Budget Cuts | The Contracting Education Academy

August 15, 2017 By AMK

Agencies can deliver better results for less money by using outcome-based contracting model

As the Trump administration continues to set its agenda for the federal government, it is emphasizing accountability, efficiency and tangible results. The message is clear: agencies must deliver better results with fewer resources.

With budget cuts, hiring freezes and greater scrutiny of program funding, we need a fundamental shift in the way agencies acquire services and deliver on their missions to citizens. Outcomes-based contracting, which promotes a tight collaboration between agencies and their contractors, is a natural fit for this environment. With the administration’s business-centric approach to problem-solving, it would make sense for agencies to tie contractors’ compensation to their ability to deliver defined program outcomes.

The Opportunity

In an outcomes-based contracting model, companies are paid for the results they deliver. It’s an approach that has already gained popularity within the technology industry, so much so that Gartner predicts that by 2018, one-third of all IT contracts will be based on program outcomes, replacing traditional cost-plus contracts that pay based on the completion of individual tasks or activities.

Outcomes-based contracting has enormous potential beyond IT procurements. Amid growing skepticism about the effective implementation of both large and small public programs, outcomes-based contracts help to ensure that agencies are good stewards of taxpayer funds by directly aligning contractor compensation with program goals.

Keep reading this article at: http://www.govexec.com/excellence/promising-practices/2017/07/how-agencies-can-deliver-better-results-less-money/139756

August 7, 2017 By AMK

Contract protests up, contract awards down — what to do?

Recent data indicates that protests have increased overall by approximately 17 percent since 2012, exceeded only by the decrease in government contract spending over that same time.

The resulting increase in pre-award costs derived from protests for all parties concerned requires a step back to analyze what is driving this not-so-encouraging trend, and what, if anything, should be done about it.

Most involved in government contracting today understand the recent trends of a declining overall market. Topping out at almost $600 billion a few years ago, the current federal budget has been squeezed by such things as the Budget Control Act of 2011, automatic budget sequestration, mandatory cuts, spending caps, and overall drawdown of U.S. military operations worldwide. Contractors are now competing for ever fewer dollars, as the government’s “mandatory” spending — in areas such as healthcare and retirement — continues to shrink the “discretionary” dollars available for everything else. This has resulted in many contractors leaving the federal market, either through mergers or simply going out of business, or diversifying into other business lines.

Keep reading this commentary at: http://www.federaltimes.com/opinions/2017/07/25/contract-protests-up-contract-awards-down-what-to-do-commentary/

July 19, 2017 By AMK

Is momentum building for another round of BRAC?

First it was Senate Armed Services Chairman John McCain, R-Ariz. Then came the drafters of President Trump’s fiscal 2018 budget request. Now it’s an ideologically diverse roster of think tank defense specialists urging a long-reluctant Congress to grab some savings by reviving the dreaded Base Closure and Realignment Commission (BRAC).

Last week, the House and Senate Armed Services panels received a letter from 45 notables — among them Gordon Adams of the Stimson Center, Michèle Flournoy of the Center for a New American Security, Derek Chollet of the German Marshall Fund, Brandon Arnold of the National Taxpayers Union, William Hartung of the Center for International Policy, Michael O’Hanlon of the Brookings Institution and Christopher Preble of the Cato Institute.

“Today, the first four BRAC rounds together are producing annual recurring savings of around $7 billion,” they wrote. “Even the much-criticized 2005 BRAC — which focused mostly on realignment of functions at existing facilities, and closed far fewer bases than in preceding rounds — is producing nearly $5 billion in annual savings.”

keep reading this article at: http://www.govexec.com/defense/2017/06/momentum-building-another-round-brac/138824

May 26, 2017 By AMK

Tight budgets bring a silver lining

For years, the question of when the government might return to “regular order” – that is, a “normal” process in which appropriations are essentially completed by the end of September — has been a prominent one.

Agency leaders, industry, and others, have continually and appropriately harped on the deleterious impacts of the funding yo-yo that has dominated the scene for far too long.

And if there was one thing many hoped for as a result of having one party in control of both the White House and Congress, it was a return to regular order.

Well, it’s probably not going to happen. As virtually all recent reports have indicated, the budget debate within the parties, let alone between the parties, remains fierce and the chances of getting a full year fiscal 2018 funding bill by Sept. 30th are slim indeed.

President Trump’s budget blueprint – the “skinny budget” — generated plenty of debate; the release of his full proposed budget will only turn up the heat further. No  budget resolutions have yet been proposed, let alone passed, and no spending instructions given to the appropriations committees.

Keep reading this article at: https://washingtontechnology.com/articles/2017/05/22/insights-soloway-budget-silverlining.aspx

April 6, 2017 By AMK

GAO: DoD boosted its ‘buying power’ by $10.7 billion in 2016

The media and Congress are quick to point out instances in which Pentagon procurement has gone drastically awry, and rightly so, since it’s public money at stake. But it’s also worth pointing out glimmers of progress when we see them.

**Better Buying Power (BBP) is based on the principle that continuous improvement is the best approach to improving the performance of the defense acquisition enterprise.**

In its annual assessment of Department of Defense (DoD) major weapons systems, the Government Accountability Office (GAO) calculated last week that over the past year, the department has seen a $10.7 billion increase in its “buying power” — GAO’s term for the amount of goods or services the department’s able to buy with a given amount of money, even after adjusting for increases or decreases in the number of items within a certain procurement line.

In fact, there are several data points in GAO’s analysis of DoD’s 2016 weapons portfolio that seem to undercut the narrative that weapons costs are out of control, a picture painted as recently as last week by Sen. John McCain (R-Ariz.), the chairman of the Senate Armed Services Committee, who claimed that the Pentagon has “done nothing but resist” Congress’s efforts to control cost growth.

As we reported in some detail last month, DoD’s own analyses show that cost growth is now at its lowest level since 1985 (3.5 percent as of 2015), and it’s been steadily declining since right around the time the department introduced a series of internal reform initiatives known as Better Buying Power.

Keep reading this article at: http://federalnewsradio.com/dod-reporters-notebook-jared-serbu/2017/04/gao-finds-dod-boosted-buying-power-10-7-billion-2016/

As the Trump administration continues to set its agenda for the federal government, it is emphasizing accountability, efficiency and tangible results. The message is clear: agencies must deliver better results with fewer resources.

The Opportunity

Recent data indicates that protests have increased overall by approximately 17 percent since 2012, exceeded only by the decrease in government contract spending over that same time.

For years, the question of when the government might return to “regular order” – that is, a “normal” process in which appropriations are essentially completed by the end of September — has been a prominent one.

The media and Congress are quick to point out instances in which Pentagon procurement has gone drastically awry, and rightly so, since it’s public money at stake. But it’s also worth pointing out glimmers of progress when we see them.

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