In Defense of Red Tape

The (continued) failure of Lincoln Memorial Reflecting Pool renovations is a useful illustration in why government procurement has so many rules—it’s to stop things like the Reflecting Pool turning green and filling up with algae, mold, and drifting sheets of slimy lining. 

Procurement in the federal government is governed by the Federal Acquisition Regulation (FAR), a document that is over 2,000 pages long and chock full of one of the most maligned aspects of public administration: red tape. 

Those who work with dangerous machines and vehicles will tell you that safety regulations are written in blood. They’re there for good reason. Analogously, we could say that procurement regulations are written in waste and corruption. The rules try to mitigate those risks. 

What do procurement failures look like? They look like the Fat Leonard Scandal. In the 2000s, Leonard Glenn Francis bribed naval officers in order to overcharge the Navy $35 million dollars on fuel and servicing of ships, which he used to fund his own lifestyle—as well as lavish parties including prostitutes and expensive cigars for those officers while they were in port. Failures look like the launch of healthcare.gov, an IT procurement failure that almost torpedoed the greatest policy achievement of the Obama administration. Originally awarded to CGI Federal and their subcontractors for $85 million dollars over three years, the government would eventually spend over $1.7 billion for something that didn’t work and had to be rescued by additional contractors (who would eventually go on to form the United States Digital Service). We can go on: 

    •    In 1988, over 90 people were convicted as part of the FBI’s Operation Ill Wind corruption investigation, including government officials, ultimately resulting in the passage of the Procurement Integrity Act. 

    •    Starting in 2024, the Army spent $533 million on a General Dynamics artillery factory that failed to produce a single shell.

    •    Starting in 2023, GDIT, General Dynamics’ software arm, flunked the redesign of the FAFSA application, resulting in a three month delay and a 9% decrease in applications. 

Obviously, such failures are bad. So, we have regulations designed to avoid such failures. The Federal Acquisitions Regulation can be read with three themes in mind. First, is the competition fair? Second, does the procurement provide what the government needs? And finally, does the procurement reflect what’s been authorized by Congress? 

To illustrate the process and how the rules are supposed to avoid failure and corruption, we’ll pretend we’re a civil servant charged with buying a system meant to counter drones. Procurement is handled mostly through two people. The Contract Officer (CO, though in the Defense Department the CO is sometimes called the KO because CO is the Commanding Officer in some units) and the Contract Officers Representative (COR). Most procurements are driven by the COR and approved by the CO.

While not in the FAR, other laws require that all federal servants have to file an ethics disclosure form called the OGE-450. You have to disclose any stock holdings you might have, any businesses your family members might own, and whether you’ve recently left a company. You’re also required to notify the government if you’re considering a job at another company. This is all meant to catch conflicts of interest. Let’s say I own stock in Cost Plus Technologies. I’d put it on my ethics form and would get a nice note from the lawyers saying that if Cost Plus was ever being considered for a procurement, I would have to recuse myself. The same thing would happen if I had a family member who held a position there. 

Assuming I don’t have a conflict of interest, the first thing I would need to do as the COR is to write the requirements and develop a scope of work. If we’re not exactly sure what would help meet our requirements, we can start out with a Request for Information (RFI). This is a formal process and to ensure fairness. During a set time, any potential vendor can respond to an RFI. 

Let’s say we get our responses back and Cost Plus Technologies claims to have pterodactyls that can intercept drones. We really like the idea. We would then write up something called a Request for Proposal that companies can bid on with all of our requirements. For example, we want a system with autonomous target acquisition, self-healing composite skeletal structure, and an organic payload delivery.  We then write down exactly how we’ll decide a winner. This can be done a few ways and can take up a few rounds, but it’s clear what we’re doing before we’re doing it—so it’s fair. 

Within the RFP, the government would outline how they’ll grade the proposals. For example, for technology projects the government can request a demonstration that’s held before a team of technical experts to prove that Cost Plus Technologies can actually train flying dinosaurs and use them to intercept drones.

Once we decide a winner, we write up a scope of work that forms the basis of the contract. We award the contract, and then the ‘protest period’ begins. Because the rules are designed to be fair, vendors who didn’t get the contract and believe the government didn’t follow its own rules can protest. Such protests are often a source of great frustration for both industry and government because even an unsuccessful protest will result in a delay of work. 

The procurement process is long and convoluted, but the FAR is actually a pretty flexible document. If certain conditions are met, you can sole-source a contract without going through the bidding process. FAR 6.303-1(a) does put strict requirements on when you can do this, but in our example since Cost Plus Technologies is the only company that meets our requirements we could make the argument for it.

Sole-sourcing a contract this way becomes a problem for technology procurements because unless you have experience building technology, you won’t be able to call bullshit on things you know won’t work or that will take more time (and money) than proposed. The problem is that procurement in itself is an expertise. To become a COR, it requires long hours of training on dense subject matter. If you want to handle a larger contract, you need years of experience and more training. This is why it’s rare to see technical CORs who know both the technology side and the procurement side. 

Once the contract is awarded, the government obligates funds to cover the cost of the contract. That doesn’t mean a check for the full amount goes out, but rather that once the agency sets aside money for the contract they can’t spend it otherwise. No robbing Peter to pay Paul here. An agency can only spend money on what Congress tells them to spend money on. Congress can reprogram the money, but that is a slow and arduous process to do when there’s a new crisis and you need money for different things. 

Ultimately, federal procurement is risk management. How do you create a system that is fair and provides good value to the government and makes it easy for the government to buy what it needs quickly?

There’s a number of ways that CORs try to solve this. CORs can require evidence that they’ve done similar work for other agencies. This locks out new entrants, but ensures competency. They can require technical panels as part of the bidding process where they can bring in experts to evaluate each bid. You might imagine for a moment we had Owen Grady from Jurassic World on such a panel, listening to the drone-intercepting pterodactyls pitch and then shouting loudly about how terrible the idea is. So the technical panel evaluations are a good idea, but they do add time and paperwork to the procurement process. And every time you add a step, it opens the process up for additional protests. 

Back in the real world,  the Reflecting Pool renovation was a sole-source “no bid” contract. This came as a surprise to the procurement community because it didn’t seem like it qualified as such. Had it gone through a bidding process, experts would have pointed out that the method the awarded vendor was using wouldn’t work. Instead, we found out on Bluesky. 

The FAR will always sit between a rock and a hard place. If you’re fast and loose with the rules, you invite corruption, cheating, and unfair competition. If you put up too much administrative friction, you make the agencies less effective. Finding the balance between the two ends is one of the biggest challenges of public administration, and it impacts virtually everything the government does. 

I think that 18F, the agency tasked with making government technology better, was on the right track to procurement reform by focusing on ways to de-risk IT procurements. Their guide is required reading for anyone buying software for the government. As we think about reconstruction, we should find ways to de-risk government procurement—even if that means defending red tape.

Featured image is Lincoln Memorial Reflecting Pool, by Ingfbruno