Cost And Pricing | The Contracting Education Academy

January 4, 2018 By AMK

The 2018 NDAA in detail

On Tuesday, December 12, 2017, President Trump signed the fiscal year 2018 (FY18) National Defense Authorization Act (NDAA) into law (Pub. L. 115-91).

An annual defense policy bill, the NDAA is a critical piece of legislation for the contracting community because it provides the funding authority for programs and activities of the Department of Defense (DoD), the largest procurer of goods and services within the US government.

In addition, the NDAA is a vehicle for encouraging in some cases, and requiring in others, changes to both DoD and government-wide procurement practices. As the NDAA moved through the legislative process, Dentons and other commentators analyzed proposed provisions, some of which were adopted as written or in a revised form, and many of which were not included in the final bill.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/658624

August 1, 2016 By AMK

IG: GSA wastes millions due to pricing problems in computer resale program

Despite years of efforts to streamline multiple award schedules used by information technology resellers, the General Services Administration (GSA) has been offering many identical items at varying prices, said an inspector general’s report released last week.

“GSA’s ability to obtain competitive, market-based prices may be impaired when IT schedule resellers have no/low commercial sales and when the Price Reductions clause is modified to exclude certain sales,” the report said, warning of “millions of dollars in unnecessary costs to the government.”

IT resellers typically buy computers and software in bulk and then add value through customization before selling the adopted product to agencies or commercial customers.

Keep reading this article at: http://www.govexec.com/management/2016/07/ig-gsa-wastes-millions-due-pricing-problems-computer-resale-program/130191

June 23, 2016 By AMK

OMB issues guidance applying ‘category management’ strategy to software purchasing

The Office of Management and Budget (OMB) has issued another in a series of information technology (IT) policies to make the acquisition and management of common IT goods and services more efficient and save taxpayer dollars.

omb OMB’s new policy is another step toward leveraging better pricing from the $8 billion government agencies spend annually on PCs, software licenses, and mobile devices. In the past eight months, OMB issued policies on federal contracting for on workstations and mobile services.

Through more efficient “category management” buying practices, OMB reports that nearly $2 billion in savings have been realized since 2009 and the prices for laptop computers have dropped by as much as 50 percent. In addition, 700 duplicative professional services contracts have been eliminated.

The latest policy policy calls for agencies to move to a more centralized and collaborative software management approach. Agencies are required to appoint a software manager to: 1) centrally manage software buys and reduce underutilization, 2) maintain a continual inventory of software licenses and better track usage, 3) consolidate redundant applications, and 4) maximize the use of best-in-class solutions.

Moreover, OMB’s latest policy directive charges the Enterprise Software Category Team (ESCT) — a cross-governmental, cross-functional team of senior IT and acquisition professionals — to lead an effort and help break down silos in government IT acquisition actions to foster centralization and greater transparency. Specifically, the ESCT is to drive and monitor the development of government-wide software strategies, such as increasing the number and use of government-wide software agreements and improving software license management practices.

Access the new OMB policy here: https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-12_1.pdf.

June 15, 2016 By AMK

How DoD is bettering its commercial pricing practices

The Defense Department (DoD) is spending a lot of time trying to figure out how it can speed up its acquisition process while saving money too.

DCMA One method DoD is constantly working on is how it buys commercial items. It spends about $60 billion a year on items that are sold in the private sector.

But, determining what is considered a commercial item and how much that commercial item should cost can get tricky.

That’s where the Defense Contract Management Agency’s new Cost and Pricing Centers come into play.

First started as a pilot program back in 2013, the Congressionally mandated centers are set to be fully staffed this June.

Keep reading this article at: http://federalnewsradio.com/acquisition-policy/2016/05/dod-bettering-commercial-pricing-practices/

November 17, 2015 By AMK

Securing the future by ‘Bending the Cost Curve’

Bending the Cost Curve (BTCC), one of the 13-Make-Every-Dollar-Count cost initiatives launched by the Air Force, includes a growing and evolving set of more than 20 acquisition reform activities. These activities are focused on finding ways the Air Force can be more effective at how it spends money to get better capabilities to the warfighter faster.

“BTCC is coming up with ideas with industry, then going out and trying those ideas to see if we can actually drive down cost, increase capability and get it delivered faster,” said Dr. Camron Gorguinpour, the director of the Air Force Transformational Innovation Office, Air Force Office of Acquisitions. “Everything we do with BTCC is in collaboration with industry. (They are) a big part of the solution, so working closely with them helps us come up with better ideas of things that we should be doing.”

One program, Open Systems Acquisition, has reached a level of success. The concept is to move Air Force weapons systems toward a more open architecture, allowing traditional and non-traditional industry partners more flexibility for future improvements.

“Basically, OSA is a plug and play type of model. You have a system that anyone can understand and plug into if they develop a product that complies within certain requirements,” Gorguinpour said. “That way one company can create a system, but down the road, when you need a new capability, another company can create the new part and it can be changed out without a huge contracting action.

“This new open architecture environment will allow us to rapidly change out capabilities, to compete to a very broad segment of industry and be able to build on certain designs rather than having just one fixed product.”

As part of this program, the Air Force Research Laboratory created its own acquisition vehicle tailored to the new OSA model. With this new system, it will take only three weeks from the time companies demonstrate their capabilities to the time the winner is funded and doing work.

“This is getting us closer to the point of where you can acquire at the pace of global innovation,” Gorguinpour said. “There is definitely a lot more work to be done to smooth out the process for everyone to use, but we are getting it closer to being a reality.”

Thinking outside of the box and in the spirit of innovation, the Air Force launched the largest cash prizes ever conducted by one of the military services called Air Force Prize — worth $2 million to the entity that can produce a lightweight, mid-sized turbine engine.

“Turbine engines are important, especially if it can be installed into a smaller vehicle, the engine can double the fuel efficiency and improve the lifecycle cost,” Gorguinpour said. “The opportunity to win the cash prize started in May and companies will have two years to provide a product.”

Also included in BTCC is the Cost Capability Analysis program that would create better transparency by providing more awareness of Air Force requirements to industry to reduce the costs and development times for Air Force systems.

“When buying something as simple as a computer, you can see where a small increase of speed or memory is going to dramatically increase the cost,” Gorguinpour said. “So you need to find the optimal setting for your requirement. Because of BTCC, the Air Force is working with industry early in the acquisition process to refine what the requirements should be.”

The Air Force is looking to provide more tools to help navigate the complex acquisition process with AQ Prime, a beta website powered by a learning computer with the knowledge of the federal acquisition regulation. This website will serve as a resource for businesses not used to working with the military, as well as the public, an easy way to understand the complex government regulation.

“Even if we do the best job at streamlining bureaucracy, the fact is that it is going to be complicated because the work we do is incredibly complex,” Gorguinpour said. “We not only need to streamline the process, but also give people the right tools to navigate this better.”

BTCC activities will continue to improve the internal Air Force acquisition process, enhance interactions with industry throughout the acquisition lifecycle, and expand competition among traditional and non-traditional industry partners.

Source: http://www.af.mil/News/ArticleDisplay/tabid/223/Article/627140/securing-the-future-by-bending-the-cost-curve.aspx

On Tuesday, December 12, 2017, President Trump signed the fiscal year 2018 (FY18) National Defense Authorization Act (NDAA) into law (Pub. L. 115-91).

Despite years of efforts to streamline multiple award schedules used by information technology resellers, the General Services Administration (GSA) has been offering many identical items at varying prices, said an inspector general’s report released last week.

The Office of Management and Budget (OMB) has issued another in a series of information technology (IT) policies to make the acquisition and management of common IT goods and services more efficient and save taxpayer dollars.

The Defense Department (DoD) is spending a lot of time trying to figure out how it can speed up its acquisition process while saving money too.

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