Dr. J.P. (Jack) London's Compelling Message to the National Contract Management Association
On July 29, 2015, CACI Chairman Dr. J.P London gave a keynote speech on at the National Contract Management Association's (NCMA) World Congress 2015 at the Gaylord Texan Resort & Convention Center in Dallas, Texas.
Speaking to more than 1,000 attendees, Dr. London delivered a compelling address on "The Character Difference," showing the critical importance of ethics in government contracting. The text and presentation are below.
Good morning everybody! It's a pleasure to be here with you this morning in Dallas. Thank you for the invitation. I trust all of you have had a good go of your NCMA. What you do is very important. Out of curiosity, how many of you are attending this event for the first time? I had a chance to visit the Exhibition Hall yesterday and I was impressed with so many varied exhibits and sponsors, and the innovative tools and services that the private sector is providing to support the Federal acquisition process.
It's also nice to be back with colleagues and friends in the contract management arena. I spoke to the NCMA Government Contract Management Conference in 2008 and at the NCMA Washington DC Chapter in 2011. And I'm honored to be giving the closing keynote for this congress, especially as a member of the professional government contracting industry.
At this point I would also like to say that my talk today is based on my 40 plus years of experience, both personal and with CACI. The comments do not represent CACI as such. Nor am I advocating anything about CACI. I'm simply sharing my personal insights into government contracting and other issues with you.
Another point: I'm going to talk about character. And it's always under your control – despite the hard choices you sometimes have to make.
But first, let me extend my congratulations to all of the winners from this morning's awards presentations. In addition to your accomplishments, you set a fine example for your fellow contract management colleagues to follow. Role models are important!
I would also like to take this opportunity to congratulate CACI's very own Terry Raney for becoming NCMA's new President-Elect. Terry has been with CACI for over 15 years, after 27 years serving in Air Force Contracting. We are proud of him to be sure!
CACI has had a longstanding relationship with NCMA. Our contracts and acquisition support employees have been active NCMA members for decades … serving at both the national and local chapter levels. CACI also appreciates and respects NCMA's mission, and its important role facilitating communication between government and private sector contract management professionals in a collegial and supportive environment.
CACI has also been a long-time supporter of NCMA's training mission. We've hosted CPCM [Certified Professional Contracts Manager] and CFCM [Certified Federal Contracts Manager] certification preparation classes at our offices. Well over 400 contract management professionals have attended these classes and many certifications have been successfully attained. CACI is also a proud sponsor of this year's Congress and has been an exhibitor and sponsor for 15 straight years.
This World Congress supports a vital service to our country. The contracting profession today is at the nexus of the public and private sector, coming together to help our federal government accomplish its many critical missions. The complex contracts that professionals – like you – write, negotiate, and administer are where mission delivery and marketplace realities meet … and where contract performance meets the needs of our government. As a result, today's contract management professional deals with many demands and complex challenges.
Individually, your professional responsibilities have been increasing in complexity, oversight, and cost. You try to meet those demands through personal and professional development – increasing your skills and experience, and expanding your future opportunities and career.
Organizationally, contract management is under increasing scrutiny. Are you getting the best value? Are the requirements and specifications well-defined and understood? Are the rules and results being accurately executed and fulfilled? Meanwhile, contract management professionals have to anticipate and manage change in processes, policies, tools, and much more. And like the theme of this Congress, you are being asked to initiate, facilitate and manage innovation.
But there's one thing in common across these challenges and opportunities. And that's you. The contracting professional who ensures that a contract succeeds and accomplishes its mission. Whether you believe circumstances are within your control or beyond them, what's always within your control are your attitude and your actions. And character is the source of both these things. Character is immutable.
Character is a unique set of moral and ethical qualities that define what you believe in, what you stand for, and what you expect of yourself and others. It's also about integrity, values, and "doing the right thing." This slide portrays the real world we live in. So make sure you have a compass to follow.
While a variety of factors form our capabilities and influence our lives, I believe that how you act on these qualities – your statement of character – will determine how far you will go in both your personal and professional life.
And character is important for all parties in government contracting, from contracting officers to contracting organizations and our customers. And let's not forget the American people – both as taxpayers and fellow citizens – who pay the bills. There are no waivers and no exemptions from integrity!
Now, let me be clear up front. Having good character does not mean being perfect or self-righteousness. A person's, an organization's, even a country's character, is always a work in progress. There is always room for improvement, something new to learn, for all of us, no matter where we are in our lives or in our careers. It's a lifetime endeavor.
Contract management tools, processes, and rules evolve. And they bring more innovative, effective and cost-efficient products and services. But it's the consistency of character throughout your lifetimes that makes the difference in the pursuit. So today, I'd like to talk about the character difference in the challenges and opportunities we all face.
I know it's early in the day and late into the Congress, but I'd like to pose some hypothetical questions. They don't require immediate answers, but I'd like you to think about what you would do. What your character would tell you to do. And some of my examples may make you feel uncomfortable, but that's the real world. And your character and integrity are your compass for your path forward.
We all like to think we know the difference between right and wrong. But can you say the same of the people you work with? For example, would you trust your senior, experienced managers to come forward if they knew of any inappropriate competitive intelligence? We would all surely like to say yes, wouldn't we? But I found myself in that very situation in the late 1980s.
At the time, I was a few years into the role of CACI's President/CEO. We had bid on a contract for the naval air systems commands – work that we knew very well. But what we didn't know was that one of our people had received information about competitive pricing and government selection criteria on that very bid. Furthermore, it may have been inadvertently or accidentally sent from the government. Regardless, it was insider information and wrong for CACI to have it.
But the employee said nothing. And this person wasn't a novice either. He was a senior vice president, a retired military officer and veteran. He had received information we shouldn't have had and said nothing. Perhaps he thought it was irrelevant or that it wasn't worth mentioning if we didn't use it.
CACI had already submitted the proposal to the Navy and it was in the review process. However, once we found out about it, we withdrew the bid. Even though the information received may not have been used, it would be wrong to not let the government know. Just as it was wrong for the SVP not to let me or anyone else at CACI know. Someone with his credentials should have known better. He didn't and we had to let him go.
The lesson here is that we think right and wrong is clear to everyone, but everyone's definition may not be quite the same. There are simply too many gray areas and interpretations. Some people might feel differently about what was the right or wrong thing to do with competitive information, but we clearly felt it was wrong to have it. Character is not just knowing what's right or wrong. It's also knowing how to act on it.
As contract management professionals, you are well-versed on the rules, how to interpret the gray areas, and what's not acceptable. It's up to you to communicate that knowledge, advise your colleagues, customers and partners, and speak up when questionable behavior arises. Because between right and wrong is a lot of gray!
To this end, I was impressed by NCMA's comprehensive review of their ethics program this past year. I understand members were asked to participate in an ethics survey. NCMA then rewrote and introduced a new Ethics Code with the goal of becoming a best practice for professional associations. You should all be very proud to be part of an organization that prioritizes innovation in the area of ethics in dealing with the challenges of our fast changing world.
Here's another scenario for you to consider – a test of accountability. Are you able to admit you made a mistake? What would you do if an elected official asked you to fix it?
In 1999, CACI was developing a large licensing and registration system for the South Carolina Department of Motor Vehicles. It was a firm, fixed-price development contract for about $25 million with CACI working on systems integration and installation, while state employees would populate the databases and their quality control. The project had a rocky start. The CACI team made some equipment mistakes. Client decisions and uncertain requirements caused delays. Early problems were addressed, but soon were followed by other issues and delays.
One day, our CACI Project Manager got a call, "Could Dr. London come down to Columbia? The Governor wants to see him." I had met with many clients, but I had never been summoned by a governor. So I went to Columbia, South Carolina. Governor Jim Hodges came with a cadre of aides, IT people, and lawyers. There must have been a dozen or more of them. It was just me and our CACI project manager. Hodges expressed his displeasure with the project's progress. He had promised DMV improvements in his previous campaign. If delayed, the project could be a big problem for him in the upcoming election. I explained the corrective measures that had already been put in place and the revised project plans. I even gave my personal assurance that the work would get done. I also asked for the state's continued effort to fix the data quality issues causing many of the delays. It was a 'political' response, for sure.
I am now proud to say that CACI delivered a quality system to South Carolina. The project ended up costing about $6 million more than the original contract price, which CACI bore even though there were mistakes made on both sides. And what we learned was that large scale, fixed-price software development contracts in that market could be disastrous. There were simply too many changing variables and political pressures that increased risks to CACI. And we learned to never bid on firm fixed-priced systems development jobs at the state level again.
To err is human, but taking responsibility shouldn't be superhuman. CACI would own up to their mistakes on the project, but would not compromise our integrity or quality of work. But we also learned what kind of contracts types worked – or did not work – for us.
The lesson I pass on to you, the contract management community, is that contract execution is not a perfect process. This is also an important lesson for innovation, which is frequently found through some trial and error. We all know Thomas Edison is said to have failed 10,000 times before inventing the incandescent light bulb. But I trust contract management innovations won't take that long. In any case, we all try our best with good intentions, but both sides have to accept responsibility for their shortcomings and step up to fix them. Accountability isn't necessarily about blame. It's ownership over our decisions, our actions, and their consequences. It's the behavior we want to set as an example and to emulate. This is a powerful difference! A character difference!
Let me ask you this. What's the difference between sole-sourcing a contract and preferential treatment? What if the sole source award helps to accomplish a good cause? And what if the person who made the call had a stellar reputation? We have a very recent example that many of you may have read about already.
Maj. Gen. Dana Pittard had a remarkable Army career. He was the military aide to President Bill Clinton and trusted with the "nuclear football" – the briefcase with the nuclear weapons launch codes. Later he became the Army's deputy commander for operations in the Middle East overseeing the training of Iraqi forces – very important work. So who would expect any problems during his command at Ft. Bliss?
Last month, Gen. Pittard was reprimanded by the Army for "excessive involvement" and for "creating the perception of preferential treatment" in the award process of a $500,000 contract to a firm run by two former West Point classmates. The contract was part of a $250 million project to make Fort Bliss – right here in Texas – self-sufficient in energy usage.
However, allegations by an anonymous whistleblower in 2011 led to a three year investigation. Pittard's staff, including his staff lawyer, had concerns about his involvement in the short-term, sole source contract. They said Pittard overrode their objections to not obtain competitive bids. In one email exchange, two colonels who called the award "downright illegal," felt they were unable to do more than talk to Pittard about the risks. He had made up his mind!
It seemed General Pittard was trying to mitigate the time delay risk of going through a competitive acquisition. In a statement, Pittard admitted he "invited a measure of risk with the contracting process." But that in his Army career, "I have always operated with an understanding that some risk is acceptable in taking action that will benefit our force."
Where Pittard saw a small risk, the people around him saw a big problem. Unfortunately, those folks didn't see a way to prevent it. The decision to sole source the contract may not have been wrong, but the perception of preferential treatment became the reality. Pittard learned a crucial lesson; that a fine reputation has to be earned over time, but can be ruined in a moment.
I would also submit that the people around Pittard also risked their reputations. According to a recent study, over two-thirds of workers admitted to seeing wrongdoing in the workplace and doing nothing about it. The contract management process is only as legitimate as the people who facilitate it.
And while we're touching on the topic of risk, I'm sure as you spoke about innovation over these past few days, the risk-averse among you may have become a little uncomfortable. Remember, risk is the natural uncertainty of trying something new. But it doesn't mean you're leaving things to chance. That's gambling. Most risk can be appropriately managed or anticipated. However, it's the temptation to take on questionable ventures or short cuts, or to outright cheat. Those are the worst risks. So contract management's integrity must be upheld by each one of us determined to do the right thing.
suppose part of the difficulty Pittard's staff faced was that Pittard was the base commander. Everyone's boss. So what would you do if your boss' actions were questionable? Can you trust your boss to enforce the standards of ethics and conduct?
In the early 1980's CACI had a contract with the Royal Saudi navy. A problem arose with timecard violations and mischarging. CACI had to enter a probation period with the Department of Justice and create a new system to eliminate mischarges. I was a division president at the time. But a few years later, I became CEO. That experience with the Saudi contract timekeeping problem directly led to my instituting company-wide training on CACI's culture, and to update our codes of conduct and standards of ethics. Sound familiar?
We like to think there are clear lines between being competitive and being dishonest. But as some of the previous examples show, there is more gray than we like. And as a leader of a contracting organization, it's essential that examples be set at the top. In fact, studies show that trust in the leader is inextricably linked to trust in the organization itself. So leaders, role models and mentors can make a big difference.
Equally important is aligning yourself with organizations of character. Seeing wrongdoing can be difficult. Reporting wrongdoing is not always easy. I hope you have noticed that reporting violations is part of NCMA's new code of ethics. If an organization's leadership makes doing nothing about wrongdoing easier than doing something about it, then it's time to move on.
So remember, leaders of all kinds – team, project, and executives – must create and sustain ethical organizations. And I maintain that the character of the leaders will be the key.
Now for the final hypothetical situation. How do you handle change? What if you decided to take the next step in your career? How would you react to legislation that turned government contracting on its head? I have faced both of these situations and I can tell you change is not always easy. But we all still have to deal with it.
Some changes you have to make for yourself. My decision to leave the Navy in 1971 was such an experience. Not being selected for an assignment in Vietnam made me reconsider my future with the Navy. Over a couple of years, I seriously thought about leaving the Navy and discussed it with my family. So just eight years short of retirement benefits, with six months of savings, no job lined up, and with many family responsibilities, I left the Navy. Looking back, I can now say that it sent me on the path into government contracting that has worked out better than I would have expected. In any case, it was a change I had to make.
Then there's the wrong way to make a change in your career. In 2003 U.S. Air Force official Darleen Druyun negotiated a job with Boeing while she was still in a government position to directly influence Boeing's contracts. A blatant conflict of interest! To make matters worse, Boeing's CFO and Druyun both attempted to conceal their misconduct during the company's internal investigation. These two previously successful professional missed the character difference by improperly negotiating the position and hiding the misconduct. The consequences for both were great and for good reason!
Other changes are thrust upon you. In 1984 government contracting was turned upside down when the U.S. Congress enacted the Competition in Contracting Act (CICA). CICA required government agencies to formally compete most (nearly all) contracts. Before CICA, the majority of CACI's business had come from single-source contracts. We had done business largely by convincing clients to hire us for additional work or by pitching our services to new clients. CICA forced us to aggressively chase down and evaluate RFPs. And we weren't used to that. CICA meant that CACI had to adapt our business model or die. So we got with it! We created a new business development group dedicated to changing how we marketed our offerings. We worked hard to make the change. We had no choice!
In 1984, CACI's competitive wins were only 7 percent of revenue. By 1986, CACI's competitive contract awards had grown to 70 percent! Today, virtually all of CACI's contracts are competitive awards. CACI would not be around today if we hadn't adapted rapidly and effectively to the changes that CICA placed on us. And we did it without compromising any aspect of our character and integrity.
Our tools, our processes, our environment will always evolve. Change is constant, and so is the importance of good character. Think about how we communicate with each other. We've gone from tablets … well … to tablets. Albeit much lighter and portable! But regardless of how the form of communication has changed, we are always being judged but what we're saying, as well as what we're doing. As contract management evolves as a practice and as your profession, be sure your good character and integrity guides you through the changes you face every day.
Character gives us more than just the perspective on right and wrong. It shapes how we assess and approach situations.
The preamble of NCMA's new code of ethics says that it "is intended to create public trust and confidence in the integrity of the contract management process."
Trust, confidence and integrity are what drive successful contract management – and I maintain also successful organizations! And what are trust, confidence and integrity driven by? They are driven by character. Individual and organizational character. And from what we've seen in the examples I gave, it's clear to me, at least, that character is really what makes the difference. The character difference!
The keys to making the character difference are simple:
Right and wrong is clear to everyone, but not necessarily the same. The gray areas are open to much interpretation;
To err is human, but taking responsibility should not be superhuman;
Reputation is earned over time, but can be ruined in a moment, even if think you're doing the right thing.
Leaders must create and sustain ethical organizations; and
Change is constant, but so is the importance of good character.
I hope you will have noticed by now that these lessons are not exclusive to contract management. They are lessons applicable to every profession. So as you leave this year's NCMA Congress, you'll take with you new knowledge, new colleagues, and a renewed enthusiasm for contract management. But the one thing you'll always have with you is your character. Remember: "good character" is a quality we can all own that no one can take from us. And it makes all the difference in the world.
Thanks again to the National Contract Management Association. It has been a privilege and honor to speak at this year’s World Congress. NCMA’s commitment to character, innovation, and excellence continues to set the example for all of us. I thank you for all that you do for your organizations and for your contracting partners. Your personal commitment to character, innovation, and excellence keeps our country going strong. I wish you all every success in your future endeavors. Have a great day!