Air Force to reshape ‘cost curve’ via targeted acquisition reforms

The Air Force is kicking off a series of targeted acquisition initiatives that its leaders hope will bring in more competition, cut out internal bureaucracy and ultimately lead to faster, cheaper procurements.

Deborah Lee James, the secretary of the Air Force, announced the plans under an overall banner she dubbed “Bending the Cost Curve.” She described the initiative as a series of actions that are complementary to DoD’s Better Buying Power initiative — but more specific and tailored than the DoD-wide project.

James said the changes, which the service developed after a months-long series of roundtables with industry groups, will help the Air Force do a better job of communicating with its existing vendor base, welcoming new firms into the fold and removing bureaucratic processes that seem to serve little purpose other than to slow things down.

“We are simply too slow in all that we do,” she told the Atlantic Council Wednesday evening. “Here’s one horrifying factoid: We currently average 17 months to award a contract in situations where we already know there’s only one supplier who can do the work.”

To tackle costs on its major systems, the Air Force will institutionalize a new program that will attempt to make price more of an independent variable in the service’s decisions about precisely what it wants its weapons systems to do.

Keep reading this article at: http://www.federalnewsradio.com/395/3781054/Air-Force-to-reshape-cost-curve-via-targeted-acquisition-reforms

Who’s the boss in government contracting?

he management structure of government procurement, where one of every six federal dollars is spent, has remained generally unchanged for many years, even as the volume and percentage of products and services performed by agencies has evolved to today’s outsourced, dependent model. One continuing characteristic of this model is decentralization.

For example, since its creation in 1971, governmentwide acquisition policy responsibility rests with the Office of Federal Procurement Policy (OFPP), residing within OMB. It helps shape the policy and practices governing over $500 billion of annual contract obligations. It does so with a very small budget and staff and relies on interagency cooperation to develop policy and workforce development planning in the form of memos, circulars, guides, or reports. OFPP chairs the FAR Council, consisting of senior procurement executives from GSA, NASA, and DoD (the largest contracting agencies at its creation), to manage cases (changes to the FAR) from civilian and defense agency councils, extensively relying on agency-provided “teams” for assigned subject areas. In addition, OFPP oversees the Federal Acquisition Institute (FAI), chairing its “board of directors” (agency procurement executives) to ensure training priorities are addressed, including development of a professional acquisition workforce. OFPP’s mandate relies on words like “collaborate,” or “assist” in describing its role over other civilian agencies. FAI itself has a small staff and relies on other, better-funded agencies, to develop training programs and schools, as well as private contractor-approved providers.

Keep reading this article at: http://www.federaltimes.com/story/government/acquisition/blog/2015/01/16/government-contracting-leadership/21858713/

Companies pay millions to settle alleged false billings on GSA Schedule and DoD contracts

At year’s end, the Department of Justice (DOJ) announced multi-million dollar false claims settlements with a pair of large contractors in connection with billing practices on GSA Schedule contracts.

  • Iron Mountain Incorporated and Iron Mountain Information Management LLC (collectively Iron Mountain) has paid $44.5 million to resolve allegations under the False Claims Act that Iron Mountain overcharged federal agencies for record storage services , the DOJ announced Dec. 19, 2014.  Iron Mountain is a records storage company headquartered in Boston.
  • Lockheed Martin Integrated Systems (LMIS) agreed on Dec. 22, 2014 to repay the government $27.5 million to settle over-billing charges brought under the False Claims Act on a contract producing products and services for U.S. troops in Iraq and Afghanistan.

Justice Dept. seal“Protecting the federal procurement process from false claims is central to the mission of the Department of Justice,” Acting Assistant Attorney General Joyce Branda said. “We will continue to ensure that when federal monies are used to purchase commercial services the government receives the prices and services to which it is entitled.”

The settlement with Iron Mountain relates to contracts under which the firm provided record storage services to government entities from 2001 to 2014 through GSA’s Multiple Award Schedule (MAS) program.  The MAS program provides the government with a streamlined process for procurement of commonly used commercial goods and services.  The settlement resolves allegations that Iron Mountain failed to meet its contractual obligations to provide GSA with accurate information about its commercial sales practices during contract negotiations, and failed to comply with the price reduction clause of the GSA contracts by not extending lower prices to government customers during its performance of the contracts.  It also resolves an allegation that Iron Mountain charged the United States for storage meeting National Archives and Records Administration requirements when the storage provided did not meet such requirements.

“Contractors that knowingly bill the government in violation of contract terms will face serious consequences,” Branda said of the Lockheed Martin settlement. “The department will ensure that those who do business with the government, and seek taxpayer funds, do so fairly and in accordance with the applicable rules.”

LMIS is a subsidiary of Lockheed Martin Inc., which is headquartered in Bethesda, Maryland.  The alleged labor mischarging occurred on the Rapid Response (CR2) contract and the Strategic Services Sourcing (S3) contract, both issued by the U.S. Army Communication and Electronics Command (CECOM).  CECOM is located at Fort Monmouth, New Jersey, and at the Aberdeen Proving Group in Maryland.  The purpose of the CR2 and S3 contracts is to provide rapid access to products and services to be provided to the Army in Iraq and Afghanistan. Individual task orders then are separately negotiated, based on these contracts, to quickly meet the needs of CECOM.  LMIS allegedly violated the terms of the contracts by using under-qualified employees who were billed to the United States at the rates of more qualified employees.  The overbilling allegedly resulted in greater profit for LMIS.

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Pentagon gets better grip on spending for services contracts

Defense Department managers in fiscal 2013 came in $500 million under spending limits on contract services required by the 2012 National Defense Authorization Act, a watchdog found, an improvement over the previous year, when departmental caps were exceeded by $1.72 billion.

pentagon-sealBut more precision and consistency in multi-year data are needed to “budget and manage contract services spending,” the Government Accountability Office reported on Dec. 11, 2014. Of all Pentagon components, only the Army broke the limits on the services contracts that the congressional Armed Services committees determined were needed to maintain the proper balance between the civilian and contract workforces.

The Army, auditors found, exceeded its spending target “due to inaccurate budget estimates and weaknesses in planning by not soliciting inputs on commands’ contract services spending plans.”

Keep reading this story at: http://www.govexec.com/contracting/2014/12/pentagon-gets-better-grip-spending-services-contracts/101154

Pentagon launches new future weapons research effort

The Pentagon is starting a massive research and development effort aimed at finding and developing next-generation technologies able to ensure the U.S. military retains its technological edge.

pentagon-sealDescribed as an effort to create a new technological offset strategy like that which the U.S. pursued in the 1950s and 1980s, the Long Range Research and Development Plan, or LRRDP, involves a solicitation to industry, academia, and small business to begin enterprising ideas on areas of focus for new weapons and technology research and development.

“The nature of future military competition suggests we cannot take our future military dominance for granted. We need to continue disruptive innovation and be sure that we have that differential advantage in the future,” Stephen Welby, Deputy Assistant Secretary of Defense for Systems Engineering, told reporters Dec. 3.

Keep reading this article at: http://www.dodbuzz.com/2014/12/08/pentagon-launches-new-future-weapons-research-effort/

War zone food contractor pleads guilty to overcharging

A major supplier of food and bottled water to U.S. military bases in Iraq and Afghanistan on Monday of last week pleaded guilty to overcharging the Defense Logistics Agency by $48 million.

Supreme Food Service, whose parent company is based in the Netherlands, agreed to pay $434 million to settle criminal and civil charges for its handling of an $8.8 million contract that was terminated in 2013, according to news reports.

The case decided in U.S. District Court in Eastern Pennsylvania was brought in part by a whistleblower employed by the company, who will receive $16.2 million, plus $1.5 million for attorney’s fees and expenses, according to Bloomberg.

Keep reading this article at: http://www.govexec.com/contracting/2014/12/war-zone-food-contractor-pleads-guilty-overcharging/100824/

Acquisition reform? Who says?

There is a lot of talk about the next generation of reforms and changes to the regimes of government acquisition policies, practices and culture.

But two stark examples emerged almost simultaneously in recent weeks that highlight just how far we have to go to create a federal acquisition system that is effective, efficient, responsive to the needs of customers, and enables access to the full array of capabilities the private sector can offer.

One example speaks directly to continued cultural challenges and the other to the mindset that drives far too much current policy and practice.

Let’s start with the culture. In a Nov. 7 article in Government Executive magazine, Kimberly McCabe, the CEO of ASI Government and Dan Chenok, the head of the IBM Center for the Business of Government, made a strong, thoughtful, and articulate case for thinking about acquisition in a holistic manner with an eye toward the realities of today and a very different future.

Moreover, their article outlined a new framework designed to describe and help measure organizational acquisition capabilities and maturity. And, perhaps most significantly, recognizing that the pressure for real, sustainable change has to come from within, the framework they outlined was largely the work of a group of federal acquisition and technology practitioners—from rising professionals to senior executives—they had convened.

Keep reading this article at: http://washingtontechnology.com/articles/2014/12/05/insights-soloway-acquisition-reform.aspx

Improving acquisition is part of recommended agenda for next Secretary of Defense

The Center for Strategic and International Studies released a  report last week in which its experts offer up some advice to the next defense secretary.

At the top of the recommended agenda?  Improving Defense Acquisition.

Below is an excerpt from the CSIS report:

“For the Secretary of Defense, no news is good news when it comes to defense acquisition.  Much like the offensive line on a football team, when things are going smoothly, it goes unnoticed. When the Secretary of Defense gets asked about the acquisition system, it usually means something has gone wrong. For this reason, and because acquisition is a highly technical discipline, it can be tempting for the Secretary of Defense to focus attention elsewhere, particularly in his or her early days. Just as the offensive line’s performance is critical to the success of a football team, however, solid performance from the acquisition system is a linchpin to a Secretary’s hopes for a successful tenure.

“Defense acquisition is a massive undertaking involving the expenditure of roughly $150 billion annually for research and development and procurement of technology and total contract spending of more than $300 billion annually. Even a small improvement in performance of the acquisition system can make a difference of billions in the cost of equipping the military.  Despite widespread pessimism on the prospects for improving defense acquisition, the opportunity to make progress is real. The latest issue of the Department of Defense’s annual report on the Performance of the Defense Acquisition System shows modest improvement in trends relating to cost growth. While this recent progress is encouraging, the squeeze of sequestration and the budget uncertainties generated by continuing resolutions and potential government shutdowns threaten to reverse this trend. The result would be a snowballing path of destruction through already tight defense budgets.

“The recent announcement of the Defense Innovation Initiative also demonstrates the strategic importance of acquisition to the Department of Defense. As the 2012 Defense Strategic Guidance and the 2014 Quadrennial Defense Review make clear, innovation is key to the military’s future. Ultimately, the acquisition system bears the largest share of responsibility for delivering innovation. Last but not least, acquisition will be critical in the Secretary’s relationship with Congress. Senator John McCain will take over as Chairman of the Senate Armed Services Committee in the new Congress, and his interest in, and concern about, the defense acquisition system is well known. On the other side of the Capitol, the House Armed Services Committee has already been examining improvements to defense acquisition for over a year under the leadership of Representative Mac Thornberry, the designated next House Committee Chairman, and his ranking member, Representative Adam Smith.

“There are clear steps for the next Secretary to take. First, meet early with industry and set the right tone. The Department depends heavily on industry’s ability to supply advanced technology. There is nothing to lose and much to gain in keeping the lines of communication open. Second, engage with Congress on improving defense acquisition. The Department spent the last year developing a legislative proposal for improving defense acquisition which can provide a solid basis for bipartisan cooperation. Third, embrace the Defense Innovation Initiative and Better Buying Power 3.0 as major priorities. These initiatives are essential to maintaining the U.S. military’s qualitative edge.”

The full set of CSIS recommendations can be seen at: https://csis.org/publication/recommended-agenda-next-secretary-defense

 

Pentagon may be forced to release aircraft manufacturer’s contract data

A little-known unit at the Defense Department may have to release data considered proprietary by a major contractor under a Nov. 23 district court ruling favoring a small business advocacy group.

The Petaluma, Calif.-based American Small Business League on Wednesday announced its legal victory.  A northern California district judge agreed that the Pentagon should honor the league’s request under the Freedom of Information Act for data Sikorsky submitted to the Comprehensive Subcontracting Plan Test Program.

That program since 1990 has authorized negotiation, administration and reporting of subcontracting plans on a plant, division or company-wide basis to “determine whether comprehensive subcontracting plans will result in increased subcontracting opportunities for small business while reducing the administrative burden on contractors,” according to the Pentagon website.

Keep reading this article at: http://www.govexec.com/contracting/2014/12/pentagon-may-be-forced-release-aircraft-manufacturers-contract-data/100175/

Government oversight group chides DoD for service contract spending

The Project on Government Oversight (POGO) criticized the Defense Department (DoD) for not being able to bring service contract spending under control.

In a Nov. 25, 2014 letter to Defense Secretary Chuck Hagel, POGO charged the DoD with hindering efforts to rein in its service contract spending.

POGO said billions of dollars are being wasted because of the DoD’s failure to assemble contracting data and to implement an Enterprise-wide Contractor Manpower Reporting Application. POGO also said the agency hasn’t adequately staffed its Total Force Management Support Office.

“POGO has reason to believe that this is being done at the urging of the service contractors themselves,” POGO said.

Keep reading this article at: http://www.fiercegovernment.com/story/pogo-chides-dod-service-contract-spending/2014-12-02

Read POGO’s Nov. 25, 2015 letter at: http://pogoarchives.org/m/co/pogo_ics_ltr_to_dod_%2020141125.pdf 

Read GAO’s Nov. 19, 2014 report containing finding that DoD had incomplete inventories of its service contracts at: http://www.gao.gov/products/GAO-15-88