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.  

Federal contracting’s bright side

Reviewing government contracting trends over time often yields some surprising results. Then again, sometimes it doesn’t.

One result is while the acquisition environment may appear dire in the short run, the overall picture is quite optimistic. For example, while spending increased dramatically during the early 2000s, owing to two of the longest wars in American history, the “severe” drop off in government contracting that started in 2010 leaves spending still almost 40 percent higher than in 2002, adjusted for inflation. Not so bad for the government contractor community!

Of course, contract spending by the Department of Defense dwarfs that of all other agencies combined. Yet, while some agencies have seen significant drops, the overall reduction is mitigated by the huge amount of spending that continues.

Keep reading this article at: http://www.federaltimes.com/article/20140508/BLG06/305080010/Federal-contracting-s-bright-side

Pentagon deputy: Defense contracting choices will only get tougher

Sequestration is forcing the Defense Department to “literally build two budgets” and, if the automatic cuts are continued, will damage the quality of U.S. weapons systems and deter innovation, a top Pentagon acquisition official said last Wednesday (Apr. 23, 2014).

Elana Broitman, deputy assistant Defense secretary for manufacturing and industrial base policy, said, “The sequester cuts are tied to no long-term plan, and, though it’s a truism in the marketplace, we are concerned about [having] enough competition with fewer entities around to fund innovation.”

Broitman spoke at a panel discussion at Arlington, Va.,’s Artisphere organized by Bloomberg Government, whose newly released annual study of the 200 top federal contractors noted that Defense Department contract spending is down by 15 percent. “We used to trim things we don’t need,” Broitman said, “now we’re choosing between two good things.” She also cited risks if the U.S. government does not invest in the industrial base and research and development, saying. , “We can no longer guarantee for adversaries and allies that our products are the best.”

A former aide to Sen. Kirsten Gillibrand, D-N.Y., Broitman also expressed regret that Congress has rejected the Obama administration’s request for another round of the Base Closing and Realignment Commission. “There’s only so many costs we can swallow if we want our troops well trained,” she said. “We can’t afford every installation where they may be housed.”

Keep reading this article at: http://www.govexec.com/contracting/2014/04/pentagon-deputy-defense-contracting-choices-will-only-get-tougher/83155/

‘Catastrophic’ network outage sets stage for ‘exception to fair opportunity’

The agency that manages the Pentagon Police Department  and also runs networks and computers used  the by the  Office of the Secretary of Defense experienced a “catastrophic network technological outage” on Jan. 3, and it could take until January 2015 to complete the repairs, an obscure document on the Federal Business Opportunities website revealed.

That document, posted on May 2, disclosed that the outage experienced by the Pentagon Life Safety System Network and Life Safety Backbone left the Pentagon Force Protection Agency “without access to the mission-critical systems needed to properly safeguard personnel and facilities, rendering the agency blind across the national capital region.”

The Force Protection Agency provides security and services to 100 military buildings in Washington, Maryland and Virginia.

The agency estimated it would take six to 12 months to “effect repairs and to upgrade the network core to mitigate future outage risks.” Repairs include recovery of data after the catastrophic network technological outage and upgrade and replacement of switches and routers.

SRA International Inc. won a $56 million contract for the Life Safety System Network in 2008 that expired on April 30. The Force Protection Agency falls under the Washington Headquarters Service, which extended the SRA contract through Oct. 31, with a value of $7.3 million, and a four month option through Feb. 28, 2015, with a total value of $11.4 million.

See the current posting on FedBizOpps at https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=7a4521d43f5f5c78b19eab99bed941ea&_cview=0

Keep reading this article at http://www.nextgov.com/defense/2014/05/pentagon-police-agency-hit-catastrophic-network-outage/83842

‘Reverse Auctions’ draw scrutiny

It is like an eBay of Washington, a well-appointed and well-connected online marketplace for lucrative government contracts.

Deals for everything from pens to pesticides, from painting offices to performing autopsies — all that and more is up for grabs on FedBid, a fast-growing private company that has positioned itself at the profitable nexus of government and business.

Financed by an investment company connected to Stephen M. Case, of AOL fame, and Ted Leonsis, majority owner of the Washington Wizards, FedBid has assembled a roster of Beltway insiders to promote an unusual approach to how contracts are meted out. Its latest big hire is Joseph Jordan, who was until recently head of procurement policy for the Obama administration.

Through FedBid, government agencies use “reverse auctions” — in which the lowest bid wins, rather than the highest — to decide who is awarded contracts. In theory, the process can save money for taxpayers by encouraging businesses to offer the best possible prices. In practice, it also makes a lot of money for FedBid, which can collect fees from the winning bidders who, in turn, pass those costs to the government.

At issue is whether FedBid encourages competition, as its proponents argue, or simply prompts companies to submit unrealistically low bids to outmaneuver business rivals. Detractors contend that awarding contracts based solely on price means that the government risks ending up with inferior products or services, though this is a risk even when the government does not use reverse auctions. A recent government study, which reviewed reverse auctions at top agencies, found that roughly a third of all FedBid auctions involved a single bidder, meaning that they were closer to no-bid contracts than true auctions.

Keep reading this article at: http://www.nytimes.com/2014/04/07/business/reverse-auctions-draw-scrutiny.html?nl=todaysheadlines&emc=edit_th_20140407&_r=1 

GAO: USDA improperly awarded $141 million sole source contract

The U.S. Department of Agriculture improperly awarded a $141 million sole source contract in exchange for the contractor’s agreement to withdraw a GAO bid protest.

According to a recent GAO bid protest decision, the award violated the Competition in Contracting Act, which does not permit an agency to award a sole source contract in exchange for a contractor’s promise to terminate litigation against the agency.

The GAO’s decision in Coulson Aviation (USA), Inc., et al., B-409356.2 et al.(Mar. 31, 2014) involved the USDA’s procurement of next generation (“NextGen”) large airtanker services for wildland firefighting support.  The Air Force initially issued a solicitation for the NextGen airtanker services in 2011.  After corrective action taken in response to a GAO bid protest, the USDA awarded NextGen contracts to four companies.  Neptune Aviation Services, Inc., which had initially been identified as an awardee before the protest, was not awarded a NextGen contract.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/gao-usda-improperly-awarded-141-million-sole-source-contract/ 

Bidders ‘stunned’ by sudden cancellation of federal contract

The invitation was to bid on a massive, high-stakes contract, estimated to be as high as $5 billion. Dozens of companies went for it, working for months to polish their proposals, then waiting for more than a year to see if they had won.

But instead of granting awards that would be part of the federal government’s largest training and human resources contract, the Office of Personnel Management issued a terse notice earlier this month that weighed in at five words: “This solicitation is hereby cancelled.”

The risk of losing is inherent in the business of federal contracting, but the sudden cancellation of such a high-profile contract with no explanation struck many as an unnecessarily secretive and bad way of doing business. The head of the Professional Services Council, an industry group representing more than 370 companies, fired off a letter saying many companies were “stunned” at the cancellation and the way it was handled.

Keep reading this article at: http://www.washingtonpost.com/business/economy/bidders-stunned-by-sudden-cancellation-of-federal-contract/2014/02/26/65978f12-9f14-11e3-b8d8-94577ff66b28_story.html 

The poster child for doing procurement the wrong way

Lockheed Martin Corp.’s F-35 Joint Strike Fighter isn’t going anywhere. But members of the House Armed Forces Committee don’t have to be happy about it.

That was the message from ranking member U.S. Rep. Adam Smith, D-Wash., and U.S. Rep. Randy Forbes, R-Va., during a panel discussion Wednesday at the Bloomberg Government’s Defense Transformation conference.

“I hate to say this without laughing, but it’s better than it was,” said Smith. “The F-35 is the poster child for doing procurement the wrong way, but to the extent possible, they’ve cleaned up. It will replace 90 percent of fighter aircraft. It’s going forward. There’s no scenario where we’d scrap it at this point.”

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2014/02/lockheeds-f-35-the-poster-child-for.html?page=all 

Acquisition planning is focus of March 3rd 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 March 3, 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.