Navy sharpens acquisition pencil to find savings

July 25, 2012 by

The Department of the Navy’s fiscal year 2013 budget request was $1.4 billion less than in 2012. The service, like other Defense Department organizations, expects next year to be the beginning of a steady budget decline.

To help counteract that expected budget decrease, the Navy is sharpening its acquisition pencil to find both efficiencies in how and what it buys.

This is especially true in services, where the DoN spends about $11 billion annually.

Elliot Branch, the Navy’s deputy assistant secretary for Acquisition and Procurement in the Office of Research, Development and Acquisition, said the service is focusing on four key procurement areas:

  • Demand management
  • Acquisition strategy
  • Contract formation
  • Contract administration

Keep reading this article at: http://www.federalnewsradio.com/?nid=494&sid=2949264.

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What acquisition officials can learn from ‘Real Housewives’

April 20, 2012 by

Reality TV shows provide ample evidence that relationships can fall apart very quickly because of a single ill-considered remark. A battle erupts. One person defends the remark, the other person lashes out in anger. It’s brutal to watch.

The relationships between agencies and contractors can be as delicate as those on TV.

Consider the case of a federal contracting officer, program manager or contracting officer’s representative giving a company a negative performance review. Friction can easily develop if the facts of the situation are open to interpretation or if the two parties have different views about what happened.

A recently introduced bill could change those dynamics, but not necessarily for the better.

The Comprehensive Contingency Contracting Reform Act (S. 2139), which Sens. Claire McCaskill (D-Mo.) and Jim Webb (D-Va.) introduced in February, would revise language in the Federal Acquisition Regulation that requires agencies to provide contractors with copies of performance evaluations and give them 30 days to comment, provide additional information or rebut an official’s assessment before it is considered final.

Under a provision of the new bill, agencies would not be required to share performance evaluations with contractors ahead of time. The bill, which is focused on wartime-related contracting, is intended to make it easier for agencies to identify and suspend poorly performing contractors. Although other provisions apply only to wartime contracting, this one would be instituted across the board.

Vendors and acquisition experts say silencing contractors in that way would damage relations between government and industry, creating distrust and leading to more litigation. Given no opportunity to review performance evaluations before they are finalized, contractors are likely to take some tough protective action.

“If a contractor’s remedy to correct the record is taken away from them, there is no safety valve for them other than the courts,” said Peter Tuttle, a former Army contracting officer and now vice president of Distributed Solutions, a consulting company.

Companies must be able to guard themselves against errors, unexpected bombshells and bias in past-performance reviews. “A contractor needs the right to defend itself from either baseless attacks or misinformation that is often a surprise or should have never been a negative rating in the first place,” said Jaime Gracia, president and CEO of Seville Government Consulting. Such inaccurate reviews happen all too often, he added.

However, acquisition experts say the evaluation process is only one aspect of the agency/contractor relationship. Just as in personal interactions, conflicts are more likely to develop if a relationship is already weak.

“I think someone who believes the past-performance review is the basis for a trusting relationship is putting up smoke and mirrors,” said Elaine Duke, former undersecretary for management at the Homeland Security Department and now president of consulting firm Elaine Duke and Associates.

Tips for avoiding a breakup

Duke offered some pointers for industry and agency officials. First of all, the two sides should be talking constantly throughout the contractual relationship to share feedback about expectations and results. That becomes even more important as the contract work progresses, especially when there are personnel changes among managers or contracting officers.

“Contract management should be a daily occurrence,” Duke said.

Government officials must tell the contractor right away if they aren’t pleased with the work. By the same token, a company must identify problems early and work them out with agency officials before they get out of hand. “Shame on you if you don’t,” Duke said.

Whether or not they have the opportunity to defend their comments, agency officials must take the time to prepare accurate performance reviews. They should take detailed notes for their contract files so they have proof of poor performance. According to Duke, officials will have trouble writing a solid review without such documentation.

Furthermore, federal employees need support from higher-level managers. Their bosses must stand up for them, even when they give a company a bad review.

In the end, Duke said a negative past-performance review should not be the cause of a breakup. As with any relationship, both sides must be fully engaged.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared on Apr. 9, 2012 at http://fcw.com/Articles/2012/04/15/HOME-PAGE-Acquisition-relationships.aspx?s=fcwdaily_100412&Page=2.

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Should contractors keep the right to respond to past-performance reviews?

March 19, 2012 by

There’s some buzz around a provision in the newly introduced Comprehensive Contingency Contracting Reform Act that would eliminate the ability established in the Federal Acquisition Regulation for a contractor unhappy with their past-performance evaluation to enter their own version of events in the file and to appeal the original past-performance evaluation to one level higher in the organization from where the original evaluation was done.

Matthew Weigelt wrote about the provision recently on FCW.com, with a moderately incendiary headline saying the provision would “stifle” contractor responses to past-performance reports. Matthew’s article was a top-five read and emailed article on the FCW site, so the issue is attracting attention.

With a small tweak, this could actually be a really good change. But the tweak is necessary, and I hope the bill’s authors will make it.

The big problem with the current FAR language is that it allows a contractor to appeal a past-performance rating one level above where it was made. In my view, this appeal right has been devastating for the honesty of past-performance ratings, and therefore for the ability of past-performance to be a differentiator in contract awards. For past-performance to work in choosing contractors, the government needs to be able to observe differentiation between better performers, who should be rewarded with new contracts, and poorer ones, who shouldn’t.

The serious shortcomings in the government’s past-performance rating system in turn is really too bad, because judgments, formal and informal, of the past performance of those with whom we do business are an absolutely crucial part of the ability of a market system to work in improving results. If we like the haircut a barber gave us, we go back, and if we didn’t, we don’t – this really provides an incentive for barbers to do a good job.

I was the person, as OFPP administrator, who authorized the current FAR language when the past-performance evaluation system began in the ‘90s. I was concerned at the time that this appeal provision was a mistake, and I believe that subsequent results have confirmed my worries. Contracting officers believe that a bad rating is an invitation to spend countless hours having to defend their judgments, and the easy response, especially with staff shortages and not enough time, is simply to go light on bad comments.

So as the person responsible for the original language, I vote for its repeal.

However, the bill’s provisions go a bit too far. There is no reason to eliminate the ability of the contractor to give their version of events and have it put in the contract file. That just seems like elementary fairness, so others using the past-performance report get to see a different version of what happened, if there is one. I think that at least enlightened elements in the contractor community could support elimination of the dysfunctional appeal process, which undermines the ability of the past-performance system to work at all. But elimination of even the right to comment is sure to arouse the ire of all contractors, as Weigelt’s article seems to show.

Can the bill authors tweak their language so it can help create a real improvement in the government’s past-performance rating system?

– by Steve Kelman, Washington Technology, Mar, 5, 2012 at http://washingtontechnology.com/blogs/lectern/2012/03/contractors-past-performance.aspx?s=wtdaily_060312.

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IT acquisition: Pay less now, more later

January 27, 2012 by

Given the current budget environment, in which even essential programs are under scrutiny, it’s only natural that agencies are pressuring their acquisition teams to put the squeeze on vendors for the best possible price. Unfortunately, they might get that price only to find out later that the joke is on them.

Experts increasingly fear that officials will develop a “lowest cost technically acceptable” attitude for their procurements. In other words, they will pick the bids that meet the minimal requirements and go for the cheapest price to demonstrate to the higher-ups that they are good stewards of the government’s money.

The result could be abysmal performance.

“Think performance is bad now? Wait,” said Jaime Gracia, president and CEO of Seville Government Consulting, a federal acquisition and program management consulting firm. “Soon, these jokers will come in to start work and they’ll be like the Three Stooges.”

In some cases, experts say, the lowest bid could actually end up costing agencies more as they eat up all the savings — and more — with make-good work.

“Suddenly, the lowest cost technically acceptable isn’t the lowest cost,” said Robert Burton, former deputy administrator at the Office of Federal Procurement Policy.

But several factors work against buying the best value, which weighs both cost and quality. One problem is timing: Investing in quality might not pay off right away, which could frustrate Obama administration officials who are eager to show that they are running the government efficiently.

Another problem is that best value is inherently subjective. Buyers must factor in the probability of success and the associated risks — both of which elude hard analysis — against any differences in cost. In contrast, when success is measured on price alone, it’s easier to set goals and measure progress against them. You can just watch that bottom line.

Those difficulties are compounded by the fact that shrinking budgets also mean acquisition officials are getting less support from contractors. In the past, contractors have often helped with market research and other important tasks that can help justify higher bids.

Dan Gordon, who recently stepped down as OFPP administrator, offers a more tempered view. There are times when the lowest cost is fine, he said. But on more complicated procurements, the best value deserves a close look, too.

He said he is confident that the federal acquisition workforce has the training and experience to navigate those choices. They know they are “entrusted with the discretion to find the way to best protect taxpayers’ dollars,” Gordon said.

But others are less optimistic. Larry Allen, president of Allen Federal Business Partners, said he believes the low-cost mentality might have already taken hold in some parts of the government, such as the Defense Department.

The Three Stooges just might be arriving with a “fleet of Yugos,” Allen said.

Data management

The government is sitting on an oil field of information that could help agencies operate better and more efficiently. If it could tap the wealth in those data reserves, it would be rich enough to move to Beverly Hills.

Managing that data in 2012 will help the government make valuable decisions that can save money and give insight into its buying habits.

Federal officials will want to know where their money is going because Office of Management and Budget officials will be asking. OMB has directed financial and acquisition officials to decrease spending — specifically spending on contracting — and it recently mandated a 15 percent decrease in contract management support services by the end of the fiscal year. Agencies will need hard data to prove that they have made the cuts.

Strategic sourcing

Officials from the Clinton, George W. Bush and Obama administrations might have disagreed on numerous policies, but they could agree on this: The federal government ought to leverage its collective buying power to get better prices on common commercial products.

Today that concept goes by the name of strategic sourcing, and agencies are beginning to see the wisdom of it. Yes, they might have to pay a fee to buy from a strategic sourcing contract, but in the end, the savings outweigh the initial cost.

As of now, the General Services Administration offers strategic sourcing contracts for printing services and for domestic delivery services, with several IT products covered by blanket purchase agreements. But the range of products available through strategic sourcing is expected to expand as interest grows.

With agencies searching under their couch cushions for loose change to put toward their shrinking budgets, strategic sourcing has the potential to catch on big.

Cuts to support services

As noted earlier, just when acquisition officials could use more help, they are likely to have a lot less of it.

In the past decade, agencies have quadrupled the amount of money they spend on management-related support functions, far outpacing the growth in overall contract spending, according to an OMB memo released late last year.

In fiscal 2010, agencies spent more than $44 billion on 12 types of support services, including IT services, acquisition planning and program management. That’s too much, OMB officials say. They will be paying close attention to agencies’ compliance with OMB’s required 15 percent reduction in spending on support services.

The process will be painful for agencies. Contracting officers will feel the pain when they’re doing the market research for solicitations, and managers will feel it when they try to get help evaluating a program only to find an empty desk where a contractor once sat. Agency employees will be doing all that work themselves.

Dialogue with industry

The Obama administration has made a lot of acquisition officials nervous with its efforts to keep dealings between agencies and companies on the up and up. But at the same time, administration officials have pushed agencies to make sure those conversations happen.

One example is the mythbusters campaign Gordon launched while at OFPP to dispel unfounded ethical concerns that are hindering government/industry dialogue. Another is GSA’s BetterBuy initiative, an effort to use Web 2.0 technology to give industry more input on planned acquisitions.

More recently, GSA has launched the Integrations Industry Community as an online venue for vendors to provide input on an upcoming governmentwide acquisition contract for IT-related professional services.

The thinking behind all those initiatives is that, now more than ever, federal agencies are in the market for new ideas — especially ones that can save them money — and contractors have innovation to spare.

One way or another, contracting officials and program managers must find a way to talk, Gordon said. He once jokingly told an apprehensive contracting officer, “Take five lawyers with you if you need to, but you’ve got to find a way to feel more comfortable talking and listening to vendors.”

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared on Jan. 20, 2012 at http://fcw.com/articles/2012/01/15/feat-watch-list-acquisition.aspx.

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Public release of contractor data delayed

January 17, 2012 by

Contractors can still challenge information tjat goes into the Federal Awardee Performance and Integrity System, but they have just a two-week window before the information becomes public.

The new provision takes affect Jan. 17, 2012. The start date was missing when the final rule was published Jan. 3.

Any information that agencies enter into database from Jan. 17 onward will be subject to a two-week delay before it is transferred to the publicly available part of FAPIIS. Past performance information won’t be published at all. Contractors will receive notice when new information about their company goes into FAPIIS, and they will have 7 days to point out information that should be exempt under the Freedom of Information Act.

In the new Federal Register notice, officials wrote that the delay until Jan. 17 will give agencies time to complete necessary system changes to support the two-week waiting period before contractors’ information goes live.

The current system is designed to automatically transfer information to the publicly available part of FAPIIS. Until officials make the change, companies would not have an opportunity to request withholding the information, the notice states.

FAPIIS is a one-stop website for contracting officers and federal employees to look at the history of companies’ work with the federal government. It includes data from the Performance Information Retrieval System, as well as information from other databases, including the Excluded Parties List System, which cites companies that are suspended or debarred from federal contracting.

The final rule gives companies seven days to find any information that should not be disclosed because it should be considered exempt. In such a case, officials will remove the information from FAPIIS to resolve the issue.

If the government official does not remove the item, it will be automatically released to the public website within 14 days after beginning entered into FAPIIS, according to the notice.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared Jan. 11, 2012 at http://washingtontechnology.com/articles/2012/01/10/fapiis-contractor-information.aspx?s=wtdaily_120112.

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Deadline set fighting disclosure of contractor work history

January 6, 2012 by

The Obama administration solidified an interim rule that requires agency officials to post a government contractor’s work history in a publicly accessible website.

The Federal Awardee Performance and Integrity Information System (FAPIIS) is a one-stop web site for contracting officers and federal employees to look at the history of companies’ work with the federal government.

FAPIIS includes data from the Performance Information Retrieval System, as well as information from other databases, including the Excluded Parties List System, which lists companies that are suspended or debarred from federal contracting. The overall purpose of FAPIIS is to make it easier for contracting officers to get an overall assessment of a company before awarding a contract by not having to search numerous databases.

A year ago, acquisition officials issued an interim rule making all the information public, except for past performance reviews by agencies.

The final rule took effect Jan. 3.

In the Federal Register notice about the rule, officials recognized the risks about the information going public though.

The final rule gives companies seven days to find any information that should not be disclosed because it should be considered exempt from disclosure. In such a case, officials will remove the information from FAPIIS to resolve the issue.

If the government official does not remove the item, it will be automatically released to the public site within two weeks after the review period began, according to the notice.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week.   This article appeared Jan. 4, 2012 at http://washingtontechnology.com/articles/2012/01/04/fapiis-public-disclosure-objections.aspx?s=wtdaily_050112.

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Lawmakers, OMB push to ban more ‘bad-actor’ contractors

November 23, 2011 by

Procedures for disqualifying dishonest or incompetent federal contractors are too rarely exploited, according to a consensus of several senators, the White House and cross-agency watchdogs. But there is disagreement over whether the solution is improving application of the rules or whether Congress should make some suspensions and debarments mandatory.

At a Wednesday hearing of the Senate Homeland Security and Governmental Affairs Committee, Chairman Joe Lieberman, I-Conn., expressed alarm that a series of reports from the Government Accountability Office and inspectors general have shown a reluctance of many agencies to refer unsatisfactory contractors to the Excluded Parties List System maintained by the General Services Administration.

A Pentagon report “just last month shows that over a 10-year period, DoD awarded $255 million to contractors who were convicted of criminal fraud; and almost $574 billion to contractors involved in civil fraud cases that resulted in a settlement or judgment against the contractor,” Lieberman said. “Last year, the Department of Homeland Security’s inspector general found 23 cases where the department had canceled a contract because of poor performance, but in none of those cases did DHS suspend or debar the contractor.”

The Federal Emergency Management Agency, despite the existence of an anti-fraud task force following Hurricane Katrina in 2005, has not sent a single name to the list, Lieberman added, noting that the rarity of suspensions and debarments has been a concern of the committee as far back as 1981.

Sen. Claire McCaskill, D-Mo., said she got angry about the issue when a U.S. soldier was killed in Iraq by a negligent truck driver working for a U.S. contractor. The U.S. military continued using the contractor. “It’s a matter of character for our nation,” said McCaskill, who is preparing related legislation to implement recommendations of the recently disbanded Commission on Wartime Contracting.

She regretted that proposals to require more suspensions and debarments founder because of a fear of litigation, because it’s “too much trouble,” some contractors are seen as “too big to fail,” or “it is unclear who is accountable for a failure” to pursue that course, she said. “We need to draw a line in the sand.”

Dan Gordon, the departing administrator of the Office of Federal Procurement Policy, said the Obama administration had made significant progress on the issue over the past three years, but the system’s “weak link” is ensuring that a fraudulent contractor is flagged for action in a timely way. “Sometimes the referral takes too long, as historically agencies have been very bad about sharing, either because officials didn’t check the list, checked it too late, or because of problems in the spelling of an entity’s name,” he said.

He pointed to a memo to agencies released Tuesday by Office of Management and Budget Director Jack Lew that requires agencies to appoint a senior accountable official to “assess the agency’s suspension and debarment program — including the adequacy of available training and resources — review internal policies and procedures,” ensure databases are checked before grants and contracts are awarded, and “take corrective action if an award is improperly made to a suspended or debarred contractor.”

Gordon said OMB has been working with its Interagency Suspension and Debarment Committee to improve training and create detailed agency guidance. But he expressed skepticism toward any prospective legislation making certain referrals mandatory, saying agency cultures differ and mandatory referrals that take away discretion could undermine the role of suspension and debarment officials.

Allison Lerner, the inspector general of the National Science Foundation who co-chairs an IG working group on the issue, said suspensions and debarments “could be used more frequently and effectively.” The resistance comes from misconceptions among agency contracting officials, she said. Some fear jeopardizing investigations by disclosing negative information on contractors and some hold the incorrect beliefs that a decision must be based only on facts uncovered in a judicial process and that IG investigations cannot be cited as evidence against contractors.

Panelists agreed that the model policy is that practiced by the Air Force. Steven Shaw, deputy general counsel for contractor responsibility at the Air Force described two recent suspensions, one involving the Boeing Co.’s launch systems units and the other involving programs within L-3 Communications. Sixty-two percent of his suspensions and debarments are “fact-based,” he said, meaning his team doesn’t wait for the Justice Department to bring criminal charges. “We take a broad view of the type of misconduct, not just criminal fraud but as it relates to business integrity, tax issues, the Foreign Corrupt Practices Act or commercial fraud,” he said.

The Air Force also uses a “carrot-and-stick approach that is aggressive at the front end” but still allows contractors to prevent fraud through risk management and ethics programs.

Ranking committee member Sen. Susan Collins, R-Maine, who as a staff director worked on the 1981 hearing chaired by then-Sen. William Cohen, R-Maine, reminded the hearing that the goal of suspension and debarment is “not to punish contractors but to protect” the taxpayer, and that allowing “bad actors” to win new contracts is “not fair or ethical to the honest contractors.” She said she is considering legislation that would force agencies — she mentioned the Justice Department — to step up use of the tool.

Such a move is opposed by Alan Chvotkin, executive vice president and counsel of the Professional Services Council, a contractors trade group. He praised this week’s OMB memo as good “cross-agency coordination to bring attention” to the appropriate use of suspension and debarment. But he stressed the “very limited circumstances” under which “automatic exclusion” should be applied to a contractor.

“The government has wide flexibility to assess each individual situation to determine whether the government is at risk, including built-in due process procedures,” he said. “Doing it in an arbitrary way would be a mistake and convert it into a punishment, which it is not.”

– by Charles S. Clark – Government Executive – November 16, 2011 at http://www.govexec.com/story_page.cfm?articleid=49355&dcn=e_gvet

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Air Force suspends three firms for bad, unfinished work

November 4, 2011 by

Air Force officials have suspended three IT companies after they left their work unfinished on two buildings at Andrews Air Force Base in Maryland and have been unwilling to provide information on source-code data so officials can fix their work, according to a government document.

The suspended companies are Advanced C4 Solutions, Inc., a Florida-based company, which was the prime contractor, and two subcontractors, Superior Communications Solutions Inc., based on Georgia, and Iron Bow Technologies, based in Virginia.

Air Force officials are also considering debarring the companies from doing business with the government any longer, according to the Air Force report from Oct. 24 on the proposed debarments. The three companies have been listed on the Excluded Parties List System since then.

None of the companies returned calls and emails today for comment. Representatives from Iron Bow Technologies have said they are working to resolve the problems.

The suspensions, and possible debarments, stem largely from unfinished work.

In June 2010, the Space and Naval Warfare Systems Command Systems Center Atlantic awarded Advanced C4 Solutions with a multi-million dollar task order associated with a major IT and furnishing project for the Jones and Smart Buildings, which are at Andrews, according the document.

Advanced C4 Solutions, and the two subcontractors, were supposed to provide mission-critical IT to more than 2,200 personnel within the first two months after the buildings reopened. They failed to meet the requirements of the task order, according to the Air Force. The IT that was installed didn’t work well.

During a review, an unaffiliated contractor discovered 14 critical findings, 19 major findings and seven minor findings that affected the overall security and the access to the technology systems.

There were also more than 145 customer-generated trouble tickets, identifying incorrectly configured network equipment, bad installation work, and a disregard for regulations on critical network security and information protection, the Air Force said.

Despite all of that, the companies stopped their work and left the job site without finishing the job. Since then, they have been unwilling to provide operational manuals or source-code data, so Air Force officials can begin to fix the work. For example, the audio-visual and teleconference systems are not working because of the IT installation work isn’t done, the Air Force said.

There was also a conflict of interest among the companies. Executives from the three companies assisted in developing requirements and cost estimates for the project. They participated in conducting market research. The law doesn’t allow that, the document states.

“Even though [the companies] improperly developed their own contract requirements, the subjects failed to meet their own requirements,” the document states.

In all, it’s caused substantial harm to the Air Force, according to the document.

“This failure provides a basis for each of their debarments,” Steven Shaw, deputy general counsel at the Air Force, wrote in the document.

Even more so, these companies have histories of failing to do their work, and their performance on other contracts has not been good. Shaw wrote that it’s more evidence for possible debarments.

An Air Force spokesman today said this is a pending administrative action and therefore limited in providing further details.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement at Washington Technology.  Published Nov. 1, 2011 at http://washingtontechnology.com/articles/2011/11/01/advanced-c4-solutions-iron-bow-technologies-superior-communications-solutions-air-force-suspensions.aspx?s=wtdaily_021111.

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Agencies can improve suspension and debarment process, says GAO

October 13, 2011 by

Too many federal agencies are insufficiently protecting against contractor fraud or incompetence by using the suspension and debarment process, the Government Accountability Office reported Thursday. Agencies with records of scant use of the practice should beef up dedicated staff and commit to greater use of the interagency committee designed for this purpose, the auditors said.

“Agencies that fail to devote sufficient attention to suspension and debarment issues likely will continue to have limited levels of activity and risk fostering a perception that they are not serious about holding the entities they deal with accountable,” William Woods, GAO’s director of acquisition and sourcing management, told a hearing of the House Oversight and Government Reform Subcommittee on Technology, Information Policy, Intergovernmental Relations and Procurement Reform. But “we need to keep the process informal to avoid red tape, because agencies need to move quickly to protect the government’s interest,” he added.

GAO examined the number of suspensions and debarments imposed under the Federal Acquisition Regulation of 10 major contracting agencies over five fiscal years. Most active were the Defense Logistics Agency, the Navy, the General Services Administration and Homeland Security Department’s Immigration and Customs Enforcement.

Agencies with little or no use of the procedure were the Commerce, Health and Human Services, Justice, State and Treasury departments, as well as DHS’ Federal Emergency Management Agency.

“The mountains of federal forms are frustrating” for many good contractors, said panel chairman Rep. James Lankford, R-Okla., “but certain contractors try to defraud, or are chronically poor performers. We need to find out why some agencies uncover the abuse and others don’t” so the government can enforce a process that “strengthens the integrity of overall contract system.”

The Defense Department has far and away the highest raw number of suspensions and debarments (1,616 over five years), but when viewed as a percentage of contracting dollars, as ranking member Rep. Gerry Connolly, D-Va. noted, the Environmental Protection Agency has a far higher rate.

HHS, Connolly and Republican members pointed out, did not post a single contractor suspension or debarment in the past five years, despite a 2010 budget that included $368 billion in grants and $19 billion in contracts.

GAO’s Woods said he was surprised by the numbers at HHS. His report does not recommend any new legislation on suspensions (which are temporary) and debarments (which are long term), but calls for the agencies deemed inactive to mimic the organizational approaches of the active ones. That means assigning full-time dedicated staff and resources, developing detailed implementation guidance, and promoting a case referral process.

In addition, GAO recommends that the administrator of the Office of Federal Procurement Policy issue governmentwide guidance to ensure that agencies are aware of the elements of an active suspension and debarment program and the importance of cooperating with the Interagency Suspension and Debarment Committee. Witnesses at the hearing suggested that many agencies lack full commitment to that panel, which was created in 1986.

Under the Federal Acquisition Regulation and a parallel set of rules for nonprocurement contracting, agencies are responsible for examining contractors and uncovering fraud or nonperformance and then posting the companies on the website of the Excluded Parties List System maintained by the General Services Administration. Contractors’ rights are supposed to be protected through established procedures for challenging the listing through a timely meeting with top agency officials and a “mini trial” in which they can present evidence defending their record.

Nearly 84 percent of suspensions and debarments are required by statute — such as past violators of the 1970 Clean Air or 1972 Clean Water acts — according to GAO, which focused its study on the 16 percent that are discretionary.

The agencies deemed inactive generally accepted GAO’s conclusions. Nick Nyack, chief procurement official at Homeland Security Department, said, “We get this. We’re going to get it right and will be a best practices agency in short order.” Under questioning, he said it could be done within three months.

Three months was also the estimate for making changes the members elicited from Nancy Gunderson, suspension and debarment official at HHS. She said the department had terminated numerous grants and contracts for reasons such as questionable scientific integrity. But HHS efforts thus far on the issue have focused on promoting an electronic desk reference, staff training and looking at other agencies’ procedures, she said.

Agencies considered models were represented by Richard Pelletier, a suspension and department official at EPA, who said his agency since 1981 has maintained a “robust” approach that involves two offices with full-time staff.

Steven Shaw, deputy general counsel of the Air Force, stressed the importance protecting contractors’ rights by having officials who aren’t in the procurement chain “examine evidence, not just the fact of an indictment.” He favors a carrot-and-stick approach that includes regular meetings with important contractors and not mandatory debarments. The overall dollar figures, rather than the number of suspensions or debarments, he added, might be a better metric on agency activity than raw numbers.

–  by Charles S. Clark - Government Executive - October 6, 2011 – http://www.govexec.com/story_page.cfm?articleid=49011&dcn=e_tma

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Daniel Gordon: ‘Progress on Wartime Contracting’

September 9, 2011 by
This commentary originally appeared as a blog post on The White House’s Office of Management & Budget web site.
 
When the Administration took office, it was clear to us that for too long there was not adequate oversight of contractors, leading to wasted taxpayer dollars, repeated delivery delays, and unacceptable contractor performance. Nowhere has this been more apparent than in wartime contracting during the last decade. That’s why this Administration has focused on cutting waste in contracting, boosting oversight, and strengthening accountability of contractors. And more broadly, earlier this summer the White House launched the Campaign to Cut Waste, a government-wide drive to crack down on fraud, waste, and abuse.

On August 31, the Commission on Wartime Contracting released a report on these challenges. We welcome the report and commend the Commission for shining a spotlight on waste in contracting, on the need to strengthen the contracting function at agencies, on the value of increasing competition in contracting, and on the importance of holding contractors accountable for their performance.

The Administration already has made significant progress addressing each of the issues raised in the Commission’s report, in many cases reversing more than a decade of problems. Whether it is reducing improper payments to contractors and grantees, closing down redundant data centers, or cracking down on nonperforming contractors, we cannot tolerate the wasting of hard-earned taxpayer dollars.

There is a lot in the report, and I want to highlight the main issues raised in it and how the Administration is working on them.

Cutting Waste and Reducing Overreliance on Contractors:

On March 4, 2009, the President issued the Memorandum on Government Contracting, which called attention to the rapid growth in contracting spending, and raised concerns about contracts awarded without adequate competition. The memorandum also addressed issues with contractors performing functions that should be performed by public-sector employees. Agency efforts to reduce waste and demonstrate fiscal discipline are producing results. We cut contracting spending for the first time in 13 years in fiscal year 2010; agencies spent nearly $80 billion less than they would have if contract spending continued to grow at the same rate it had under the prior Administration.

Expanding Competition and Strengthening Contract Management and Oversight:

Over the past two years, significant progress has been made in reducing the use of high-risk contracting methods – including cutting $5 billion in spending on so-called “no bid contracts” last year. Consistent with the Commission’s recommendations, the Administration is strengthening the acquisition workforce by increasing training and certification requirements for those with a key role in oversight of contractors, including those working in Iraq and Afghanistan. The Department of Defense has made improving the defense acquisition system a top priority, and is tracking metrics on cost overruns, schedule delays, competition, the acquisition workforce, and acquisition employee training certifications.

Strengthening the Suspension and Debarment Process for Bad Actors and Improving Contractor Accountability:

Where there are bad actors in the contracting community, agencies have increased their use of suspension and debarment and other tools to deal with irresponsible contractors, consistent with the Commission’s recommendations. For example, in the last 18 months alone, USAID has taken more than 40 suspension or debarment actions – almost double the number of actions taken in the prior seven years combined. OMB has worked closely with the Interagency Suspension and Debarment Committee (ISDC) to review current agency suspension and debarment practices and to identify opportunities where these practices can be strengthened.

The Commission’s report recommends improving the recording and use of contractor performance data, so that contracting officers have ready access to useful information about vendors’ past performance, and can take this information into account in decisions to award contracts. This Administration has made unprecedented progress in improving the collection of contractor performance data and in making this information publicly available, as part of our commitment to transparency.

For the first time, contractor performance data is posted online to help ensure that the government does business with reputable companies. Data is now available on suspensions and debarments, terminations, and criminal activities of contractors. Data on where contractor dollars are being spent is now posted on http://www.usaspending.gov/ – including down to the sub contract or sub award level for the first time this year. Finally, the Office of Federal Procurement Policy issued guidance to agencies to enter meaningful assessments of contractor performance into a central database to ensure that the government awards to vendors that can perform.

Our agreement with the broad contours of the Commission’s report and with many of the specific recommendations does not, of course, mean that we agree with all details of the Commission’s recommendations, but we welcome the focus the report brings to the need to continue improving contracting. We simply cannot afford to continue to tolerate the waste of taxpayer dollars that we saw in the past. We look forward to continuing to work with Congress and all concerned citizens in addressing the Commission’s legislative recommendations, as we continue to make strides toward boosting accountability and cutting waste in contracting.

Daniel Gordon is Administrator of OMB’s Office of Federal Procurement Policy.

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