Contract management: a fundamental component of any resource management program.
"In any organization that spends a large portion of its annual funding program on contracts, a leader cannot afford to not have a contract management program where the leaders and managers of the organization are integrally involved."
Today's National Security and Defense leaders face a daunting challenge. Simply stated, the nation's economy cannot sustain the level of defense spending that the country has experienced since the attacks of September 11. Over the past decade, the United States (U.S.) defense budget has more than doubled. The U.S. Army's top line has more than tripled, growing at a unprecedented pace from $78 billion in 2000 to over $250 billion in 2008.
A growth of this magnitude and pace cannot be assimilated easily in a burea of the Department of Defense (DoD). Consequently, growth--by design--has come through the use of contra mentation contracts, service contracts, weapon system procurement contracts, and large enterprise systems acquired through contracts in virtually every aspect of national security, contractors are present and contributing. From Highly Qualified Executives, think tanks, and expert advisory/consulting services at the highest levels of the DoD, to aviation and vehicle mechanics, groundskeepers, and dishwashers at the tactical level, an outsourced capability is integral to virtually every operation.
Dependence on Contracted Services
The National Security apparatus's dependence on contracted capability has never been greater in our nation's history. In the U.S. Army alone, taxpayers spend over 50 percent of the Service's annual budget on outsourced capabilities (contracts), spending on average over $400 million a day on contracted capabilities. The Army's ability to manage these contracts has not grown commensurate with its dependence on them
The Army's Installation Management Command (IMCOM) represents a microcosm of this dependence, spending roughly 50 percent of its Base Operating Support funding on service contracts, The other major capability areas in the Installation Management Community rely heavily on contracting. These include the following:
* Sustainment, Restoration, and Modernization of the Army's existing infrastructure
* Army Family Housing Operations, which is almost totally privatized and operated by a contractor
* Military construction of new buildings and real property to replace those that have outlived their life span or to support key legislation, such as Base Realignment and Closure and the growth and movement of Army formations to other operating bases
* Support to Overseas Contingency Operations (formerly known as the Global War on Terrorism). These funds, primarily provided through supplemental legislation are used in IMCOM to ensure that the Army's deploying and redeploying formations from overseas theaters are fully supported and prepared to conduct their missions across the Army Force Generation (ARFORGEN) continuum, as well as to care for deployed Soldiers' family members remaining at home.
Comprehensive Management Program Promotes Fiscally Informed Contracting Decisions
To ensure that the Army maximizes its purchasing power throughout its installations while exacting a greater level of fiscal discipline, IMCOM developed and implemented in 2009 a comprehensive contract management program that empowers its leaders to better manage and resource installation-level services contracts. Commonly referred to as SIECMP (Services and Infrastructure Enterprise Contract Management Program), this IMCOM program has become an invaluable tool, enabling leaders at both garrison and IMCOM Headquarters levels to make better, fiscally informed contracting and resourcing decisions concerning the Army's installation's services. Implemented properly, the program gives leaders and other decision makers full contract visibility and a holistic view of the outsourced capabilities that are essential when making fiscally and operationally sound sourcing decisions.
IMCOM developed SIECMP as a Leader's program founded on three fundamental Lines of Effort (LOE):
* Establish a structured management program
* Leverage Enterprise Sourcing and other available tools
* Conduct full-spectrum training
Establish a Structured Management Program
LOE 1 establishes a structured management program. To achieve this, IMCOM developed a Contract Management Staff Officer (CMSO) position and authorized each garrison to hire one individual whose job is to help the garrison manage the entire contracting spectrum from requirements generation and validation to contract execution and closure. Residing within this LOE is the most important facet of SIECMP--the periodic conduct of Contract Review Boards at established intervals that complement and inform both operational and resourcing activities in an organization. Over time, commands are expected to develop and mature a comprehensive contract database to serve as an authoritative and current source for all command service contracts.
Leverage Enterprise Sourcing and Other Available Tools
LOE 2 seeks to leverage enterprise sourcing and other available tools to ensure that the command maximizes efficiencies. This is accomplished by contracting like services in the same manner and, where it makes sense, using an enterprise-level contracting vehicle that has the potential to produce large savings (such as the storage of privately owned vehicles for Soldiers deploying from installations in the Continental United States).
Conduct Full-Spectrum Training
LOE 3 seeks to develop key non-acquisition personnel professionally by conducting full-spectrum training for leadership and management personnel. Currently, the command conducts CMSO training via Defense Connect Online, has instructed the program at command-level symposiums and forums to mid-level management, and has integrated instruction about the SIECMP in key executive leadership courses like the General Officer Senior Commander's Course and the Garrison PreCommand Course.
SIECMP Shows Substantial Progress and Great Promise
While the command has realized varying degrees of success and progress within each of these three LOEs, the progress is evident in the program's first year of operations: garrisons conducted four SIECMP Quarterly Contract Review Boards and reported identifying cost avoidance and savings estimated at approximately $50 million.
With just a little over a year in operation at the garrison level, SIECMP still has room for improvement and greater opportunities for the Installation Management Community. The essential ingredient for continued success is emphasis from the same leaders who rely upon it to empower them to make sound contracting and resourcing decisions. Maximum benefit results from key leadership involvement; deployment with a dedicated staff (the CMSO); disciplined reviews, analyses, and reporting; and integration into the organization's resource management program.
SIECMP is not without precedence and is applicable at virtually every level in any environment. Similar programs have been implemented with excellent results in operational units and deployed environments, such as in support of Operation Iraqi Freedom. SIECMP is a powerful tool in aiding commanders in one of their fundamental duties--being good stewards of the Army's resources while providing quality installation services to the Soldiers, families, and civilians they are privileged to serve.
The Army's ability to sustain itself fiscally as the world's premier fighting force is dependent on tools like SIECMP. It has proven to facilitate sound and timely sourcing and resourcing decisions that fully support ARFORGEN operations and other key operating and generating force requirements while maximizing the purchasing power of its operating budget.
To learn more about IMCOM's Services and Infrastructure Enterprise Contract Management Program, log on to https://www.us.army.mil/suite/page/604044 or contact Chris Greiman (the IMCOM G8 SIECMP Program Manager) at firstname.lastname@example.org/(210) 424-8792, or Kathy Thomas (the IMCOM G8 Acquisition and Sourcing Division Chief) at email@example.com/(201) 424-8620.
(1.) Secretary of Defense Robert M. Gates, the Pentagon, January 06, 2011
(2.) President Barack Obama in his White House Memorandum titled Government Contracting for the Heads of Executive Departments and Agencies released March 4, 2009
"... But this country's dire fiscal situation and the threat it poses to American influence and credibility around the world--will only get worse unless the U.S. Government gets its finances in order. And as the biggest part of the discretionary federal budget, the Pentagon cannot presume to exempt itself from the scrutiny and pressure faced by the rest of our government." (1)
SECRETARY OF DEFENSE ROBERT M. GATES
"Contracts must be adequately managed from start to finish, ensuring funds are spent wisely. Government-wide assessment of contracts is needed in order to identify those contracts that are wasteful or inefficient. In addition, federal agencies should be sensitive to contractors performing inherently governmental activities that should not be outsourced." (2)
PRESIDENT BARACK OBAMA
"The Army's capacity to effectively manage contracts has not grown commensurate with its dependence on them."
BG THOMAS A. HORLANDER, IMCOM G8
BRIGADIER GENERAL THOMAS A. HORLANDER, CDFM
Brigadier General Thomas A. Horlander currently serves as the U.S. Army Installation Management Command G8/ Resource Manager. He is a U.S. Army Master Strategist and holds three master's degrees in business administration, military arts and science--international relations and national security. He is a sitting member of ASMC's CDFM Certification Commission and a member of ASMC's Washington Chapter.