Contractors struggle with ‘patchwork’ of cybersecurity regulations

Federal contractors trying to report a hack on their computer systems struggle with a maze of piecemeal regulations, contracting experts say. And clarifying that ambiguity could be a difficult long-term project because there is likely no one bill or executive action that would do the trick.

“The compliance issues are hard for government contractors because you don’t have one box, one checklist of things you can do for all of your contracts to make sure that you’re compliant,” said Elizabeth Ferrell, a partner at McKenna Long and Aldridge, at a Nov. 6 conference hosted by the Coalition for Government Procurement in Washington.

The revelation in August of a high-profile breach at U.S. Investigations Services and the Office of Personnel Management’s subsequent decision to terminate the firm’s background-check contracts drove home the vulnerability of federal contractors to cyberattacks and prompted some to reassess their security. OPM’s ditching of USIS also raised the question of whether government agencies will write higher data security standards into contracts.

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DOD tries to allay industry fears on intellectual property

Addressing an audience of defense executives and military acquisition officials, Assistant Secretary of Defense for Acquisition Katrina McFarland sought to clarify how much intellectual property the Defense Department is interested in owning in a project it outsources to private industry. McFarland and other DOD leaders argue that maintaining a delicate balance of owning parts of a project to control its upkeep but not owning too much IP as to scare off bidders could help shore up the U.S. defense industry’s dwindling technological edge.

DOD does not want to own IP when it amounts to business secrets a firm can leverage for competitive advantage, McFarland told a conference hosted by Defense Daily in Washington, D.C. Rather, the department wants to own the interfacing part of a system that would be interoperable with another firm’s technology added later in a project, she said.

Defense Acquisition University defines open systems as those that use open, public interfaces and formats, making them interoperable and portable. To encourage competition for projects, and in turn save money in tight fiscal times, DOD has made open-systems architecture a key tenet of Better Buying Power 3.0, the latest edition of acquisition reform that the department unveiled in September. BBP 3.0 is now in draft form and won’t become DOD practice until the department hears more from industry, Congress and other stakeholders in the coming weeks.

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Pentagon seeks $60 billion increase for FY16 budget

As the White House and Pentagon pass drafts of the fiscal 2016 defense budget back and forth before submitting it to Congress early next year, the base budget request possibly could exceed Congressionally-mandated spending caps by as much as $60 billion, according to a former defense official with knowledge of the discussions.

Administration and defense officials have said for months that the 2011 Budget Control Act (BCA), which limits how much the Pentagon can spend, wouldn’t fully constrain the 2016 request. But a source with knowledge of a meeting between President Barack Obama and the Joint Chiefs of Staff said the chiefs have pushed for an increase of $60 billion over the $535 billion cap for defense, with another $10 billion for Department of Energy programs.

While the number might appear high, Pentagon and administration plans to push past the cap are no surprise.

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Understanding acquisition needs key to training workforce, experts say

Better understanding of an agency’s specific acquisition needs leads to better training for the acquisition workforce of the future, according to two acquisition experts.

Melissa Starinsky, chancellor of the Department of Veteran’s Affairs’ Acquisition Academy, and Andrew Hunter, director of the Defense Department’s Joint Rapid Acquisition Cell, spoke to Federal News Radio for the special report, The Missing Pieces of Procurement Reform.

Starinsky said the Acquisition Academy has come a long way since its inception in 2008.

“One of the successes I would say we’re most proud of, that could be replicated or adopted across other agencies, is our Warrior to Workforce program, which is really a way for us to bring our wounded veterans into the field of acquisition, for a career in acquisition.”

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DOD asks leaders to grade RFPs earlier in acquisition cycle

The Defense Department is requiring senior officials to review major acquisitions before the program receives approval to move into the technology development phase, commonly known as Milestone A.

This change is part of the rigor brought into the military from the Better Buying Power (BBP) initiative.

“How do we ensure our investment accounts go as far as they can through addressing affordability? We are doing it through increased emphasis through systems engineering, especially before and around Milestone A,” said Katrina McFarland, the assistant secretary of Defense for acquisition.

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DCMA releases review of Defense procurement functions

The Defense Contract Management Agency (DCMA) issued a summary of the results of its FY14 review of Defense Department (DoD) procurement functions.  The purpose of DCMA’s annual reviews is to assess the effectiveness of the contracting function, including the identification of best practices and lessons learned.

Shortcomings identified in DCMA’s Program Management Review report include:

  • Insufficient documentation in contract files, contrary to instructions in FAR part 4.801.
  • Over-reliance on checklists and templates, reducing necessary analysis and substance required in particular circumstances.
  • Technical evaluations lacking critical analysis.
  • A propensity to accept proposed prices and an aversion to negotiation.
  • Lack of evidence that Contracting Officers are reviewing the actions and files of Contracting Officer’s Representatives during post-award contract administration.
  • Minimal documentation supporting contract modifications.
  • Misalignment of effective dates with periods of performance, funding dates, and signatures.

A copy of the DCMA’s report can be downloaded by clicking here.

Sequestration resulted in deep cuts to DoD procurement spending, report says

The Defense Department has cut contracting dollars by 16 percent in 2013 from the prior year as a result of sequestration, according to a recent report by the Center for Strategic and International Studies.

DoD’s budget was cut by about 8 percent in 2013, from 2012, and spending on procurement took the brunt of the hit, the Oct. 15 report says.

As a share of total gross defense outlays, Defense-funded contract obligations in 2013 have declined from 53 percent to 49 percent, which is the lowest share since 2002, the report says.

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Temporary funding benefits Army acquisition

The U.S. Army’s top weapons buyer said temporary funding keeping the government open until December is actually a good thing for the service’s weapons acquisition programs.

Congress passed the short-term measure, known as a continuing resolution, or CR, last month to fund government agencies, including the Defense Department, through Dec. 11, at which point lawmakers will need to take another similar step or pass a full-year budget.

“It’s quite ironic, but in this fiscal environment we’re living in, in which annual base budgets are declining, CR turns out to be great because I can spend what I was authorized last year, right, as opposed to this year, in which inevitably my budget is going to be cut ‚” Heidi Shyu said at last week’s annual conference in Washington, D.C., organized by the Association of the United States Army, an Arlington, Virginia-based advocacy group.

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GAO: Agencies not taking advantage of market research on lower dollar contracts

Federal agencies are taking advantage of market research for big dollar procurements, but are missing those opportunities for smaller contracts, an Oct. 9, 2014 Government Accountability Office (GAO) report says.

All 28 contracts GAO reviewed included some evidence of the market research conducted. The contracts GAO reviewed were pulled from the Defense Department, Homeland Security Department, Federal Aviation Administration and the Transportation Department.

The market research conducted on the 12 higher dollar contracts GAO reviewed tended to be more robust and include more techniques that involved outreach to vendors, such as issuing requests for information to industry. That helped promote competition, the report says.

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Senate report contributes to discussion about acquisition reform and support for training

Last week, the U.S. Senate published a compendium of expert views on acquisition reform within the Department of Defense (DoD).  While the report contains no recommendations from the Senate itself, the Senate’s Permanent Subcommittee on Investigations points out that the report documents shortcomings in the acquisition process that may serve to guide Congressional deliberations in the future.

The Oct. 2, 2014 report, entitled “Defense Acquisition Reform: Where Do We Go from Here?”, contains the views of 31 government Defense policy and procurement experts.  Significantly,

  • Nearly half of the experts feel that cultural change is required while over two-thirds believe improving incentives for the acquisition workforce is necessary for reform.
  • Two-thirds of the contributors feel that training and recruiting of the acquisition workforce must be improved.
  • Nearly half believe that DOD needs to attain realistic requirements at the start of a major acquisition program that includes budget-informed decisions.
  • More than half of the submissions noted the need for strong accountability and leadership throughout the life-cycle of a weapon system – with several experts stating the need to further integrate the Service Chiefs into the acquisition process.

Seal_of_the_United_States_SenateAbout 70 percent of the report’s contributors express the view that although Congress has taken steps to address deficiencies in DoD’s acquisition workforce, more should be taken. Several contributors state that the Defense Acquisition Workforce Development Fund (DAWDF), which Congress established in 2008 to ensure that the acquisition workforce has the skills to ensure the DoD receives the best value for taxpayer dollars, should be continued and strengthened.

Former Administrator of the Office of Federal Procurement Policy (OFPP) Dan Gordon, now Associate Dean at George Washington University Law School, states in the report that improvements in training through Defense Acquisition University (DAU) coursework will help the acquisition workforce “buy smarter” in the current budget environment.  Gordon notes that of the three phases of the contracting process — planning, award, and administration — the “weak links in our procurement system [are] poor acquisition planning, especially poor definitions of what the government is trying to buy, and lax contract management.”  These two problematic areas, notes Gordon, “are those least amenable to legislation” and instead tend to rely on the experience, judgment, and training of acquisition professionals.

Gordon calls for “better training for purchasing services, and creation of specialized acquisition cadres, at least in large entities such as the military services, to help run procurements in areas that demand education and experience in the field, such as the acquisition of IT and professional services.”

Many of the report’s contributors believe that DoD should create a clear career path for acquisition professionals similar to the military promotion system and designate acquisition billets to be on the same level as operational billets.  According to those contributors, that may grant more opportunity for promotion, thereby attracting a higher quality workforce.

The report includes input from many current and former officials, including the Pentagon’s Acquisition, Technology and Logistics chief Frank Kendall; former Joint Chiefs Vice Chairman retired Gen. James Cartwright; former acting Deputy Defense Secretary Christine Fox; former Chief of Naval Operations retired Adm. Gary Roughead; former Air Force Chief of Staff retired Gen. Norton Schwartz; former F-35 program manager retired Vice Adm. David Venlet; and former President of the Defense Acquisition University Frank Anderson.

The full report is available here: Defense Acquisition Reform – A Compendium of Views – 10.02.2014