US DoD to consolidate contracting for healthcare professionals in view of GAO recommendation

The US Government Accountability Office (GAO) has released a Report on Defense Health Care (GAO-13-322), where it concludes that the Department of Defense (DoD) needs a strategic approach to contracting for health care professionals. According to GAO, 
DoD does not have a consolidated agency-wide acquisition strategy for medical services. In the absence of such a strategy, contracting for health care professionals is largely fragmented. For example, the military departments had not consolidated their staffing requirements by developing joint contracts beyond a limited number of instances amounting to about 8 percent of the fiscal year 2011 spending on health care professionals. The departments have made efforts to use multiple-award contracts to consolidate intraservice staffing requirements, but GAO identified several instances where multiple task orders were placed for the same type of provider in the same area or facility. A more consolidated strategic sourcing strategy could allow DOD to acquire medical services in a more cost-effective way.
Therefore, GAO is recommending that the Secretary of Defense develops a DoD-wide strategic approach to contracting for health care professionals, with which DoD concurs. This means that there are winds of consolidation in US DoD healthcare procurement. Hopefully it will take into consideration previous GAO recommendations concerned with consolidation and centralisation, as discussed here in relation to inter-agency agreements.

US GAO report on interagency contracting: A mirror for centralised purchasing strategies in the EU?

The US Government Accountability Office (GAO) has just published an interesting report and recommendations for executive action regarding interagency contracting.

In the US, interagency contracting refers to a strategy whereby 'one agency either places an order directly against another agency's contract or uses the contracting services of another agency to obtain supplies or services'. The EU rough equivalent is the use of centralised purchasing strategies and, in particular, the carrying out of cooperative procurement--most often through dedicated central purchasing bodies. 

In view of the importance given to these 'smart procurement' strategies in the revision of the current EU rules (see October 2012 compromise text for a 'state of play' on centralised procurement strategies), learning from the lessons offered by the experience in the US looks like a promising opportunity.

In my view, the relevance of the GAO interagency contracting report relies on its realism and practical approach. Indeed, GAO 'designated the management of interagency contracting as a high risk area in 2005, in part because of the need for stronger internal controls and clear definitions of agency roles and responsibilities'. 

Following a first assessment in 2010 and the implementation of important policy reforms aimed at strengthening the governance and oversight of interagency contracting, GAO now issues a series of additional recommendations that, basically, boil down to giving effect to the 2011 Policy developed by the Office of Federal Procurement Policy (OFPP) and to strengthening the collection and analysis of data on interagency contracting. Some of the most interesting extracts are, in my opinion, the following:
OFPP issued guidance in September 2011 that requires agencies to develop business cases for creating new governmentwide acquisition contracts and multi-agency contracts. The business cases must address three key elements: (1) the scope of the contract vehicle and potential duplication with existing contracts; (2) the value of the new contract vehicle, including expected benefits and costs of establishing a new contract; and (3) the administration and expected interagency use of the contract vehicle.
The guidance also requires senior agency officials to approve the business cases and post them on an OMB website to provide interested federal stakeholders an opportunity to review and provide feedback. Feedback is addressed through various channels, including posting written comments through the website and sending letters or memos to stakeholders. According to OFPP, it also conducts follow-up with sponsoring agencies when significant questions are raised during the interagency vetting process, including questions related to potential value or duplication.
OFPP and GSA have taken a number of steps to address the need for better data on interagency contract vehicles. We previously have reported that a lack of reliable information on interagency contracts hampers agencies’ ability to do market research as well as efforts to manage and leverage them effectively. To promote better and easier access to data on existing interagency contracts, OFPP has worked to improve the Interagency Contract Directory, a searchable online database of indefinite delivery vehicles for interagency use created in 2003. [...] Short-term improvements include enhancing the search function and simplifying the presentation of search results, which should aid market research. Potential long-term enhancements include the ability to access vendor past performance information and upload contract documents, such as statements of work, to the system. OFPP officials also noted that this information will be helpful in providing data on the use of interagency contract vehicles, as the database provides information on the amount of obligations against the contracts, and eventually may provide other information such as a notification when contracts not designated for interagency use are being used in that manner.
In my view, the practical recommendations and the policy objectives set out by the OFPP and now strongly endorsed / recommended by GAO make sense and should be carried to the regulation of centralised procurement bodies/strategies in the forthcoming EU rules, with a particular focus on data collection and analysis (which has been significantly reduced with the proposed suppression of article 84 of the 2011 Commission's proposal and, particularly, of its paragraph 3(1) that mandated special public oversight of central purchasing bodies). 

I think that the more general transatlantic message to carry home in the revision of the current of the EU rules is that, as procurement strategies become more complicated, more planning and more oversight / analysis are required. Maybe not an easy lesson to square with the aim of procurement simplification, but definitely an operative need if we want to avoid creating (or nurturing) a 'regulatory beast' we may be unable to tame.