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DoD procurement overhaul report recommendations draw both praise, critique from industry groups

The most important recommendation to come out of the third Section 809 Panel report on defense procurement reform is one that doesn’t directly relate to procurement, according to a leading industry group.

Corbin Evans, director of regulatory policy for the National Defense Industrial Association, told WashingtonExec the most crucial recommendation is for Congress to enact timely regular appropriations bills instead of continuing resolutions. Otherwise, defense acquisition will continue to suffer, regardless of what other reforms are made.

“This has been an NDIA priority for years,” he said. “It’s important to ensure that these bills are done on time and that money can be distributed in a predictable manner.”

Evans also singled out the panel’s recommendation to enable enhanced use of advanced payments at the time of contract awards to small businesses, which comprise about 75 percent of NDIA’s 1,700 members.

Keep reading this article at: https://washingtonexec.com/2019/01/section-809-report-dod-acquisition-reform/

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Fiscal 2019 could be ‘high-water mark’ of defense spending

With the defense budget enhanced and set for fiscal 2019, contractors should “enjoy the moment,” Pentagon Comptroller David Norquist told an industry audience on Monday.

In processing the newly augmented $700 billion spend that Congress delivered before the start of the fiscal year, many on his finance staff had no recollection, he said, of a time decades ago when the military wasn’t always coping with the uncertainty of multiple continuing resolutions and government shutdown threats.

“We’re in a very different place now,” he told 300 attendees at the Professional Services Council’s 54th annual Vision Federal Market Forecast conference, held in in Fairfax, Va. “Under a continuing resolution, we often had to wait until spring to do some things—now we can finalize them now or do them on schedule.”

Keep reading this article at: https://www.govexec.com/defense/2018/10/fiscal-2019-could-be-high-water-mark-defense-spending/152390

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How has federal contract spending changed over time?

DataLab, a unit operated by the U.S. Treasury Department, recently undertook an analysis of ten years of federal contract spending data.  The results are thought-provoking. 

Take a look at what they discovered when they examined the USAspending.gov database:

  • Over the past decade, federal spending on contracts increased from fiscal year 2007 through 2010, following the surge in federal funding related to the Recovery Act.  As the Recovery Act tapered off in 2011, contract spending began to decrease, which accelerated following sequestration in 2013.  By 2015, contract spending had fallen 27 percent from its 2010 peak, before rebounding slightly in the following years.
  • Seasonal trends in contract spending occur within each year.  Spending tends also rise and fall on a monthly cadence, with roughly one small peak and one small drop per month.  During the last month of the federal fiscal year — September — contract spending spikes, especially one week prior to the end of the government’s fiscal year.
  • End-of-year spikes consistently occurred across the decade, and generally followed the broad rise and fall of spending. On average, September spikes accounted for between 6-8 percent of the annual spending in a fiscal year.
  • USAspending.gov data captures two types of activity related to contracts: 1) the issuance of new contracts, and 2) modifications to existing contracts.  Splitting spending on contracts into these two categories, DataLab found that spending on new contracts tended to spike in September.  Modifications, however, displayed less variance and did not spike as drastically at the end of each fiscal year.  This suggests that new contracts — not modifications—drove the spikes at the end of each fiscal year.
  • USAspending data also captures what the government received from a contract (i.e., goods or services.) This categorization scheme, utilizing Product and Service Codes, contains almost 6,000 different categories, ranging from Dining Facility Maintenance to Buoys.  For this analysis, DataLab collapsed these 6,000 categories into seven high-level groups.  Notably, contracts classified as Facilities, Equipment, and Construction, displayed about 3.5 times the level of variance over the decade as total contract spending, and over 50 times the variance of spending on Weapons and Ammunition.  Unlike the other categories, contracts for weapons ammunition did not spike at the end of the fiscal year.

DataLab also looked at USAspending data to determine the relationship between the passage of continuing resolutions, new appropriations, and the amount of spending on contracts across the government.  Here’s what they found:

  • Continuing resolutions caused contract spending to spike in the same week, which was not observed for the passage of new appropriations. These findings cohere with qualitative research conducted by the Government Accountability Office (GAO), which noted in February 2018 that “some agency officials reported delaying contracts and application times for grants while under a [continuing resolution].” If agencies are unable to issue new contracts because adequate funds are not available under continuing resolutions, needs accumulate, and then are satisfied once funding is available.
  • Notably, DataLab found that the passage of new appropriations resulted in a statistically significant decreases in total contracts and especially on professional services contract spending. This suggests that new appropriations allow the government to engage in longer-term budgeting, potentially facilitating forward-looking spending decisions.
  • DataLab also noted that research and development spending was less variable and less impacted by continuing resolutions, suggesting that this type of service is likely to follow a distinct pattern for contract issuance from the typical cycles followed by other goods and services.  As one of the smallest categories of spending, it is possible that this type of contract is partially sheltered from the timing of congressional appropriations.
  • Other categories showed evidence of very large spikes in spending in response to congressional appropriations, such as transportation and logistic services. Further research as to why specific types of spending are more reactive to continuing resolutions would need to be done to explain why.

To see this report, including trends displayed in graphs and tables, visit: https://datalab.usaspending.gov/contracts-over-time.html

 

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Thousands of federal workers in limbo as shutdown drags on

Lawmakers on Sunday (Jan. 21) appeared far from reaching a budget compromise that would allow federal agencies to return to normal operations on Monday following a funding lapse that took effect at midnight Friday.

As Senate Majority Leader Mitch McConnell, R-Ky., put it: “This shutdown is gonna get a lot worse tomorrow.”

While Republicans and Democrats blamed each other for the standoff, the shutdown that began Saturday is the first to take place during one-party control of Congress and the White House.

The House passed a temporary funding bill on Friday along party lines that would have continued funding through Feb. 16, but that measure was rejected by the Senate where the Republicans hold a narrow majority and need 60 votes for passage. House Speaker Paul Ryan, R-Wis., said the House would accept a bill that extends funding through Feb. 8 to give lawmakers more time to reach a permanent agreement, and senators spent Sunday trying to work out a compromise. McConnell scheduled a vote for 1 a.m. Monday if Democrats wouldn’t agree to a vote sooner; by mid-afternoon the prospects appeared dim.

Keep reading this article at: http://www.govexec.com/management/2018/01/thousands-federal-workers-limbo-shutdown-drags/145351

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Navy gets savvy with contracting rules to avoid maintenance problems due to CR

The Navy is making progress on repairs it needs to make on its fleet of ships.

The service is seeing a 75 percent reduction in the days that ships are unable to be operational due to maintenance issues or repairs since 2014, said Real Adm. James Downey, deputy commander for surface warfare at the Navy Regional Maintenance Center.

“Coming through 2014, it was nearly 5,000 lost operational days, 4,900 and change,” Downey said during a Jan. 11 speech at the Surface Naval Association Conference in Arlington, Virginia. “As of November 2017, we closed out at about 1,165 lost operational days. We are still not where we need to be. The 75 percent reduction over the last three to four years is principally due to efforts put in place by my predecessors on process, on standing up various planning activities and on strategy.”

Last year, Vice Chief Naval Officer Bill Moran warned that putting off maintenance on ships is detrimental to the Navy.

Keep reading this article at: https://federalnewsradio.com/defense/2018/01/navy-is-getting-savvy-with-contracting-rules-to-avoid-maintenance-problems-due-to-cr/

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