DoD doesn’t know if it can sustain contracting database, says GAO

The Defense Department doesn’t know what resources it needs to sustain it’s contracting database, says a Feb. 18 Government Accountability Office (GAO) report.

The DoD has not assessed all resources that it will need to sustain the Synchronized Predeployment and Operational Tracker-Enterprise Suite – a repository of information on contracts and contractor personnel in contingency operations.

DoD has not updated its life-cycle cost estimate or fully defined and assessed its plans to determine the resources needed to sustain SPOT-ES, GAO says.

Specifically, the agency hasn’t updated its life-cycle cost estimate since 2010, despite changes to costs due to schedule delays, the report says.

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High risk list: Government IT acquisitions fail ‘too frequently’

The new federal chief information officer, Tony Scott, has his work cut out for him. The Government Accountability Office (GAO) today is adding information technology acquisition to its high-profile list of “high-risk” federal programs.

Despite a raft of reforms over the course of the Obama administration, “federal IT investments too frequently fail or incur cost overruns and schedule slippages while contributing little to mission-related outcomes,” the 2015 update to GAO’s High-Risk List states.

The government has wasted billions on botched IT projects that fail to deliver promised – or any – functionality and have been mothballed. Even more programs are still on the books, but remain at risk of falling behind. And hundreds of watchdog recommendations for improving the state of federal IT acquisitions have gone unaddressed.

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GAO’s ‘high-risk list’ now includes IT acquisition

The Government Accountability Office’s High-Risk List, which calls Congress’ attention to problematic, risky or troubled programs, is about to receive two high-profile additions.

Multiple Capitol Hill sources with knowledge of the list confirmed to Nextgov that IT acquisition and operations and veteran health care are being included on the watchdog’s list.

The news is hardly surprising, given the steady stream of criticism and negative headlines those two areas have generated since GAO last updated its biennial High-Risk List in February 2013.

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Pass-through contracts for war zones need monitoring, GAO finds

Three agencies working overseas that together spent $322 billion on contracting in fiscal 2013 need to improve guidance given contracting officers to reduce risk of overpayments, a watchdog found. Two-thirds of that money is funneled through prime contractors to smaller contractors who perform most of the work.

Use of pass-through contracts—under which at least 70 percent of funding is routed to subcontractors—requires new analysis and guidance before they are awarded, the Government Accountability Office noted in a Dec. 22, 2014 report.

“Concerns remain that the government could overpay contractors that provide no, or little, added value for work performed by lower-tier subcontractors,” GAO wrote.

The watchdog cited requirements imposed on the Defense and State Departments and the U.S. Agency for International Development under the 2007, 2009 and 2013 versions of the National Defense Authorization Act to reduce waste in purchasing goods and services primarily in Afghanistan.

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Acquisition 101: When a bargain isn’t a bargain

When my wife and I purchased our first vacuum cleaner, we selected a cheap model. It met all the specs of what we needed, did a minimally acceptable job and lasted little more than a year before it died. Not learning the lesson that buying the first vacuum should have taught us, we immediately bought another cheap vacuum to replace the first one, and it died an early death about 18 months later. We finally did learn our lesson with the third vacuum and paid slightly more for a better vacuum that has lasted six years (and counting).

Much like our predicament with the rotating vacuums, federal contracting professionals are facing increasing pressure to purchase goods and services as cheaply as possible using a method commonly referred to as “lowest price/technically acceptable” (LPTA)—even if it means minimal acceptability.  This push is laudable in theory, but the reality is often higher prices and a smaller pool of quality contractors, while robbing contracting officers of any discretion to choose a solution or product that is more cost-effective in the long term.

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About the authors: Eric Crusius, a partner with Fed Nexus Law, focuses on government contracts, cybersecurity, employment law and complex litigation. Mitchell Bashur, an associate at Fed Nexus Law, also contributed to this column.

Company excluded from competition protests $5 billion Army IT contract

A $5 billion Army contract program for information technology that’s almost two years behind schedule could be delayed even longer, as at least one company excluded from the competition files a protest in a federal court.

MicroTechnologies LLC of Virginia confirmed it filed a protest Jan. 9 in the U.S. Court of Federal Claims against the Army’s decision to exclude the company’s bid for the Information Technology Enterprise Solutions-3 Hardware program, or ITES-3H, to supply the Army commercial IT hardware.

While all documents in the case are sealed, MicroTech General Counsel and Chief Administrative Officer Aaron Drabkin said the grounds mirror those included in its protest filed with the Government Accountability Office (GAO), which was denied in October 2014. The company raised several challenges to the agency’s evaluation of its past performance.

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GAO forbids funding for disposable flatware

Federal agencies cannot use department funds to buy disposable flatware for employee use, as those items don’t directly support an agency’s mission,according to a recent decision from the Government Accountability Office.

The Department of Commerce instituted a policy in 2009 to provide disposable cups, plates and utensils, along with hand sanitizer and disinfectants to employees at the National Weather Service offices in response to concerns over an outbreak of the H1N1 virus, colloquially called “swine flu.”

In 2013, Commerce announced that it would no longer provide disposable flatware to the regional offices, stating that the “purchase was for the primary benefit of the employees” and not the agency’s mission.

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Navy’s $2.5 billion plan for shipboard networks hits snag after GAO partially upholds protest

The Government Accountability Office has partially sustained a bid protest filed by contractor CGI Federal over a $2.5 billion set of U.S. Navy contracts. GAO’s ruling could further delay Navy’s plans to upgrade the nation’s surface warship fleet.

Navy logoIn August, the Navy awarded the contracts to five companies – BAE Systems Technology Solutions & Services, General Dynamics C4 Systems, Global Technical Systems, Northrop Grumman Systems Corp. and Serco, Inc. However, work ceased Sept. 2 when losing bidders CGI Federal and DRS Laurel Technologies protested the decision.

GAO entirely denied DRS Laurel Technologies’ protest over the Navy’s Consolidated Afloat Networks and Enterprise Services — or CANES — system and portions of CGI Federal’s protest.

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House lawmakers call for OFPP to issue reverse auction guidance

House lawmakers are pressing the Office of Federal Procurement Policy to update the Federal Acquisition Regulations to detail how best agencies should use reverse auctions.

Reps. Jeff Miller (R-Fla.) and Sam Graves (R-Mo.), chairmen of the Veterans Affairs and Small Business committees, respectively, wrote to Anne Rung, OFPP administrator, Dec. 4, asking for a FAR case to be opened immediately to address reverse auctions.

“As you may well know, while our two committees recognize that reverse auctions, when properly used, may deliver savings to the taxpayer, we have long been concerned that some are misusing this tool to evade competition and compliance with other procurement regulations,” Graves and Miller wrote in the letter obtained by Federal News Radio.

Graves and Miller highlight findings from the December 2013 report from Government Accountability Office as well as recent GAO bid protest decisions detailing agency struggles with reverse auctions.

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Adjustments in agency cost realism analyses must be rational

Editor’s note: This is the second post in a series focused on protest allegations related to cost and price analyses. The first post explained the basic principles on price and cost realism. Planned future posts will discuss benchmarks an agency may use in a realism analysis, the role of an offeror’s technical approach in a price/cost realism analysis, price reasonableness, and recent protest decisions involving cost/price analysis issues. 

As discussed in the first post in this series, a cost realism analysis is required when an agency evaluates proposals for a cost-reimbursement contract. The analysis is required for cost-reimbursement contracts because under these contracts, an offeror’s proposed costs are not controlling–the Government will be bound to pay the contractor its actual, allowable, and reasonable costs. To determine the probable cost of performance, an agency may adjust the amounts an offeror proposed for given elements to reflect what the agency believes is realistic – the most probable cost. When an agency adjusts an offeror’s proposed amount and the offeror is not selected for award, those adjustments can become a ground for protest at GAO or the CFC.

Cost realism analyses are a standard part of an evaluation for the award of a cost-reimbursement contract. When an agency does a cost realism analysis, it reviews and evaluates specific elements of an offeror’s proposed cost estimates to determine whether the proposed costs (1) are realistic for the work to be performed, (2) reflect an understanding of the requirements, and (3) are consistent with the method of performance described in the offeror’s technical approach. If the proposed costs are inconsistent with these principles, the agency will make adjustments to determine the probable cost of performance.

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