The Contracting Education Academy

Contracting Academy Logo
  • Home
  • Training & Education
  • Services
  • Contact Us
You are here: Home / Archives for business systems

March 17, 2017 By AMK

DCMA’s capability working groups help streamline business processes

Thirteen working groups have been implemented and kicked off under the Defense Contract Management Agency’s Business Capabilities Framework initiative.

According to the capability framework’s website, “DCMA’s capability framework is a set of high level contract management functions that underpin the agency’s strategic plan and capture the results of the daily, multi-functional activities of our personnel in order to provide actionable insight to the Defense Acquisition Enterprise.”

Pam Sutton, the director of the Strategic Analysis Division, said the initiative will allow everyone across the agency to communicate with a similar message the value of DCMA’s mission of providing acquisition insight and oversight.

“We wanted a means to communicate to the undersecretary of defense for acquisition, technology and logistics, and to the Department of Defense as a whole, the value that DCMA brings to the department and communicate in dollars the return on investment,” said Sutton, whose team is responsible for providing support by helping the capability working groups achieve their goals.

One of the major milestones each group is tasked with is to separate policy from procedure, with an emphasis on producing agency manuals and streamlining policies in their respective area to make sure everyone around the agency follows the same guidelines.

The five primary capability working groups include: Product Acceptance and Proper Payment; Indirect Cost Control; Contractor Effectiveness; Negotiation Intelligence; and Contract Maintenance. The three integrating working groups include: Program Support; Corporate Assessment; and Mission Assurance and Industrial Base Viability Assessment. The five enabling working groups include: Facilities Management; Talent Management and Skills Development; Stewardship; Information Technology Management; and Planning and Programming.

Primary Focus: Administering Contracts

The primary groups focus on administering existing or future contracts, while the integrating groups will take the information gleaned from the primary groups, analyzing and repackaging the data to help the agency’s other stakeholders, especially its customers. The enabling working groups were established to provide support to DCMA’s workforce so employees can do their jobs even better.

“Employees from around the agency are a part of these working groups,” said Sutton. “Each working group is comprised of employees from various job series and different grade levels because we wanted to make sure each group was integrated and multifaceted, just as the capabilities are. These groups are purposefully designed to have different specialists working together to problem solve and create better solutions.”

Each working group is led by a manager with two team leaders who reached out to the regions and contract management offices for volunteers to serve on the team. All of the working groups have met and are in the process of working to achieve a set of five milestones. The groups choose how often they meet and can meet face to face or via teleconference or videoconference. There isn’t a minimum or maximum number of employees who can participate in a group.

“This is a great opportunity to participate in creating a framework to make the agency even better,” said Sutton.

Technology Interests Represented

In addition, an IT representative serves on each team.

“It’s important to have someone from IT on each working group to help build a business architecture and provide expertise such as document flow and making sure the data is accurate,” said Sutton.

Sutton said the managers and team leaders meet every Thursday with Marie Greening, DCMA’s chief operations officer, on the status of their group and to discuss topics that affect all of the teams, such as risk assessment. She said she has already started receiving positive feedback about the new working groups.

“People are beginning to understand the benefit of using the capability framework,” said Sutton. “By working in an integrated manner, this will help us to get to one team, one voice.”

Nathan Scoggin, director of the Enterprise Performance Advocacy Division in the Technical Directorate, is a co-team leader with Seay Anne Sheley, the director of the Corporate/Divisional Administrative Contracting Officer Group in the Cost and Pricing Center, for the Indirect Cost Control group. They met with their working group for three days in February at Fort Lee to establish baseline goals and start working on a strategic gap analysis. The group’s capability manager is Tim Callahan, the Contract Directorate’s executive director.

Cost Savings Linked to Suppliers’ Indirect Costs

“It was critical to pull everyone together to establish a working relationship and a capability baseline,” said Scoggin. “Indirect Cost Control offers the Department of Defense an opportunity to realize substantial cost savings by ensuring the supplier’s indirect costs accurately reflect their projected business base and allowable expenses per the Federal Acquisition Regulation. This area has been emphasized by (the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics) in the Better Buying Power initiative.”

Scoggin said the working group accomplished a lot during the initial meeting.

“We are coordinating a holistic approach to documenting instructions, processes and procedures as agency doctrine,” Scoggin explained. “The working group collaborated on defining Indirect Cost Control and split into smaller groups to optimize the interaction of members. We analyzed existing agency instructions, reviewed draft instructions created by the Integrated Policy Office, and collected data on the activities, processes and tasks for alignment with personnel roles. There was also the identification of areas that presented opportunities for a return on investment, which created a baseline for estimates of the agency’s direct impact in this critical area.

“The level of interest from the field and the eagerness of the participants to help advance the agency’s ICC capability was gratifying,” added Scoggin. “This solid foundation will be critical to our work ahead.”

Jose Ortiz, who is a systems engineer on the Integrated Cost Analysis Team at DCMA Lockheed Martin Denver, said he is excited about participating on the ICC working group. His skillset is in technical analysis, including Forward Rate Pricing Proposals and Cost Estimating Relationships.

“Indirect Cost Control is a key component in the dynamic business world we live in,” he said. “DCMA has an advantage by establishing a team that genuinely knows the processes involved in Indirect Cost Control and can use that knowledge and experience to improve the way business is performed.

“Our initial meeting was significant because of the different skillsets that were represented by each of the attendees,” he added. “This is a great opportunity to work as a change agent in DCMA and a learning experience for everybody in the group. I will use what I learned from this group to orient my peers on the significance that Indirect Cost Control has for the agency and the initiatives that are currently in place or are being set up.”

Read more about the Business Capabilities Framework on DCMA 360 (login required) at https://360.dcma.mil/directorate/PH-DC/DCA/BCF/SitePages/Home.aspx

Source: http://www.dcma.mil/News/Article-View/Article/1106563/dcmas-capability-working-groups-help-streamline-business-processes/

Filed Under: Government Contracting News Tagged With: business systems, contract administration, contract management, cost savings, DCMA, indirect costs, integrated product team, IPT, technology

September 18, 2015 By AMK

United Technologies in Pentagon’s penalty box on business systems

The Pentagon often feuds with defense contractors about billion-dollar weapons that are over budget or underperforming. But it also holds back millions of dollars over flaws in everyday business systems.

United Technologies Corp. tops the most recent target list of 15 companies whose payments are being withheld for inadequate systems to manage subcontractor purchases, estimate costs or keep track of schedules.

DCMAAs of Aug. 12, the Defense Contract Management Agency was holding back almost $180 million in billings, or as much as 5 percent, from the company’s two military units. That’s up from $130 million in May.

The recent total includes $123.4 million from Sikorsky Aircraft — the helicopter maker that United Technologies has agreed to sell to Lockheed Martin Corp. — and $56.1 million from the Pratt & Whitney engine unit.

The withholdings signal steady Pentagon enforcement of a three-year-old regulation calling for contractor compliance with six internal systems that the government says are necessary to measure a company’s progress in meeting cost and schedule goals for weapons contracts.

Keep reading this article at: http://www.bloomberg.com/news/articles/2015-09-08/united-technologies-in-pentagon-penalty-box-on-business-systems

Filed Under: Government Contracting News Tagged With: business systems, DCMA, DoD, internal control, Pentagon

December 6, 2010 By AMK

Defense revises rule on contractor business systems

The Defense Department has revised a controversial rule issued early this year on withholding payments from contractors that fail to maintain adequate controls against waste, fraud and abuse.

On Friday, the department published in the Federal Register an amended change to the Defense Acquisition Regulations System that clarifies how federal officials will determine when contractor business systems are deficient.

The rule — the Pentagon’s second crack at developing industry standards for business systems — also lowers the amount of money contracting officials can withhold when documented problems are not corrected.

“Contractor business systems and internal controls are the first line of defense against waste, fraud and abuse,” the modified rule stated. “Weak control systems increase the risk of unallowable and unreasonable costs on government contracts.”

Defense published its draft rule on Jan. 15. During the following two months, the department received 370 comments from 25 respondents. Most of the feedback came from industry officials, who criticized the plan as short-sighted, ill-defined and unnecessarily burdensome.

“Despite a laudable goal of seeking to establish uniform criteria for what constitutes an acceptable business system, the rule falls short of that goal,” wrote the Professional Services Council, a trade association. “It creates more complicated procedures than are necessary to incentivize contractors to ensure that key business systems are ‘acceptable,’ imposes significant burdens on small and midtier businesses doing business with DoD, and introduces mandatory withholds of contractor funds that could easily be disproportionate to the goals to be achieved or to the government’s risk.”

The Pentagon addressed many of industry’s concerns in its revised proposal, offering more specific standards for contractors’ business and accounting systems. Deficiencies in the systems must relate to potential risks to the government, according to Friday’s rule. Critics had complained that in the original proposal, business systems could be judged deficient for reasons that would not put the government at risk of waste or abuse.

“The intent of the rule is to withhold payments when a deficiency exists that impairs the government’s ability to rely on the system’s outputs,” the rule stated. “A system must provide reasonable assurance that the relevant system criteria are satisfied and that the risk of material misstatements caused by error or fraud is low.”

Arguably more significant, the new rule reduces the amount that contracting officers can withhold from firms from 10 percent to 5 percent, or 2 percent for small businesses. If the contractor submits a corrective action plan within 45 days of a noted deficiency, the department will withhold only 2 percent, or 1 percent for small firms. This is down from the original proposal of 5 percent.

For companies with defects in multiple business systems, the cumulative percentage of payments that can be withheld is 20 percent, or 10 percent for small firms. The original proposal set the threshold at 50 percent. The new rule also eliminates a clause that would allow the government to withhold all payments for deficiencies deemed “highly likely to lead to improper contract payments being made,” or problems representing “an unacceptable risk of loss to the government.”

Officials did not attempt to calculate how many small business contractors are expected to be affected by the rule change. But based on several financial triggers and thresholds outlined in the notice, the proposal will generally affect midsize and large firms.

Alan Chvotkin, PSC’s executive vice president and counsel, said he is more comfortable with the revised plan, but that it’s too soon to give his approval. “Substantial improvements have been made,” Chvotkin said. “But, it’s going to take some time to evaluate.”

The rule would provide contracting officers with the authority to withhold payments on cost reimbursement, incentive-type, time and materials, and labor-hour pacts. They also could do so on contracts that provide progress payments based on costs or on a percentage or stage of completion.

A clause would be added to contracts requiring firms to certify that they have no major defects in their systems for accounting; purchasing; estimating; and property, earned value and material management. Auditors from the Defense Contract Audit Agency and other functional specialists would be charged with documenting the business system deficiencies.

The contracting officer and the auditor must approve any corrections to business systems, according to the notice.

Comments on the proposed rule will be accepted until Jan. 3, 2011, and can be e-mailed to dfars@osd.mil with DFARS Case 2009-D038 in the subject line. Comments also can be mailed to:

Defense Acquisition Regulations System
Attn: Mark Gomersall, OUSD (AT&L)DPAP/DARS
Room 3B855, 3060 Defense Pentagon
Washington, D.C. 20301-3060

-by Robert Brodsky – GovExec.com – December 6, 2010

Filed Under: Government Contracting News Tagged With: business systems, DCAA, DFARS, DoD, fraud

Popular Topics

abuse acquisition reform acquisition strategy acquisition training acquisition workforce Air Force Army AT&L bid protest budget budget cuts competition cybersecurity DAU DFARS DHS DoD DOJ FAR fraud GAO Georgia Tech GSA GSA Schedule GSA Schedules IG industrial base information technology innovation IT Justice Dept. Navy NDAA OFPP OMB OTA Pentagon procurement reform protest SBA sequestration small business spending technology VA
Contracting Academy Logo
75 Fifth Street, NW, Suite 300
Atlanta, GA 30308
info@ContractingAcademy.gatech.edu
Phone: 404-894-6109
Fax: 404-410-6885

RSS Twitter

Search this Website

Copyright © 2023 · Georgia Tech - Enterprise Innovation Institute