Differing DoD and SBA rules on protecting SBIR technical data causing confusion

The intellectual property rights of small business are subject to risk from differing Defense Department and Small Business Administration rules governing Small Business Innovation Research contracts, say DoD auditors.

Policies governing how long the technical data developed by small businesses under the SBIR program differ between the Small Business Administration SBIR Policy Directive and the Defense Federal Acquisition Regulation Supplement.

Federal agencies that spend more than $100 million annually on external research must allocate during the current fiscal year at least 2.8 percent of that budget to SBIR contracts.

The SBA directive governing SBIR says the technical data protection period starts when the last deliverable under the contract is delivered by a small business awardee. That period can be extended if the SBIR data is protected and referenced under a subsequent SBIR contract, even if the rights expired.

The DFARS rule says project completion determines the protection period. DFARS doesn’t whether the protection period can be extended or renewed.

Keep reading this article at: http://www.fiercegovernment.com/story/differing-dod-and-sba-rules-protecting-sbir-technical-data-causing-confusio/2014-03-31

The DoD Inspector General’s report can be downloaded at: http://www.dodig.mil/pubs/documents/DODIG-2014-049.pdf


State Dept. IG issues alert over $6 billion in contracting money unaccounted for

The State Department’s inspector general has warned the department that $6 billion in contracting money over the past six years cannot be properly accounted for and cited “significant financial risk and . . . a lack of internal control.”

The warning was the second “management alert” in State Department history, both issued by new Inspector General Steve Linick. Linick took over the job in late September, after it had been vacant for nearly six years.

oth the alert, dated March 20, and the department’s response a week later, were made public Thursday, April 3, 2014.

The department said it concurred in all recommendations and outlined steps it will take to address what it agreed is a “vulnerability.”

Linick initiated the alert format to report on problems that remain unaddressed despite repeatedly being identified in IG audits and investigations. The first alert, released in January in partly classified form, cited “significant and recurring weaknesses in the Department of State Information System Security Program.”

Keep reading this article at: http://www.washingtonpost.com/world/national-security/state-department-inspector-general-issues-alert-over-6-billion-in-contracting-money/2014/04/03/8ebf465c-bb73-11e3-9a05-c739f29ccb08_story.html 

F-35’s operating cost to decline, says DoD acquisition chief

The Pentagon will decrease its $1.1 trillion estimate for the cost of supporting Lockheed Martin Corp. (LMT)’s F-35 fighter jet over a 55-year lifespan, the top U.S. weapons buyer said.

“It will drop to a number that’s not trivial but is not as much” a reduction “as I would like,” Frank Kendall, the Defense Department’s undersecretary for acquisition, said April 3, 2014 at a Bloomberg Government breakfast in Washington.

While debate over the aircraft, the costliest U.S. weapons system, has focused mostly on the price to develop and build the fighter, Pentagon agencies also have disputed its long-term operating costs, from spare parts to repairs.

Kendall declined to elaborate on the reduced 55-year estimate by the department’s independent cost-assessment office. The figure will be released later this month in its next unclassified Selected Acquisition Report. Until then, the official projection is the $1.1 trillion formulated by that office three years ago.

By contrast, the Pentagon’s F-35 program office estimates that the fleet will cost $857 billion to operate and support over its lifetime.

On the separate cost of developing and producing a planned fleet of 2,443 F-35s, the U.S. Government Accountability Office said in February that its projection is $390.4 billion, as adjusted for inflation over the years the plane is produced. The Pentagon’s latest estimate by the same measure is $391.2 billion, about a 1.1 percent reduction from an earlier calculation.

Keep reading this article at: http://www.bloomberg.com/news/2014-04-03/lockheed-f-35-s-operating-cost-estimate-to-decline.html 

Army’s bright acquisition spot: Howitzer upgrades

The U.S. Army is moving forward with plans to develop upgraded versions of the M109 self-propelled howitzer in one of the service’s few bright acquisition spots.

The Army is “fully committed” to the M109 Paladin Integrated Management, or PIM, program, Army Secretary John McHugh said on Thursday during a hearing of the House Appropriations Defense Subcommittee.

“We need a new self-propelled artillery howitzer to keep up with our formations and so we’re going forward,” he said in response to a question from Rep. Tom Cole, R-Okla., whose district includes Fort Sill, which houses the Army and Marine Corps’ field artillery schools.

McHugh acknowledged the service’s troubled acquisition history, including many failed attempts to replace its Cold War-era fleets of vehicles and helicopters. Most recently, it scrapped the Ground Combat Vehicle, designed to replace the Bradley fighting vehicle, due in part to automatic budget cuts known as sequestration.

But the secretary said the M109 development program is moving forward, albeit slowly. BAE Systems Land & Armaments LP, part of the U.S. subsidiary of the London-based defense contractor, received a contract potentially worth almost $700 million for initial production of the vehicles.

Keep reading this article at: http://www.dodbuzz.com/2014/03/27/armys-bright-acquisition-spot-howitzer-upgrades/ 

Cheapest contract isn’t always the best, acquisition officials say

Confusion over “lowest price, technically acceptable” contracts have rendered the Pentagon’s acquisition workforce “brutalized” by critics and the press who mistake shrinking defense budgets for a lack of ambition for innovation, a top acquisition official said Thursday.

Katrina McFarland, assistant Defense secretary for acquisition and past president of the Defense Acquisition University, said “Low-cost, technically acceptable is good when appropriate, but shouldn’t be used to achieve innovation.” Her “very junior-level” acquisition workforce has a learning curve when it comes to taking the next step toward value added in contracts, McFarland told several hundred industry and government executives at a conference titled “Agility, Velocity and Service Excellence” sponsored by the General Services Administration, the Homeland Security Department and the American Council for Technology-Industry Advisory Council.

Seeking industry input on how to prioritize Defense spending on weapons and information technology, McFarland gave a capsule history of how the acquisition workforce in the 1990s was cut by 20 percent to “reap the peace dividend,” and how, following the 9/11 terrorist attacks, the civilian force was then flush with money and focused more on “pushing product out the door to the warfighter. We weren’t focused on honing business skills or maintaining a good customer-provider relationship,” she said.  “We were a bad customer.”

An injection of money by Congress in 2008 allowed planners beginning in 2010 to assemble 53 experts from agencies and industry and boil down 325 proposed initiatives to 23, which eventually resulted in the Pentagon’s pair of Better Buying Power initiatives. These include rewards and incentives for the workforce, McFarland noted, including the first-ever visits to contractor sites by deputy and undersecretaries to explain “from the horse’s mouth” the distinctions between low-cost contracts, value-added innovations and affordability in the context of the long-term costs of ownership of a system. “Instead of beating the workforce about the ears, it is a guide to help you think,” she said. If the workforce doesn’t understand low-cost technically acceptable, it will fumble around a bit,” she added, telling the business representatives, “if [acquisition] people ask questions and say this is not logical, do not stop them,” for this is how risks are taken that succeed.

Keep reading thgis article at: http://www.govexec.com/management/2014/03/cheapest-contract-isnt-always-best-acquisition-officials-say/80965

DoD a top spender on GSA’s governmentwide contracts

Nearly $1 billion has flowed through the General Services Administration’s governmment-wide contracts this year, with SAIC and SRA International among the companies receiving the bulk of that business.

Defense components and the military services account for nearly half of the spending across GSA’s five GWACS, which include 8(a) STARS, 8(a) STARS II, Alliant, Alliant Small Business and VETS.

DoD, which includes defense agencies, has obligated $230 million in task orders against the GWACS. The Air Force Headquarters obligated $167 million in funding, and the Army has spent $110 million as of March 10, according to GSA data.

SAIC, SRA International and Lockheed Martin have seen the largest share of business under the GWACS this year.

Keep reading this article at: http://www.federaltimes.com/article/20140310/ACQ01/303100005/DoD-top-spender-GSA-s-governmentwide-contracts

Here’s a visual guide to the Defense Department’s FY15 budget proposal

Deciphering the Pentagon’s 2015 spending proposal has been difficult, but Defense News has some charts the could serve as a decoder ring.

Out friends at VisualDoD helped us compile data from the Defense Department’s spending plan to create these detailed graphics, which tell a story on their own.

First, the chart below provides a nice overview of overall DoD spending since 2006. As you can see, defense spending has flat-lined in recent years.

DoD Top Line Spending

Now lets get a little more into the weeds.

Keep reading this article at: http://intercepts.defensenews.com/2014/03/a-visual-look-inside-dods-2015-budget-proposal

Government on pace to meet small-business contracting goal — but will the bar get higher?

It appears the federal government has fulfilled its annual contracting promise to small businesses for the first time in seven years — and perhaps just in the nick of time, as lawmakers are looking to raise the bar going forward.

Government data available online currently show that federal agencies spent $83.2 billion at small companies last fiscal year, representing slightly more than 23 percent of the $355 billion in prime federal contracts officials consider viable for small firms. If so, it will mark the first time since 2006 that the government has met its statutory goal of spending at least 23 percent of all federal contracting dollars at small businesses.

More than a quarter of the contracts were awarded by the Defense Department, while the SBA, Federal Communications Commission and Interior Department each spent most of their contracting dollars at small businesses, according to the federal government’s online small business dashboard, which tracks government spending by agency.

SBA officials, who compile the data, declined to comment on the current numbers, saying they could change and the agency will issue an official tally later this year.

Keep reading this article at: http://www.washingtonpost.com/business/on-small-business/government-on-pace-to-meet-small-business-contracting-goal–but-will-the-bar-get-higher/2014/02/26/d3ba6e98-9ef5-11e3-9ba6-800d1192d08b_story.html

Also see: Small business contracting numbers inflated by errors and exclusions, data show - http://www.washingtonpost.com/business/on-small-business/small-business-contracting-numbers-inflated-by-errors-and-exclusions-data-show/2013/07/28/7fa2a4fc-f2f6-11e2-8505-bf6f231e77b4_story.html 

Unauditable DoD, interagency activity are key financial issues

Major financial management problems kept the Government Accountability Office from providing an audit opinion on the federal government’s financial statements for fiscals 2013 and 2012.

“The federal government is not able to demonstrate the reliability of significant portions” of its consolidated financial statements for those years, the GAO says in a Feb. 27 report, citing material weaknesses in internal controls.

The Defense Department’s continued failure to produce auditable financial statements is one of the main reasons that GAO can’t offer an audit opinion, the report says. Another is the government’s inability to accurately reconcile activity between federal agencies.

Improper payments, and the inability of federal agencies to know their full extent, also represent a material weakness, the report says.

Keep reading this article at: http://www.fiercegovernment.com/story/unauditable-dod-interagency-activity-are-key-financial-issues/2014-03-04 

Air Force bets $41 billion on sequestration

Air Force Secretary Deborah Lee James has placed a $41 billion bet that Congress will ease off on the mandatory spending cuts in the sequester process and also go along with a White House proposal to raise taxes.

“We will be working hard to convince Congress that there’s too much risk” to the Air Force and the nation if the $41 billion in additional funding is rejected, James said last week at a defense issues forum.

In offering the Pentagon’s Fiscal Year 2015 budget plan last week, Defense Secretary Chuck Hagel also put forward a five-year projection calling on Congress to boost military spending by $115 billion through sequester relief.

Hagel is counting on an additional $26 billion for defense from the total $56 billion Growth and Opportunity Fund that President Obama plans to outline Tuesday in the White House budget plan.

The $56 billion for the Fund would come from a combination of tax increases and offset spending, White House officials.

Keep reading this article at: http://www.dodbuzz.com/2014/03/03/air-force-bets-41-billion-on-sequestration/