Sequestration is ‘dumbest fiscal management policy ever conceived’ – NDIA chair

[Editor's Note: With Congress scheduled to vote on the 2014 National Defense Authorization Act this month, sequestration will be the giant hiding behind the door.   The effects of sequestration are ignored by the bill (as they are ignored by the administration’s budget.)  Into this vacuum steps the chairman of the National Defense Industrial Association, who heads EADS NA, the North American subsidiary of the European defense giant. Read below what Sean O’Keefe believes must be done.]

Forrest Gump was right. “Stupid is as stupid does.” It is coming as no surprise that “sequestration,” the dumbest fiscal management policy ever conceived, is already producing some pretty mindless results.

As bad as the damage is from enduring automatic salami-slicing of budget line items, perhaps what is worse is the evisceration of already low public confidence in both legislative and executive branch leadership, coupled with the complete demoralization of the career public service facing furloughs on a regular basis for the next several months.

Sequestration was created by frustrated budget negotiators who felt that the pain it might portend would be so great that surely wiser heads would prevail and a budget deal would be achieved. Clearly, the negotiators underestimated our government’s capacity for sustaining self-inflicted wounds. It is as if the now-recognized “Mayhem” guy of Allstate commercial fame has found a new job.

The reports are just beginning to come in, but you don’t have to look hard to find plenty of near-term decisions that will make savings at the margin only to create larger bills in the future. Public leaders don’t try to make nonsensical decisions — but there is something about the current budgetary environment that makes such actions more likely. It is as if we have rendered null and void Winston Churchill’s observation, “Gentlemen, we have run out of money, now we have to think.”

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DOD must continue to educate military personnel to work with, manage civilian contractors, report says

Civilian contractors play a vital role in the Defense Department, but  experiences in Iraq and Afghanistan with contractor-related waste and  mismanagement led the military and Congress to rethink how they will be used in  future operations.

The military is reevaluating how it works with contractors, specifically  training officers to work with and better understand how contractors do their  jobs, a May 17 Congressional Research Service report  (.pdf) says.

The report found that contractors made up at least half of the deployed  forces in the Balkans, Iraq and Afghanistan. In March 2013, there were some  108,000 DoD contractors in Afghanistan, making up 62 percent of the total force.  Of this number, there were 18,000 private security contractors, compared to  65,700 U.S. troops. The report notes that many government officials and analysts  admit that the military is so reliant on civilian contractors that it cannot  carry out long term and many short-term operations without them.

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Secret ‘man caves’ found in EPA warehouse

A warehouse maintained by contractors for the Environmental Protection Agency contained secret rooms full of exercise equipment, televisions and couches, according to an internal audit.

EPA’s inspector general found contractors used partitions, screens and piled up boxes to hide the rooms from security cameras in the 70,000 square-foot building located in Landover, Md. The warehouse — used for inventory storage — is owned by the General Services Administration and leased to the EPA for about $750,000 per year.

The EPA has issued a stop work order to Apex Logistics LLC, the responsible contractor, ensuring the company’s workers no longer have access to the site — EPA security officials escorted contractor personnel off the premises on May 17 — and ending all payments on the contract.

Since awarding the contract in May 2007, EPA has paid Apex Logistics about $5.3 million, most of which went to labor costs. Conditions at the facility “raise questions about time charges made by warehouse employees under the contract,” the report said.

“The warehouse contained multiple unauthorized and hidden personal spaces created by and for the workers that included televisions, refrigerators, radios, microwaves, chairs and couches,” the IG report said. “These spaces contained personal items, including photos, pin ups, calendars, clothing, books, magazines and videos.”

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Procurement chief: Measure contractor performance

Joe Jordan, the top White House procurement official, recently told a gathering of government officials and contractors how he and his wife sometimes travel to New England and look for places to stay along the way. He wasn’t giving travel advice, though.

The remarks, delivered at an acquisition conference in Washington, aimed to highlight a way the government can improve how it does business.

“It really bothers me at a personal, visceral level that when I look for a bed and breakfast because my wife and I are going away for the weekend, I have vastly more descriptive information … about the quality of bed and breakfasts within a three-hour drive of D.C. than what many agencies have when they answer to a $20 million IT services contract,” Jordan said. “That’s ridiculous.”

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Sharing contractor performance data in eight easy steps

The Obama administration is pressing the acquisition workforce to get better at telling other agencies, through a governmentwide online performance database, how well contractors do their jobs.

Joe Jordan, administrator of the Office of Federal Procurement Policy, wants to improve the quantity and quality of data agencies put into the Federal Award Performance and Integrity Information System (FAPIIS).

FAPIIS is the foundation for good data, Jordan stressed in the memo, dated March 6.

“However, ” he added, “agencies must increase their use of these tools, as underreporting performance information leaves the government vulnerable to poor acquisition outcomes in the future.”

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OFPP tells agencies to get serious about tracking contractor performance

The Office of Federal Procurement Policy is attempting, for a third time, to get  agencies to use the Past Performance Information Retrieval System (PPIRS) more  consistently.

So instead of asking and encouraging, OFPP Administrator Joe Jordan is setting  specific goals for agencies.

In a new memo to chief acquisition officers and  senior procurement executives, Jordan sets three-year targets for agencies to  enter vendor-performance information into the governmentwide database.

This year, the goals vary depending on how often the agency is currently entering  data into PPIRS. For instance, departments inputting data for 60 percent or more  of their contracts, must improve to 85 percent by Sept. 30. For agencies using  PPIRS 30 percent to 60 percent of the time, their goal now is 75  percent. And for those agencies using PPIRS less than 30 percent of the time,  their goal is 65 percent.

“This required contract-administration duty can significantly reduce the risk to  the government on future awards, so agencies must take bold steps to ensure that  all critical performance information is made available in the Past Performance  Information Retrieval System (PPIRS) in a timely manner, and to the maximum extent  practicable, eliminate duplicative, paper-based past performance evaluation  surveys generated outside these systems,” Jordan wrote.

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DoD AT&L chief: sequestration “unconscionable”; endorses performance based logistics

“It is utterly unconscionable — utterly unconscionable — that Congress will allow sequestration to go on.”

Those are the words of Frank Kendall, the Pentagon’s head of acquisition, speaking to an audience of several hundred New York financial types. Kendall is just back from a trip to Afghanistan and he had heard from soldiers there who worried they would be furloughed if sequestration goes through. They won’t be — military personnel salaries are exempted from sequestration, so only federal civilians will be affected — but worry and uncertainty can weaken any organization, and Kendall was visibly angry as he spoke.

But sequestration wasn’t the only issue on Kendall’s agenda at yesterday’s conference on the aerospace and defense sector put on by the Cowen Group.

Kendall told the audience of several hundred Wall Street financiers that he planned to push for more competitive prototyping, more Performance Based Logistics (PBL) contracts, and more of the wide array of acquisition reforms the Pentagon groups under the rubric Better Buying Power 2.

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Questions surround Special Operations’ body armor recall

U.S. Special Operations Command is recalling thousands of body armor plates after discovering a manufacturer’s defect that could put operators at risk. At the same time defense industry experts are questioning whether SOCOM may have added to the risk by searching for the lightest plates possible.

Throughout the war, elite troops have worn body armor known as the Special Operations Forces Equipment Advanced Requirements, or SPEAR, made by Ceradyne Defense. The lightweight, ceramic plates have proven to be effective at stopping enemy rifle bullets and weigh significantly less than the conventional Army’s Enhanced Small Arms Protective Insert, or ESAPI.

A little less than a year ago, government inspectors discovered a defect in Ceradyne’s new SPEAR Gen III plates. The special, metal “crack arrestor” in the back of the plate began separating or “delaminating” from the plate’s ceramic material. The arrestor was designed to reduce the spreading of cracks in the ceramic when dropped – a common characteristic of all ceramic body armor plates.

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DHS contractor allegedly fixed an airplane with paper clips

Jerry Edward Kuwata, formerly an executive at an airplane repair company with government contracts, pleaded guilty to “recklessly endangering the safety of aircraft,” the Justice Department announced.

Kuwata, a former executive with WECO Aerospace Systems Inc., concealed facts about repairs from customers and did not ensure that repairs were done according to Federal Aviation Administration regulations, said U.S Attorney Benjamin Wagner of the Eastern District of California. WECO’s clients included the Homeland Security Department and the City of Los Angeles.

“This conduct recklessly endangered the safety of aircraft that used the parts repaired by WECO,” Wagner said.

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Pentagon withholds $47 million from Lockheed on F-35

The Pentagon is withholding $46.5 million from Lockheed Martin Corp, its biggest contractor, because of continued flaws with a business system used to track costs and schedules for the F-35 fighter.

The money held back was assessed against two F-35 production contracts and a smaller development agreement with the Israeli Air Force that’s managed by the U.S. The funds equal 5 percent of periodic billings against the contracts for reimbursement of money spent by the company performing the work.

The F-35 has been criticized by Pentagon officials and lawmakers for test-performance failings, delays and its ballooning cost. At an estimated $395.7 billion for eventual production of 2,443 planes, the cost is up 70 percent, adjusted for inflation, from the $233 billion projected when Lockheed Martin won the program from Boeing Co. in late 2001.

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