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DLA - The Good, the Bad, and the Ugly

The Defense Logistics Agency supplies almost every consumable item America’s military services need to operate, from groceries to jet fuel to light bulbs. It provides approximately 95% of the military services’ repair parts and 100% of the services’ subsistence, fuels, medical, clothing and textile, construction and barrier material. It then disposes of surplus material and supplies. It has operations in 48 of the fifty states including Alaska and Hawaii (the neglected states are Vermont and Iowa) and would be #57 on Fortune’s 500 list (if it were a company). So in terms of basic commodities, if you are looking to sell to the government DLA is a key agency to consider.

DLA managed $2.07 billion in foreign military sales for FY 2008 and supports 126 allied nations. It employs 23,000 military and civilian employees. Manages 6.4 million items in eight supply chains and processes 114,000 requisitions every day. It conducts 11.200 contract actions every day and supports 1603 weapon systems. It spends about $35 billion every year, and that number went to $42 billion in 2008. It is a very busy and productive place. It’s contracting specialists are some of the best and working for DLA gets you vast experience very quickly. Speed and efficiency are key measures of success, and unlike many logistic functions – soldiers’ lives depend on DLA’s effective execution of its mission. It is a high-pressure, but very rewarding environment.

Historically, although its roots go back to WWII, DLA has only existed since 1961. In that year, Secretary of Defense Robert McNamara ordered that the previous single-manager agencies(where each branch of the armed services had responsibility for certain commodities) be consolidated into one agency. The Defense Supply Agency (DSA) was established on October 1, 1961, and began operations on January 1, 1962. In 1965, DOD consolidated most of the contract administration activities of the military services to avoid duplication of effort and provide uniform procedures in administering contracts. Officials established the Defense Contract Administration Services (DCAS) within DSA to manage the consolidated functions.

DLA took on its present name on January 1, 1977, when DOD changed the name of the Defense Supply Agency to the Defense Logistics Agency. In 1990, DOD directed that virtually all contract administration functions be consolidated within DLA. In response, the agency established the Defense Contract Management Command, absorbing its Defense Contract Administration Services into the new command. You might here some of us still refer to DCAS or DSA, much as we sometimes here references to the ASPR! Some old habits die hard.
This past September, however, Congress heard testimony from the Government Accountability Office that suggested that perhaps DLA was not functioning quite as it should. According to this report DOD faces challenges in making sure that DLA gets value for the taxpayer’s dollar and obtains quality commodities in a cost-efficient and effective manner. Key areas of concern include clearly defining its requirements, using the appropriate contract type, and effectively overseeing contractors. Specifically the GAO has found the following problems:

Accurate Requirements Definition – Without a good understanding of customers’ projected needs, DLA is not assured it is buying the right items in the right quantities at the right time. GAO’s prior work has identified instances where problems in properly defining requirements can lead to ineffective or inefficient management of commodities. For example, GAO reported in 2005 that while DLA had a model to forecast supply requirements for contingencies, this model did not produce an accurate demand forecast for all items, including Meals Ready-to-Eat. As a result, the demand for these items was underestimated and some combat support units came within a day or two of exhausting their Meals Ready-to-Eat rations.
Sound Business Arrangements – Selecting the appropriate [contract] type is important because certain contracting arrangements may increase the government’s cost risk where others transfer some of that cost risk to the contractor. For example, GAO noted in 2007 that DLA’s Defense Energy Support Center was able to purchase fuel and supply products for the forces in Iraq more cheaply than an Army Corps of Engineers contractor because DLA was able to sign long-term contracts with the fuel suppliers.
Proper Contract Oversight and Management – Failure to provide adequate contract oversight and management hinders DOD’s ability to address poor contractor performance and avoid negative financial and operation impacts. For example, in June 2006, GAO found that DLA officials were not conducting required price reviews for the prime vendor contracts for food service equipment and construction and equipment commodities. Agency officials acknowledged that these problems occurred because management at the agency and supply center level were not providing adequate oversight to ensure that contracting personnel were monitoring prices.

GAO-09-1040T

GAO acknowledged that DLA from its headquarters at Fort Belvoir in northern Virginia has taken some actions to address these challenges. For example, DLA has begun adjusting acquisition strategies to reassign programs to a best procurement approach. DLA has also established contracting officer’s representative training requirements to ensure these individuals are properly trained to carry out their responsibilities.

On the one hand it might be easy to say that after all this time, DLA should be able to get it right; that GAO should not still be finding these problems. When you look at these criticisms, however, they are identical to the very issues that EVERY contracting activity faces. Defining and understanding the requirement, placing the contract under the correct business arrangement, and overseeing the contractor are the three areas that require constant attention. Government contracting is very dynamic, resources are stretched too thin, and inadequate training conspire to create these perennial problems. No agency is immune.

But that doesn’t suggest that it is excused. Our profession MUST continually strive to properly define requirements and train those who do so. The variety of business arrangements must be understood. For example, when was the last time you saw a Fixed Price Redeterminable contract? Did you even know that such a contract type existed? Doing things a particular way because “that’s the way we’ve always done it” is just sloppy contracting. Contracting professionals MUST engage in continuous learning or they neglect one of the linchpins of being a professional. And having enough trained contract professionals is going to continue to be problem as the baby boomers continue to retire. These are not easy problems to solve. But that doesn’t mean we shouldn’t try. What can you do to address these three areas in your organization? The next GAO report might be a cut and paste from this one, only this time it will refer to your command, company, or service center.

Do You Compete With Federal Prison Industries?

Under applicable federal procurement rules certain products are required to be purchased from Federal Prison Industries (FPI). These purchases are intended to give prisoners productive work and a method to pay, at least in part, for their upkeep and maintenance. The problem is that there are companies in the commercial marketplace that are effectively frozen out of the federal market since they produced the same things as FPI.

In a recent decision, GAO had occasion to review the statutory and regulatory underpinnings of the current role of FPI in federal procurements.  Ashland Sales & Service Company. B-401481,September 15, 2009.

 FPI is a self-supporting, wholly-owned government corporation that was established to provide employment and training to federal penal inmates involving the production of commodities for consumption in prisons or for sale to government agencies. 18 U.S.C. §§ 4121, 4122 (2006); Federal Acquisition Regulation §§ 8.601(a), (b). For DOD, the requirements for the procurement of products from FPI are defined by the National Defense Authorization Act (NDAA) for Fiscal Year 2002, (citations omitted).

In 2008 Congress changed the process for determining when FPI is a preferred provider. This law created a new procedure for obtaining products from FPI for situations where FPI has been determined to have a “significant market share” of the product category in question as follows:

The Secretary of Defense may purchase a product listed in the latest edition of the Federal Prison Industries catalog for which Federal Prison Industries has a significant market share only if the Secretary uses competitive procedures for the procurement of the product or makes an individual purchase under a multiple award contract in accordance with the competition requirements applicable to such contract. In conducting such a competition, the Secretary shall consider a timely offer from Federal Prison Industries.
* * * *
For purposes of this subsection [2410n(b)], Federal Prison Industries shall be treated as having a significant share of the market for a product if the Secretary, in consultation with the Administrator of Federal Procurement Policy, determines that the Federal Prison Industries share of the Department of Defense market for the category of products including such product is greater than 5 percent.

So if FPI has captured 5% or more of a market segment, then DOD publishes that list from time to time as the DOD determines necessary. In the particular procurement before the GAO here, the product was “8405, Outerwear, Men’s” and it had been added to the list on June 3, 2009, with an effective date thirty days hence. Based on a solicitation issued within this window, and after conducting market research on these items as required by the statute, the agency decided to obtain them from FPI non-competitively. The protestor argued that since FPI now had a greater then 5% market share, the use of the set-aside was improper. The issues before GAO included the discretion of DOD in publishing the list with a later effective date, and the proper role of FPI in the federal marketplace.
The GAO analysis began with the interpretation of the relevant statute. For GAO and other decision makers when conducting statutory interpretation, they start with an analysis of the language in the law – does it provide an unambiguous expression of the intent of Congress? If so, the analysis ends there because the unambiguous intent of Congress must be given effect. (citations omitted) If, however, the statute is silent or ambiguous with respect to the specific issue, the decision maker will turn to the interpretation given to the statute by an agency responsible for administering the law; in this case DOD (citations omitted). Generally if the agency has interpreted ambiguous provision of the statute through a process of rulemaking or adjudication, the decision maker will provide great deference to that interpretation unless the resulting regulation or ruling is procedurally defective, arbitrary, or capricious in substance, or manifestly contrary to the statute. (citations omitted) On the other hand, where the agency’s position reflects an informal interpretation, deference is not warranted; in these cases, the agency’s interpretation is “entitled to respect” only to the extent it has the “power to persuade.” (citations omitted) The weight given to an interpretation under this lesser standard depends “upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade.”

So in a nutshell, and these rules apply whenever statutory or regulatory interpretation is required to resolve a dispute, if agencies follow a formal process of rulemaking/interpretation under authority granted to them by Congress then the courts and boards will generally follow that interpretation. If the interpretation is merely advisory, or informal in its creation, it is provided much less deference, but is given weight to the degree it makes sense and is persuasive. These are good rules to remember when reading laws or regulations.

Another rule of statutory interpretation cited by GAO is the rule that “[a] statute is passed as a whole and not in parts or sections and is animated by one general purpose and intent. Consequently, each part or section should be construed in connection with every other part or section as to produce a harmonious whole.” (citations omitted).

In this case, GAO determined that the timing of the update was proper, and even though a determination had been made that FPI had a greater than 5% market share for these products, the formal publication provided for 30 days to become effective. Thus the procurement from FPI under a non-competitive acquisition was proper.

So there are two lessons to consider here. If you compete with FPI, you will not have an opportunity to sell to the government unless and until FPI reaches a 5% market share. You might make your product commercially unique in a way that meets a government need, but is not copied by FPI. Intellectual property protection might be one way to do this. Second, this GAO opinion provides some excellent guidance on how adjudicative bodies interpret statutes and regulations. As confusing as they may be sometimes, these are standard rules of interpretation. Given the number of regulations and statutes that are involved in government procurement, these rules are worth remembering and applying.

Remembering 9/11

This is a part of Project 2996 – a project designed to recruit 2996 bloggers to post a blog about one of the 9/11 victims. Certified Contracting Solutions, LLC is proud to participate in this worthwhile project.

I fully expect that at some point in our future we will, as a nation, realize the impact of the events of 9/11. As the government report told us, just because we did not believe that we were at war, there was an entity out there that has been at war with us for many years. It is naive to think that they have just “given up” or that sitting down and talking to them peacefully will change their hearts. As hawkish or dovish as you might be personally, there does come a time when we must fight to protect the freedoms that others wish to take from us. Sadly we can lose them just as easily, perhaps more easily, by letting them drift away slowly rather than be taken away by force and violence. When the time comes to fight for those freedoms, and violence becomes necessary for our protection, count me in.
There were 2996 victims killed in the war of 9/11. Today we have been selected to honor one of them. Today we honor the memory of Allison Horstman Jones. She was 31 on that fateful day and was working as an analyst for Sandler O’Neil & Partners, an investment banking firm. There is no telling just what she was doing. It was a normal business day in World Trade Tower 2. People on the 104th floor were making coffee, booting up their computers, catching up with co-workers, looking at their schedules and to-do lists, and taking care of the myriad tasks we all tend to each morning.
 
Allison was a Phi Mu at Albright College. Her class mates and sorority sisters knew her as a “beautiful, loving, cheerful glow that added much joy to any room she entered.” She was a New York City resident, but loved the outdoors. Biking in my neighboring town of Boulder was one of her favorite activities. She and her husband Larry grew up in Bernardsville, New Jersey. With what seems to be Type A personality, when Larry introduced her to outdoor sports she took to them with a vengeance, as she apparently did with most things in her life. Biking, running, hiking, and swimming were activities in which she excelled. She skied in Idaho, and competed in tri-athlete competitions.  She hoped to enter the Iron Man competition someday.
She and her husband had been married barely five years. On their honeymoon in Belize they went wind-surfing and scuba diving. Just a few days before 9/11 she mountain-biked 30 miles. This was routine for her. According to one report, her husband who has since relocated to Boulder, said, “I’d be following her down a hill and hear her hooting and hollering… She kept on discovering new things about herself. She blessed me in a sense. Her drive to overcome adversities — I’ve taken that with me.”

I never knew Allison or any of the other 2995 victims. I confess to a curiosity of why anyone would work in a building that tall. I’m not a big fan of heights, but we do what we must when earning a living. I am guessing, obviously, but I think I would have been a better person for having known her. There may never have been an opportunity to meet, but some encouragement in my exercise program, some inspiration from someone so dedicated to outdoor sports, and some good Type A company certainly would do me some good. Because of the actions of some radicals who have been at war with us for so many years, I will never get that chance.
How long should we remember this day? Some suggest that excessive mourning is just too fatiguing. Perhaps. And clearly there are days that we never forget such as Pearl Harbor and D-Day, while there are others that fade as a remembrance of a specific day such as the sinking of the Maine and the fall of the Alamo. What we must remember is that we are still at war, even if we want to deny it. Our enemies will use that denial to their advantage, and it is just stupid to give your enemies any advantage whatsoever. Until the jihadists are defeated entirely, the war continues and unlike Viet Nam, we must fight it to win. Remembering the awful attack on our home soil by these vile creatures should serve to cement our resolve against them. It is not a remembrance of terror – it is a tribute to the unwavering courage of the American people. The grieving has ended for most of us, but certainly not the families who lost loved ones. They live with the loss every day. And as a society we feel that loss even if we can’t define it. So it remains a day of remembrance for most of us. Let us not forget that there are those who seek to destroy our freedoms and way of life. Remember that.
Some of the victims, both in the towers and on the planes, grabbed their final seconds and called loved ones – most just to say “I love you.” Some reached a voice; others just a machine. But they said what was important. What will you do today that captures those final seconds? Who will you call just to say, “I love you?”
On this day of remembrance, we look to the short life of Allison Horstman Jones. May she not be forgotten and even in death may she inspire us to be the best we can be. We can still make a difference in this world. May none of the victims have died in vain. Think about what you can do today, and every day for the rest of your life, to capture the good traits and disciplines of those who have gone before us, such as Allison.

Taking Exceptions

There is boilerplate in almost every government solicitation, and many from prime or higher-tier contractors, that says in effect. “you must accept our terms and conditions or you will not be considered for award.” The exact phrasing varies, but the point is clear – in any battle of the forms, buyer wins.

And it is also true that almost all offerors (especially under a government RFP or a subcontract request from a higher-tier; less so under an IFB since that will risk being found automatically non-responsive) will engage in that classic battle of the forms (see the classes on the UCC) and take exception to some portion of the terms and conditions.

So the question becomes in a government solicitation, when is it appropriate to take exception to the terms, conditions, or requirements, and when will you run a greater-than-usual risk that you will be found non-responsive, or fail to meet an essential element of the solicitation? That was the question raised in the protest of Northern Light Productions against a competition held by the National Park Service and decided just this week.

The solicitation, which was for the purchase of various audio-visual productions, stated that the government expected to get unlimited rights in anything produced by the contractor. Once they paid for it, they had no interest in dealing with future licenses or royalties. It was, as is often the case, designed to be a “work for hire” that would let NPS use the material for training, publication, advertising, or whatever. Forever. It was to be theirs to do with as they pleased. Part of the evaluation specifically said, “Evaluation will also include your understanding of the Rights in Data clause and other licensing requirements.”

In its initial proposal Northern Lights made no reference to data rights, but in a later revision it stated that the rights to be granted were “for educational and museum presentation use for the life of the program, up to twenty years.” This was factored into the evaluation by the evaluation team, but upon review by the contracting officer, she determined that this reservation made the proposal unacceptable for failing to meet an essential requirement of the solicitation.

So what was it, a minor exception to a term or condition or a material element of the solicitation? The GAO cited the rule that in “negotiated procurements, a proposal that fails to comply with the material terms of the solicitation should be considered unacceptable and may not form the basis of award.” In a footnote to that rule GAO further explained that “clearly stated RFP requirements are considered material to the needs of the government.” GAO further noted that the RFP contained a “deviations and exceptions” clause that notified offerors that exceptions would not, in and of themselves, automatically cause a proposal to be deemed unacceptable.

The protestor argued that since the exception had been evaluated and scored, it could not later be a strict past/fail criterion. It was part of a ten-point factor, and even if they had been scored as a zero in that factor, they should still be considered for award. Further, it argued, since it did not list anything in the “deviations and exceptions” clause, it could not be considered a disqualifying item.

None of this was persuasive to GAO. They denied the protest on the basis that the requirement was clearly stated, it was reviewed by the agency (thus it was not an “automatic” disqualification) and in the agency’s discretion, the failure to permit unlimited rights was a material deviation thus making the proposal unacceptable. GAO, while it might have reached a different conclusion regarding the structure of the RFP or in the evaluation scheme, it was not inclined to say that the agency acted unreasonably in meeting its needs.

So what are the lessons? First, do not make material changes in an updated proposal. Introducing an exception that late in the process is just asking for trouble. Address the items that were raised during discussions, fine tune a few things if you choose, but do not take exception to a clearly articulated government requirement. And that is the second lesson. When the government says they need something – give it to them. If you can’t, don’t make an offer in the first place. If you think that the requirements are overly restrictive, the time to ask that question is BEFORE the initial submission, not after you have lost the competition.

Taking exceptions with the government is always risky. Companies that are more accustomed to commercial practices where the Uniform Commercial Code will step in to determine the terms of the contract are often surprised at the rigidity of the government process. In the expenditure of public funds, and fairness to all competitors, the government cannot permit such deviations. Yes, certain exceptions will generally not get you thrown out, but talk to someone who knows. Taking exceptions is not a best practice with clearly stated government requirements.

Northern Light Productions, B-401182, decided June 1, 2009.

Memorial Day 2009

As custodians of our defense contracts, we, the procurement professionals, have a special obligation and duty to our fighting men and women. We supply the troops; we bring them the latest and best technology in the world; and we make sure that they have the best America can provide. Fail in our duty, and people can and will die. This is a sobering thought, but the weight of our responsibility should be ever present on our minds.

Today is a day of reflection toward those who have given the ultimate sacrifice so that we can enjoy the greatest and freest society the world has ever known. It is not, as our dear President mistakenly observed, the day to honor those who serve – they have Veterans Day. Today is the day to honor the fallen. And to thank the families of those who have died – they too have paid a terrible price for our freedom.

Our liberally slanted society today reflects the youth of the ‘60s. Make love, not war. As Peggy Noonan has observed, “It’s good to remember war is hell. But when we removed the warrior, we removed something intensely human, something ancestral and stirring, something celebrated naturally throughout the long history of man. Also it was ungrateful: They put themselves in harm’s way for us.”

I find it interesting and sobering that so little respect is afforded to our flag these days. Kids have stopped saying the pledge every day in school. When prayer was removed, the religion of humanism was allowed to pervade their consciousness. It is now the National religion. Look at this picture.

Who honors the flag? The man who willingly risked his life to defend it. So many others just don’t seem to care, or sadly, know. Common courtesy has faded; is it any wonder that respect for our country and those who fought to save it has also gone by the wayside?

No one likes war, at least no one who is sane. It is a natural result of the human condition where good must fight evil to prevent it from dominating us. People are born to be free. It is an inalienable right. It comes from the creator – words that our founding fathers immortalized. You don’t have to believe in God to know that there is a split between good and evil. Demonizing? You betcha! And all it will take for evil to succeed is for good men and women to do nothing.
One of our greatest patriots of the modern era had this to say in recognition of this day. “I have no illusions about what little I can add now to the silent testimony of those who gave their lives willingly for their country. Words are even more feeble on this Memorial Day, for the sight before us is that of a strong and good nation that stands in silence and remembers those who were loved and who, in return, loved their countrymen enough to die for them. Yet, we must try to honor them — not for their sakes alone, but for our own. And if words cannot repay the debt we owe these men, surely with our actions we must strive to keep faith with them and with the vision that led them to battle and to final sacrifice. Our first obligation to them and ourselves is plain enough: The United States and the freedom for which it stands, the freedom for which they died, must endure and prosper.” Yes, those are the words of President Ronald Reagan.
Patriots today come in all shapes and sizes. And the fact that we can still debate the rightness or wrongness of battles between good and evil. I particularly like the words of the hunter, musician, and patriot, Ted Nugent who said, “In paying the ultimate sacrifice, American warriors ensured that not only would America continue to be free but that America would continue to be a beacon of freedom so intense that it no threat of oppression can extinguish it. So long as Old Glory flutters in the wind, there is hope. So long as American warriors are willing to carry Old Glory into battle, freedom’s flame will never be extinguished. Our enemies can knock sometimes down our buildings, but mortar, brick and steel does not America make. It is the irrepressible spirit and undying love of freedom that is uniquely America and it is the American warrior who is willing to fight and die to protect the God-given freedoms and rights of all people.”
We are not brick and mortar. We are free human souls. Our souls are from above. Our freedom is from our forefathers and the many who have died to preserve it for us. It was bought at great price. Respect that. Work to continue the effort they started. And never, never, never, give up.

Contracts and Bridges

There are many things we attempt that literally have no value until they are completed. At the same time, there are some things that just getting them done “well enough” can be acceptable.

For example, if you are writing a position paper and you have thought out your arguments, gathered your facts, and written all of this is a logical manner, there is a good probability that what you have done is good enough for the purpose and you can submit it. If you are like me, however, you constantly believe that you can make it just a little bit better so you sleep on it “just one more night” and maybe you get back to it and maybe you don’t. In these cases, you need to discipline yourself to accept “good enough” and move on. The same can be said of a contract. Anyone who has attended my classes has heard me say that there is not such thing as the “perfect contract” (no matter what your boss or even Legal might try to tell you). No matter how many sets of eyes get to see it, there is always something that can be done to improve it in some way. It’s the nature of business transactions and the foibles of our human language. Good enough needs to be good enough, and you need to get on with other matters.

But there are some things where good enough isn’t. Suppose you were building a bridge. You might have the anchor supports, the girders, the suspension cables, and the mid-span supports (I’m no engineer, so there are probably correct names for all of this, but I think you get what I am saying), but unless you have laid the very last section of decking, you do not have a bridge. It is not functional. It cannot be used as a “bridge.” It might be a nice piece of art, and it might even be considered a “good start,” but if someone is trying to take a truck loaded with widgets across it, they won’t make it. And the results can be disastrous if not catastrophic.

In everything you do in the course of a day, which of them can be completed “good enough” and which ones must be fully carried across the finish line? Are you writing a contract or building a bridge? Each task you tackle in the course of your day fits within one, and only one, of these two categories. Do you ever confuse them?

I recently accepted the task of writing an agreement for a client. It’s a pretty standard agreement with mostly boilerplate language. It was relatively easy to locate a model, review it for applicability, accuracy, and currency and have it prepared. It was, as far as this type of agreement goes, “good enough.” The problem arose in that this client as not completed the formation of their business. They do not have an approved company name registered with the state. So while the agreement is “good enough” we cannot carry it across the finish line. There is an absolutely essential part that is missing – the name of the party.

So the next time you create your “to do” list, give some thought about into which of these two categories each task fits. Can you get it completed “good enough” and not waste any more time trying to make something perfect that never will be? Or is this a task that has a critical component that must be completed? What is that critical component? Have you set the wheels in motion to make that happen? Do you even know what that component looks like, who has to do it, and what resources will be necessary to get it done? We worked with a client who was frustrated over not having a website. They had drafted all the content, but could not figure out how websites are set up (let’s just say that IT and web searches were beyond their experience). We showed them how to register a domain name, how to set up a hosting agreement, and how to load webpages into the site. Any ONE of those things being missing would have prevented the site from being viewed by potential customers. We needed all three. And it made no sense to embark on building a website until all three were identified and someone was made responsible for making it happen. The content could be considered a good-enough task. The whole website was a bridge task.

How many projects do you have that have lain incomplete for what seems forever? Are they contracts or bridges? Can you make use of it in its current good-enough state? Or must you find that missing link to connect both ends of the bridge?

When you think about getting things done, considering this approach might be a useful tool in increasing your productivity.

Active Listening - Part 2

In our last post we talked about some of the techniques you can use to develop better skills at active listening. In this post we will talk about some additional active listening skills and also about some tools for persuasion.

When the situation calls for it, and negotiations usually do, a question often comes up over whether you can take notes while engaged in active listening. Certainly you have to drop the eye contact to look at a piece of paper, but the simple answer is yes – it is appropriate to take notes. LIMITED notes. Why limited? While eye contact encourages a focus on what is being said, most people will remember better things that they write down. By making limited notes you can focus on those most important things and commit them to memory. Further, some note taking suggests to the speaker that you consider something they said so important that it is worth making a “permanent” record of it. And there is something interesting about the written word. When we see something in writing, we naturally believe that it is more accurate [you know like they say, “I found it on the web so it must be true!”] Obviously that is NOT true, but we laugh because it is “almost” true. We are more likely to believe something that is written down, and if you are writing what the speaker is saying, you are encouraging them with the subliminal message that you believe what they are saying. So yes, it’s OK to take notes during active listening, but keep it limited and only the high points. Keep it short so that you can re-engage the eye contact.

When you are speaking there are a few techniques that will encourage active listening by your audience. Certainly the use of eye contact and positive body language just as when you are listening, but now you also have the tool of your voice. Speak softly, but loud enough to be heard. Temper your words. Do not be aggressive with your language or your attitude, just as you should not appear condescending. If your listener perceives that you are speaking down to them, they will stop listening and begin plotting their revenge. You can’t control their perceptions completely, but you can work toward not antagonizing them! And I can’t emphasize this enough – there is NEVER a place for vulgarity or profanity. Remove those words from your language in all situations.

When making an argument, break it down into bite-sized pieces. Don’t lay everything out at once. Make it follow a logical progression. Ideally you want them to reach your conclusion before you get to it. In that way they perceive it as their own idea. This is good. Don’t make the waters murky either; concentrate on the key points and ignore the inconsequential ones. In the same vein, stay focused and try to keep the conversation on point.

Another strong suggestion for being persuasive is to make sure that you advocate for a particular position rather than simply being against theirs. If you just disagree, you will be perceived as just disagreeable. This does not enhance the relationship and remember that all negotiations involve three aspects – the subject matter, the process, and the relationship. Have a particular result in mind, but there is no need to be dogmatic about it. Keep in mind that you are on a quest for the ultimate interests. Positions are where you end up after you understand the interests.

Another excellent suggestion is to eliminate the word “but” from your lexicon. Why? Because whenever there is a “but” in a sentence it is a big red flag that says “everything that came before this is about to be negated.” It is an indirect (and passive/aggressive) way to say, “You are all wrong!” People don’t like that. So what if instead of using “but” you convert every one into an “and?” This validates what they have said and adds to it. Try this in your everyday conversation. You will see a very different reaction from those around you.

And the last suggestion today is this: Don’t worry about who gets credit for an idea that closes the deal. The goal is to close the deal. If your ego is that large, you probably aren’t an active listener (or a very good negotiator) anyway!

What is Active Listening?

When you are negotiating, selling, or in any situation where you need to build a relationship, there is one very simple skill you should master to make these encounters more powerful and rewarding. It is the skill of active listening.

What exactly is that? There is an old adage that God gave us one mouth and two ears for a reason – we should listen twice as much as we talk. Stephen Covey tells us that a key habit of successful people is to seek first to understand – then to be understood. We all want to be understood – or at least heard. The problem is that most of us have developed some very bad habits that send constant signals to people that we are NOT listening! So one goal of active listening is to shut down those signals.

The first of these is to establish solid eye contact. This is not a staring contest to see who can go without blinking for the longest time. Eye contact tells the person that you are focused on them; that you are listening to their every word. It should be natural and you should try very hard to not pay attention to the TV behind them, or the dog running down the street, or the cop writing a ticket on – wait a minute is that your car? OK, there are legitimate distractions, but absent that, stay focused on the speaker.

You can also use positive body language. Stand straight. Nod in understanding. This does not indicate agreement; only that you are listening. Where you place your hands can also invite the speaker to provide more detail or explanation. Putting your hands on your hips (called “akimbo”) suggests that you are impatient and this will quiet them more quickly. Fiddling with change in your pocket or jingling keys can have that same effect. Try to keep your hands still. Don’t sway, dance, or shuffle your feet. Be relaxed. And listen.

We can all listen far more quickly than even the most rapid speaker can talk. What we usually do with this surplus brain power is to formulate what we are going to say next. While some thinking allows us to comprehend what is being said, resist the temptation to formulate your entire next monologue after hearing the first ten words of the person speaking. In the same vein, don’t interrupt. Even if justified, it makes people angry and they respond accordingly. Let people drone on if they must. It makes them feel as if they are being heard. This sometimes takes some patience, but it is part of active listening and a trait that you should work to develop.

You should also practice a few natural phrases that encourage people to tell their whole story. Such phrases as, “and then what happened?’ or “and how did that make you feel?” or “Please tell me more” all serve to get more detail from the speaker. Not everyone is a good storyteller, so they might need some coaching to get the story laid out in a complete fashion. To improve your skill in this area practice telling jokes or short stories. Very few people do this well, but it can be learned. One positive suggestion is to read Mark Twain – the consummate storyteller.

The last suggestion for now (there is more, but we will cover that next time!) is to practice repetition and rephrasing. State to the person what you heard. Put it in your own words if you must, but this gives them a level of confidence that you understood things they way they intended to convey them. This repetition also locks it into your mind so that you can recall it later.

Practicing active listening is harder for some than it is for others, but in negotiations it is a critical skill that is worth the practice.

The Christian Doctrine in Government Contracting

The following article appeared in this month’s issue of FAR View – a newsletter put out by the Government Contracting students of Cal Poly Pomona’s Society of Law, Contracts and Procurement. If you are not already subscribed to this wonderful publication, simply send an email to farviewcpp@gmail.com and just ask! And if you want to check out the current issue, just ask them or ask me – I’ll send it to you. Just go to www.ask-tom-reid.com and post the request.

There is a principle of government contract law referred to as the Christian Doctrine. When I teach this in a class I typically joke that it is the principle that states that defaulting contractors will be fed to the lions. But in reality it has nothing to do with lions, or Christians, or eating. It is the principle that tells us when a clause, having been omitted from the contract, might be “read into” the contract by operation of law – often to the great surprise of the contractor.

The doctrine gets its name from the seminal case in the area captioned G.L. Christian & Associates v. US, 312 F.2d 418 (Ct. Cl. 1963); rehearing denied, 320 F. 2d 345 (Ct. Cl. 1963); cert denied, 375 U.S. 954 (1964). The contract in question was awarded by the New Orleans Corps of Engineers for construction work in the area. There is a hint that the Termination for Convenience clause was actively negotiated out of the contract by the contractor. When a new contracting officer arrived, however, and it was determined that the services were no longer needed, a termination for convenience issued. Mr. Christian argued that without the clause, a termination was such an extraordinary act that the government had no right to terminate and as a result he would be entitled to recover full commercial damages for breach of the contract. These damages would include all consequential and incidental damages, including his lost profits measured by what he would have made if the contract had been allowed to run its course. These are called “anticipatory profits” and every government contracting student knows that these are damages the government never pays.

The Court of Claims (now the US Court of Federal Claims) reasoned that there were some clauses that were required to be in contracts that reflected such an ingrained principle of federal contracting law that their omission could not be tolerated. As a matter of public policy, therefore, if the clause was omitted, it could only have been by accident and it must be read into the contract. As a result Mr. Christian’s contract was deemed terminated for convenience and his damages were limited to the termination for convenience clause limitations, once they were “read into” his contract.

On the one hand this may seem very unfair to Mr. Christian. Looking at it from the view of the “public” however, the termination clause itself is so unique to government contracting simply because it does reflect a very important policy. If the government no longer needs whatever the contract is for, the taxpayer should not be required to continue paying for something it does not need. In commerce generally this is considered a breach, but for the government different policies apply. So the Christian Doctrine has been developed to provide the following guidance: IF (and only if) there exists a required clause that reflects an important public policy, its omission will be corrected by reading the clause into the contract. So there are two essential elements for invoking this doctrine. First the clause in question must be required by the regulation or statute. Second, it must reflect an important public policy. If it meets those standards, then the Christian Doctrine will apply and the clause will be considered part of the contract, whether or not it appears by reference or full text in the contract.

Clearly not all clauses fit into those requirements. One clause that does not is the “Availability of Funds” clause. Can you figure out why? We’ll talk about that clause next time.

Do You Pray for Your Contracts?

Have you ever heard someone say, about a coworker who was taking on a significantly challenging task, that “He doesn’t have a prayer?” The obvious meaning is that even calling on your deity will not assist you in achieving your objective. Have you ever read a contract and had that same feeling? Would you normally pray for your contracts? And why would I ask such a ludicrous question?

Before you think me gone mad, or that I am one of those “loony Christians” (which by the way I am – Christian, that is. The jury is still out on the loony part,) let me assure you that my questions are quite reasonable – especially today. Today is the National Day of Prayer.

If you look at the history for the National Day of Prayer you find that it dates WAY back to the earliest days of our country’s founding.
1775 The First Continental Congress called for a National Day of Prayer.
1863 Abraham Lincoln called for such a day.
1952 Congress established NDP as an annual event by a joint resolution, signed into law by President Truman.
1988 The law was amended and signed by President Reagan, to be the first Thursday in May.

In honor of this day in 1982, Ronald Reagan sad, “Today, prayer is still a powerful force in America, and our faith in God is a mighty source of strength. Our Pledge of Allegiance states that we are ‘one nation under God,’ and our currency bears the motto, ‘In God We Trust.’ The morality and values such faith implies are deeply embedded in our national character. Our country embraces those principles by design, and we abandon them at our peril. Yet in recent years, well-meaning Americans in the name of freedom have taken freedom away. For the sake of religious tolerance, they’ve forbidden religious practice in the classrooms. The law of this land has effectively removed prayer from our classrooms. How can we hope to retain our freedom through the generations if we fail to teach our young that our liberty springs from an abiding faith in our Creator?”

Powerful words. This blog is too short to go through the presentation I often make in classes about whether or not America is a “Christian Country,” but suffice to say that Christian themes have predominated in our collective view of the underlying principles on which our country was founded. And even the use of “Christian” is being co-opted, much like other words that we learned in grade school, but today have completely different meanings. One of the preferred monikers now is “Follower of Jesus.” Seems people have abused the true meaning of Christian to the point that it is no longer a badge of honor and statement of the moral values you try to practice. Too much has been done in the name of Christianity for it to maintain its proper place of reverence in our vocabulary. And prayer is not unique to the Christian faith.

Regardless of your religious leanings (or lack thereof) most Americans believe in the power of prayer. And if you have a contract that seems hopeless, think about praying about it. It just might help.