Navy officials said they are aiming to deploy the new system for training in fiscal 2014, with full operation by 2015. The service is seeking a commercial system that is ready to go “out of the box.” DCMA said it too wants to acquire a commercial contract writing system, which will “improve efficiency, reduce procurement process times, and increase data accuracy.”
In recent months there has been no shortage of comparisons between the budget reductions of the 1980s and 1990s and the likely impacts of the current draw-down. While some of the comparisons are instructive, there also are important lessons that can be drawn from the previous declines that could be tools to drive new thinking and help avoid the mistakes of the past. Unfortunately, in some very key areas there is little evidence that those lessons are being widely heeded.
Specifically, during the last significant budget battle in the 1990s, the Defense Department, in the aftermath of the Cold War, reduced its total physical and personnel infrastructure by about one-third. In fact, according to the Government Accountability Office, 98 percent of all federal workforce reductions during the 1990s took place at DOD. Further, those reductions were taken on an almost linear basis—almost all functional areas were affected at a similar rate, including acquisition.
At the time, one key part of my portfolio at DOD was the acquisition workforce, which at DOD includes not just contracting but also program management, systems engineering, and a range of other high-end skills. We fought long and hard to prevent the Congress from imposing massive, arbitrary, across-the-board acquisition workforce reductions. Yet, even as we fought against immediate cataclysmic cuts, we nonetheless drove sizable reductions in that workforce on our own.
In so doing, we failed to fully account for the already evident and growing demographic imbalance in the workforce and for the fact that, despite the budget reductions, the department’s acquisition and technical needs were growing due to the technology revolution and DOD’s evolving mission requirements. As a result, more than a decade later, DOD finds itself facing greater workforce challenges than should be the case, as evidenced by the corrective action plan in former Defense Secretary Robert Gates’ 2009 workforce initiative. And within the civilian agencies, where attention to the acquisition (and broad technology) workforce is a more recent phenomenon, the problems are equally, if not more, acute.
Therein lies a critical lesson that we can learn from, but don’t appear ready to do so. The president’s budget request includes significant increases in positions and funding for the Defense Contract Audit Agency, Defense Contract Management Agency, and the Wage and Hour Division of the Labor Department (which enforces the Service Contract and Davis Bacon acts, among other things).
While these increases may well be needed, it is notable that these are all post-award, oversight organizations. Beyond significant but still limited funding to continue the defense acquisition workforce development fund, the budget has little in the way of meaningful proposals to increase other, critical operational and business skills in civilian agency acquisition and the broader technology fields so essential to the government’s ability to innovate and drive higher performance.
Although we haven’t yet seen the Republican budget proposal, it is unlikely that it will place more emphasis on developing critical skills in the federal workforce and may well go in the other direction.
But, even more importantly, there are no serious proposals on the table today to address the challenges current federal personnel rules and policies create for the government when it is competing for talent. It remains incredibly difficult within government to selectively hire, train, compensate, develop and manage personnel with especially necessary skills. Such strategies are commonplace in the private sector and play a key role in the ability of firms to compete for critical talent. The importance of these strategies – as well as the mandate for new thinking – only compounds during times of constrained resources.
One might ask why an industry executive is raising this issue. The answer is simple: As is true in any other market, the ability of government contractors to do what they do best – optimize efficiency and drive innovation – is tied in large part to the nature and quality of their partners on the other side of the table. The objective is not to supplant contractors; rather it is in the best interest of both government and industry to have a well-resourced, well-supported and well- trained partner workforce. In the end, we rise and fall together.
The Office of Personnel Management reported last year that the government retirement rate rose by nearly 30 percent in 2011 over 2010. Other OPM data continues to show that the government has about four times as many employees over 50 as it does under 30, and that the percentage of federal employees who are deemed to be “technical” has not grown in more than a decade, even as those percentages in the private sector have skyrocketed.
In short, there is a huge federal workforce problem staring us in the face that demands prompt, comprehensive and sustainable action. The lessons of history clearly illustrate what will happen if we don’t learn from them.
The United Arab Emirates-based Anham LLC has issued a statement denying charges made Saturday by the Special Inspector General for Iraq Reconstruction that the contractor had marked up the cost of parts by as much as 12,000 percent.
“These conclusions are false,” the company said through a publicity agent. “In fact, the company saved the U.S. government and the U.S. taxpayers nearly $153 million dollars through its performance of the contract.”
SIGIR, in its quarterly report, summarized an audit that found that, due to weak oversight, the Defense Department was billed $900 for a control switch valued at $7.05 (a 12,666 percent increase) and $80 for a small segment of drainpipe valued at $1.41 (a 5,574 percent increase), among other items.
In rebuttal, the company said: “Every purchase by every subcontractor was the result of a competitive bidding process where the lowest price subcontractor was selected, and not a single screw or nail was purchased without prior, advance approval by the U.S. government after their review of the competitive bidding process amongst potential subcontractors. Full disclosure of the nature of every potential subcontractor was fully disclosed to the U.S. government.”
Anham added that it “takes enormous exception to the SIGIR implications. Its suggestions — based on innuendo rather than hard facts — are not the result of a meaningful ‘audit.’ Anham is continually audited by the Defense Contract Audit Agency and welcomes such true audits.”
Stuart W. Bowen Jr., the IG for Iraq reconstruction, told Government Executive that SIGIR stands by the report. He said neither DCAA nor the Defense Contract Management Agency has performed audits on costs incurred by Anham. “DCAA is years behind in audits,” he said. “But for our audit, these excessive billings would not have been uncovered, possibly for years.” He added that DCAA and DCMA concurred with his conclusions and have agreed to review the company’s contract, which goes back to 2007.
“The one true point Anham makes,” Bowen said, “is that the government didn’t complain about the charges. There was a breakdown in the process of cost review, which wasn’t as strong as it should have been, but that doesn’t render the billings valid.”
— by Charles S. Clark – GovExec.com – August 3, 2011 at http://www.govexec.com/story_page.cfm?articleid=48434&dcn=e_gvet
The 112th Congress is unlikely to let the Obama administration move full-speed ahead on its initiative to bring contractor jobs back in-house, a consultant and a Republican Senate staff member said on Thursday.
Jonathan Etherton, president and owner of the consultancy Etherton and Associates Inc. and a former Senate Armed Services Committee staffer, told an audience of contractors at a Coalition for Government Procurement breakfast he has heard at least three congressional panels plan to look at whether insourcing is being implemented strategically and whether agencies are focusing on critical positions.
Bill Wright, Republican staff director for the Senate Homeland Security and Governmental Affairs Ad Hoc Subcommittee on Contracting Oversight, noted insourcing is on the radar of ranking member Sen. Scott Brown, R-Mass. Brown is concerned the initiative is moving forward too quickly and without enough consideration of its effect on small businesses, Wright said during the breakfast discussion.
More generally, Brown is looking for ways to improve efficiency during times of mounting national debt, Wright said. The senator is developing an acquisition savings plan that could include expanding strategic sourcing, an approach in which agencies analyze purchasing trends and buy common commodities and services in bulk; rewarding high-performing acquisition teams; and promoting a more specialized acquisition workforce by requiring officials to obtain certifications in certain areas of expertise.
New Congress could put the brakes on insourcing Much of the subcommittee’s oversight work to date has been bipartisan, Wright added, and Brown is working with the administration on the efficiency initiatives.
Etherton noted, however, that Congress’ overall relationship with the executive branch is likely to grow more adversarial in 2011 with Republicans in control of the House and lawmakers aggressively scheduling oversight hearings.
In addition to insourcing, Etherton said, the next Congress is likely to examine implementation of the 2009 Weapons System Acquisition Reform Act; the relationship between the Defense Contract Audit Agency and the Defense Contract Management Agency; the definition of inherently governmental work; how to best ensure adequate contractor controls against waste, fraud and abuse; and how Defense Department savings initiatives will affect the industrial base.
Wright predicted lawmakers also would focus on transparency surrounding contractor profit incentives and subcontractor performance; tracking contract-related earmarks; and enhancing competition and limiting risk through fixed-price arrangements.
– by Amelia Gruber – Government Executive – December 16, 2010