Contracts and Automated Rules

Stephen DeAngelis

November 22, 2006

As a businessman, I can’t help reading newspapers with one eye on business opportunities. A story in the Washington Post about contracting challenges inside the Department of Homeland Security tells me that DHS is a place that could benefit from rule set automation [“Report Finds DHS Lax on Contracting Procedures,” by Robert O’Harrow, Jr., and Scott Higham, 22 November 2006]. The challenges sound all too familiar and can be found in many large organizations.

Private consultants hired by the Department of Homeland Security have found widespread problems with its contracting operation, including nearly three dozen contract files that could not be located. Files that could be found often lacked basic documentation required under federal rules, such as evidence that the department negotiated the best prices for taxpayers. … “The inability to locate files and inconsistent file organization puts the government at risk in ensuring the contractor is fulfilling its contractual obligations and the government is meeting its contract administration responsibilities,” the consultants wrote in their report.

Although I am unfamiliar with the DHS process per se, more and more contracting throughout the business world is being completed electronically. Such electronic processes are ideal candidates for rule set automation. Processes governed by automated rules can addresses the types of challenges noted in the article and provide alerts to decision makers if any red flags appear in the process. Contracting is a rules heavy process and we know that DHS has rules in place.

Last year, Homeland Security Secretary Michael Chertoff, Deputy Secretary Michael P. Jackson and others at the agency acknowledged having trouble with contracting and promised to do better. They said they had made progress by hiring scores of contracting officials and by tightening rules.

When rules are automated, human errors decline dramatically and audit trails are more easily followed. In addition to being more efficient, automated rules are also more cost effective. Something every taxpayer would be thankful to see. Speaking of being thankful, I hope that all U.S. readers have safe and happy Thanksgiving weekend.