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/

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

GAO: DoD didn’t take steps to ensure contactor pay was correct

The Defense Department didn’t fully implement the steps required to make sure contractor pay was correct, a June 23 Government Accountability Office (GAO) report says.

The Defense Finance and Accounting Service is responsible for processing and disbursing nearly $200 billion annually in contract payments for the DoD, the report says.

“Although DFAS has asserted audit readiness, until it corrects the deficiencies and fully implements its Financial Improvement Plan, its ability to process, record, and maintain accurate and reliable contract pay transaction data is questionable,” GAO says.

In one instance, DFAS didn’t assess the dollar activity and risk factors of its processes. Because of that DFAS couldn’t reconcile its contractor pay data with the ledgers of its DoD components, the report says.

Keep reading this article at: http://www.fiercegovernment.com/story/gao-dod-didnt-take-steps-ensure-contactor-pay-was-correct/2014-06-24

Senate testimony: Intelligence community needs to keep better tabs on its contractors

The 17 agencies in the intelligence community must get a better handle on the extent of their reliance on contractors, witnesses told a Senate panel on Wednesday. Overuse of outsourcing presents risks to both national security and managerial efficiency, senators and an auditor warned.

“Contractors can provide flexibility and unique expertise, but there are risks” if internal controls, formal planning and documentation are inadequate, Timothy DiNapoli, director of acquisition and sourcing management at the Government Accountability Office (GAO), told the Senate Homeland Security and Governmental Affairs Committee. “Changes to the definition of core contract personnel limit the comparability of the information over time,” he said, noting that the civilian intelligence community agencies used various methods to calculate the number of contract personnel and did not maintain documentation to validate the number of personnel reported for 37 percent of records reviewed. GAO also found that the civilian intelligence community agencies either under- or over-reported contract obligations by more than 10 percent for one-fifth of the records.

Panel Chairman Sen. Tom Carper, D-Del., said, “The people we entrust with leadership roles at these agencies need to be able to show the American people, and Congress, that they know who is working for them and why.” Overreliance on contractors behind the intelligence agencies’ secrecy walls presents three hazards, Carper said: hollowing out the in-house workforce and making it weaker, requiring extra layers of management and paying more for work that could have been performed by federal employees.

Keep reading this article at: http://www.defenseone.com/management/2014/06/intelligence-community-needs-keep-better-tabs-its-contractors/86758/

GAO: $10 billion worth of current federal IT contracts could fail

At least $10 billion in federal technology contracts are currently at risk of failing, according to a new review by the Government Accountability Office — and the number could be larger.

Chief information officers across federal agencies reported that 183 of 759 major IT investments were at medium to high risk of failing before completion, the congressional watchdog found. Other IT projects also may be at risk, but federal agencies appear to be underreporting potential problems or removing or reclassifying IT investments that once were part of a public scorecard.

The GAO’s IT management director, David A. Powner, outlined the findings last week at a hearing of the Senate subcommittee on efficiency and effectiveness of government programs. His report comes as the government continues to recover from the problem-plagued rollout of HealthCare.gov and other high-profile IT miscues.

“Information technology should enable government to better serve the American people. However, despite spending hundreds of billions on IT since 2000, the federal government has experienced failed IT projects and has achieved little of the productivity improvements that private industry has realized from IT,” Powner said in written testimony.

Keep reading this article at: http://www.washingtonpost.com/business/on-it/gao-10-billion-worth-of-current-federal-it-contracts-could-fail/2014/06/13/1e6ee728-f24f-11e3-9ebc-2ee6f81ed217_story.html

Denied bid protests don’t guarantee smooth sailing for GSA’s office supply contract

The Government Accountability Office (GAO) recently denied bid protests for the Office Supplies 3 (OS3) strategic sourcing contract, but that doesn’t mean its clearing sailing for the General Services Administration (GSA).

The GAO found the GSA met requirements to evaluate the economic impact the strategic sourcing contract has on small businesses, even though the Small Business Administration recently said GSA failed to do so.

“GSA conducted market research and considered alternatives to the procurement approach set forth in the solicitation,” the June 9 decision says.

The GSA says that means OS3 will move forward.

Keep reading this article at: http://www.fiercegovernment.com/story/denied-bid-protests-dont-guarantee-smooth-sailing-os3/2014-06-11

Another contractor protests GSA’s professional services contract

More companies are piling on bid protests against the General Services Administration’s OASIS contract, according to documents filed with the Government Accountability Office.

IT service contractor Phacil Inc., is the latest of five companies to protest the award. Smartronix, Inc., VSE Corporation, American Systems Corporation, the Logistics Management Institute and Aljucar, Anvil-Incus & Company all filed protests May 27. Aljucar, Anvil-Incus & Company also filed bid protests during the pre-award phase of the contract, which were denied.

GSA awarded its 10-year, multibillion dollar OASIS contract to 74 companies on May 19. OASIS is governmentwide acquisition contract that offers professional services, such as financial management and engineering, scientific and logistics services. OASIS also features separate contracts for small businesses and larger firms and is valued at around $6 billion a year in agency business.

Keep reading this article at: http://www.federaltimes.com/article/20140604/ACQ01/306040017/Another-contractor-protests-GSA-OASIS-contract

Also see earlier article on initial protests to OASIS contract award: http://www.federaltimes.com/article/20140529/ACQ01/305290008/First-protests-filed-GSA-s-OASIS

Also see earlier article on the award of the OASIS contract: http://www.federaltimes.com/apps/pbcs.dll/article?AID=2014305190012

Avoid single-bid procurements by engaging early with industry, GAO says

Reaching out to industry early in the procurement process can prevent situations where only one vendor bids on a contract that is supposed to be competitively awarded, the Government Accountability Office says.

As part of a report dated May 5, GAO auditors reviewed the Defense Department’s single-bid contracts, whose combined dollar value is in the billions annually.

They also spoke with vendors, who said they’re more likely to bid on a contract if they hear about it as early as possible. They often make their decisions about whether to bid before a request for proposals is published and the 30-day solicitation period ensues.

Vendors may not want to spend the resources to prepare a bid if they don’t feel confident in their prospects of winning the award, especially if there’s an incumbent contractor that appears to have performed well so far.

Keep reading this article at: http://www.fiercegovernment.com/story/avoid-single-bid-procurements-engaging-early-industry-gao-says/2014-05-06

DoD may stick with 4 separate systems to track contractors

The Defense Department may keep four separate systems to track the hundreds of thousands of contractors it employs, says the Government Accountability Office.

The Army, Navy, Air Force and the rest of the department each maintain their own Contractor Manpower Reporting Application system, with their own interfaces and separate log-in systems.

A new GAO report says DoD is interested in moving to a common system, and officials told auditors they expect to adopt a single interface in fiscal 2015.

But standardizing all the systems, as well as the processes for collecting their information, has been a challenge. DoD officials said they’re hindered by a lack of dedicated funding to develop a common system.

Keep reading this article at: http://www.fiercegovernmentit.com/story/dod-may-stick-4-separate-systems-track-contractors/2014-05-21

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Contractor suspensions and debarments doubled over the last 4 years

The number of contractor suspensions and debarments government-wide have doubled since fiscal 2009 because agencies have developed better management tools and a more active referral process, a May 21 Government Accountability Office (GAO) report says.

Agencies can use suspension and debarment to exclude individuals, contractors and grantees from receiving future contracts, grants and other federal assistance due to various types of misconduct.

A previous GAO report found agencies issuing the most procurement related suspensions and debarments shared common characteristics: dedicated staff, detailed policies and procedures, and an active referral process.

Many agencies that previously faltered in rooting out contractor misconduct have taken the lead from those stronger agencies, the latest report says.

Keep reading this article at: http://www.fiercegovernment.com/story/gao-contractor-suspensions-and-debarments-have-doubled-over-last-4-years/2014-05-22