cost savings | The Contracting Education Academy

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/

February 27, 2015 By AMK

Air Force claims $2 billion in acquisition savings from ‘should-cost’ management

The concept of “should-cost” management was a key component of the first version of the Defense Department’s Better Buying Power program when it was first rolled out almost five years ago.

But the Air Force’s top acquisition official said the idea hasn’t been forgotten: his service has used it to cut programs’ actual costs by an estimated $2 billion over the last several years, with more potential savings to come.

Should-cost is not strictly a new idea in government procurement. It’s been codified in the Federal Acquisition Regulation for decades, but it wasn’t until 2010 that the Pentagon ordered the military services to use it in all of their major acquisitions. In a nutshell, it requires program managers to set-aside the historically-based independent cost estimates that are developed for all big programs and that DoD is required to base its budgets on, and instead, manage their programs according to what they ought to cost.

Keep reading this article at: http://www.federalnewsradio.com/395/3802526/Air-Force-claims-2-billion-in-acquisition-savings-from-should-cost-management

October 23, 2014 By AMK

Contract management continues to be a challenge at Energy

Contract management at the Energy Department continues to be a significant challenge, says an Oct. 7, 2014 DOE inspector general report.

The DOE is the most contractor-dependent civilian agency in the federal government. It awards contracts, grants and other financial assistance to industrial companies, small businesses, academic institutions and nonprofit organizations.

About 90 percent of the DOE’s budget is spent through those contracting vehicles, the report says.

The Government Accountability Office has included the DOE on it’s high-risk list since 1990 because of inadequate contract oversight.

Keep reading this article at: http://www.fiercegovernment.com/story/doe-oig-contract-management-continues-be-challenge-doe/2014-10-13

June 3, 2014 By AMK

Feds could save $20 billion with better IT infrastructure initiatives, study finds

Perhaps data center consolidation, virtualization, cloud computing, remote access and infrastructure diversification aren’t the sexiest terms in the federal repertoire, but they do hold the keys to as much as $20 billion in annual savings, according to a study by Meritalk.

The study, underwritten by Brocade, is based on survey results from 300 federal network managers who estimate that if the government were to fully leverage all five initiatives, it could save about 24 percent of the government’s $80 billion information technology budget.

The survey’s results sound promising, but there’s a caveat: Two-thirds of the surveyed network managers reported their networks are ill-equipped to meet current mission needs, and much further away from being able to fully embrace newer tech initiatives like cloud computing. If network managers could magically flip a switch and significantly increase network speed by approximately 26 percent, the survey claims the government could cash in $11 billion in savings in one year.

Keep reading this article at: http://www.nextgov.com/cloud-computing/2014/05/feds-could-save-20-billion-better-it-infrastructure-initiatives-study-finds/84925

January 15, 2014 By AMK

GSA’s Networx contracts not as effective as they might have been

Although GSA officials say the agency’s Networx contracting vehicles have put significant dents in the federal government’s telecommunications bills, a GAO study says the road to those savings wasn’t nearly as smooth as it could have been.

The Government Accountability Office said complex acquisition processes and weaknesses in project planning contributed to delays transitioning to Networx from the GSA’s old FTS2001 contracts, resulting in cost increases and missed savings for federal users.

According to the GAO study, under Networx, federal agencies tended to transition easier items first to demonstrate progress, before they turned to work on items such as data networks and international services that needed longer lead times. As a result of the delays, it said, GSA’s estimated cost to complete the transition increased by $66.4 million, 44 percent over the baseline estimate.

Keep reading this article at: http://fcw.com/articles/2014/01/07/gao-networx-study.aspx

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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