Contracting officers given overly high marks by Army

Army contracting apparently is like the schools at Lake Wobegon — everybody is above average.

The U.S. Army Corps of Engineers fell victim to the biggest bid-rigging scandal in the history of federal procurement in 2011 — the same year the Army’s cadre of more than 5,600 contracting officers received unusually stellar job ratings.

Out of 5,670 contracting officers, just two received an unsatisfactory performance rating in fiscal 2011, while more than 60 percent of the Army’s procurement workers were given the highest rating of “role models,” according to a previously undisclosed 2013 Army Audit Agency review that found “there are few, if any, consequences for unfavorable contracting practices.”

Even personnel working in “high-risk” offices often managed to score above-average job-performance ratings, according to the report, obtained through the Freedom of Information Act, which officials said signaled widespread problems of job ratings in government reviews.

“It’s not just contracting officers,” Harry Hallock, the Army’s deputy assistant secretary for procurement, acknowledged in an interview with The Washington Times on Thursday.

“It’s frankly across the Army, across DOD, across the federal government. I think over time we have had an issue with performance appraisals matching performance,” he said.

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Army to Seek Northrop refunds over inflated labor rates

The U.S. Army will press Northrop Grumman Corp. (NOC) for refunds after the Pentagon’s inspector general found the contractor charged the service inflated labor rates on programs to fight drug trafficking.

The Army Contracting Command will conduct its own audit “as soon as feasible” of Northrop’s billings and the resumes of subcontractor workers to determine how much money should be repaid, spokeswoman Giselle Lyons said in an e-mail.

Allegations in the report “are being further investigated by the U.S. Army Contracting Command,” she said. “The command is implementing the recommendations proposed to help ensure the proper management and oversight of current and future contract actions.”

Northrop, the fifth-biggest U.S. contractor, charged the Army excessive labor rates for almost six years for more than 300 subcontractor employees working in Afghanistan and in the U.S. on counter-narcotics efforts abroad, the inspector general said in a May 13 report labeled “For Official Use Only” and obtained by Bloomberg News.

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Army’s bright acquisition spot: Howitzer upgrades

The U.S. Army is moving forward with plans to develop upgraded versions of the M109 self-propelled howitzer in one of the service’s few bright acquisition spots.

The Army is “fully committed” to the M109 Paladin Integrated Management, or PIM, program, Army Secretary John McHugh said on Thursday during a hearing of the House Appropriations Defense Subcommittee.

“We need a new self-propelled artillery howitzer to keep up with our formations and so we’re going forward,” he said in response to a question from Rep. Tom Cole, R-Okla., whose district includes Fort Sill, which houses the Army and Marine Corps’ field artillery schools.

McHugh acknowledged the service’s troubled acquisition history, including many failed attempts to replace its Cold War-era fleets of vehicles and helicopters. Most recently, it scrapped the Ground Combat Vehicle, designed to replace the Bradley fighting vehicle, due in part to automatic budget cuts known as sequestration.

But the secretary said the M109 development program is moving forward, albeit slowly. BAE Systems Land & Armaments LP, part of the U.S. subsidiary of the London-based defense contractor, received a contract potentially worth almost $700 million for initial production of the vehicles.

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DoD re-emphasizes importance of contractor past-performance reporting

The Defense Department’s contracting chief, Frank Kendall, has called for renewed emphasis on the importance of agency reporting on contractor performance.

In a January 9, 2014 memorandum to the Department of Defense (DoD) acquisition workforce, DoD Undersecretary for Acquisition, Technology and Logistics points out that while the reporting goal for FY14 is 95 percent, compliance with the goal is at only 81.5 percent department-wide.

Only first quarter FY14 data are available at this point.  Past performance reports are to be filed in Past Performance Information Retrieval System (PPIRS).

An analysis of first quarter FY14 data shows that while five units within DoD have a reporting record of 90 percent or better, there are eight DoD units with 50 percent or lower reporting compliance.  Most of these are small units with a small amount of contracting activity.

A DoD unit with a significant number of contract closeouts coupled with a high rate of reporting non-compliance is the Defense Contract Management Agency (DCMA).  DCMA’s reporting percentage is 68.5 percent.

The  Navy, Army and Air Force have the highest numbers of contracts and contract closeouts.  While their levels of reporting are relatively high (85, 78, and 87 percent, respectively), each has a high number of overdue reports as of the end of the first quarter.  The Army has 8,810 past due reports, while the Navy and Air Force have 3,023 and 1,737 late reports, respectively.

The memorandum and its attachment can be seen here: USA000068-14-DPAP.

GAO finds agencies need guidance on use of reverse auctions

In a study released on December 11, 2013, the Government Accountability Office (GAO) found that the potential benefits of reverse auctions–competition and savings–have not been maximized by federal agencies.

Key findings include:


  • Over one-third of fiscal year 2012 reverse auctions had no interactive bidding, where vendors bid against each other to drive prices lower.
  • Almost half of the reverse auctions were used to obtain items from pre-existing contracts that in some cases resulted in agencies paying two fees–one to use the contract and one to use the reverse auction contractor’s services.
  • There is a lack of comprehensive government-wide guidance and the Federal Acquisition Regulation (FAR), which is the primary document for publishing uniform policies and procedures related to federal acquisitions, does not specifically address reverse auctions. As a result, confusion exists about their use and agencies may be limited in their ability to maximize the potential benefits of reverse auctions.

The Departments of the Army, Homeland Security, the Interior, and Veterans Affairs used reverse auctions to acquire predominantly commercial items and services–primarily for information technology products and medical equipment and supplies–although the mix of products and services varied among agencies. Most–but not all–of the auctions resulted in contracts with relatively small dollar value awards–typically $150,000 or less–and a high rate of awards to small businesses. The four agencies steadily increased their use of reverse auctions from fiscal years 2008 through 2012, with about $828 million in contract awards in 2012 alone. GAO was not able to analyze data from a fifth agency, the Defense Logistics Agency (DLA), because it collected only summary level information during fiscal year 2012. DLA guidance states that the reverse auction pricing tool should be used for all competitive purchases over $150,000.

Four agencies used the same commercial service provider to conduct their reverse auctions and paid a variable fee for this service, which was no more than 3 percent of the winning bid amount. DLA conducts its own auctions through a purchased license. Regardless of the method used, according to agency officials, contracting officers are still responsible for following established contracting procedures when using reverse auctions.

More details on this GAO study may be found at:

Army seeks to expand public-private partnerships

The Army is looking to expand privatization efforts to nearly all commercial-like services, according to Army officials.

Lt. Gen. Michael Ferriter, the Army’s top installations official, told a conference of the Association of the United States Army that the privatization of housing and utilities has been a success and the Army is looking to expand privatization efforts further.

“We will partner with anyone who can cut costs,”  Ferriter said at a conference of the Association of the United States Army.

He noted that the Army’s privatization of housing and utilities has been a success and said a likely next step is in-home child care within local communities. He said the Army will test various business models to make sure they work financially before rolling out something across all installations.

Another candidate: dining halls. The Army is looking at issuing dining cards that could be used at its installations and at local restaurants, according to Army officials.

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Army cyber chief meets buyers In pursuit of faster acquisition

The Army’s top cyber commander, Lt. Gen. Edward Cardon, met with acquisition officials for several days last week eager to find ways to buy capabilities within three years or less.

Cardon told reporters at a roundtable here that he wanted to buy “faster, better, quicker” since the cyber realm doesn’t really allow for the seven to 10 years a standard acquisition program usually takes.

He noted the hierarchy of acquisition, with DARPA producing really cool stuff when it hits the sweet spot, standard acquisition doing what it does, rapid equipping filling in combat gaps and in-house projects.

One of the difficulties with figuring out just what works best now is that Army Cyber Command and its equivalents are very new and are still not generating many requirements. “We have to, because that’s what drives the system,” he said.

On other fronts, Cardon says Army Secretary John McHugh is “very close” to making a final decision on establishment of an Army cyber center of excellence (approved in July by Army Chief of Staff Gen. Ray Odierno). The center, likely based at Fort Gordon, Ga., would be the one place where all Army cyber warriors received their training.

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It’s not all bad news in the Defense acquisition world

There are many reasons why defense acquisition has received a bad rap and why lawmakers and Pentagon leaders have been trying to reform the acquisition process for more than 30 years.

The problems are well known. It takes  too long to develop and field new technology within the constraints of federal acquisition regulations.

There are cases, however, when defense acquisitions can work effectively.

Examples of successful defense acquisitions can be found in the Defense Department’s Ordnance Technology Consortium, known as DOTC. It was chartered in 2002 by the undersecretary of defense for acquisition, technology and logistics as a procurement reform initiative that is designed to preserve and advance the U.S. ordnance technology base.

DOTC facilitates collaboration, technology development and prototyping among U.S. industry, academia and the Defense Department’s ordnance
community. This arrangement is legally supported by Section 845 prototype “other transaction agreement.” OTA is administered by the Army at Picatinny Arsenal, N.J., through a government-staffed DOTC program office.

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Army awards year-end communications contracts worth $4.7 billion to 12 firms

The Army has awarded year-end communications contracts valued at $4.7 billion, including a $4.1 billion deal Thursday with 12 companies for long-haul communications and transmission systems.

These companies will compete for task orders on the five-year indefinite delivery, indefinite quantity contract supporting the Defense Communications and Army Transmissions Systems program, which provides satellite and terrestrial communication systems to Army and Defense Department organizations, including the National Command Authority.

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How agencies bury noncompetitive procurements

I get a daily FedBizOpps feed of widget and gadget procurements and awards, and have spent literally hours the past two days poring through year-end sole source contract awards.

These are taxpayer dollars expended in an end-of-fiscal-year “use it or lose it” frenzy, but eyeballing these sole source awards is a manual process that requires opening multiple windows to divine what agencies bought and how much they spent.

In many cases agencies don’t disclose what they spent on the sole source contracts, which raises my reporter antenna.

The justification for these non-competitive awards all contain standard boiler plate language — only Vendor X can supply the gadget, software or service and if the contract is not extended or the gizmo acquired, vital operations will cease, often with a threat to national security.

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