The Contracting Education Academy

Contracting Academy Logo
You are here: Home / Archives for GAO

By

3 big problems continue to dog federal procurement

Congress and the executive branch have worked for years to improve the quality of and reduce costs for federal acquisition, but some problems continue to hamper many agencies, according to a Sept. 12 Government Accountability Office report.

“Acquisition reform has been on everyone’s agenda for many, many years, decades. There have been proposals in the Congress, there has been changes to the regulations. This has been a very, very active area for a long time,” said Bill Woods, director on the Contracting and National Security Acquisitions Team at GAO, in an agency podcast.

The report evaluated federal agency acquisition improvements against 89 recommendations made by the Acquisition Advisory Panel in 2007 and divided the areas of improvement into three “buckets” that represent the acquisition life cycle: requirements and definitions; competition and pricing; and contractor oversight.

“One is in the requirements, definition process of actually deciding.  What is it does the agency want?  What does it need, and what’s the best way of getting what we need?” said Woods.

Keep reading this article at: https://www.federaltimes.com/acquisition/2018/09/17/3-big-problems-continue-to-dog-federal-procurement/

By

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/

By

GAO acknowledges progress in federal acquisition by Congress and Executive branch, but says ‘challenges endure’

Congress established an Acquisition Advisory Panel to review federal acquisition laws, regulations, and policies — and identify opportunities for improvement.  The Government Accountability Office (GAO) just issued an assessment of the progress made since the Panel’s 2007 report.

Here’s what GAO found:

Congress and the executive branch have taken numerous actions to address key issues the Acquisition Advisory Panel identified in its 2007 report, but these actions have not eliminated some enduring challenges. The figure below presents the key issues the Panel addressed in relation to the life cycle of a typical contract as identified by GAO:

Three of the key issues, and the corresponding challenges, align with specific phases in the contracting life cycle:

  • Requirements Definition: The Panel found that fully identifying requirements before a contract is awarded is key to achieving the benefits of competition. GAO has found that unrealistic requirements have contributed to poor program outcomes at the Department of Defense (DoD), and that the Army’s requirements development workforce decreased by 22 percent from 2008 to 2017.
  • Competition and Pricing: The Panel said that competition can help reduce prices. GAO’s work shows that competition rates have remained steady government-wide, and declined at DOD. See figure below.

GAO also found that agencies are sometimes using bridge contracts — which GAO has generally defined as either extensions to existing contracts or new short-term, sole-source contracts — to avoid a lapse in service caused by delay of a follow-on contract award.   In some instances, bridge contract awards delay opportunities for competition and can place the government at risk of paying higher prices for multiple years.  The figure below depicts how an Army bridge contract for computer support services planned for 12 months was extended to 42 months.

Further, GAO’s work shows that agencies have not fully embraced initiatives and techniques intended to reduce the prices they pay, including consolidated purchasing approaches and robust market research.

  • Contractor Oversight: The Panel raised questions about the capacity of federal agencies to oversee contractors.  GAO found that agencies continue to award contracts warranting increased management attention at a steady rate, such as contracts for management support services. With contracts like those for management support services, there is an increased risk that contractors may perform tasks reserved for the government.  Additionally, GAO found that heavy workloads at the Department of Veterans Affairs have made it difficult for officials who oversee contractors to ensure contractors adhere to contract terms.

Three of the key issues, and the corresponding challenges, cut across all the phases of the contracting life cycle:

  • Acquisition Workforce: The Panel found that the federal acquisition workforce faces workload and training challenges. GAO’s work has shown that DoD has enhanced its workforce, but some workforce gaps endure at DoD and across agencies.
  • Federal Procurement Data: The Panel found that the government’s primary repository for acquisition data contained some unreliable data.  Also, GAO found that the system has demonstrated limitations. For example, guidance from the Office of Management Budget (OMB) required that agencies collect specific contract award data, but the system did not have the capability to do so.
  • Small Business Participation: The Panel found a number of challenges hindering agencies’ efforts to meet small business goals. GAO found small business participation has increased, but many agencies are not in full compliance with requirements governing Offices of Small and Disadvantaged Business Utilization (OSDBUs). For example, the directors of these offices should report directly to agency heads or their deputies, but not all agencies have established this type of direct reporting relationship.
What GAO Recommends

GAO did not make any new recommendations in its Sept. 12, 2018 assessment, but it has made numerous recommendations in the past.   Federal agencies have agreed with many of GAO’s recommendations, and have implemented some of them, but not others.  For example, GAO has previously made the following recommendations.

  • The Army should assess the resources needed for the requirements development process. The Army agreed, but it has not yet done so.
  • OMB should provide guidance for agencies to manage bridge contracts. OMB agreed and has drafted management guidance but has not yet finalized it.
  • Certain federal agencies should take steps to document how they conduct market research. The agencies agreed and did so.
  • The Department of Veterans Affairs should develop tools to help oversee contracts. The department agreed and did so.
  • DOD should have issued an updated acquisition workforce plan in fiscal year 2016. DOD agreed and issued the plan.
  • OMB should take steps to improve how agencies collect certain procurement data. OMB generally agreed, but has not yet addressed the recommendation.
  • Certain federal agencies should take steps to comply with OSDBU-related requirements. Most agencies that provided comments agreed or partially agreed. Two agencies — the National Aeronautics and Space Administration, and the U.S. Agency for International Development — have addressed the recommendations.

It its latest report, GAO reiterates its belief that all agencies should implement all of these recommendations.

See the GAO’s full report here: https://www.gao.gov/assets/700/694457.pdf

By

How has federal contract spending changed over time?

DataLab, a unit operated by the U.S. Treasury Department, recently undertook an analysis of ten years of federal contract spending data.  The results are thought-provoking. 

Take a look at what they discovered when they examined the USAspending.gov database:

  • Over the past decade, federal spending on contracts increased from fiscal year 2007 through 2010, following the surge in federal funding related to the Recovery Act.  As the Recovery Act tapered off in 2011, contract spending began to decrease, which accelerated following sequestration in 2013.  By 2015, contract spending had fallen 27 percent from its 2010 peak, before rebounding slightly in the following years.
  • Seasonal trends in contract spending occur within each year.  Spending tends also rise and fall on a monthly cadence, with roughly one small peak and one small drop per month.  During the last month of the federal fiscal year — September — contract spending spikes, especially one week prior to the end of the government’s fiscal year.
  • End-of-year spikes consistently occurred across the decade, and generally followed the broad rise and fall of spending. On average, September spikes accounted for between 6-8 percent of the annual spending in a fiscal year.
  • USAspending.gov data captures two types of activity related to contracts: 1) the issuance of new contracts, and 2) modifications to existing contracts.  Splitting spending on contracts into these two categories, DataLab found that spending on new contracts tended to spike in September.  Modifications, however, displayed less variance and did not spike as drastically at the end of each fiscal year.  This suggests that new contracts — not modifications—drove the spikes at the end of each fiscal year.
  • USAspending data also captures what the government received from a contract (i.e., goods or services.) This categorization scheme, utilizing Product and Service Codes, contains almost 6,000 different categories, ranging from Dining Facility Maintenance to Buoys.  For this analysis, DataLab collapsed these 6,000 categories into seven high-level groups.  Notably, contracts classified as Facilities, Equipment, and Construction, displayed about 3.5 times the level of variance over the decade as total contract spending, and over 50 times the variance of spending on Weapons and Ammunition.  Unlike the other categories, contracts for weapons ammunition did not spike at the end of the fiscal year.

DataLab also looked at USAspending data to determine the relationship between the passage of continuing resolutions, new appropriations, and the amount of spending on contracts across the government.  Here’s what they found:

  • Continuing resolutions caused contract spending to spike in the same week, which was not observed for the passage of new appropriations. These findings cohere with qualitative research conducted by the Government Accountability Office (GAO), which noted in February 2018 that “some agency officials reported delaying contracts and application times for grants while under a [continuing resolution].” If agencies are unable to issue new contracts because adequate funds are not available under continuing resolutions, needs accumulate, and then are satisfied once funding is available.
  • Notably, DataLab found that the passage of new appropriations resulted in a statistically significant decreases in total contracts and especially on professional services contract spending. This suggests that new appropriations allow the government to engage in longer-term budgeting, potentially facilitating forward-looking spending decisions.
  • DataLab also noted that research and development spending was less variable and less impacted by continuing resolutions, suggesting that this type of service is likely to follow a distinct pattern for contract issuance from the typical cycles followed by other goods and services.  As one of the smallest categories of spending, it is possible that this type of contract is partially sheltered from the timing of congressional appropriations.
  • Other categories showed evidence of very large spikes in spending in response to congressional appropriations, such as transportation and logistic services. Further research as to why specific types of spending are more reactive to continuing resolutions would need to be done to explain why.

To see this report, including trends displayed in graphs and tables, visit: https://datalab.usaspending.gov/contracts-over-time.html

 

By

OTAs: Preserving the authority

Other Transaction Authorities are the latest buzzwords in federal contracting, and for good reason.

OTAs have become critical to rapid prototyping in the defense realm, in some cases cutting off years from the time warfighters wait for new systems and capabilities.

OTAs are a business tool that let the government buy products and services using means other than those governed by the Federal Acquisition Regulations. These authorities, initially conceived by NASA in the 1950s and later expanded to the Defense Department in 1994, have recently surged in use and popularity — and praise. However, they also elicit a fair amount of criticism and debate about their future.

Fairness during the award process, soundness of proposals and lack of public information throughout the course of the award are among issues detractors highlight on OTAs. If their supporters want to preserve this acquisition instrument, they must address these concerns.

They’re not small concerns.

Keep reading this article at: https://washingtontechnology.com/articles/2018/08/03/insights-hawk-carlisle-ota.aspx

Contracting Academy Logo
75 Fifth Street, NW, Suite 300
Atlanta, GA 30308
info@ContractingAcademy.gatech.edu
Phone: 404-894-6109
Fax: 404-410-6885

RSS Twitter