OFPP updates rules for how agencies should analyze ways to lower costs

The Office of Federal Procurement Policy is reinvigorating the concepts of share- in-savings and lowering life-cycle costs of programs by analyzing all facets of the approach.

OFPP released the first update to Circular A-131 in more than two decades in the Federal Register on Dec. 26, 2013.  The Office of Management and Budget first issued A-131 in 1988 and updated it in 1993, but since then has only offered memos encouraging its use.

A-131 promotes the use of value engineering (VE), which is an organized effort by an integrated product team to evaluate functions of systems, facilities, services and supplies with an eye toward lowering costs and maintaining performance, quality, safety and reliability.

“VE challenges agencies to continually think about their mission and functions — in the most basic terms — in order to determine if their requirements are properly defined and if they have considered the broadest possible range of alternatives to optimize value,” OFPP Administrator Joe Jordan wrote in the notice. “Most importantly, VE enables agencies to achieve greater fiscal responsibility and operate within tighter budgetary constraints. By identifying and eliminating unnecessary program and acquisition costs that do not contribute to the value, function and performance of the product or service, VE can permit programs to continue delivering the same, or an even higher, level of service for less money — a critical capability for managing in a fiscally austere environment.”

Keep reading this article at: http://www.federalnewsradio.com/517/3534771/OFPP-updates-rules-for-how-agencies-should-analyze-ways-to-lower-costs 

Study group issues recommendations to improve DoD acquisition

The IBM Center for The Business of Government has issued a set of eight recommended actions that government can take to improve the federal acquisition process.

The report, the third in a series on the government acquisition process, is entitled “Eight Actions to Improve Defense Acquisition” and can be downloaded here.

While the report centers on acquisition in the Department of Defense (DoD) because of its dominant size in the federal budget, the eight proposed action s— which build on previous acquisition reforms including increased competition, more use of best value contracts, expanding the supplier base, and better tailoring of contract types to contract goals — apply to civilian agencies as well. The authors emphasize the urgency of acquisition reform in DoD given budgetary constraints and security challenges, finding that “DoD will need to gain every possible efficiency, while resisting the temptation to buy defense on the cheap.”

More information, including information on a second report, A Guide for Agency Leaders on Federal Acquisition: Major Challenges Facing Government, is available at: http://www.businessofgovernment.org/report/eight-actions-improve-defense-acquisition.

The first report in the series, Controlling Federal Spending by Managing the Long Tail of Procurement, provides the first quantitative analysis and recommendations about government “tail spend” (smaller, non-core expenditures that often receive less attention in cost control but can add up to a large overall amount).

Cost-reimbursement contracts could save DoD money on systems acquisition, paper says

The Defense Department (DoD) could improve its acquisition process by relying more on cost-reimbursement contracts for systems developments, among other things, a Dec. 17, 2013 Center for the Business of Government paper says.

The report, is authored by former Under Secretary of Defense for Acquisition, Technology and Logistics Jacques Gansler and University of Maryland professor William Lucyshyn.

“The DoD has made numerous attempts to reform its acquisition system over the last 50 years,” the authors say. “These initiatives, combined with many in Congress, have produced only modest improvements.”

The DoD periodically embraces fixed-price development contracts in an effort to control cost growth and shift more of the responsibility and risk to the contractor, the paper says.

Keep reading this article at: http://www.fiercegovernment.com/story/cost-reimbursement-contracts-could-save-dod-money-systems-acquisition-paper/2013-12-19 

New OFPP rule: Program managers must meet acquisition certification requirements

The New Year brings new requirements for federal program and project managers.

Under new guidance issued by the Office of Federal Procurement Policy (OFPP) program managers now must meet all Federal Acquisition Certification (FAC) requirements.

What’s more, agency chief acquisition officers (CAOs) no longer have the option to waive the program and project certification prerequisites.  The only latitude granted by OFPP is that CAOs may extend a current certification on a case-by-case basis for up to one year.  If an extension is granted, a date by which the program or project manager must meet the new certification requirements is to be set.

The new requirements become effective on March 31, 2014 and are outlined in the following chart:

(click on chart to enlarge)

(click on chart to enlarge)

To maintain a FAC-P/PM, certified professionals are required to earn 80 CLPs of skills currency every two years. The two-year anniversary is set by the date the individual is certified.

“The revised program is designed to strengthen civilian agency P/PMs to improve program outcomes, and reflects the need to improve the management of high-risk, high-impact programs,” stated OFPP director Joe Jordan in the Dec. 16, 2013 guidance entitled Revisions to the Federal Acquisition Certification for Program and Project Managers (FAC-P/PM).  “Having skilled, competent, and professional program and project managers (P/PMs) is essential to the success of critical agency missions. P/PMs ensure that requirements are appropriately written, performance standards are established, and contractors deliver what they promise. P/PMs develop requirements, lead integrated project teams (IPTs), and oversee budgeting and governance processes, all of which are critical to ensuring that agency mission needs are filled and expected outcomes achieved.”

While a specific curriculum is not articulated by OFPP, the new guidance recommends “an instructional approach best suited to deliver the learning outcomes that align to the competencies.”   FAC-P/PM core-plus professionals now are required to earn 80 CLPs of skills currency every two years. Maintenance of CLPs is shared between the core-plus area and the core FAC-P/PM continuous learning requirement. At least 20 of the 80 CLPs required must be dedicated to continuous learning in topics associated with the core-plus area. If an individual fails to obtain the 80 CLP requirement, the core FAC-P/PM and core-plus specialization will simultaneously lapse. To regain certification status after a certification has lapsed, the 80 CLP requirement must be completed within the two year period, including the requirement for 20 of the 80 CLPs dedicated to continuous learning in topics associated with the core-plus area.

For a copy of the OFPP’s Dec. 16, 2013 guidance, click here.   

 

DoD official pushes back against contracting ‘myths’

Pentagon procurement official Shay Assad sought to dispel what he said were myths that the Defense Department’s contracting workforce is untrained and unprepared.

“Our workforce today is healthier and stronger than it has been in the last 10 years or so,” said Assad, who oversees pricing for the department.

Some of the myths he addressed included:

■ Reports the contracting workforce is shrinking. Assad said it has grown by nearly 24,000 people over the last five years through a combination of additional hiring by the services and through in-sourcing.

■ Reports DoD is not hiring enough experienced contracting officers. He said that DoD has focused on having 35 percent of its contracting workforce have industry and business experience — that number is about 34 percent today.

■ Rumors the Defense Department is moving toward lowest-price, technically acceptable contracts. Assad said that only one major program falls under that category and that LPTA is less than 2 percent of DoD purchasing and that he is not pushing to increase that number.

Keep reading this article at: http://www.federaltimes.com/article/20131118/DEPARTMENTS01/311180004/DoD-official-pushes-back-against-contracting-myths- 

DoD finalizing major rewrite of acquisition guidance

Pentagon officials are “very close” to finishing their work on an overhaul of the official guidebook to DoD’s byzantine acquisition system, and the process led them to the conclusion that they need Congress’ help to help unwind a cumbersome maze of laws that have been layered on through decades of well-intentioned reform efforts.

The document in question is officially known as DoD Instruction 5000.02 — the key collection of guidance that describes the military acquisition process. Frank Kendall, the undersecretary of defense for acquisition, logistics and technology, has been working on a revamped version for months.

“I’ll be out very soon,” he said Thursday at the Center for Strategic and International Studies. “It’s going to emphasize tailoring even more than previous editions did. And we show people multiple models of how you can structure an acquisition program depending upon what the product is. You know, at the end of the day, the way you structure the program to develop, produce and field the product depends on what the product is and what it takes to get that job done. There’s a logic and a flow that has to be consistent with what you’re trying to accomplish. And it’s definitely not a one-size-fits-all business. We do a large range of different types of things.”

That tailored approach to acquisition is consistent with the messages in the current Better Buying Power effort Kendall’s office has been leading in DoD, emphasizing that the department’s own professionals need to use their judgment to structure the right acquisition vehicle and contract type for the right job. The latest version came with the tagline: “A guide to help you think.”

Kendall says the rewrite of the instructions was needed, in part, because of several recent laws Congress has passed imposing new requirements on DoD acquisition managers. And reworking the document from scratch led his office to the conclusion that those recent legislative changes were just one more layer on a system that’s been growing in complexity for decades.

Keep reading this article at: http://www.federalnewsradio.com/65/3502073/DoD-finalizing-major-rewrite-of-acquisition-guidance

House panel targets DoD acquisition reform, but will that be enough?

The House Armed Services Committee is taking another crack at defense acquisition  reform.

Committee chairman Buck McKeon (R-Calif.) recently tasked Vice Chairman Mac  Thornberry (R-Texas) to head up a new panel looking at ways to reform the defense  acquisition process.

“While this Committee has led successful efforts to improve the way the Department  acquires items and services, there are still significant challenges facing the  defense acquisition system,” McKeon said in a release. “We cannot afford a costly and ineffective  acquisition system, particularly when faced with devastating impacts of repeated  budget cuts and sequestration.”

The announcement came as experts on defense acquisition gave the committee some  guidance on how to proceed. One of the witnesses was Dov Zakheim, former  undersecretary of Defense (comptroller) and now a senior adviser at the Center for  Strategic and International Studies. He says a new approach to defense acquisition  reform has the potential for new results and the old approach won’t work this time  around either.

“The way that we’ve been trying to do it, which is essentially focusing on  specific issues with legislation, addressing them or process improvements is just  not the way to go,” Zakheim told In Depth with Francis Rose. “It  clearly hasn’t worked.”

Keep reading this article at: http://www.federalnewsradio.com/473/3499160/House-panel-targets-DoD-acquisition-reform-but-will-that-be-enough

Reforming a Defense acquisition system that costs money, lives

(Editor’s note: The following is an Op Ed written by Rep. Mac Thornberry, R-TX, vice chairman of the House Armed Services Committee and chairman of the HASC Subcommittee on Intelligence, Emerging Threats and Capabilities.)

A scan of any week’s headlines makes clear that the world is not getting any safer, nor are our security challenges getting any simpler.  We face a complex array of threats, known and unknown.

Yet, we will have to meet those threats with tight defense budgets for the foreseeable future.  Even if Congress and the President can agree to find other savings to replace further defense cuts under sequestration — which we should — the United States will still have to meet essentially unlimited threats with quite limited resources.  That means it is more important than ever to get the most value possible out of each dollar spent on our national security.

Too much of the money spent now is not used as efficiently or as effectively as it should be.  Upward of 10 percent of the entire federal discretionary budget goes to buying things for our troops, ranging from tanks to toilet paper.  Reform of defense acquisition – the goods as well as the services we buy – must be a top priority.

There are a lot of good people in and out of government who work hard to see that our military is provided with the best.  But they operate in a system that too often works against them.  Heavy federal regulations drive up the cost of military hardware.  There are nearly 2000 pages of acquisition regulations on the books, many of which have not been reviewed in years.  Too often, Congress and the Pentagon respond to cost overruns by adding another law or an additional oversight office.

Keep reading this article at: http://www.realcleardefense.com/articles/2013/10/29/reforming_a_defense_acquisition_system_that_costs_money_lives_106939.html 

Air Force launches crowdsourcing-like approach to acquisition

The Air Force lost 35 veteran contracting officers over the last year with a  combined 700 years of federal experience.

Instead of trying to replace them over time, the service is pooling its resources  from across the world under a new installation contracting agency.

Air Force Maj. Gen. Wendy Masiello, the director of contracting at the service,  said the virtual agency stood up Oct. 1 and will move to full operating capability  over the next year.

Masiello, who spoke Wednesday at the Coalition for Government Procurement  conference in Falls Church, Va., said the Air Force realized it wasn’t going to be  able to replace the  civilian experts who left easily or quickly, so it needed another approach to  make up for the lost knowledge and abilities.

“It was born out of that whole idea of we can’t do it on our own. We’ve got to do  it as a team, and how do we pull those teams together from major commands that are  in Texas, Hawaii, Europe and Langley, Va.? How do we make them one team?” she  said. “We started talking to each other and figured out this is how we will have  to build this cohesive team and figure out how better to manage. Right now, we  have organization stood up. The policies and procedures are pretty well defined in  terms of authorities. But now for the next year as we move from initial operating  capability to full operating capability we start fleshing out the details.”

Keep reading this article at: http://www.federalnewsradio.com/395/3494820/Air-Force-launches-crowdsourcing-like-approach-to-acquisition-

Former comptroller questions competence of DoD’s acquisition team

Acquisition personnel at the Defense Department from management on down don’t have the knowledge or incentives to do their jobs well, said Dov Zakheim, the  department’s former comptroller, on Oct. 29.

The era where DoD technology was far more advanced than the private sector  has passed, he said, with Silicon Valley and other technology centers holding  their own. But DoD doesn’t ensure that its acquisition workforce remains  conversant with the latest advances, Zakheim said during a House Armed Services  Committee hearing.

“Too many program managers appear to be deficient when it comes to  supervising the progress of programs simply because they don’t know the  technology that they’re supervising,” he said. Some have to depend on contractors to help them understand the technologies they oversee.

Zakheim was DoD’s comptroller and chief financial officer during the George  W. Bush administration. He was also a high-ranking DoD official in the Reagan Administration.

Also out of date, he said, are the policies for promotion within an agency,  as many employees move up the chain because of their years of service rather  than as a reward for good work. Zakheim proposed that DoD include cost savings  that acquisition officers have achieved as a factor in promotions, to alter their incentives.

Keep reading this article at: http://www.fiercegovernment.com/story/ex-pentagon-official-acquisition-failures-tied-personnel-issues/2013-10-30

A webcast and prepared testimonies are available on the hearing webpage at http://armedservices.house.gov/index.cfm/hearings-display?ContentRecord_id=df2275cc-a8dd-40dc-878f-ed7afc2cdacd