‘Reverse Auctions’ draw scrutiny

It is like an eBay of Washington, a well-appointed and well-connected online marketplace for lucrative government contracts.

Deals for everything from pens to pesticides, from painting offices to performing autopsies — all that and more is up for grabs on FedBid, a fast-growing private company that has positioned itself at the profitable nexus of government and business.

Financed by an investment company connected to Stephen M. Case, of AOL fame, and Ted Leonsis, majority owner of the Washington Wizards, FedBid has assembled a roster of Beltway insiders to promote an unusual approach to how contracts are meted out. Its latest big hire is Joseph Jordan, who was until recently head of procurement policy for the Obama administration.

Through FedBid, government agencies use “reverse auctions” — in which the lowest bid wins, rather than the highest — to decide who is awarded contracts. In theory, the process can save money for taxpayers by encouraging businesses to offer the best possible prices. In practice, it also makes a lot of money for FedBid, which can collect fees from the winning bidders who, in turn, pass those costs to the government.

At issue is whether FedBid encourages competition, as its proponents argue, or simply prompts companies to submit unrealistically low bids to outmaneuver business rivals. Detractors contend that awarding contracts based solely on price means that the government risks ending up with inferior products or services, though this is a risk even when the government does not use reverse auctions. A recent government study, which reviewed reverse auctions at top agencies, found that roughly a third of all FedBid auctions involved a single bidder, meaning that they were closer to no-bid contracts than true auctions.

Keep reading this article at: http://www.nytimes.com/2014/04/07/business/reverse-auctions-draw-scrutiny.html?nl=todaysheadlines&emc=edit_th_20140407&_r=1 

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

OMB and GSA try for agility in IT development, oversight

The Office of Management and Budget plans to revamp its TechStat agency information technology oversight methodology, said Beth Corbet, deputy director for management at OMB.

Cobert said a new TechStat approach will allow federal chief information officers to take an incremental, agile approach rather than focusing on static compliance. She testified during a March 12 hearing of the Senate Homeland Security and Government Affairs Committee.

“As we think about a process like TechStat, you don’t want to be measuring compliance with requirements. You want to be looking early about how we’re looking at needs,” Cobert told the committee.

The idea of more quickly, efficiently and openly delivering federal IT may be catching on at the General Services Administration as well.

GSA unveiled March 12 a new office called 18F, presumably named after the address of GSA headquarters at 1800 F St. NW. The office’s inaugural blog post explains that it is a startup within GSA, which encompasses the Presidential Innovation fellows program, and in-house designers, developers and project managers from within government.

Keep reading this article at: http://www.fiercegovernmentit.com/story/omb-and-gsa-try-agility-it-development-oversight/2014-03-13 

Strategic sourcing’s impact on small biz needs measurement and monitoring, GAO says

“Strategic sourcing” is a method used by the federal government to improve procurement efficiency by moving away from numerous individual procurements toward a broader aggregate approach.   Since 2005, the Office of Management and Budget (OMB) has encouraged federal agencies to use strategic sourcing.

Now, the Government Accountability Office (GAO) has issued a report on how strategic sourcing affects small businesses, including small disadvantaged businesses. The report discusses: (1) how OMB, GSA, and selected agencies have considered small businesses in their strategic sourcing efforts, and (2) the extent to which data and performance measures are available on the inclusion of small businesses in strategic sourcing initiatives.

In its review, GAO found that OMB and the General Services Administration (GSA) have developed guidance on strategic sourcing that stresses the importance of including small businesses.  GAO’s review of documentation for three ongoing government-wide strategic sourcing initiatives showed that GSA considered the inclusion of small businesses in the strategic sourcing process. For example, when developing strategic sourcing initiatives for office supplies and print management, GSA identified the current market share of small businesses with these products and also set aside specific contracts for various categories of small businesses, such as service-disabled veteran-owned small businesses. In addition, GAO’s review of agency-wide strategic sourcing initiatives at each of five agencies — Departments of Defense (DOD), specifically Army and the Defense Logistics Agency; Homeland Security (DHS); Housing and Urban Development (HUD); and the Interior and the National Aeronautics and Space Administration (NASA) — showed that the agencies generally considered the inclusion of small businesses.

However, data and performance measures that would provide a more precise understanding of the inclusion of small and disadvantaged businesses in strategic sourcing initiatives are limited.  GAO’s specific findings include:

  • Although GSA has collected baseline data on proposed government-wide initiatives, it has not developed a performance measure to determine changes in small business participation going forward.
  • DHS has collected some data on contracts awarded to small businesses under strategic sourcing initiatives, but it and the other agencies in GAO’s review generally did not have baseline data and performance measures to determine how small businesses were affected by strategic sourcing.  OMB guidance requires agencies to establish baselines for small business participation prior to implementing strategic sourcing and set goals for small business participation.
  • In addition, federal internal control standards state that information is needed to determine whether the agency is achieving its compliance requirements under various laws and regulations.  Without baseline data and performance measures, the effect of strategic sourcing initiatives on small businesses will be difficult to determine.
  • Moreover, OMB has not monitored agencies’ compliance in reporting baseline data and performance measures on the inclusion of small businesses in government-wide and agency-wide strategic sourcing initiatives. OMB required agencies to submit annual reports on the implementation of strategic sourcing from fiscal years 2005 through 2007 and prepare information for acquisition status sessions from fiscal years 2010 through 2012. (No reporting was in place for fiscal years 2008 or 2009.)  However, virtually none of this information included baseline data or measures of the effect of strategic sourcing on small businesses.
  • Federal internal control standards state that effective monitoring should assess the quality of performance over time.  Without effective monitoring, it will be difficult for OMB to help ensure that agencies are tracking the impact of strategic sourcing on small businesses.

As a part of its report, GAO made recommendations to GSA, selected agencies, and OMB to improve data collection and performance measures related to the inclusion of small businesses in strategic sourcing. DOD, DHS, GSA, HUD, and OMB agreed with GAO’s recommendation. Interior partially agreed, suggesting that a more effective approach would be to work with OMB and other agencies to develop common approaches. NASA disagreed, stating it already tracks related spending for the agency. GAO believes its recommendations remain valid as discussed in the report.

To download the complete report, click here.

Data on contractor past performance is missing or inaccurate

Four interagency databases designed to warn contracting officers about a company’s past performance are riddled with problems that can become expensive agency boondoggles, a senator declared at an oversight hearing Thursday.

Sen. Claire McCaskill, D-Mo., blasted as “shockingly old and clunky” the databases pioneered by the Navy and now administered governmentwide by the General Services Administration, calling for more complete information on whether contractors, for example, have been suspended and debarred.

She criticized the Office of Management and Budget for not sending a witness to a hearing she held as chairwoman of the Homeland Security and Governmental Affairs contracting subcommittee. McCaskill also said the Centers for Medicare and Medicaid Services “could have avoided a black eye” for the “very public failure” of the rollout of the Healthcare.gov website last fall had it been able to discover more on the past performance of the contractor CGI Federal.

Since passage of the 2002 E-Government Act, agencies have sought to consolidate and centralize online data on contractors’ performance history including contract terminations, criminal acts and administrative adjudications. The chief databases that managers may consult include the Past Performance Information Retrieval System (PPIRS), the Federal Awardee Performance Integrity Information System (FAPIIS) and the System for Award Management.

Keep reading this article at: http://www.govexec.com/contracting/2014/03/senator-some-data-contractor-past-performance-missing-or-inaccurate/80062

 

OMB says budget deal means no further sequester cuts in FY14

Federal agencies will not face any additional sequester-related spending cuts for fiscal 2014 following passage of December’s bipartisan budget deal, the Office of Management and Budget confirmed in a report this month.

Under the deal, Congress agreed to partially roll back discretionary spending reductions previously mandated in 2011, leaving total defense spending—not counting funding for the Afghanistan war—at $520.5 billion and total spending on other programs at $491.8 billion this year. Lawmakers also reworked the caps for next year to keep overall discretionary spending at about the same benchmark; for 2015, the caps on security and non-security spending are $521.3 billion and $492.4 billion respectively, according to the OMB report.

Keep reading this article at: http://www.federaltimes.com/article/20140217/MGMT05/302170012/1001 

Departing PBS chief intends to write about government inefficiencies

Sixteen months after being named to the post, Dorothy Robyn is leaving as head of the Public Buildings Service for the General Services Administration, a job in which she inked a deal with Donald Trump for a luxury hotel and led the search for a new FBI headquarters.

Her replacement is expected to be Norman Dong, who has been serving as acting controller at the Office of Management and Budget, Robyn said.

Robyn came from the Defense Department in September of 2012 to help right the ship after a scandal over convention-related expenses brought down the GSA’s previous leadership. She oversaw public buildings during a time of tightening budgets, prompting her to press agencies to occupy less space and forgo real estate that they did not need.

She and GSA administrator Dan Tangherlini teamed to take better advantage of under-performing government buildings, completing a deal to lease the Old Post Office Pavilion to Trump’s real estate firm and selling the West Heating Plant in Georgetown to a developer affiliated with the Four Seasons.

In an interview she said she was frustrated at the resistance of Congress to invest in cost-saving infrastructure improvements, as well as the accounting policies “ that make it difficult for us to follow best practices in the private sector.”

Rather than take a new job immediately ,Robyn said she would take time off to write about some of the government inefficiencies that she said were strangling the country’s infrastructure improvements and failing to reduce energy usage.

Keep reading this article at: http://www.washingtonpost.com/news/capital-business/wp/2014/01/29/dorothy-robyn-head-of-public-buildings-for-gsa-steps-down 

In tech buying, the U.S. is still stuck in the last century

Four years after President Obama vowed to “dramatically reform the way we do business on contracts,” the spectacular failure of the HealthCare.gov website has renewed calls for changes in how the government hires and manages private technology companies.

But despite Mr. Obama’s promises in the last two months to “leap into the 21st century,” there is little evidence that the administration is moving quickly to pursue an overhaul of the current system in the coming year.

Outside experts, members of Congress, technology executives and former government officials say the botched rollout of the Affordable Care Act’s website is the nearly inevitable result of a procurement process that stifles innovation and wastes taxpayer dollars. The Air Force last year scrapped a $1 billion supply management system. Officials abandoned a new F.B.I. system after spending $170 million on it. And a $438 million air traffic control systems update, a critical part of a $45 billion nationwide upgrade that is years behind schedule, is expected to go at least $270 million over budget.

Longstanding laws intended to prevent corruption and conflict of interest often saddle agencies with vendors selected by distant committees and contracts that stretch for years, even as technology changes rapidly. The rules frequently leave the government officials in charge of a project with little choice over their suppliers, little control over the project’s execution and almost no authority to terminate a contract that is failing.

Keep reading this article at:http://www.nytimes.com/2013/12/23/us/politics/in-tech-buying-us-still-stuck-in-last-century.html?pagewanted=2&pagewanted=all

Budget deal’s lower contractor pay cap pleases many

he budget deal passed by the House on Dec. 12, 2013 includes a compromise on the much-fought-over amount the government may reimburse contractors for executive pay, drawing qualified approval from employee unions and nonprofit critics of current policy.

The bill negotiated by budget committee leaders Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis., would lower the cap on reimbursements for an executive’s annual pay to $487,000, about half the $952,308 recently announced by the Office of Management and Budget.

The Senate is expected to vote on the deal next week, but if that $487,000 amount becomes law, it would supersede a proposal for a $625,000 cap included in the National Defense Authorization Act agreement reached by Armed Services committee chairmen from both chambers on Monday.

The budget deal’s figure, however, is still double the cap of $230,700, or the vice president’s salary level, sought in legislation sponsored by Sens. Barbara Boxer, D-Calif., Joe Manchin, D-W.Va., Jon Tester, D-Mont., and Chuck Grassley, R-Iowa, as well as Rep. Paul Tonko, D-N.Y.

OMB, stressing that it was required by law to raise the cap, last May proposed a ceiling of $400,000, equal to the president’s salary. The newly announced $952,308 cap has few defenders — even among the contracting community.

Keep reading this article at: http://www.govexec.com/contracting/2013/12/budget-deals-lower-contractor-pay-cap-pleases-many/75506 

OFPP’s Jordan leaving for the private sector

Joe Jordan is resigning as the administrator in the Office of Federal Procurement Policy. Jordan is going to FedBid as the president of the public sector, according to a company press release.

OMB Director Sylvia Burwell confirmed Jordan’s decision to leave.

The company said in a release Jordan will help grow and manage FedBid’s federal buyer base, while also working to grow the company’s efforts in the state, local and education sectors.

Additionally, Jordan will assist with the company’s recent private-sector launch, a move to open commercial businesses of all sizes to buy commodity goods and simple services in the online marketplace.

“With a diverse career over the last 20 years of significant public and private sector procurement, contracting, business process and solution-making successes, Jordan will be a natural fit to move FedBid’s public sector business forward,” said FedBid CEO Ali Saadat in an statement.

Jordan will stay at OFPP through the end of January. Lesley Field, the deputy administrator, will step back into the acting role when Jordan leaves.

Keep reading this article at: http://www.federalnewsradio.com/517/3529122/OFPPs-Jordan-leaving-for-the-private-sector