INTERVIEW: Daniel McLaughlin, the IRS' systems buyer

I would say we have become more focused on buying commercial products. We understand that the government follows the rest of the industry as far as the information technology industry is concerned.When we are buying desktop or notebook PCs or routers, we look at what is commercially available. We don't have things made specifically for us. Instead, we look at the commercially available software and hardware and then we buy those things.Also, the procurement process has changed a great deal. It used to take a long time, say one or two years, to get a new piece of equipment in the door after you started the solicitation.Today, because of the changes in Federal Acquisition Regulations and new business methodologies, it could be very, very quick.For instance, one reverse auction that we did took only three weeks from start to finish once we decided what to buy. We can buy some things in as short as two weeks.Most contracting people have also become more businesslike. We look at not only the contractual area but also at the business part of it. We look at it as an investment. We need to leverage the reforms that have been made during the various FAR rewrites.I was on a FAR Part 15 rewrite team, and one thing that we wanted to make sure was that we could openly communicate with the business community about our needs.The method used before the FAR 15 rewrite tended to stifle the communication between business and government. One of the reasons was that we were very intent on providing a fair and level playing field. One of the things that we did was try to cut off communications with the folks that we were buying from.The FAR 15 rewrite really helped us open up communication lines with industry so that we can do market surveys and understand the industry better and they could understand us better and what we wanted from them. It has been very successful. For instance, in the first reverse auction at the IRS, we saved a tremendous amount of money. The final price for a PC was $625, whereas we were expecting a market price of probably $800 to $900.We are successful in getting the equipment to the customer as quickly as possible.Because of the business methodologies we use, we look at doing enterprise arrangements with software companies. We look at leveraging the entire marketplace, not just the IRS, but the entire Treasury Department and its 120,000 employees.Instead of buying maybe just 30,000 units of Adobe Acrobat last year, we bought it enterprisewide and got a tremendous price break. It's managing people. I am a firm believer that people are your most precious resource, and folks that are happy at work and want to come to work are more productive.What we have to do as managers is provide people with an environment in which they do the best they can do and fulfill their work.Everyone has different things they want to achieve. Someone may want more money; someone may want more autonomy; someone may want a more challenging job. And you have to look at people to see what they want and how they can be made more productive and the best person they can be at work.Also, providing customer satisfaction is a big challenge'a constant challenge. It's extremely hard to keep IT people. Most of the folks who work for the government do so because there is something about working for the government'you know you are doing good for the entire country. It may sound trite, but a lot of that motivates people in the government.Because we are in contracting, we have different recruitment procedures. But we take a lot of time to develop and hire people. And as they start doing better and better, they stay.We make sure that if the folks want to get a master's degree or take training that we send them to classes. That helps to keep people around, believe it or not. It's one of the ways; it's one of the many tools in our toolbox. Our first reverse auction was very successful.We saved a tremendous amount of money. We are looking at trying to balance using that tool with also keeping a partnership with our vendor community.One of the things that we studied about reverse auctioning'and what industry told us they don't like about it'is that it tends to drive prices down where companies have a hard time doing what they are committed to do.The more of a commodity we buy, the more appropriate reverse auctioning is. Industry should meet with us and make sure that we are informed about what's going on as far as technology is concerned.They should keep us informed about their products, what other agencies are doing, the methodologies they are using to buy things, and what other companies are doing to buy things and save money. What they can learn from us is what we can learn from them and that is to cooperate with one another.We need to teach each other best practices and best methods, things that are working, what's paid off and what's not, and ways to establish partnerships with vendors.One thing we want to do is to set up an environment throughout the federal procurement community to bring in new things, not for the sake of newness but because they might be good ways to do business. At the people level, yes there is. We are beginning to work together on, say, what the Mint, Customs Service and Secret Service are buying.If we all know what the other is buying, we can come up with a good partnership. But we need to constantly talk to each other. The challenge is to make sure that our customers receive the goods and services and all the employees have the goods and services they need to do their jobs. We have to ensure that the taxpayer ultimately receives a benefit from that. The IRS is a customer-focused organization and that customer is the taxpayer.