Teaching feds not to fear the FAR

From the General Services Administration’s 18F technology incubator and Health and Human Services’ emerging Buyers Club program to the Office of Management and Budget’s TechFAR guide, federal procurement officials have been busy rolling out plans aimed at reshaping the way government thinks about buying and developing IT.

Those officials are hoping the programs will spur the conservative, risk-averse federal procurement culture to more keenly navigate existing regulations and take more chances in IT acquisition.

The dense Federal Acquisition Regulation (FAR) issued by the Department of Defense, GSA, and NASA, is a primary target of the programs. More than a few federal officials and technology vendors have grown disillusioned with the FAR – or rather with how it has been used — arguing that it is wielded far too conservatively and is offers far more room for innovative than it’s given credit for.

Frustration with stagnant, staid FAR thinking spurred Health and Human Services to develop its Buyers Club program this spring. HHS officials talked publicly about development of the program in May, rolled out a Buyer’s Club web site June 24 and plan to accelerate the effort in the coming months, Bryan Sivak, HHS chief technology officer, told FCW.

Sivak said the program’s goal is to blaze new trails through the FAR that HHS contracting officers can follow to more efficient, innovative and successful IT procurement. Citing a Standish Group study that estimated roughly 90 percent of federal IT procurements valued at over $10 million fail, Sivak said it was obvious old thinking was not cutting it.  “Even if that estimate is a little on the high side, the numbers are still too way too high,” he said. “With those numbers, what’s the risk of trying to do something new?”

Keep reading this article at: http://fcw.com/articles/2014/07/14/far-fearing-feds.aspx 

What motivates defense contractors? Four lessons for government leaders

Competition was the main theme of the Defense Department’s second annual report on acquisition performance, released earlier this month. Declining budgets may be pushing defense contractors to look for work outside the government, but the Pentagon’s emphasis remains on promoting competition, according to Frank Kendall, the undersecretary of defense for acquisition, technology and logistics.

The report analyzed contractors’ cost and schedule performance over more than a decade to see what motivated them to produce better results. Here are some takeaways:

1. The carrot-and-stick approach works.

2. Fixed-price isn’t always the best fix.

3. More competition does mean better performance.

4. Leadership matters, but it’s not clear how much.

For details, keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/what-motivates-defense-contractors-four-lessons-for-government-leaders/2014/06/27/a623fb06-f577-11e3-a3a5-42be35962a52_story.html

Officials: Budget cuts, pay freezes hurt DoD acquisition workforce

Myriad challenges face Defense Department acquisition and many of them have exacerbated budget cuts and pay freezes, DoD officials told a House panel July 10, 2014.

“The fiscal challenges, shifting operational requirements, the current budget instability deriving from sequestration, years of pay freezes, furloughs, military end-strength reductions and the requirement for commensurate reductions in our civilian workforce, more than a decade of conflict–inevitably all of these things have affected the acquisition workforce,” said Acting Assistant Secretary of Defense Stephanie Barna at the hearing.

DoD Under Secretary Frank Kendall echoed Barna’s concerns that budget cuts, pay freezes and furloughs have slowed progress on acquisition reform.

Keep reading this article at: http://www.fiercegovernment.com/story/official-budget-cuts-pay-freezes-hurt-dod-acquisition-workforce/2014-07-15

Not following interim DoD rule may be costing taxpayers billions

A new report from the U.S. Department of Defense found that Navy and Marine Corps contracting personnel may be subjecting billions of dollars to waste due to non-compliance with cost reimbursement regulations.

According to the department’s internal watchdog, of 170 contracts reviewed, valued at about $7.7 billion, 135 of them, valued at about $7.54 billion were in question because contracting personnel did not consistently implement the Federal Acquisition Regulation (FAR) revision, called the interim rule.

“As a result, contracting personnel continue to issue cost-reimbursement contracts that may increase DoD’s contracting risks because cost-reimbursement contracts provide less incentive for contractors to cut costs,” the Inspector General wrote in the report.

Keep reading this article at: http://www.washingtontimes.com/news/2014/jul/12/defense-dept-contracting-personnel-may-be-wasting-/ 

 

Both competition and small business participation are down in DoD contracts

The Department of Defense (DoD) has issued its annual report on the “Performance of the Defense Acquisition System,” and at least two elements of the report are sure to get attention:

  • There’s less competition in DoD contracting, and
  • Small business goals continue to be missed.

The Defense Department has been losing ground for the last six years in the percentage of contracted work being let competitively.  In 2008, 64 percent of DoD contract dollars were spent through competitive awards; by 2013, that rate had fallen to 57 percent.

DoD Competition Trend FY06 - FY13

This table showing declining competition in DoD contracts is from page 18 of DoD’s report entitled “Performance of the Defense Acquisition System, 2014.”

Of the units with in DoD, the Defense Logistics Agency (DLA) engaged in the highest rate of competitive contracting (82 percent) while the lowest rate of competitive contracts (41 percent) was demonstrated by the Air Force, Navy and Marine Corps.  Overall, DoD missed its competitive contracting target of 60 percent, coming in at 57 percent in FY13.   No unit within DoD met its competition goal.  Even at 82 percent, DLA missed its goal of 86 percent.

The decline in competition comes despite DoD’s formal acquisition policies to increase competition.  In 2010, DoD began setting strategic goals to increase the percentage it spends on competitively-awarded contracts. In September of that year, then-Under Secretary of Defense for Acquisition, Technology and Logistics Ashton Carter issued the memorandum “Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending,” which, among other things, aimed to lower weapons costs by increasing competition.  Building on those goals, Frank Kendall, Carter’s successor, launched the Better Buying Power 2.0 initiative two years later. 

In a related contracting area, DoD’s rate of contract awards to small businesses  has been improving since FY11, but awards to small businesses in FY13 lag DoD’s achievements in several recent years, specifically FY03, FY04, FY05, FY06 and FY09.

Small business eligible dollars obligated to small businesses in FY13 totaled $47.2 billion across the Department: $15.9 billion for products (i.e., supplies and equipment) and $31.3 billion for services.  Overall, DoD missed its FY13 goal of 22.5 percent by 1.3 percentage points.

DoD Small Business Utilization Rates - FY01-FY13

This table from page 20 of “Performance of the Defense Acquisition System, 2014″ shows that participation by small businesses in DoD contracts lags achievements in FY09 and earlier years.

To read DoD’s complete annual report on acquisition, visit: http://www.acq.osd.mil/docs/Performance-of-Defense-Acquisition-System-2014.pdf

Quality cost data is key to making better management decisions

Cost estimating may not be as exciting as the new baseball season or the competition on American Idol, but for anyone in management, it is absolutely vital, if somewhat less entertaining. Especially if you’re involved in program management, procurement or finance you rely on high quality cost estimates every day.  Why?  Because they provide the foundation for informed decision-making.

As such, it’s essential for managers to be able to distinguish between two important, but very different (and often confused) types of cost estimates: life cycle cost estimates (LCCEs) and independent government cost estimates (IGCEs).

This table compares and contrasts the two types of estimates, to help decision-makers determine which one they need to utilize.

This table compares and contrasts the two types of estimates, to help decision-makers determine which one they need to utilize.

Life cycle cost estimates take a comprehensive view of a program. They include all costs, whether incurred by the government or the contractor, including labor, materials, facilities, hardware, software and integration costs, and sometimes even imputed costs. Life cycle cost estimates can be for 30 years or more. For high dollar programs, LCCEs are required by many government agencies at various acquisition milestones. For example, on very large programs the Defense Department requires LCCEs at three milestones before projects can proceed. Given the scope and duration of LCCEs, they are treated as living documents that should be updated annually.

Keep reading this article at: http://www.govexec.com/contracting/2014/07/quality-cost-data-key-making-better-management-decisions/87946/

What you need to know about the top federal contractors

In his farewell address to the nation, President Eisenhower warned against the economic and political influence of the rising military industrial complex: the relationship between government entities and private government contractors.

Yet almost 60 years later, with the government contracting industry so large that many call it a fourth branch of government, Eisenhower’s warning appears unheeded.

Top Contractors by Dollars Obligated 2014

Proponents of the industry say that contractors keep the nation safe, doing work the government does not have the capability to do. Its critics, on the other hand, assert that contractors have an incentive to perpetuate war—the more weaponry contractors produce, the more profits they make.

Keep reading this article at: http://time.com/2917578/government-contractors-lockheed/

Procurement troubles still dog Defense Department

Congress has held hearings over the past 30 years seeking ways to fix the Defense Department’s poor procurement system.

A June 24th hearing offered interesting ideas.

No headlines afterward about stopping F-35 costs from skyrocketing, keeping new production of nuclear aircraft carriers on schedule or halting the failure of billion-dollar computer programs — in fact, there was hardly any press coverage at all.

Two worthwhile ideas that came from the four experienced procurement specialists who appeared before the House Armed Services Committee provided no silver bullets, but they made sense.

  1. Give the main contracting officer for major weapons projects absolute cradle-to-grave authority and responsibility and accountability.
  2. Interservice rivalry and even intraservice competition have far from ended, and they harm the procurement system.

 

Will an obscure Pentagon small business program live on?

Deep in the bowels of the Pentagon is a 25-year-old research project designed to test a new way of encouraging large contractors to pass along some of their work to small businesses.

Known as the Comprehensive Subcontracting Plan Test Program, it was set up in 1990 to “determine if comprehensive subcontracting plans on a corporate, division or plant-wide basis [instead of for individual contracts] would lead to increased opportunities for small businesses,” according to its website.

Participants in this elongated research project include a dozen major contractors, from Lockheed Martin Corp. to Northrop Grumman Corp.

Yet the program — created when George H. W. Bush was president and housed within the Office of Small Business that reports to the undersecretary of Defense for Acquisition, Technology and Logistics — has yet to release a single report or data set. And an array of small business groups have long viewed the project as a wasteful distraction that is actually costing them opportunities by allowing the major firms leeway to get around the governmentwide goal of awarding 23 percent of contract dollars to small business.

Keep reading this article at: http://www.govexec.com/contracting/2014/07/will-obscure-pentagon-small-business-program-live/87769 

Oracle files pre-award protest to DISA cloud storage contract

Oracle Corp. has filed a protest to a $427 million cloud storage contract for the Defense Information Systems Agency (DISA) even before it’s been awarded.

The company has filed a pre-award protest involving the Enterprise Storage Services II contract to provide a state-of-the-art storage capacity to replace the DISA’s existing technology.

According to the Government Accountability Office (GAO), Oracle filed the protest on June 25.  The agency will make a decision by October 3.

Keep reading this article at: http://www.fiercegovernmentit.com/story/oracle-files-pre-award-protest-disa-cloud-storage-contract/2014-07-01

See solicitation documents at: https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=b69e716000296e561f0bd63a52795024&_cview=0