Cost Savings | The Contracting Education Academy

January 24, 2018 By cs

Government would function better if IGs and Congress worked together

Since fiscal 2015, the federal government’s 73 inspectors general have identified $87 billion in potential savings that could be realized if agencies eliminated questionable expenditures and made more efficient use of federal funds.

While agencies have adopted many of these findings and addressed issues of waste, fraud and abuse revealed in IG audits and investigations, thousands of recommendations issued every year are not implemented.

The Health and Human Services Department’s inspector general, for example, is tracking more than 1,200 open recommendations. As of May 2017, the HHS IG’s open recommendations included reducing tens of millions of dollars in Medicaid and home health care fraud; protecting Medicare beneficiaries from opioid addiction that cost the Part D drug program in excess of $4 billion in 2015; and clamping down on millions of dollars in improper payments to a child care and development fund.

Keep reading this article at: http://www.govexec.com/excellence/promising-practices/2018/01/government-would-function-better-if-igs-and-congress-worked-together/145185

August 7, 2017 By cs

Federal acquisition shops shouldn’t wait for direction

The next few years may bring significant challenges for federal acquisition organizations. While most agencies will complete the fiscal year 2017 contracting cycle without facing major upheavals, fiscal year 2018 may bring the beginning of a sea change for acquisition and federal agencies at large.

As signaled by the Office of Management and Budget Memo 17-22, “Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce,” OMB is calling for agencies to take a wholesale look at their performance, cut costs and prioritize programs. As agencies strive to minimize the impact to their mission, support functions will be under the microscope, especially acquisition.

Acquisition organizations will necessarily be on the front line of supporting this efficiency push. Lower budgets and shifting policy goals will mean mission delivery will be even more reliant on acquisition professionals’ abilities to get flexible and high-quality goods and services at the best cost. OMB M-17-22 specifically calls on agencies to consider governmentwide contracts for common goods and services and to avoid redundant contracting actions. Additionally, the memo calls on agencies to investigate external providers or outsource when the total cost would be lower.

Keep reading this article at: https://fcw.com/articles/2017/07/28/comment-acquisition.aspx

July 19, 2017 By cs

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

April 6, 2017 By cs

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/

March 17, 2017 By cs

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/