Federal IT funds circle the drain due to poor procurement policies

April 5, 2013 by

It may seem like a simple thing to fix — if the U.S. government wants more vendors to compete for contracts, just ask more companies to take part. However, those looking to reform the procurement process are running into snags that favor the status quo, and a new survey shows just how much money is wasted. A greater emphasis on open standards and boosting the role of CIOs are two possible solutions now being studied.

Federal agencies routinely pass up opportunities to improve information technology performance, and save money at the same time, by failing to seek vendor competition in the procurement process, according to a recent survey.

Federal IT professionals revealed that their agencies could save as much as $15.8 billion per year — about 20 percent of annual IT spending — by being more aggressive in utilizing multiple vendors in a more competitive environment for infrastructure projects.

The survey of 208 federal specialists was conducted in January by MeriTalk, an online community of public and private sector IT professionals.

Reporting on the survey in early March, MeriTalk said that 95 percent of respondents believe there are benefits to using more than one vendor in an area of their infrastructure, and 44 percent believe that adding a vendor drives down acquisition costs. However, five percent of agencies reported that their entire IT infrastructure uses just one vendor, and another 23 percent use just two or three.

Keep reading this article at: http://www.ecommercetimes.com/story/77636.html.

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Acquisition executives figuring out how to deal with budget woes

October 4, 2012 by

Agency chief acquisition officers are not playing a big role in planning for sequestration or even future budget cuts.

An exclusive Federal News Radio surveyof federal CAOs and senior procurement executives found 57 percent of the respondents said they are not preparing for smaller budgets.

Joe Jordan, the administrator of the Office of Federal Procurement Policy, said the survey responses weren’t that surprising.

“With the budget situation overall, agencies have some good foreknowledge usually into what their agency’s budget will look like,” Jordan said in an exclusive interview on In-Depth with Francis Rose. “The important thing is to make sure that planning is integral to the acquisition process overall, make sure agencies are doing good acquisition forecasting, creating robust plans and conducting the appropriate market research, so they can cast a wide net for new businesses that can deliver the goods and services they need in the best possible way.”

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About 15 percent of the 53 CAOs and SPEs responded to Federal News Radio’s questions conducted in August 2012. This is the a second biannual survey of CAOs.

Keep reading this article at: http://www.federalnewsradio.com/517/3062540/Acquisition-executives-figuring-out-how-to-deal-with-budget-woes-

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FAR clause on small business R&D set asides to be confusing no more

August 30, 2012 by

The writers of federal regulations controlling procurements say a clause telling contracting officers when to set aside research and development contracts worth more than the simplified acquisition threshold needs clarification.

In an Aug. 10 notice in the Federal Register, the Federal Acquisition Regulation Council says language in FAR 19.502-2(b) regarding setting aside R&D contracts for small businesses when worth more than the simplified acquisition threshold (currently $150,000) is the subject of a clarification request from the Small Business Administration.

Keep reading this article at: http://www.fiercegovernment.com/story/far-clause-small-business-rd-set-asides-be-confusing-no-more/2012-08-20?utm_source=rss&utm_medium=rss.

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In acquisition, more meetings might not be a waste of time

April 24, 2012 by

For the past few years, it seems that every conference, seminar and executive session in Washington, D.C., that deals with federal acquisition management dwells, at least in part, on the need for better collaboration and communication between government and industry. Add to that the General Services Administration’s BetterBuy project, the Office of Federal Procurement Policy’s myth-busters initiative, the Obama administration’s 25-point plan for improving IT management — the list goes on and on.

In my opinion, we can’t talk about it enough. However, improving government/industry communication is more difficult than simply saying we need to do it. There are many reasons for the difficulty, but let’s look at two in particular: culture and bandwidth.

At last month’s Acquisition Excellence 2012 conference sponsored by GSA and the American Council for Technology/Industry Advisory Council, Mary Davie, assistant commissioner of GSA’s Office of Integrated Technology Services, posed a great question to the audience: “Has communication between government and industry gotten better in the past couple of years?”

The answers varied widely. On reflection, some organizations are easier to communicate and collaborate with than others, and the difference generally stems from culture, not policy. If agencies don’t encourage employees to reach out — or if they punish them for doing so — employees won’t make the effort.

The culture is beginning to change. In both government and industry, senior acquisition leaders have become more accessible and have begun to beat the drum for better communication and collaboration. Also, the younger generation’s adoption of social media as a method to stay in touch — that is, to communicate and collaborate — is also changing the way we all interact. That’s a good thing. Still, a fear of openly communicating and collaborating is still widespread in the middle ranks of many organizations.

One thing that might help is to keep having events where industry and government can participate at a professional and social level, such as the recent conference. Barriers start to come down when folks can interact in a “safe” environment where they can discuss their challenges and engage one another in dialogue, thus increasing their awareness, understanding and empathy (yes, empathy) for one another. Professional organizations, industry associations and public/private partnerships play a big role in opening communication and encouraging collaboration.

Another big issue is bandwidth. Today, we are all frightfully busy, and it is tough to find any time to meet with people who are not directly involved with our immediate priorities. Additionally, we all spend so much time in meetings already that the thought of having more of them is unappealing. After all, we have “real” work to accomplish.

The problem is that spending time understanding the market, the mission requirements, the technology, the vendor, the agency, etc., is part of our real work. And with extremely tight budgets on the horizon, that understanding is more important than ever. By sharing their experiences, industry and government acquisition professionals might find ways to reduce costs and stretch every dollar, whether taxpayer or corporate, as far as possible. So we need to make the time.

Industry can help by scheduling short, focused meetings with their government contacts and recognizing that none of us have time to waste.

So although communication and collaboration are happening more and more, we need to keep the pressure up, and we need to be patient. Changing culture takes a lot of time and effort. Let’s keep up the good work!

About the Author: Peter G. Tuttle, CPCM, is senior procurement policy analyst for Distributed Solutions Inc., an acquisition consulting firm, and a fellow at the National Contract Management Association.  This article was published by Federal Computer Week on Apr. 6, 2012 at http://fcw.com/articles/2012/05/15/comment-peter-tuttle-acquisition-collaboration-communication.aspx?s=fcwdaily_100412.

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Government marketing workshop offered May 16th

April 17, 2012 by

Businesses seeking insights into how to market to the government will want to pay attention to this.

In partnership with American Express OPEN, the Contracting Education Academy at Georgia Tech is proud to offer a free, three-hour workshop entitled “Victory in Procurement: Marketing to the Federal Government.”

Especially designed for small business owners, this event will teach you how to effectively pitch your business to the government and provide:

  • Insights into how to select which government agencies to target and how to get meetings with them,
  • Tips and tactics for improving your elevator pitch and capabilities statement,
  • Sample elevator pitches and capabilities statements,
  • Advice from a panel of government buyers and successful small business owners,
  • Interactive, roll-up-your-sleeves round-table exercises where you’ll hone your new-found skills.

The event will be held on Wednesday, May 16, 2012 at the Tech Square Research Building (TSRB), located at 85 Fifth St., NW, Atlanta, GA 30308.   The workshop will take place from 9:00 am until 12 noon.

Pre-registration is required.  Click here to pre-register.  Due to space limitations, walk-ins on the day of the event will not be allowed.

A flyer describing this event can be downloaded by clicking here.

For directions, please visit http://contractingacademy.gatech.edu/directions-to-tsrb.  Remember, you must pre-register in order to attend.

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Resource centers boost competition for secret contracts

January 24, 2012 by

Restricted websites similar to the Federal Business Opportunities site are boosting competition for sensitive national security procurements, showing that competition is possible in the mysterious world, according to a report.

The National Reconnaissance Office hosts the Acquisition Research Center, which was developed for intelligence community procurements. It limits potential contractors to about 1,200 registered firms that are already cleared to work in a secure environment and have a workforce with security clearances.

“An NRO senior procurement official described this system as a proprietary classified version of FedBizOpps,” the Government Accountability Office wrote in a report released Jan. 13, 2012. GAO was reviewing competition for Defense Department contracts for national security needs.

Along with NRO, the National Security Agency has a business registry database. It provides industry with a central place for acquisition information. NSA officials use it for market research as a way to distribute documents to partners and other companies. All companies that are interested in doing business with NSA must be registered in the system. As of October 2010, the database included about 9,300 companies, GAO reported.

The Defense Intelligence Agency and the National Geospatial-Intelligence Agency, both of which are within the Defense Department, have made arrangements to use the systems.

GAO compared their contracts awarded under an acquisition rule allowing particular agencies to exempt certain national security contracts from a full-and-open competition. Because of the acquisition centers, NSA and NRO showed higher levels of competition compared to the DOD military departments, which don’t use the databases.

Annually, for NRO and NSA, competition for contracts ranged from 27 percent to 70 percent of total spending, GAO wrote, based on the information the agencies provided.

On the other hand, GAO found much less competition after analyzing procurement data on about 11,300 DOD national security contracts from fiscal 2007 through fiscal 2010, which equaled $2 billion. Military departments received more than one bid on only 16 percent of all contracts and task orders purchased under a national security exemption rule.

Defense officials noted three obstacles for their low percentage of competition.

  • Few contractors with clearances.
  • Constraints on soliciting new vendors.
  • Few tools to do market research.

In response to the report, DOD officials said they would assess the tools that the intelligence community has to do market research and consider giving defense agencies access to the databases.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article apperaed on Jan. 17, 2012 at http://fcw.com/articles/2012/01/17/national-security-acquisition-resource-center.aspx.

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Defense technology to grow despite Pentagon budget cuts

January 16, 2012 by

As the Defense Department slashes its budget by at least $487 billion in 10 years, technology investment is one of the few areas that will continue to grow, according to a new military strategy that President Obama and Pentagon officials released Thursday.

The increased spending will focus on cyberspace, intelligence systems, space and science research, according to the review.

President Obama told a Pentagon press briefing that Defense has to develop “smart, strategic priorities.” Specifically, he called for enhanced intelligence, surveillance and reconnaissance systems.

In his written introduction to the review, Obama said the new strategy will “ensure that our military is agile, flexible and ready for the full range of contingencies.” He added this includes investments to ensure that the United States can prevail in all domains of military operations, including cyberspace.

Defense Secretary Leon Panetta said broad cuts in the new Defense budget, due for release in late January, do not apply to investments in technology, including unmanned systems, space capabilities and “particularly cyberspace capabilities.”

Defense budgeted $3.2 billion for cybersecurity in 2012. The Pentagon, Panetta said, must continue to invest “in new capabilities to maintain a decisive edge.”

He declined to provide specific funding figures for any military programs, deferring that action until release of the 2013 Defense budget. But, Panetta said, the strategy will drive the structure of the budget.

Deputy Secretary of Defense Ashton B. Carter said the new strategy envisions budget increases in “all aspects of cyber,” along with science and technology research. Defense cannot abandon that research, Carter said, as it would be akin to “eating our seed corn.”

Highlighting the importance of networks and space systems in the future, the strategy document said: “Modern armed forces cannot conduct high-temp, effective operations without reliable information and communication networks and assured access to cyberspace and space. Today space systems and their supporting infrastructure face a range of threats that may degrade, disrupt or destroy assets. Accordingly, DoD will continue to work with domestic and international allies and partners and invest in advanced capabilities to defend its networks, operational capability and resiliency in cyberspace and space.”

Trey Hodgkins, vice president of national security and procurement policy at TechAmerica, an industry trade group, said the new military strategy reflects an increasing awareness within Defense that technology, including information technology, sits at the core of multiple missions, and the Pentagon has to continue to beef up investments in this area.

Obama pointed out that the new military strategy shifts the Pentagon focus from Europe and the Mideast to the Asia-Pacifc region, including a beefed-up U.S. force presence in Australia that he announced in November 2011.

“As we end today’s wars, we will focus on a broader range of challenges and opportunities, including the security and prosperity of the Asia-Pacific [region],” Obama wrote in his introduction to the review. This shift includes dealing with the growth of the military power of China, which should be balanced by greater U.S. military presence in the region, the document said.

Hodgkins said this increased focus on the Asia-Pacific region will boost the importance of the U.S. Pacific Command headquartered in Honolulu and will require greater Defense network capacity in the region.

– by Bob Brewin – NextGov – 01/05/12 at http://www.nextgov.com/nextgov/ng_20120105_8406.php?oref=rss?zone=NGtoday

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VA made mandatory an inadequate national contracting management system

September 16, 2011 by

The Veterans Affairs Department rolled out an electronic contract management system in its national acquisition center without first ensuring the system adequately supports contracting operations, says the VA’s office of inspector general.

The system, known as eCMS, “lacks some of the functionality required to manage and provide contract information,” the Sept. 2 report says.

VA national contracting officers also use another system, known even more prosaically than eCMS as “Contact Management,” and data from both systems is required to gain a complete acquisition solution, the national acquisition center director told auditors.

The office of acquisition and logistics (within which the national acquisition center resides) is developing an eCMS upgrade that includes integrating functions from the other system into it, but its rollout has already been delayed from September 2010 to August 2011, the report adds.

Auditors also say a review of contracts in the eCMS pulled up records with missing information. For example, the electronic file for a $19 million contract for pharmaceuticals had no acquisition plan, no evidence of market research, nor the determination of price reasonableness.

Auditors also chide the national acquisition office for taking longer than an allotted 130 days to award contracts. A sample of contracts examined by auditors found an average time to award of 422 days, with one contract requiring 1,143 days.

The acquisition director told auditors each contract delay had a legitimate reason behind it, such as a vendor protest, a contract review board decision, or staff reassignment. Auditors say that staff reassignment, at least, is a factor not outside of the control of the director, and add that contracting officers are “not being held accountable for the untimely awarding of contracts in our sample.”

– by D. Perera – Fierce Governmemt IT -  Sept. 4 2011 – http://www.fiercegovernment.com/story/va-made-mandatory-inadequate-national-contracting-management-system/2011-09-04

For more:
- download the VA OIG report, 10-01744-265 (.pdf)

Related Articles:
Veteran-preferred contracting programs rife with fraud, say VA OIG, GAO
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New guidance for IT program and acquisition manager positions

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DOD pushes contractors into a pricing war

May 9, 2011 by

The Defense Department has announced a renewed focus on pricing that could have significant effects across the market. Given the budget climate, that focus is both wise and understandable. If ever there were a time that the government needs to make sure it is spending its money wisely, this would be it. The question is how best to do so.

There are a range of tools available to the government to help achieve that goal: well-run, competitive procurements; solid market research and price analysis; enhanced and accelerated workforce training; good contract management; and more. But recent statements from the department’s acquisition leadership indicate that their pricing initiative will be centered on eliminating existing procurement flexibilities and developing new models and data requirements for determining, even dictating, a reasonable price and profit.

In a recent speech at the Defense Acquisition University, DOD Director of Procurement Policy Shay Assad said, “We’re the only company in the world that tries to spend our money as fast as we can and get nothing for it.”

By any measure, that’s a remarkable and demonstrably false statement.

Although Assad was obviously using provocative rhetoric to make a larger point, the clear message is that the department believes it is getting a raw deal. He’s asserting that contractors are making excessive profits, even though every independent analysis, including public company filings, clearly show that, though generally healthy, this industry’s profits are far from excessive and are often well below standard commercial margins.

Nonetheless, DOD is developing new cash flow models and weighted profit guidelines for services, in the apparent belief that such models will better enable them to dictate price reasonableness. Moreover, DOD has asked Congress to remove from the decades-old statutory definition of a commercial item the crucial phrase “of a type,” which was included to recognize that much of what the government buys is commercial but that the government might need it to be slightly modified to meet its specific needs.

Without rehashing the historic rationale for this important legislative provision, DOD’s efforts to eliminate it are based on its belief that it is not getting adequate pricing information on some commercial procurements and that its workforce doesn’t do the requisite market research and analysis. But neither is a compelling rationale.

The statute does not deprive the government of its right to obtain adequate pricing data. All it prohibits is requiring certified cost and pricing data which, for most commercial firms, is a nonstarter because it requires creating and maintaining parallel accounting systems that can comply with the government’s unique and complex cost accounting standards. Hence, commercial procurements are based on competition, market research and what is known as other than certified cost and pricing data.

If the department is concerned that it is not getting the pricing it deserves, there are far more effective ways to deal with that concern than reversing important procurement flexibilities that will affect the government and thousands of companies. If contracting officers are not exercising their authority to request reasonable levels of pricing information when necessary, the answer is easy — ask for it. If companies refuse to provide it, don’t do business with them. And if the workforce lacks the resources to do the necessary market research and price analyses, accelerate its training and the delivery of support tools.

The department actually gets a lot for its money, but it can always do better. Making regressive policy changes and adding costly, unnecessary processes, rather than focusing on more effective and efficient ways to capitalize on the real benefits of market forces and competition, is simply the wrong answer. And it signals a trend worth worrying about.

About the Author: Stan Soloway is president and chief executive officer of the Professional Services Council. This article was published on 5/6/2011 by Washington Technology at http://washingtontechnology.com/articles/2011/05/02/insights-soloway.aspx?s=wtdaily_090511.

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