Keep Away from Runaround SOO — The Pitfalls in Contracting Objectives

Been very busy the last couple of weeks visiting clients and discussing policy, so blogging is a bit backed up.  Most recently ran into an agency where the rule of thumb in contracts is only to use Statements of Objectives, also known as SOO.  This is a different animal than the usual Statement of Work (SOW) and Performance Work Statement (PWS).

The SOO, according to DAU’s Acquipedia “is used in solicitations when the Government intends to provide the maximum flexibility to each offeror to propose an innovative approach. That portion of a contract that establishes a broad description of the government’s required performance objectives.”

This flexibility is in response to many of the criticisms of government procurement that oftentimes a new technology or innovation wasn’t considered since the SOW and/or PWS seemed to bake in the solution.  The old bugaboo “prescriptiveness” is often applied now to any alternative method than the SOO, which tends to lead the procurement process down some odd roads.

For those of you who are not familiar with the process of writing a SOO, it involves several steps.  These are, once again, thanks to Acquipedia:

a.  Conduct market research to determine whether commercial items or non-developmental items are available to meet program requirements.
b.  Review the requirements documents which authorize the program, various DoD, services, joint services requirements documents for program management and acquisition management impacts to the program.
c.  Prepare a bibliography citing the specific portions of all applicable governing instructions, directives, specifications and standards with which the program must comply.  Keep these requirements to the absolute minimum.
d.  Develop the program objectives by completing a risk assessment that highlights the high and moderate risks in the areas of business, programmatic, and technical identified on the program based on the requirements and user’s high level objectives.

I have no general objection to this method of developing a contract specification, but it is not a panacea or a should be applied across the board.  As a matter of fact, the weaknesses inherent in the steps are well known in the contracting community.  Some of these include:

1.  The scope of the market research becomes skewed to limit the competition and drive the procurement to one or two preferred sources, including organic or custom solutions;

2.  Essential governing instructions are limited to the detriment of the public interest, particularly the application of earned value management;

3.  Running a risk assessment in the absence of sufficient data for the items being procured, or narrowing the risk to favor large businesses.

For example, I have participated in such solicitations, particularly with software, where the first step is achieved by the issuance of an RFI where a multi-page list of features that the COTS or NDI product is expected to meet.  Absent such “market research” are such considerations as the elegance of the underlying code, stability, sustainability, scalability, and efficacy of the solution.  So rather than successfully finding innovative new technologies to incorporate, in the first step the initiator of the purchase request is able to skew the research in favor of the familiar.  With step 4, the risk assessment, this tends to undermine initiatives to support small business and skew contracts in favor of large accounting, software, and consulting firms.  Needless to say, this is a self-reinforcing spiral, in which bigness is rewarded with more money to result in more bigness.

When economists like Thomas Piketty discuss the concentration of wealth over the last thirty years they must first look to government policy in general and contracting policy in particular, especially since the socio-economic measures meant to even the playing field in contracting were disassembled.  Policy and method have favored concentration and monopoly for quite some time and the public is paying a price for it.  In virtually all systems the ones that display the greatest degree of diversity are the most healthy.  Given the amount of concentration in key U.S. verticals, a change of policy to provide greater, and not less, guidance to encourage and reward diversity and small business–and more than a little money for the training of contracting specialists–is in order.

The stated purpose of the SOO is flexibility for a worthy end, but like all ideas implemented without knowledge, it not only fails to achieve its intended purpose but oftentimes provides an opening for opposite results.