Procurement systems shape nearly every moment in the federal buying lifecycle. They influence how money moves, how contracts get formed, and how quickly agencies can respond. You can hear that story unfold in this week’s episode of the Optimize Podcast.
Chris Hamm sits down with long-time colleague and systems expert Robert Niewood, who spent more than two decades inside GSA shaping the tools and processes that power federal acquisition. Their conversation pulls back the curtain on something everyone feels but rarely explains: why modernization is so hard, and why the next generation of acquisition systems must look very different from the last.
The Hidden Forces That Shape Procurement Systems
Rob’s early years captured a familiar scene: Word documents, Lotus Notes, and contract files in metal cabinets. Then came the first attempt at an enterprise contracting system, an SAP rollout that never delivered. As he puts it, “The financial tail wags the dog,” pointing to one-year, multi-year, and no-year funds and strict controls. These rules influence how systems are structured and how data must flow. Many commercial platforms can’t support the appropriations model without major surgery.
“The way the federal government manages money undercuts a lot of what happens in the contract space. I like to say the financial tail wags the dog."
Why Modernization Keeps Stalling
For years, agencies have tried to adopt commercial tools that promise clean workflows and faster speed. But each attempt eventually runs into the same wall: federal financial rules. Rob explains that commercial tools assume money behaves in predictable ways. Federal money does not. Agencies work with one-year funds, multi-year funds and no-year funds. Each comes with its own timing, availability rules and audit constraints. That complexity forces every acquisition system to become part financial engine, part workflow tool and part compliance cockpit, all at once.
This is why modernization keeps dragging. A low-code platform may let contracting shops model workflows, but it still needs to sync obligations, accruals and disbursements back into financial systems that were customized over decades. A COTS tool may generate solicitations or automate clauses, but it breaks the moment it touches appropriations logic. So agencies shift back toward custom builds because they provide the flexibility needed to match real business conditions.
There is also a human element. Workforce reductions, buyouts and RTO turbulence weakened institutional knowledge. Agencies now have fewer people who understand how the data, workflows and financial controls fit together. That loss of connective tissue makes modernization harder. If the system is complex, and the people who know the system are leaving, transformation slows. You can’t modernize what you barely have the capacity to operate.
Modernization will continue, but it will succeed only when government aligns system design with how federal business actually works, not how commercial software wishes it worked.
Centralization May Help, but It Brings New Complications
The drive toward centralization looks logical on paper. One office buys for many agencies. One system supports the whole portfolio. One team sets the standards. But as Rob points out, procurement rarely works that cleanly. Centralizing contract formation, without centralizing funds management or contract administration, creates a new layer of friction. Agencies still need to certify funding, issue interagency agreements and perform acceptance of goods and services. OCAS only picks up one piece of a much larger lifecycle.
This creates an odd effect: you simplify one step while making everything around it more complex. Instead of agencies managing simple procurements directly, they now manage agreements, oversight chains and shared workflows. And because each agency’s financial system behaves differently, OCAS must stitch together multiple pathways for moving money and tracking performance. That adds overhead, not efficiency.
“They’ve centralized the contract formation, but they’ve created a much more complex financial management picture.”
Moving large vehicles into GSA has the same challenge. People imagine a clean transfer, lift the files, drop them into a new system, call it done. But each vehicle sits on years of data conventions, reporting formats, pricing logic, clauses and technology integrations. Even where NIH and GSA both use Symphony, it’s only one piece of the machinery. Contract data must still land inside systems like PRISM, feed enterprise data warehouses and become discoverable to customers. That takes years, not months.
Centralization can deliver value. But only when it aligns people, funding processes, data structures and system architectures. Without that alignment, it risks adding complexity instead of reducing it.
AI Will Help, but Not in the Way Many Expect
AI is everywhere right now, and procurement teams feel the excitement, and the pressure. Agencies want to automate workflows, summarize requirements, generate acquisition strategies and validate documents. Industry sees opportunity too, especially as AI becomes more accessible. But Rob warns that early adoption usually follows the same pattern as dashboards and robotic automation a decade ago. People experiment in pockets. They build small tools for one office or one workflow. Those tools help, but they don’t scale. The result is a patchwork of one-off automations scattered across the enterprise.
This matters because federal acquisition rarely succeeds with fragmentation. A template generator in one office doesn’t fix data quality in another. A summarization tool for one program doesn’t solve integration across financial or reporting systems. AI makes small tasks easier, but it doesn’t yet solve the core system issues: traceability, auditability and compatibility with legacy data structures.
“I view AI right now much like dashboards and robotic process automation were years ago. There’s a flurry of activity, but not much that scales yet.”
Still, real opportunity exists. AI can help automate repetitive tasks in market research, early document drafting, quality checks and file audits. It may reduce low-value manual work and free acquisition teams to focus on evaluation and strategy. But agencies must move carefully. Without governance, AI can create more technical debt, just at a faster pace.
The most successful AI implementations will be the ones aligned to enterprise data models, not built in isolation.
What the Next Generation of Acquisition Systems Must Deliver
Rob closes with a hopeful but grounded view. The next generation of acquisition systems cannot be a prettier contract-writing tool. It must reflect the full ecosystem, requirements intake, funds execution, vendor engagement, evaluation, oversight and closeout. It must support the real flow of money, decisions and accountability. A single interface won’t fix procurement. A connected environment will.
“At no point in this conversation have we talked about contract writing. It’s the glue, the financial flow, the audits, the process.”
Future systems must also give agencies the agility to adjust. As FAR rules change and AI becomes embedded in the workflow, systems must adapt without massive rebuilds. That means modular architectures, clean data standards and clear boundaries between financial logic and operational workflows. And they must support people first. If tools aren’t intuitive, or if they create extra steps, they fail, even if the technology behind them is sound.
Incremental modernization will lead the way. Agencies will maintain legacy systems while building new layers around them. They will automate the processes that offer the highest return and gradually re-architect the areas that create the most friction. It won’t be fast. But it can be smart. And if done well, modernization will reduce administrative drag, strengthen the industrial base and help agencies buy better.
The path forward isn’t a new system. It’s a new mindset, one that respects the complexity of federal procurement and builds an ecosystem resilient enough to support it.
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