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Why I Won’t Be a Prime Contractor


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Author: John Krieger

Because I don’t have to.
It is as simple as that.

You may wonder why I wrote this article. (Actually, I did too—but probably for different reasons.) So, before we proceed any further, let me provide the genesis. Dr. D. Mark Husband, senior advisor, Root Cause Analyses, Office of Performance Assessments and Root Cause Analyses (PARCA) asked the Defense Systems Management College (DSMC) to gather “subject matter experts” (SMEs) from various career fields to discuss issues related to doing business with the federal government, specifically the Department of Defense. I was invited to discuss contracting issues.

The discussion was in support of the Better Buying Power (BBP) 2.0 effort to achieve greater efficiency and productivity in defense spending. Frank Kendall, Under Secretary of Defense for Acquisition, Technology, and Logistics (USD[AT&L]), sent letters to the chief executive officers of major defense contractors seeking similar information. During one part of the discussions, I made the bold assertion that I wouldn’t contract with the federal government as a prime contractor. We discussed that for a time and moved on.

Shortly after that gathering, my supervisor, manager and the dean of DSMC received an e-mail from Dr. Husband on the topic (i.e., Subject: Request for info from John Krieger iso of USD(AT&L) study on “Eliminating Requirements Imposed on Industry Where Costs Outweigh Benefits”). He wanted a white paper on my thoughts and rationale on why I wouldn’t contract directly with the federal government. My initial, flip response was “Look at the table of contents of FAR Part 52 and DFARS Part 252. Is that short enough for a White Paper?” He heeded my suggestion. It gave him a headache. But, he asked for more. The “more” is found below.

I make a comfortable living when you consider my salary as a reemployed annuitant, intermittent professor of contract management at the DSMC, leading sessions of The FAR Bootcamp, and occasional consulting. With the wages and payments I receive, combined with my civil service retirement pay, my income exceeds my needs. Why would I want to inflict contracting with the federal government on myself? Just so we are clear on what I mean, consider the first two definitions of “inflict”:

verb (used with object) 1. to impose as something that must be borne or suffered: to inflict punishment. 2. to impose (anything unwelcome): The regime inflicted burdensome taxes on the people. (Dictionary.com)

As I am not (particularly) greedy, the answer to the question is, “No reason.” If I were younger, more ambitious, it might be different.

Let’s look at why I use the term “inflict” in relation to contracting with the federal government.

The table in this article compares contracting with the federal government and contracting in the commercial or private sector. In the right-hand column of each pair, “commercial” does not refer to commercial item acquisition as discussed in Federal Acquisition Regulation (FAR) Part 12, but to contracting with private, for-profit organizations.

Table 1. Comparison of Federal Government and Commercial Contracting Requirements

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In the table, the requirements associated with contracting with the federal government are in the left column and those associated with commercial contracting or as a subcontractor are in the right column.

Not mentioned in the table are some other concerns (e.g., bureaucracy, current competency of federal personnel and their market knowledge). All have a tendency to detract from the experience of doing business with the federal government.

So, why then do people contract with the federal government?

It’s the only game in town for them. Some products and services (e.g., tanks, bombers, aircraft carriers) are of such a nature that the federal government is the only customer.

To diversify their portfolios and protect against downturns, or other issues, in a single market (i.e., having many eggs in many baskets). For example, the Boeing Company building both commercial and military aircraft.

To leverage federal government research and development dollars for infusion into commercial products and services.

jan-15-article-9-secondaryThe return on assets employed is great in the sense that the government pays you for the assets you employ. If you have many contracts, the rate of return is predictable. Remember that the owners of some government contractor firms are largely widows and orphans and retired public employees, including some from Canada, if you look at the institutional investors.
Patriotism. I have it from a usually reliable source (one of my brothers) that a major commercial firm built telescopes/cameras for spy satellites out of patriotism, though the company wasn’t allowed to talk about it.

(Unlike me) for additional money. After all, as Willie Sutton is purported to have said, but didn’t, about why he robbed banks, “That’s where the money is.”

Whatever the reason, there is one thing I do know: If I were to decide to become a prime contractor with the federal government, the first thing I would do is hire someone like me to ensure that I followed the rules. By the way, my mobile phone is 703-772 —-

Krieger is an intermittent professor at the Defense Systems Management College at Fort Belvoir, Virginia.

The author may be contacted at john.krieger@dau.mil.


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