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Are meetings with industry actually accelerating military acquisitions?

Military leaders say they are determined to find faster ways to buy cutting-edge technologies.

“We can’t afford to spend seven years thinking about a requirement,” Army Undersecretary Ryan D. McCarthy said during a 2018 visit to Fort Belvoir, Virginia.

“If it is going to take that long, you are probably not going to get it. So, we need to get these capabilities sooner.”

To that end, the Department of Defense has increased the number of engagements with industry, launched alternative contracting vehicles, and taken other steps to streamline innovation more effectively. Industry officials are often clamoring for that interaction, but some say the Pentagon’s efforts are beginning to bear fruit.

One area where those changes are most visible has been in the Army’s modernization of its battlefield network. David Huisenga, president and chief executive at Klas Telecom Government, said he has noticed a marked difference in the quality and quantity of engagements between industry and the Department of Defense.

Keep reading this article at: https://www.c4isrnet.com/industry/2019/09/19/are-meetings-with-industry-actually-accelerating-military-acquisitions/

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OIG seeks voluntary refund despite contractor’s adherence to TINA requirements

DoD’s Office of Inspector General (OIG) for the Department of Defense (DoD) has recommended that a contractor be requested to provide a refund based on “excessive profits.”

On February 25, 2019, the Office of Inspector General (OIG) for the Department of Defense (DoD) issued an audit report analyzing the prices of spare aviation parts purchased by the Defense Logistics Agency (DLA) and the Army from TransDigm Group, Inc.

The audit was conducted in response to letters from certain Members of Congress, who had inquired whether the spare parts were sold at fair and reasonable prices and in compliance with the Truthful Cost or Pricing Data Act (formerly known as the Truth in Negotiations Act or TINA).

The OIG’s audit confirmed that both TransDigm and the responsible DoD contracting officers fully complied with the Act and related regulations governing the price negotiations, but the OIG nonetheless concluded that the contractor earned excess profit on the majority of parts sold.  In a highly unusual move, the OIG recommended that DoD request a “voluntary refund” from TransDigm of its allegedly “excessive” profits, and the OIG also recommended a number of changes to statutory, regulatory, and administrative policies governing the provision of cost or pricing data.

The OIG’s Findings

At the request of U.S. Representatives Ro Khanna and Tim Ryan and Senator Elizabeth Warren, the OIG reviewed the price reasonableness of 47 spare aircraft parts DoD procured from TransDigm between January 2015 and January 2017.  Using uncertified cost or pricing data that it collected during the audit, the OIG calculated the apparent profit realized by the contractor on the sale of each part, and concluded that the contractor realized “unreasonable” profits (defined as profits of greater than 15% in the report) on all but one of the parts.  (The OIG arrived at the 15 percent profit percentage, in part, by looking at maximum profit percentages allowed in the FAR for three different types of contracts, none of which were fixed price.)  The OIG applied this finding to a broader sampling of contracts held by TransDigm, and concluded that the contractor had earned $16.1 million in “excess profit” (i.e., profit over 15 percent) for the parts at issue.

The OIG concluded that a number of factors contributed to these supposedly “excessive” profits.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2019/03/when-compliance-is-not-enough-oig-seeks-voluntary-refund-despite-contractors-adherence-to-tina-requirements/

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DoD says blockchain can help in disaster relief

The U.S. Department of Defense says blockchain technology has “enormous” potential in helping improve disaster relief efforts.

The Troop Support division of the Defense Logistics Agency held a meeting last month in Philadelphia to understand how blockchain could have helped its already “successful” efforts assisting in Puerto Rico after the devastating Hurricane Maria in 2017. The meeting was hosted by Troop Support’s Continuous Process Improvement (CPI) office.

“The potential is absolutely enormous,” said CPI management analyst Elijah Londo, according to a DLA report of the event. “Talk about blockchain, and you’ll hear experts comparing it to transforming trust or transactions in the same way the internet changed communication.”

Currently, the DLA tracks logistics processes through centrally managed systems, which makes it hard for involved parties to synchronize data and ensure they all are tracking correct and up-to-date information. By using blockchain technology, the agency could track data and thereby improve supply chain transaction processes and in-transit visibility of shipments, it said in the report.

Keep reading this article at: https://www.coindesk.com/us-defense-department-says-blockchain-can-help-disaster-relief

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Manufacturer agrees to pay $400,000 to settle False Claims Act violations

The United States Attorney’s Office for the Middle District of Pennsylvania has announced that Arvco Container Corporation of Kalamazoo, MI has agreed to pay $400,000 to settle False Claims Act allegations in connection with a contract with the Defense Logistics Agency (DLA) in New Cumberland, PA.

Arvco Container Corporation (Arvco) violated subcontract limitations imposed by federal regulations and the terms of a contract to provide corrugated boxes to the federal government from August 3, 2010 through August 3, 2014.  The contract was awarded by the DLA to Fibre Technologies LLC (Fibre) located in Reading, PA.

The contract was set-aside for eligible HUBZone small businesses in accordance with program requirements administered by the U.S. Small Business Administration (SBA).

Federal regulations and the terms of the contract limited Fibre’s ability to subcontract the manufacturing of the boxes to no more than 50 percent.  Arvco performed 100 percent of the manufacturing requirement.

Arvco’s gross profits for the performance of the contract total $246,682 which will be returned to DLA.  Arvco also agreed to pay a civil penalty amount of $153,318.

Limitations on subcontracting provisions in federal contracts are designed to ensure that otherwise ineligible businesses do not use small or disadvantaged businesses merely as vehicles to access set-aside contracts.

This case was investigated by the U.S. Attorney’s Office for the Middle District of Pennsylvania, the SBA’s Office of Inspector General, and the Defense Criminal Investigative Service.

Readers are reminded that the claims resolved by the settlement are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/usao-mdpa/pr/michigan-corrugated-manufacturer-agrees-pay-400000-settle-false-claims-act-violations

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GAO to DoD: Fix ‘fourth estate’ inefficiencies

The Government Accountability Office is telling the Defense Department to clamp down on inefficiencies in its 19 agencies and 8 field activities — collectively known as the “Fourth Estate.”

While DoD spends billions annually on these defense agencies and DoD field activities to maintain business functions, it “does not comprehensively or routinely assess the continuing need” for them, according to a report published last week by the watchdog agency.

The Defense Department has agreed to act on GAO’s five recommendations to fix the problems. However, the DoD official who signed off — Chief Management Officer John Gibson — is reportedly being terminated by Defense Secretary Jim Mattis for non-performance.

A former U.S. Air Force finance official with a long defense industry resume, Gibson is the first-ever CMO. The job was established last year in the largest reorganization of the DoD since the Goldwater-Nichols Act of 1986.

Keep reading this article at: https://www.defensenews.com/pentagon/2018/09/11/gao-to-dod-fix-fourth-estate-inefficiencies/

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