Why Partnering Matters in a Tight Budget Environment

By Kevin Hilferty, Legal Intern

With the arrival of sequestration and slashed budgets, agencies have been facing many tough decisions on where to cut spending and save money. Acquisition teams have been given the difficult task of doing the same or even more with less. The pressure to maintain current levels of support with less funding may seem to put acquisition personnel and contractors at odds with each other. In today’s tough environment one cost-effective way to achieve greater productivity and cost savings in procurement is not through becoming adversarial, but rather through partnering.

Partnering is the teaming of acquisition personnel and contractors to achieve a common goal. Partnering requires parties to look past their different incentives and come together to create a relationship based on trust, good faith, and open communication. This does not require that one party must agree to the other party’s position, only that they articulate they understand the other’s perspective. Following the spirit of partnering helps avoid costly disputes and protests, improves efficiency, and gets more accomplished. The meeting of the minds required of partnering helps ensure that contract modifications and changes are reduced because both parties understand each other’s needs from the beginning.

A Good Idea and a Requirement

Building an effective government-contractor relationship is not just good for business, but is often required by both agency acquisition regulation and law. Legal precedents mandate that parties to a contract must exhibit good faith in performance of that contract. The requirement for fair dealing and good faith is no less for parties to government contracts than those in commercial contracts. See Maxim Corp. v. United States. There have been many cases where the lack of a good relationship exhibiting good faith between government and contractor has led to significant problems.

Uncooperative behavior between parties can lead to legal disputes, and often termination of contracts. In Lucille Holden (Jan. 11, 1984), the contractor was so verbally abusive with obscene language to government employees that the Board held that the contract was terminated for default. In Apex Int’l Mgmt. Servs.Inc. (Mar. 4, 1994), the Board found the government employees did not exhibit fair dealing when they did not provide access to necessary equipment, including throwing keys in trash dumpsters and removing telephone wiring. Courts and boards have found lack of good faith in less extreme situations as well, including for failure to assert a claim in a timely manner. See All-American Poly Corp. (Sept. 21, 1984).

The Federal Acquisition Regulations (FAR Subpart 42.5) also encourage cooperative behavior in both the post-award orientation process and through incentivizing good working relationships in the past performance review process. The contractor’s history of cooperative behavior and commitment to customer satisfaction are, among other factors, to be considered in past performance reviews. These reviews are often used in relationships during all contracts.

Beyond the FAR, many agencies have taken a proactive approach and started partnering programs to help ensure mutual cooperation and trust in the acquisition and contract administration process. The Army Corps of Engineers pioneered the partnering field by creating a partnering program in the early 1990s that includes workshops with lectures and group exercises designed to help participants learn to achieve goals through teamwork. Since the introduction of the Corps of Engineers’ partnering program, many agencies and states have started their own programs aimed at increasing communication and teamwork.

Formal or Informal Partnering a Benefit

Even without a formal partnering program any procurement process can still benefit from applying some best practices to increase teamwork and build good working relationships:

• Get to Know Each Other – Something as simple as spending a small amount of time in post-award meetings introducing all parties and talking about common goals in the contract administration process can go a long way toward preventing disputes.
• Begin on Neutral Ground – Another good practice is to try to have a meeting away from the office or project site to allow both sides a chance to step out of their office roles and build working relationships in a non-adversarial environment.
• Communicate Goals – The most important practice of all is to have honest and open communication about mutual goals for the project and the motivation behind those goals. Keeping communication honest and frank can help build strong relationships based on trust.

In an environment of shrinking budgets there is great pressure for both procurement officials and contractors to accomplish more with less funding. Viewing the acquisition process from an adversarial perspective will only lead to problems with cooperation and can lead to costly legal disputes, delays, and increased costs through contract modifications. Partnering, or seeing the procurement process as teamwork between government and contractor, can help avoid disagreements and reach goals more efficiently without incurring additional cost.

Republished from the Integrity Matters blog – Perspectives on Acquisition and Program Management.

Note: The legal information in this blog post was for general informational purposes only and should not be a substitute for obtaining legal advice from a licensed attorney in your jurisdiction.