Efficiency and Effectiveness of Outcomes-Based Requirements
By Tim Cooke
President & CEO, ASI Government
More than any policy, buying smarter means building team capacity and capability across the acquisition team, especially the program and procurement offices which develop, communicate,
and persevere in outcome-based requirements. It also means continuously involving functional stakeholders, understanding markets and engaging with suppliers to understand the latest in industry innovation and the possibilities within the marketplace.
The Federal Emergency Management Agency’s (FEMA) Flood Insurance and Mitigation Administration (FIMA) offers a prime example of such success. FIMA has used this Strategic Acquisition Program Management Office (PMO) approach to establish—in just nine months—a federal reinsurance capability and program for the first time ever, to strengthen the sustainability of the National Flood Insurance Program (NFIP). FEMA’s achievements included establishing the first-ever federal reinsurance broker procurement in four months, an acquisition requiring resolution of multiple unknowns, and first-time consequential decisions predicted to take 18 months. Because FEMA purchased reinsurance in January 2017, FEMA recovered more than $1 billion from reinsurers
following Hurricane Harvey later that year. The program secured a total of $1.96 billion in reinsurance coverage for 2018 to further strengthen the sustainability of the NFIP.
FIMA launched its PMO with a two-tiered approach to acquisition governance, enlisting stakeholders across the enterprise at both the staff and executive level to align procurement practice with program vision and goals. Led by a small group of functional business owners from the acquiring program office, the PMO included one team of working-level members from the program, procurement, finance, IT, and legal functions—all the organizations with a stake in the acquisition outcomes. It also included a complementary team of executive leaders from the same organizations. This two-tiered governance approach allowed those working on the project to stay connected to the critical outcomes, milestones, and risks of the reinsurance program.
The PMO fostered a space of transparency and non-judgement so that members felt comfortable raising risks and issues at both the working and executive levels. Having an aligned executive team and transparent culture helped quickly garner executive support when needed to address risks, assign resources to critical project areas, and provide top cover for innovative approaches. Such alignment and transparency led to the mitigation of critical project risks, including procurement and IT timeline risks which threatened the program’s desired outcomes.
To better understand the latest in industry innovation and to inform the objectives of the first broker procurement, the PMO also conducted quick, direct market research with industry and government. A series of conference calls with industry providers increased the buying team’s understanding of what was possible and available in the reinsurance brokerage market. Ongoing engagement, with state-level reinsurance programs, including onsite visits, provided advice and perspective on establishing a reinsurance program and driving market conditions that supported an effective reinsurance placement. The buying team then utilized this market intelligence to jointly draft performance-based brokerage requirements. The PMO also embraced the notion of continuous, iterative market research by holding market research sessions throughout the project to continually advance FEMA’s understanding of the reinsurance market and establishing a market research board to continue conversations with the market to ensure continuous enhancement of the evolving private-public partnership.
The Reinsurance Team’s achievements, bolstered by the Strategic PMO approach, are winning accolades inside FIMA, FEMA and across government. The team won the Homeland Security Department’s Excellence Award in 2017, and was a
finalist for a Management Excellence Service to America Medal (SAMMIE Award)
to be presented in October by the Partnership for Public Service.
This article appeared in the Fall 2018 Service Contractor magazine's Sounding Board feature. Click here to read the PDF article.