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On government procurement and business intelligence

Business intelligence could do much to assist in improving federal procurement, enabling the government to be a more effective and efficient purchaser of goods and services.

This article originally appeared on the BeyeNETWORK.

Everything the federal government buys is in someway regulated by the Federal Acquisition Regulation (FAR). This is the bible of government buyers, contracting officers and, of necessity, the blueprint for any company that wants to sell to the government. It is a rather voluminous and complex document that is published by the General Services Administration FAR Secretariat.

The whole federal procurement system has come under attack over the last number of years as being fundamentally flawed, and much of the criticism has been leveled at the FAR, which was established to codify uniform policies for acquisition of supplies and services by the government.

What I would postulate today is that business intelligence could do much to assist in improving federal procurement.

First, let’s start with the important things. A government agency is no different than any private company in that it needs certain goods and services in order to go about its business. You’ll need chairs to sit on, offices to work in, computers, pencils, telephones, supplies, transportation services, etc., no matter whether you are working for the State Department, for the FAA, or for Wal-Mart, Xerox, Kodak or Microsoft.

Yes, some government procurements are very large (i.e., the Navy acquiring a new aircraft carrier, or NASA building the space shuttle), but so are those of many private companies (i.e., Exxon building a new refinery, Sirius Satellite Radio launching their constellation of satellites or Pfizer developing a new line of pharmaceuticals.)

The important thing in all cases is performance. Did I get the value I paid for? And this is something that can be measured. Furthermore, the government usually rates contractors’ past performance, and this is often an important factor in deciding new procurements. But there has not been much business intelligence produced in a rigorous and methodical manner from the large repositories of procurement information that are collected and stored throughout the federal government.

Each federal agency has its own databases with information going back usually for decades about the contracts it has awarded to acquire goods and services. In addition, there is the Federal Procurement Database System (FPDS) and its recent offspring, FPDS Next Gen, which collects information about all government purchases above certain dollar thresholds. Then there is the Central Contractor Registry (CCR), which houses information about all companies that sell to the government and where agencies may rate their contractors’ performance on individual contracts, task by task, on a number of different aspects of their work. And, now there is a new database in the making that will capture all government spending and put it out for taxpayers to see on the Internet.

These are all goldmines waiting to be exploited, and through the business intelligence discipline, we have the tools to do it.

We should be able to explore these databases and, at the very least, search for indicators of fraud, assist in determining compliance with the FAR, and examine performance by the multiple dimensions that are relevant in the acquisition domain.

In this last area, for example, we might be able to get answers to questions such as what type of contractors are better at performing what type of government work? Does it matter where the contractor is headquartered or whether the workers are on-site or off-site? How relevant is it for a program manager to have a graduate degree for different types of projects? Does the number of sub-contractors on a team have an impact on performance? Does U.S. or foreign-ownership matter in terms of contract ratings? Can we identify early indicators of contract overruns? Is it important for a contractor to hire former government employees in order to score well in certain tasks? For certain kinds of work, does the government get better results if it hires a large or a small business, or a small business that is owned by a woman, a minority or a service-disabled veteran? What types of contract (i.e., time and material, fixed price, cost plus) obtain better results for the government and for what contract scopes?

There are many variables to be looked at in order to search for correlation with performance. If some prove to have significant explanatory power over the results, then it might be possible to use some predictive modeling techniques to forecast how existing contracts are expected to do, and preventive or corrective action could be taken as needed.

Likewise, from the large amount of collected data, tied to the accounting systems of these agencies, there could be good opportunity for fraud detection. Are there contractors that are systematically overcharging the government? Is there compliance on deliveries and value per the contract specifications? Are there financial indicators that could assist in predicting fraud? Are there contractual deficiencies present in similar cases of fraud?

Clearly as taxpayers, we would all benefit if the government could become a more effective and efficient buyer. Business intelligence can help to make this happen.

Dr. Barquin is the President of Barquin International, a consulting firm, since 1994. He specializes in developing information systems strategies, particularly data warehousing, customer relationship management, business intelligence and knowledge management, for public and private sector enterprises. He has consulted for the U.S. Military, many government agencies and international governments and corporations.

Dr. Barquin is a member of the E-Gov (Electronic Government) Advisory Board, and chair of its knowledge management conference series; member of the Digital Government Institute Advisory Board; and has been the Program Chair for E-Government and Knowledge Management programs at the Brookings Institution. He was also the co-founder and first president of The Data Warehousing Institute, and president of the Computer Ethics Institute. His PhD is from MIT. Dr. Barquin can be reached at rbarquin@barquin.com.

Editor's note: More government articles, resources, news and events are available in the BeyeNETWORK's Government Channel. Be sure to visit today!

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