cost overrun | The Contracting Education Academy

March 14, 2016 By AMK

White House would curb contracting waste with innovation labs

The Obama administration is rolling out a new weapon in the perennial battle against contract cost overruns and agencies taking delivery of instantly obsolete software.

Acquisition Innovation Labs, as announced last Wednesday by U.S. Chief Acquisition Officer Anne Rung, will “provide a pathway to test and implement more innovative approaches to acquisitions, with a strong emphasis on improving IT investments.”

Under the plan, each agency will appoint acquisition innovation advocates (AIAs) to promote testing of new ideas and better ways of executing existing practices in their agencies through managed risk-taking. Agencies will set up innovation labs “to promote meaningful collaboration through an integrated product team,” Rung said, and will participate in a new AIA Council to maximize collaboration across the government as well as share best practices and lessons learned.

Keep reading this article at: http://m.govexec.com/contracting/2016/03/white-house-would-curb-contracting-waste-innovation-labs/126578

March 31, 2015 By AMK

House committee unveils DoD procurement reform bill

The House Armed Services Committee released a highly anticipated bill that is meant to streamline the Defense Department’s acquisition process and better train it’s procurement officers.

The legislation would focus on four areas of the acquisition process: workforce training, chain of command, streamlining reporting requirements and overall acquisition strategy.

“More than being monetarily wasteful, dysfunction in the acquisition process is sapping America’s technological edge and robbing our military of agility in the face of multiplying threats,” says Rep. Mac Thornberry (R-Texas) in a joint statement with committee ranking member Rep. Adam Smith (D-Wash.).

Thornberry went on to say the DoD’s acquisition system is slow and cumbersome and that it delivers “vital equipment years late that underperforms and is difficult and costly to maintain.”

The legislation (H.R.1597) would require procurement officers to be trained in the commercial market to close the knowledge gap between government and industry. It would also require ethics training specifically aimed at the acquisition process.

Keep reading this article at: http://www.fiercegovernment.com/story/hasc-unveils-dod-procurement-reform-bill/2015-03-30

Also see: http://www.govexec.com/defense/2015/03/house-defense-acquisition-reform-plan-seen-step-right-direction/108655/

March 30, 2015 By AMK

Pentagon: The cost of major weapon systems are finally coming down

More than four years since Ashton Carter took on reforming Pentagon acquisition, the cost of the largest arms projects is beginning to stabilize, defense officials say.

Costs among the Defense Department’s largest arms programs are beginning to stabilize after years of overruns, a recent trend that Pentagon officials say is the result of an improvement project launched by now-Defense Secretary Ashton Carter more than four years ago.

Nearly 70 percent of the Pentagon’s 80 major procurement projects – valued at $1.6 trillion – are performing better than anticipated, and in many cases, have reduced costs compared to one year ago, said one senior Pentagon official who was not authorized to speak publicly.

“I think this is a good example compared to last year and then I think you’ll see it again,” the official said.

Costs are down because the military services have become more realistic when laying out schedules and funding for projects, according to the official. They are also doing a better job of making sure projects fit in long-term budget plans.

Keep reading this article at: http://www.defenseone.com/management/2015/03/pentagon-cost-major-weapons-systems-are-finally-coming-down/108000/

September 24, 2013 By AMK

Trillion dollar government acquisition called ‘national scandal’

Days after the U.S. Defense Department signaled an improving relationship with Lockheed Martin Corp. over the cost of the F-35 fighter jet, Sen. John McCain called the program “one of the great national scandals.”

McCain, a Republican from Arizona and the 2008 Republican presidential candidate, was speaking during a Senate Armed Services Committee hearing to consider the nominations of several White House appointments, including Deborah Lee James to become the next secretary of the Air Force.

McCain criticized the F-35 Joint Strike Fighter as the government’s first trillion-dollar acquisition program (including sustainment costs). Its repeated cost overruns “have made it worse than a disgrace,” he said. Despite recent efforts to reduce prices on the next batch of aircraft, “it’s still one of the great, national scandals that we have ever had, as far as the expenditure of taxpayers’ dollars are concerned,” he said.

McCain, who also noted that the Navy’s new USS Gerald R. Ford aircraft carrier is more than $2 billion over budget, was responding to James’ comment that the current budget environment is “chaotic” and makes planning difficult.

Keep reading this article at: http://www.dodbuzz.com/2013/09/19/mccain-f-35-among-the-great-national-scandals/

August 1, 2013 By AMK

DoD report shows no cost difference when using cost-plus or fixed-price contracts

The first annual Defense Department acquisition report shows there is no statistical correlation between rise in cost of schedule or cost growth and the cost-plus or fixed-price contract types.

Between 1970 and 2011, fixed-price contracts did not exhibit a significantly different cost growth than cost-reimbursable contracts, the June 28 report says.

During the same period, data shows that there is no significant difference in between cost-reimbursable and fixed-price contracts with respect to schedule growth on development contracts, the report says.

Keep reading this article at: http://www.fiercegovernment.com/story/dod-report-shows-no-cost-difference-when-using-cost-plus-or-fixed-price-con/2013-07-11

The Obama administration is rolling out a new weapon in the perennial battle against contract cost overruns and agencies taking delivery of instantly obsolete software.

More than four years since Ashton Carter took on reforming Pentagon acquisition, the cost of the largest arms projects is beginning to stabilize, defense officials say.

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