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February 19, 2020 By cs

A high-profile OTA program goes off the rails

It had to happen at some point.  A high-profile, big-ticket Army program using an other transaction authority (OTA) agreement has turned into a fiasco.
One prototype of the Army SMET (squad multipurpose equipment transport) concept.

In December, the Army Contracting Command announced it was canceling and re-soliciting a contract issued in October to manufacture hundreds of robotic mules. This is bad news.

For critics of the Army’s acquisition system, it’s another example of the service’s poor record over the last 20 to 30 years of developing and fielding new weapon systems. While Army leadership say they are going to speed procurement of badly needed technology to take on “great powers” — this is a black mark and will certainly get the attention of Congress.

And the same goes for proponents of other transaction authority agreements — touted as a way to put new technology into the hands of warfighters faster by forgoing the traditional acquisition system.

The program in question is the squad multipurpose equipment transport, or SMET, the Army’s answer to helping dismounted troops lighten their loads. This so-called robotic mule has been on the service’s wish list dating back to the Future Combat Systems program, which was canceled in 2009.

Keep reading this article at: https://www.nationaldefensemagazine.org/articles/2020/2/4/a-high-profile-ota-program-goes-off-the-rails

Filed Under: Government Contracting News Tagged With: Army, modernization, OTA, other transaction agreements, other transaction authorities, other transaction authority, prototype, resolicitation, SMET

January 31, 2020 By cs

Army cancels $45-billion armored vehicle contest that drew one bid

The U.S. Army says it will reevaluate its effort to replace the Bradley Fighting Vehicle after just one company submitted a qualifying bid in the $45-billion contest.
M2 Bradley Fighting Vehicle (photo courtesy U.S. Army)

“Based on feedback and proposals received from industry, the Army has determined it is necessary to revisit the requirements, acquisition strategy and schedule before moving forward,” the Army said in a recently released statement.

The statement did not mention that only General Dynamics submitted an eligible bid. The Army disqualified a Raytheon-Rheinmetall team because it was unable to get its German-made Lynx fighting vehicle to the United States by Oct. 1. SAIC and Bradley-maker BAE Systems did not submit bids.

The U.S. Army Futures Command is the Army command focused on modernization.

Thursday’s decision is a setback for Army Futures Command, founded in 2018 to lead the modernization of the service’s weapons. But the Army did live up to Secretary Ryan McCarthy’s edict: “If you fail, we’d like you to fail early and fail cheap.”

After several failed attempts to buy new combat vehicles, the Army tried to fast-track the Bradley replacement, which it calls the Optionally Manned Fighting Vehicle. But the speed helped contribute to its demise.

Keep reading this article at: https://www.defenseone.com/business/2020/01/army-cancels-45b-armored-vehicle-contest-drew-one-bid/162504/

Filed Under: Government Contracting News Tagged With: acquisition strategy, Army, Army Futures Command, bid proposal, bid rejection, combat vehicle, DoD, requirements definition, single bid, sole bidder

January 28, 2020 By cs

The contracting pendulum

Contracting methods have evolved over time, from three-page, performance-based contracts to specification-based contracts hundreds of pages in length, and now appear set to shift back to shorter contracts.
Maj. Don Lee and Sgt. 1st Class Rechelle Collins of the 639th Contracting Team discuss training on blanket purchase agreements conducted recently at Fort Bragg, NC. Knowing when a contracting tool like blanket purchase agreements is a good fit is a key contributor to contracting speed. (Photo by Sgt. 1st Class Terry Ann Lewis, graphic by U.S. Army Acquisition Support Center)

The implementation of statutes, regulations and policies designed to ensure fair and equitable treatment for industry became burdensome and increased the time and complexity of the acquisition process. This resulted in an ineffective procurement process that influenced mission readiness. Since that time, the contracting pendulum has swung to agile, streamlined initiatives.

These initiatives have been spearheaded by several important laws and regulations, including the National Defense Authorization Act (NDAA) for Fiscal Year 2016, which was implemented by the Section 809 Panel, secretary of the Army initiatives and strategic reforms from the Office of the Deputy Assistant Secretary of the Army for Procurement. One streamlining initiative embraced by Stuart A. Hazlett, deputy assistant secretary of the Army for procurement, is “data-driven contracting.” Data-driven contracting will facilitate analytics on raw data that can influence factors such as requirements, money spent, talent management and procurement acquisition lead time.

SIGNIFICANT CONTRACTING CHANGES

Historically, there have been significant regulatory changes that have influenced DoD contracting processes. These regulatory changes are the springboard to many contracting initiatives used today. In 1962, Congress passed Public Law 87-653, the Truth in Negotiations Act. That law specifies that when dealing in a sole-source environment, each procurement-contracting officer must certify cost as accurate, completed and current for all cost and pricing data. The Truth in Negotiations Act has been a cornerstone for ensuring that prices paid by the government are considered “fair and reasonable.”

In 1974, Congress passed legislation to establish the Office of Federal Procurement Policy (OFPP) within the Office of Management and Budget. OFPP provides direction for government-wide procurement policies, regulations and procedures; it also promotes economy, efficiency and effectiveness in the acquisition process. One way in which OFPP provides this direction is through the Federal Acquisition Regulation (FAR).

The FAR, implemented in 1984, provides uniform policies and procedures governing federal government contracts. Accompanied by the Defense Federal Acquisition Regulation Supplement (DFARS), these regulatory policies inundate contracting professionals and industry partners. In 1984, Congress also passed the Competition in Contracting Act. That act requires competition for award of all government contracts. The theory is that more competition for procurements reduces costs and allows more small businesses to win federal government contracts. It also established that if a protest is submitted to the U.S. Government Accountability Office (GAO) before contract award, the awarding of the contract will be suspended until GAO rules on the protest.

In 1994, Congress passed the Federal Acquisition Streamlining Act. That legislation established a preference for the use of commercial products and exempted commercial products from various statutory and regulatory requirements. It raised the ceiling for the use of “simplified purchase procedures” and raised the threshold for issuance synopsis. It exempted the micro-purchase from virtually all statutory requirements, and it required that paper-based contracting systems be replaced with an electronic contracting system within five years.

CONTRACTING REFORM INITIATIVES

Acquisition reform is important and provides a check and a balance between regulatory accountability and agile acquisition. Because of recent reform initiatives, the contracting pendulum has swung from complex to streamlined contracting processes, providing for efficient and rapid acquisition in support of the warfighter.

In 2005, OMB asked the OFPP to identify goods and services the government can purchase more effectively and efficiently through strategic sourcing. Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace. As a result, the U.S. General Services Administration and Department of the Treasury established the Federal Strategic Sourcing Initiative to address government-wide opportunities to strategically source commonly purchased goods and services and eliminate duplication of efforts across agencies. An example of strategic sourcing for the Army is in the procurement of commercial hardware and software purchases under the CHESS (Computer Hardware, Enterprise Software and Solutions) program.

Then, in December 2014, OFPP issued a memorandum that directed agencies to take specific actions to implement category management, an approach based on industry leading practices, to further streamline and manage entire categories of spending across government more like a single enterprise. This approach includes strategic sourcing along with a broader set of strategies, such as developing common standards in practices and contracts, and improving data analysis and information sharing to better leverage the government’s buying power and reduce unnecessary contract duplication.

The NDAA passed in 2016 streamlined the acquisition process and eliminated redundant and duplicative requirements. Section 809 of the NDAA required that the secretary of defense establish a nine-member advisory panel consisting of experts in acquisition and procurement policy. The objective of the panel is to review DOD’s acquisition regulations and provide recommendations for streamlining procurement.

Some of the significant recommendations made by the panel include expanding and clarifying the use of other-transaction authority for production. Other-transaction authority is the term commonly used to refer to DOD’s authority to carry out “certain prototype, research and production projects” other than contracts. Such authority gives DOD the flexibility necessary to adopt and incorporate business practices that reflect commercial industry standards into its award instruments. DOD currently has permanent authority to award other-transaction agreements for research, prototype and production purposes. This kind of agreement allows nontraditional vendors a pathway for doing business with the government and introducing new and innovative ideas. In fiscal year 2019, the Army awarded 854 other-transaction agreements valued at roughly $4.9 billion.

FAR and DFARS contract clauses that are required to “flow down” from prime contractors to subcontractors, especially commercial subcontractors, are excessive and create additional burdens on DOD’s supply chain. In response, the Section 809 panel updated the FAR and DFARS to reduce burdens on DOD’s commercial supply chain, to decrease cost, prevent delays, remove barriers and encourage innovation in the military services.

The panel recommended minimizing the number of government-unique terms in commercial buying. The panel noted that when the Federal Acquisition Streamlining Act was established in 1994, there were only 57 FAR and DFARS clauses applicable to commercial buying. Today there are 165, according to the panel. The proliferation of clauses applicable to commercial buying at the prime contract level directly affects the number of government-unique clauses to subcontractors offering commercial products and services.

The 2018 NDAA amended the Truth in Negotiations Act to increase the threshold for contractors submitting certified cost and pricing data from $750,000 to $2 million. Contracting officers may still require cost or pricing data without certification, as they are tasked with ensuring that the cost or pricing data is fair and reasonable. However, this change is widely embraced by contractors doing business with the government.

Finally, the 2018 NDAA made changes to the bid and protest procedures relative to the Competition in Contracting Act and allows for enhanced post-award debriefing rights for DOD. What that means for DOD acquisitions is that, when a protest is filed, the “five-day period” to file a bid protest to trigger an automatic stay of award does not start until after the government delivers a written response to the offeror. Per the NDAA, a disappointed offeror may submit, “within two business days after receiving a post-award debriefing, additional questions related to the debriefing.” The law requires that “ … [t]he agency shall respond in writing to any additional question … within five business days” and that “the agency shall not consider the debriefing to be concluded until the agency delivers its written responses.”

ARMY CONTRACTING REFORM

The Army awards thousands of contracts yearly to support military forces worldwide. In FY19, the Army awarded 212,094 contract actions estimated at $94.59 billion. This does not include grants, government purchase-card buys, cooperative agreements or other authorized transactions that increased the estimate to $104.89 billion.

In 2017, the secretary of the Army directed initiatives to reform Army contracting, issuing “Army Directive 2017-32 (Acquisition Reform Initiative #6: Streamlining the Contracting Process),” which mandated streamlining practices within Army contracting to reduce the time it takes to develop and award a contract.

In accordance with this reform initiative, the deputy assistant secretary of the Army for procurement (DASA(P)) embarked on extensive reformation initiatives. They include:

1. Developed a centralized policy to standardize contracting policies across the Army.

2. Created policies and procedures that will facilitate the efficient implementation of category management. One policy, currently in coordination, aligns contracting activities to categories. This policy will promote habitual relationships among the contracting centers, category managers and customers. The draft policy stipulates that customers shall only submit their requirement to the designated contracting office. Aligning contracting activities with categories will assist in enforcing standard levels of services, limit standard levels of service end-run actions, and limit contract-action shopping among contracting centers.

3. Of 312 authorities identified in the FAR and DFARS, the Army delegated 159 authorities to a level lower than the assistant secretary of the Army for acquisition, logistics and technology (ASA(ALT)). This increased efficiency and eliminated the requirement to staff packages to ASA(ALT) for signature and approval, thereby saving time, money and resources.

4. Established “reform managers” to lead changes to contracting processes and develop new streamlined procedures, e.g., source selection, pricing cell, etc.

5. DASA(P) is also embracing “data-driven decision-making in contracting.” This type of contracting involves making decisions based on actual raw data derived from the automated contract systems. Data-driven decision-making improves how requirements are communicated between major stakeholders such as financial managers, program managers, requirements activities and industry partners. The bottom line is that everybody wins through increased productivity in procuring goods and services for the warfighter.

CONCLUSION

On Sept. 30, 2019, in a message to the Army force, Secretary of the Army Ryan D. McCarthy said, “We must maintain a sustainable level of readiness to meet current demands while executing an aggressive modernization strategy to ensure the total Army remains the most lethal ground combat force in the world.”

To achieve that end, the contracting pendulum must swing toward less restrictive acquisition policies and procedures.

For more information, go to https://spcs3.kc.army.mil/asaalt/procurement/SitePages/PAMHome.aspx#&panel1-3 

This article was published in the 2020 Winter issue of Army AL&T Magazine.  See: https://www.dvidshub.net/news/357393/contracting-pendulum

Filed Under: Government Contracting News Tagged With: acquisition methods, acquisition reform, acquisition workforce, Army, DFARS, DoD, FAR, innovation, NDAA, OFPP, OMB, procurement reform, simplified acquisition, TINA

December 17, 2019 By cs

Former Army employee charged with bribery, kickbacks in connection with scheme to steer contracts

A former civilian employee of the U.S. Army was charged in an indictment unsealed Dec. 12th for his role in a scheme to steer Army contracts for work to be performed at Camp Arifjan, a U.S. Army base in Kuwait.

Ephraim Garcia, 62, was charged in an indictment filed in December 2018 in the District of Columbia with one count of offering a bribe, one count of receiving illegal gratuities and one count of offering kickbacks.

The indictment further charges Gandhi Raj, 39, with paying illegal gratuities to Garcia.

As alleged in the indictment:

  • Garcia worked in the U.S. Army’s Directorate of Public Works and was involved in the solicitation, award and management of various government contracts related to projects at Camp Arifjan.
  • In or around September 2015, Garcia allegedly approached an employee of a prime contractor and offered to pay him in exchange for his assistance in steering contracts to a particular subcontractor owned by Raj, Gulf Link Venture Company.
  • Garcia allegedly told the prime contractor employee that Gulf Link would artificially inflate the cost of certain of its bid proposals, and Garcia, Gulf Link and the prime contractor employee would split the proceeds.
  • Additionally, over a period of about five years, Garcia and/or members of his immediate family allegedly received over $170,000 in wire transfers from Raj and other individuals associated with Gulf Link and another subcontractor that was bidding on work under the prime contract.

Garcia was arrested on Dec. 10, 2019, in the Philippines, where he has been residing since 2016.  Raj, who was living in Kuwait at the time of the offense, remains a fugitive.

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Army Criminal Investigation Command (CID) and Defense Criminal Investigative Service (DCIS) investigated the case.  The Fraud Section of the Justice Department’s Criminal Division is prosecuting the case.

Source: https://www.justice.gov/opa/pr/former-army-employee-charged-bribery-kickbacks-connection-scheme-steer-contracts

Filed Under: Government Contracting News Tagged With: abuse, acquisition workforce, Army, bribe, bribery, corruption, DCIS, DoD, federal contracts, gratuity, kickback

October 30, 2019 By cs

Army’s acquisition boss on artificial intelligence and the evolving procurement process

As the U.S. Army begins to replace its existing fleet with fresh platforms that will form a force capable of countering adversaries across multiple domains and theaters, the acquisition side of the house will face tough choices.
Army acquisitions chief Bruce Jette, center, receives a briefing on product improvements for cannon systems. (Photo credit: John Snyder, U.S. Army)

Defense News posed a variety of questions to Bruce Jette — Army acquisition chief — ahead of the Association of the U.S. Army’s annual conference to see what he’s thinking about when it comes to the evolution of the service’s procurement approach, including its relationship with Army Futures Command, which is tasked with modernizing the service.

A year ago you were developing a framework for how you, as the assistant secretary of the Army for acquisition, logistics and technology, would interface with Army Futures Command. How has the framework evolved?

The framework for interfacing with Army Futures Command has evolved as we’ve identified unique, shared or overlapping responsibilities among stakeholders as well as sole responsibilities for each stakeholder.

The major muscle movements are: AFC has lead responsibility in the space between concepts creation and requirements definition, bringing “unity of command” to modernization organizations previously scattered across the Army. Unique to AFC is the responsibility to create concepts for how the Army will fight, and creation of the initial materiel requirement. AFC transitions to a critical supporting role after the concept and requirement refinement milestones, and is essential in collaborative efforts during acquisition activities leading to production. There are overlapping roles of capabilities to requirements throughout the development and procurement processes.

Keep reading this article at: https://www.c4isrnet.com/show-reporter/ausa/2019/10/14/us-armys-acquisition-boss-on-artificial-intelligence-and-the-evolving-procurement-process/

Filed Under: Government Contracting News Tagged With: acquisition reform, acquisition workforce, AI, Army, Army Futures Command, artificial intelligence, procurement reform, requirements definition

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