help when on the job. If you can partner with the companies that we have already invested in, you will hear about how to get things done more quickly.

Better Tailoring of Presentations

Respondent advice included the phrase “do more homework”—i.e., industry players that are most successful expend significant effort to understand agency missions, terminologies, and needs. Tailoring presentations to specific needs can give contractors an edge:

The government takes capability briefings all the time but seldom sees tailored presentations to what they have going on. Industry needs to do research and meet them halfway. Do homework on the mission. It’s not what you know or who you know, but rather it’s what you know about what you know or who you know.

Respondents said contractors should focus on pointing out efficiencies and examples of “taking solutions to next level. Know the requirements,” read the fine print, “boil them down to a proposed solution and then come probe.“

Practicing fundamentals is also recommended:

Start with an invitation to the meeting, awareness of the meeting and of each other. This conversation with you all is based on a personal awareness and relationship. Write down names, ask good questions, take notes, tell your story- know what is going to make you stand out, what you are interested in, show interest in the agency and what they are doing.

One respondent said, “when meeting with us, skip talking about how great the firm is and focus on how your product or solution will meet a need,” refrain from, “asking us how we do things. Do your research in advance and apply your solution to their problem sets.” Interviewees recommended demonstration of company capabilities through examples of other Agencies using company capabilities to do real work, “It is about the mission and doing things more efficiently—it is not about the technology. Technology is just an enabler.”

In addition, several respondents noted companies’ desire to brand themselves as unique solution-providers. When acquisition professionals perceived that a firm is selling products instead of mission solutions, they became apprehensive, “as a Federal project manager, when I see something that says ‘I have a special approach,’ I take a step back.” Another respondent said, “sometimes government folks shy away from industry because it always feels like a sales pitch. Know your customer.” One respondent offered a “message for industry: we do not care about the tech that is solving the problem.”

Rather, interviewees said they seek companies that know how to better walk a fine line between being too sales-focused and providing value, “they should be focused on helping to bring solutions to the government.”

Part of that presentation should include accurate cost estimates and seek to provide cost-estimates that lead to win-win scenarios, “sometimes the government wins for offered services and sometimes the industry bidder wins, and the government loses. The mission then feels squeezed.” One respondent warned against pricing services too low, “the government looks at price and expects quality. If you way undercut competitors to get business, then you have failed twice: on reputation and ability to serve the customer.”

Budget understanding includes knowing how government purchasing of solutions takes significant time, real money, and approval: “Make sure to talk value. What is valuable to that individual or that agency? People come to sell to me when they do not understand my needs.”

Effective Methods of Communication

In ranking the most effective methods of communicating, Requests for Information (RFI) were top-rated.

Please rank each of these modes of communicating with industry from most effective (rated with number 1) to least effective (rated with number 8)

Requests for Information

Reverse Industry Days

Direct Communications One-on-ones Conferences

I’m always going to tell you to respond to sources sought and Requests for Information. Almost all of what we do is driven by market research results. If you see us doing something stupid, say something. There are plenty of large businesses that contact me all the time. Do we really need to have 35 evaluation factors on a simple acquisition? No, 2-3 are enough.

Respondents expressed a need for more industry feedback on RFIs, especially from small businesses,

This is a sore spot. We would love to do more business with small businesses, but we do not get responses to Requests for Information and Sources Sought. What is the problem? What communication is lacking? How can we increase the aperture? It is critical to the department to get that thought leadership from industry. We will act on it.

Respondents said that Reverse Industry Days, in which industry presents to a government audience on a government-generated question, are “very helpful” and much appreciated. Such formats allow industry to highlight concerns but also to express their needs and perspectives directly to agencies. “This is not a surprise, but a lot of our staff never hear from contractors and how burdensome our processes can be.”

Respondents said that virtual industry days are more cost-effective with broader participation, and a good platform for industry-government communications.

Protests are the least desired method of government-industry communication. Some respondents said they are inundated with protests with most procurement efforts including pre- or post-award protests and resulting in months—or longer—of mitigation. Other respondents stated that their agencies “bake-in” protests as part of their acquisition strategy. While PSC and respondents believe that protests are a valuable tool available to contractors who can bring attention to unfair solicitation practices, it is no secret that government officials “are annoyed with frivolous protests.”

During the pandemic, in procuring personal protective equipment, I was blown away by the number of protests going to courts to get waivers for awards. You are protesting during a bona fide emergency. The government has taken to corrective actions, and then industry protests again. You get into a wasteful loop.

One potential solution is a common practice already: the government should keep offering debriefs to help industry understand why they lost. Respondents agreed enhanced post-award debriefings are a good opportunity for communication with industry and encouraged more frequent use.

Respondents noted these session allow the to be upfront with bidders regarding evaluation criteria and areas for improvement. In cases where debriefings are not required, Contracting Officers should still be encouraged to provide information to why companies did not win an award.

Some hesitation comes in the form of ‘debriefings are not a requirement, we do not want to open up for challenge’… [but] if not provided, nothing prevents someone from filing protest. This becomes more challenging with a lot of competition and a lot of offers, requiring a lot of explanation. In many cases, written communication is needed if you need more information. Volumes of it.

Communication and Collaboration with Industry—Decision Points for Federal Leadership

This survey found 67 percent of respondents believe that communication and collaboration with industry has gotten better over the last two years and 70 percent of respondents believe that communication and collaboration with industry will get better over the next 2-3 years. This is encouraging news, and we look forward to better and better communication methods with government, virtually, in person, and in conference. Decision points for federal leaders exist to enhance communication and collaboration with industry:

Create partnership, rather than impersonal and infrequent relationships between contractors and contracting authorities

Collaborate between industry and government to think through missions and execute concepts to completion

Ask questions and solicit well-researched options for government consideration

Encourage industry officials to be open, honest, flexible, and, frankly, nice to Federal partners. It’s often a thankless job.

Conclusion: Lead First, Fail Fast, Identify the Viable, Execute

PSC’s 2023 Acquisition Policy Survey indicates government acquisitions are in a stable condition, though ambiguity at programmatic and policy levels creates an opportunity for federal leadership action at many different decision points. Decision points exist on how best to apply the composing parts of impact areas for mission execution and to determine if some of these composing parts even work at all. We recognize that systems take time to change, and such leadership will take multiple officials to make multiple choices at multiple different decision points to best implement systems for better government execution of missions: we conclude with one respondent’s ‘message for everyone:’

We need a new approach to risk. We need a new thinking around risk. We have leadership understanding. We have a system that punishes it. How do we encourage risk and reward responsible risk-taking? It is easy to say but complicated to come up with an answer. Failure is still a concern. It has been a challenge for a decade and it will be for next decade. We need to FAIL FAST. Stop doing so many studies, identify the most viable and execute.

We look forward to seeing the decisions leaders will make.

Acknowledgments

This year’s Acquisition Policy Survey draws on nearly 200 detailed discussions and a smaller number of survey responses involving government acquisition professionals across 13 federal agencies. Our survey offered anonymity and non-attribution to all respondents to ensure candid conversation with the broadest range of interested respondents. We would therefore like to express appreciation to anonymous respondents from the following agencies who participated in interviews and responded to our post-interview data collection:

PSC also thanks its staff, interviewers from member companies and interviewees who took time to coordinate and participate in our discussions. This report seeks to capture themes from each discussion to honor the time, candor and value so generously contributed to this endeavor. We appreciate you.

PSC Production Team

Lead and Author

Sebastian Beau Herrick

Senior Associate, Public Policy Editor and Co-Author

Stephanie Kostro

Executive Vice President, Policy

Special Thanks to:

David Berteau President and CEO

Michelle Jobse

Director, Vision Federal Market Forecast

Pheniece Jones Director, Media Relations

Cassie Katz Director, Marketing

Donald Baumgart

Manager, Vision Federal Market Forecast

Daniel Boddie

Digital Marketing Associate

MaryFrances Warner

Intern

The Pulse of GovCon Survey Development

Amanda Goff

Director of Research and Analysis