Cloud of sequestration looms over DC region

Five weeks before another round of deep Defense Department cuts is set to go into effect absent action from Congress, budget analysts and elected leaders throughout the region are renewing concerns about the Washington area’s reliance on Pentagon spending and the need to advance private sector growth in its place.

20131112_193738No state is more reliant on defense spending than Virginia, where it affects nearly 13 percent of the commonwealth’s economic output, tops nationwide, and provides the basis for 11 percent of jobs, third in the nation.

D.C. and Maryland also rank in the top 10 in Defense Department spending among states, with 6.9 percent and 5.8 percent of their output relying on defense respectively, according to a department report released last year.

In some ways Virginia is still reeling from automatic spending cuts known as sequestration that took place in 2013. The state’s gross domestic product had zero growth in 2014, according to a recent Department of Commerce report, third worst among states.

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No protests after $9 billion Pentagon contract

When Leidos and its partners, Cerner and Accenture Federal, secured a monster Pentagon health records contract worth up to $9 billion in late July, eyes turned to losing bidders IBM and Computer Sciences Corp., expecting a bid protest.

pentagon-sealThat hasn’t happened.

Protestors have 10 days after a contract award or debriefing from the awarder to file a bid protest with the Government Accountability Office. That timeline can be extended if parties agree to it during the debriefing, but sources tell Nextgov such an agreement didn’t happen.

Protestors can also file protests directly to the U.S. Court of Federal Claims, even after a protest period. While GAO receives some 2,500 bid protests annually, the Court of Federal Claims only gets around 100 – and about half of those only landed in court after previously being handled by GAO.

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Incomplete contractor info made it difficult for DoD to determine noncompetitive contract prices

The Defense Department had trouble determining reasonable prices for noncompetitive contracts because some contractors wouldn’t share pricing information, according to an Aug. 12 Government Accountability Office (GAO) report.

GAO-GovernmentAccountabilityOffice-SealNormally, DoD relies on competition to ensure that it pays a reasonable price for its goods and services. But for noncompetitive contracts, DoD relies on other methods including information from previous contracts or from the contractors themselves, GAO says in the report.

The DoD requested pricing information from contractors for 12 of 32 noncompetitive agreements in GAO’s sample. For the remaning 20 contracts, DoD felt it already had enough information to make sure it was getting a reasonable price.

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New DFARS proposed rule on commercial items acquisition and subcontracting: An end run on Congress?

On Monday, August 3, 2015, the Department of Defense (DoD) issued a long-awaited proposed rule that could have a significant impact on how the DoD and prime contractors procure commercial items.  

US DoD logoThe Proposed Rule is said to merely implement Section 831(a) of the Fiscal Year 2013 National Defense Authorization Act (NDAA), but goes much further, proposing significant substantive changes to what qualifies as a “commercial item” under DoD-funded contracts and imposing significant burdens on prime contractors to gather data from their commercial item subcontractors.

Section 831 directed DoD to, among other things, issue guidance including “standards for determining whether information on the prices at which the same or similar items have previously been sold is adequate for evaluating the reasonableness of prices.”  Section 831 was, in part, a response to DoD’s recent efforts to narrow the broad commercial item paradigm created by Congress in the 1990s, including a 2012 DoD legislative proposal to change the statutory and regulatory definition of “commercial item.”

Specifically, DoD requested legislation to grant DoD greater access to cost or pricing data associated with commercial items and sought to change the definition of commercial items to exclude items that are merely “offered for sale” or “of a type” offered for sale in the marketplace.  Congress declined to make those changes, recognizing the Federal Acquisition Streamlining Act (FASA) purposefully includes a broad definition of commercial items in order to ensure that the federal government has access to products available in the commercial marketplace.

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Former Joint Chiefs of Staff member named to faculty

Admiral James “Sandy” Winnefeld, the most recent vice chairman of the Joint Chiefs of Staff, has been named a faculty member at the Georgia Institute of Technology. Winnefeld joins the Sam Nunn School of International Affairs as a Distinguished Professor. He will also serve as a senior fellow in the School’s Center for International Strategy, Technology and Policy, which focuses on policy research.
Navy Admiral James "Sandy" Winnefeld is a member of the Sam Nunn School of International Affairs in the Ivan Allen College of Liberal Arts.
Navy Admiral James “Sandy” Winnefeld is a member of the Sam Nunn School of International Affairs in the Ivan Allen College of Liberal Arts.

Winnefeld will work with Georgia Tech faculty, researchers and students on a number of projects, classes and presentations; he brings recent experience in the fields of strategy and policy, leadership and defense investment to the Institute.

“We have already benefitted greatly from Admiral Winnefeld’s expertise and experience in his role on the Georgia Tech Advisory Board, and are looking forward to his expanded role with the Institute,” said Georgia Tech President G.P. “Bud” Peterson. “The richness of his leadership experience and his global perspective will be invaluable to our students, faculty and staff, along with the Atlanta community. We enthusiastically welcome him home to his alma mater.”

Winnefeld graduated from Georgia Tech in 1978 with a degree in aerospace engineering. He retired from his position as the nation’s second highest-ranking military officer on July 31. He will be based near Washington, D.C., at the Georgia Tech Research Institute’s office in Rosslyn, Virginia. Winnefeld will also have an office on the Georgia Tech campus in the Ivan Allen College of Liberal Arts.

“I am very pleased to join the Sam Nunn School of International Affairs and CISTP,” said Winnefeld. “I’ve long been an admirer of Senator Nunn’s, and look forward to working with – and continuing to learn from – him.  I’m also excited to lend my energy and experience to a very talented group of faculty and students.  It’s especially gratifying to be able to do so at an institution that gave so much to me as an undergraduate.”

Prior to his role at the Joint Chiefs of Staff, he served as the commander of United States Northern Command and the North American Aerospace Defense Command (NORAD).  He also commanded the United States Sixth Fleet and NATO Allied Joint Command, Lisbon. His new title, Distinguished Professor, is the same as Nunn, the former U.S. Senator for whom the Institute’s School of International Affairs is named.

“Admiral Winnefeld is one of our nation’s most distinguished and valuable military leaders, and is now returning to his home base at Georgia Tech,” said Nunn. “This is great news for the Nunn School and the Institute. Sandy will continue to render invaluable service to our nation by working with our students and faculty as they tackle some of our most important international and technological challenges.”

Winnefeld’s awards include the Defense Distinguished Service Medal, Distinguished Service Medal, Defense Superior Service Medal, the Legion of Merit, the Bronze Star, the Defense Meritorious Service Medal, the Meritorious Service Medal, the Air Medal, and five Battle Efficiency awards.