Pentagon considers spliting Air Force One contract to gain more competition

The U.S. Air Force will decide by December whether Boeing will have to share a multibillion-dollar project to provide the next Air Force One jetliner for the president, the service said.

The Air Force has budgeted $1.6 billion for research through 2019 and is “working toward release” of a request for proposals early next year with a schedule to purchase the first aircraft in fiscal 2016, according to spokesman Charles Gulick.

The military hasn’t ruled out buying 747-8 passenger planes from Chicago-based Boeing and then using other contractors to outfit them for the special needs of the presidential fleet. Airbus Group NV, the European aircraft company, said last year that it wouldn’t challenge Boeing to build the plane.

“The Air Force does not yet have an approved acquisition strategy,” and intends to present one “in fall 2014” for review by the Pentagon’s Defense Acquisition Board, Gulick said in an e-mailed statement.

Keep reading this article at: http://www.heraldnet.com/article/20140828/BIZ/140829035/Air-Force-may-make-Boeing-share-work-on-presidential-planes

IG: USPS should rescind its facilities contract delegation

The Postal Service should rescind its facilities contract delegation because the contracting officers aren’t required to meet professional qualifications or establish competition requirements, an Aug. 5 USPS inspector general report says.

USPS’s Supply Management office is responsible for approving contracts to acquire goods and services, but they can delegate contracting authority to personnel outside of Supply Management, the report says.

In September 2013, the Postal Service reported six delegations. And though five of those delegations have performed well, the facilities delegation hasn’t, the IG says.

Facilities did not require contracting officers to meet professional qualifications or establish sufficient competition requirements for contracts, the report says. Also, the facilities delegation could not identify its active contracts and did not timely submit the required annual reports.

Keep reading this article at: http://www.fiercegovernment.com/story/ig-usps-should-rescind-its-facilities-contract-delegation/2014-08-12

What motivates defense contractors? Four lessons for government leaders

Competition was the main theme of the Defense Department’s second annual report on acquisition performance, released earlier this month. Declining budgets may be pushing defense contractors to look for work outside the government, but the Pentagon’s emphasis remains on promoting competition, according to Frank Kendall, the undersecretary of defense for acquisition, technology and logistics.

The report analyzed contractors’ cost and schedule performance over more than a decade to see what motivated them to produce better results. Here are some takeaways:

1. The carrot-and-stick approach works.

2. Fixed-price isn’t always the best fix.

3. More competition does mean better performance.

4. Leadership matters, but it’s not clear how much.

For details, keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/what-motivates-defense-contractors-four-lessons-for-government-leaders/2014/06/27/a623fb06-f577-11e3-a3a5-42be35962a52_story.html

Both competition and small business participation are down in DoD contracts

The Department of Defense (DoD) has issued its annual report on the “Performance of the Defense Acquisition System,” and at least two elements of the report are sure to get attention:

  • There’s less competition in DoD contracting, and
  • Small business goals continue to be missed.

The Defense Department has been losing ground for the last six years in the percentage of contracted work being let competitively.  In 2008, 64 percent of DoD contract dollars were spent through competitive awards; by 2013, that rate had fallen to 57 percent.

DoD Competition Trend FY06 - FY13

This table showing declining competition in DoD contracts is from page 18 of DoD’s report entitled “Performance of the Defense Acquisition System, 2014.”

Of the units with in DoD, the Defense Logistics Agency (DLA) engaged in the highest rate of competitive contracting (82 percent) while the lowest rate of competitive contracts (41 percent) was demonstrated by the Air Force, Navy and Marine Corps.  Overall, DoD missed its competitive contracting target of 60 percent, coming in at 57 percent in FY13.   No unit within DoD met its competition goal.  Even at 82 percent, DLA missed its goal of 86 percent.

The decline in competition comes despite DoD’s formal acquisition policies to increase competition.  In 2010, DoD began setting strategic goals to increase the percentage it spends on competitively-awarded contracts. In September of that year, then-Under Secretary of Defense for Acquisition, Technology and Logistics Ashton Carter issued the memorandum “Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending,” which, among other things, aimed to lower weapons costs by increasing competition.  Building on those goals, Frank Kendall, Carter’s successor, launched the Better Buying Power 2.0 initiative two years later. 

In a related contracting area, DoD’s rate of contract awards to small businesses  has been improving since FY11, but awards to small businesses in FY13 lag DoD’s achievements in several recent years, specifically FY03, FY04, FY05, FY06 and FY09.

Small business eligible dollars obligated to small businesses in FY13 totaled $47.2 billion across the Department: $15.9 billion for products (i.e., supplies and equipment) and $31.3 billion for services.  Overall, DoD missed its FY13 goal of 22.5 percent by 1.3 percentage points.

DoD Small Business Utilization Rates - FY01-FY13

This table from page 20 of “Performance of the Defense Acquisition System, 2014″ shows that participation by small businesses in DoD contracts lags achievements in FY09 and earlier years.

To read DoD’s complete annual report on acquisition, visit: http://www.acq.osd.mil/docs/Performance-of-Defense-Acquisition-System-2014.pdf

What you need to know about the top federal contractors

In his farewell address to the nation, President Eisenhower warned against the economic and political influence of the rising military industrial complex: the relationship between government entities and private government contractors.

Yet almost 60 years later, with the government contracting industry so large that many call it a fourth branch of government, Eisenhower’s warning appears unheeded.

Top Contractors by Dollars Obligated 2014

Proponents of the industry say that contractors keep the nation safe, doing work the government does not have the capability to do. Its critics, on the other hand, assert that contractors have an incentive to perpetuate war—the more weaponry contractors produce, the more profits they make.

Keep reading this article at: http://time.com/2917578/government-contractors-lockheed/

The future of contracting

As government agencies now rely primarily on contractors to meet their mission objectives, they must embrace the oversight and management of contractors as a core competency, not as an administrative function buried deep within the management and/or administration office. Mission delivery through external, private-sector, and profit-motivated businesses requires all federal executives and staff to accept their roles in ensuring that contractors properly support the agency’s “customers” as well as its own private business objectives. Immense advances in technology in recent years and the rising prominence of new corporations in our information age replacing those of the industrial age raises the question: How can government acquisition better leverage new methods of communication and technology; and if so, how can it be more effective?

While technology continuously improves our lives in many ways, such as providing new and improved tools to make data more available, functions to perform faster, and communication to be more accurate and responsive, the professional competencies required and goals of government contracting cannot and should not change. These are concepts of fairness, competition, the role of small business, fair and reasonable pricing, ethical standards of conduct, best value, intellectual property, acquisition planning, compliance, etc. There are also business competencies of leadership, economics, accounting, marketing, etc.  The terminology of competencies may change, but the competencies themselves will remain.

Keep reading this article at: http://www.federaltimes.com/article/20140624/BLG06/306240011/The-future-contracting

Acquisition planning is focus of July 14 course

Want to learn about the Government’s policies and procedures for planning an acquisition?  How does the Government deal with required and preferred sources of supplies and services?  What must be done to ensure competition?

To answer these questions and many, many more, The Contracting Education Academy at Georgia Tech is presenting a one-week course beginning July 14, 2014, entitled CON 090-2: Contract Planning in the FAR.

By attending this course, students will learn all the types of contracts that may be used in acquisitions, special contracting techniques, the impact of socioeconomic programs, the use of special contract terms and conditions, the implications of contractor qualifications, and proper advertisement procedures.

The course provides vital instruction for Government contracting personnel as well as important insights for contractors.

CON 090-2 is the second of four modules from CON 090 – Federal Acquisition Regulation (FAR) Fundamentals.  The Contracting Education Academy at Georgia Tech offers CON 090 in four, one-week classes.  Each module stands on its own, allowing students multiple opportunities throughout the year to complete the entire CON 090 course without the challenge of being away from work or home for an entire month.

The course consists of limited lecture, and is heavily exercise-based.  Students should be prepared to dedicate about an hour each evening for reading.

The Contracting Education Academy at Georgia Tech is an approved equivalency training provider to the Defense Acquisition University (DAU) and provides continuing education training to Acquisition and Government Contracting professionals as well as to business professionals working for government contractors or pursuing opportunities in the federal contracting arena.

Procurement troubles still dog Defense Department

Congress has held hearings over the past 30 years seeking ways to fix the Defense Department’s poor procurement system.

A June 24th hearing offered interesting ideas.

No headlines afterward about stopping F-35 costs from skyrocketing, keeping new production of nuclear aircraft carriers on schedule or halting the failure of billion-dollar computer programs — in fact, there was hardly any press coverage at all.

Two worthwhile ideas that came from the four experienced procurement specialists who appeared before the House Armed Services Committee provided no silver bullets, but they made sense.

  1. Give the main contracting officer for major weapons projects absolute cradle-to-grave authority and responsibility and accountability.
  2. Interservice rivalry and even intraservice competition have far from ended, and they harm the procurement system.

 

4 lessons for government leaders on what motivates contractors

Competition was the main theme of the Defense Department’s second annual report on acquisition performance, released earlier this month. Declining budgets may be pushing defense contractors to look for work outside the government, but the Pentagon’s emphasis remains on promoting competition, according to Frank Kendall, the undersecretary of defense for acquisition, technology and logistics.

The report analyzed contractors’ cost and schedule performance over more than a decade to see what motivated them to produce better results. Here are some takeaways:

  1. The carrot-and-stick approach works.
  2. Fixed-price isn’t always the best fix.
  3. More competition does mean better performance.
  4. Leadership matters, but it’s not clear how much.

Keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/what-motivates-defense-contractors-four-lessons-for-government-leaders/2014/06/27/a623fb06-f577-11e3-a3a5-42be35962a52_story.html

Pentagon ranks top suppliers to spark competition among contractors

The Defense Department’s acquisition chief on Friday (June 13, 2014) released a ranking of the top 30 supplier units within the contracting industry as part of a continuing effort to improve the government’s largest procurement operations by curbing costs and professionalizing the workforce.

Frank Kendall III, undersecretary of Defense for acquisition, technology and logistics, introduced the first rankings from a Navy Department pilot project called the Superior Supplier Incentive Program. Designed to help industry “recognize its better performers” based on past performance and evaluations by program managers, such a list is planned for all the services beginning to build incentives, Kendall told reporters. “The industry people who will respond the most will be the ones at the bottom,” he said.

Sean Stackley, assistant Navy secretary for research, development and acquisition industry, said “industry best practices include recognizing the best suppliers, which gives them an incentive to sustain superior performance.” The selections were made through a process designed to be “fair and objective and understood by the public and Congress, as well as easy to manage,” Stackley said.

Keep reading this article at: http://www.govexec.com/contracting/2014/06/pentagon-ranks-top-suppliers-spark-competition-among-contractors/86473/

For the annual report on the performance of the Defense Acquisition System, click here.