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May 5, 2020 By cs

Navy hoping to keep some acquisition momentum during COVID-19

The Navy says the way it is procuring goods and services during the COVID-19 outbreak may help quicken acquisitions later on during the crisis and keep programs on target for whenever it ends.

Speaking at the recent virtual Sea Air Space Conference, Navy acquisition chief James Geurts said the service is injecting money into the acquisition system to keep companies liquid with cash so they can stay afloat. The Navy is also speeding up contract awards.

“We are going to apply all the things we’ve learned during this to accelerate during the recovery phase because ships still need to come out on time,” Geurts said. “We’ve got to do the maintenance, we’ve got to continue to supply lethal capabilities to our sailors and marines and we can’t afford to lag the recovery.”

Geurts said he does not foresee the crisis affecting the Navy’s priorities after things return to normal. The Navy still wants at least 350 ships and it wants to field its Columbia-class submarine. The trick is keeping everything on schedule or close to it through the coronavirus outbreak.

“What’s important is that we don’t let the delay and disruption carry any further than it has to into the execution of our programs,” Geurts said. “There will be delay and disruption. The program teams have looked hard into where we were prior to this crisis so we can separate issues we had going in from issues caused by the crisis.”

Keep reading this article at: https://federalnewsnetwork.com/navy/2020/04/navy-hoping-to-keep-some-acquisition-momentum-during-covid-19/

The Contracting Education Academy at Georgia Tech has established a webpage where all contract-related developments related to the coronavirus (COVID-19) are summarized.  Find the page at: https://contractingacademy.gatech.edu/coronavirus-information-for-contracting-officers-and-contractors/

Filed Under: Government Contracting News Tagged With: billing rates, CARES Act, contract delays, coronavirus, cost reimbursement, COVID-19, disaster relief, DoD, emergency response, FAR, industrial base, innovation, Navy, nontraditional, OFPP, OMB, pandemic, readiness, research and development, small business, Technology and Logistics

May 1, 2020 By cs

DoD expects three month acquisition delays, billions in payouts to contractors

The Defense Department will suffer serious setbacks on developing weapons and pay companies billions of dollars in relief funds as a result of COVID-19.

The Pentagon expects a three-month delay across the board for major acquisition programs, putting a kink in systems like the Ford Class Aircraft Carrier, the Columbia Class Ballistics Missile Submarine and the Next Generation Operational Control System.

“Particularly, we see a slowdown in the shipyards,” Ellen Lord, defense undersecretary for acquisition and sustainment, told reporters Monday at the Pentagon. “Aviation is the most highly impacted sector that we have. Right now there isn’t any specific COVID penalty that we see for a specific program; however, we do anticipate a three-month slowdown in terms of execution.”

Lord said DoD is now starting to look at key procurement milestones that may be impacted by the delays.

Meanwhile, DoD is just beginning to take into account the amount of money in relief funds it will have to pay out to companies unable to do government work because of the coronavirus.

Keep reading this article at: https://federalnewsnetwork.com/defense-main/2020/04/dod-expects-three-month-acquisition-delays-billions-in-payouts-to-contractors/

The Contracting Education Academy at Georgia Tech has established a webpage where all contract-related developments related to the coronavirus (COVID-19) are summarized.  Find the page at: https://contractingacademy.gatech.edu/coronavirus-information-for-contracting-officers-and-contractors/

Filed Under: Government Contracting News Tagged With: billing rates, CARES Act, contract delays, coronavirus, cost reimbursement, COVID-19, disaster relief, DoD, emergency response, FAR, industrial base, innovation, nontraditional, OFPP, OMB, pandemic, readiness, research and development, small business, Technology and Logistics

April 21, 2020 By cs

OMB releases guidance to clarify coronavirus relief act’s contracting provisions

On Friday, April 17 the Trump administration released guidance to clarify how and when agencies can reimburse contractors as outlined in the recently enacted novel coronavirus economic relief legislation.
Click on image above to download OMB Memorandum M-20-22.

The Office of Management and Budget published a memo to supplement Section 3610 of the $2.2 trillion CARES Act, which allows federal agencies to use their funds to give contractors sick or paid leave during the pandemic if they are not able to access their worksites or telework. Although the administration advised agencies to “maximize telework” for contractors, that is not possible for many contractor jobs, including some involving sensitive or classified work. Trade associations that represent federal contractors previously welcomed this provision, but then asked for more clarification.

For applicable contractors, agencies can “modify the terms and conditions of a contract, or other agreement” to “reimburse at the minimum applicable contract billing rates” up to an “average of 40 hours per week [for] any paid leave (including sick leave) a contractor provides to keep its employees or subcontractors in a ready state,” according to the legislation. The new guidance says agencies can use their funds to reimburse contractors from the period of March 27 (when the CARE Act was signed) to September 30, 2020. Initially, the bill did not give a start date.

Additionally,  the Office of Federal Procurement Policy within OMB “has developed [the] guidance to help agencies make rational business decisions that balance the need for contractor resiliency with the need for good stewardship,” Michael Wooten, OFPP administrator, told Government Executive on Friday.  This includes being mindful of the challenges small businesses face and helping contractors secure the correct documentation they need for reimbursement.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2020/04/trump-administration-releases-guidance-clarify-coronavirus-relief-acts-contracting-provisions/164729/

The Contracting Education Academy at Georgia Tech has established a webpage where all contract-related developments related to the coronavirus (COVID-19) are summarized.  Find the page at: https://contractingacademy.gatech.edu/coronavirus-information-for-contracting-officers-and-contractors/

Filed Under: Government Contracting News Tagged With: billing rates, CARES Act, coronavirus, cost reimbursement, COVID-19, emergency response, FAR, industrial base, innovation, nontraditional, OFPP, OMB, pandemic, readiness, research and development, small business, Technology and Logistics

January 28, 2020 By cs

The contracting pendulum

Contracting methods have evolved over time, from three-page, performance-based contracts to specification-based contracts hundreds of pages in length, and now appear set to shift back to shorter contracts.
Maj. Don Lee and Sgt. 1st Class Rechelle Collins of the 639th Contracting Team discuss training on blanket purchase agreements conducted recently at Fort Bragg, NC. Knowing when a contracting tool like blanket purchase agreements is a good fit is a key contributor to contracting speed. (Photo by Sgt. 1st Class Terry Ann Lewis, graphic by U.S. Army Acquisition Support Center)

The implementation of statutes, regulations and policies designed to ensure fair and equitable treatment for industry became burdensome and increased the time and complexity of the acquisition process. This resulted in an ineffective procurement process that influenced mission readiness. Since that time, the contracting pendulum has swung to agile, streamlined initiatives.

These initiatives have been spearheaded by several important laws and regulations, including the National Defense Authorization Act (NDAA) for Fiscal Year 2016, which was implemented by the Section 809 Panel, secretary of the Army initiatives and strategic reforms from the Office of the Deputy Assistant Secretary of the Army for Procurement. One streamlining initiative embraced by Stuart A. Hazlett, deputy assistant secretary of the Army for procurement, is “data-driven contracting.” Data-driven contracting will facilitate analytics on raw data that can influence factors such as requirements, money spent, talent management and procurement acquisition lead time.

SIGNIFICANT CONTRACTING CHANGES

Historically, there have been significant regulatory changes that have influenced DoD contracting processes. These regulatory changes are the springboard to many contracting initiatives used today. In 1962, Congress passed Public Law 87-653, the Truth in Negotiations Act. That law specifies that when dealing in a sole-source environment, each procurement-contracting officer must certify cost as accurate, completed and current for all cost and pricing data. The Truth in Negotiations Act has been a cornerstone for ensuring that prices paid by the government are considered “fair and reasonable.”

In 1974, Congress passed legislation to establish the Office of Federal Procurement Policy (OFPP) within the Office of Management and Budget. OFPP provides direction for government-wide procurement policies, regulations and procedures; it also promotes economy, efficiency and effectiveness in the acquisition process. One way in which OFPP provides this direction is through the Federal Acquisition Regulation (FAR).

The FAR, implemented in 1984, provides uniform policies and procedures governing federal government contracts. Accompanied by the Defense Federal Acquisition Regulation Supplement (DFARS), these regulatory policies inundate contracting professionals and industry partners. In 1984, Congress also passed the Competition in Contracting Act. That act requires competition for award of all government contracts. The theory is that more competition for procurements reduces costs and allows more small businesses to win federal government contracts. It also established that if a protest is submitted to the U.S. Government Accountability Office (GAO) before contract award, the awarding of the contract will be suspended until GAO rules on the protest.

In 1994, Congress passed the Federal Acquisition Streamlining Act. That legislation established a preference for the use of commercial products and exempted commercial products from various statutory and regulatory requirements. It raised the ceiling for the use of “simplified purchase procedures” and raised the threshold for issuance synopsis. It exempted the micro-purchase from virtually all statutory requirements, and it required that paper-based contracting systems be replaced with an electronic contracting system within five years.

CONTRACTING REFORM INITIATIVES

Acquisition reform is important and provides a check and a balance between regulatory accountability and agile acquisition. Because of recent reform initiatives, the contracting pendulum has swung from complex to streamlined contracting processes, providing for efficient and rapid acquisition in support of the warfighter.

In 2005, OMB asked the OFPP to identify goods and services the government can purchase more effectively and efficiently through strategic sourcing. Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace. As a result, the U.S. General Services Administration and Department of the Treasury established the Federal Strategic Sourcing Initiative to address government-wide opportunities to strategically source commonly purchased goods and services and eliminate duplication of efforts across agencies. An example of strategic sourcing for the Army is in the procurement of commercial hardware and software purchases under the CHESS (Computer Hardware, Enterprise Software and Solutions) program.

Then, in December 2014, OFPP issued a memorandum that directed agencies to take specific actions to implement category management, an approach based on industry leading practices, to further streamline and manage entire categories of spending across government more like a single enterprise. This approach includes strategic sourcing along with a broader set of strategies, such as developing common standards in practices and contracts, and improving data analysis and information sharing to better leverage the government’s buying power and reduce unnecessary contract duplication.

The NDAA passed in 2016 streamlined the acquisition process and eliminated redundant and duplicative requirements. Section 809 of the NDAA required that the secretary of defense establish a nine-member advisory panel consisting of experts in acquisition and procurement policy. The objective of the panel is to review DOD’s acquisition regulations and provide recommendations for streamlining procurement.

Some of the significant recommendations made by the panel include expanding and clarifying the use of other-transaction authority for production. Other-transaction authority is the term commonly used to refer to DOD’s authority to carry out “certain prototype, research and production projects” other than contracts. Such authority gives DOD the flexibility necessary to adopt and incorporate business practices that reflect commercial industry standards into its award instruments. DOD currently has permanent authority to award other-transaction agreements for research, prototype and production purposes. This kind of agreement allows nontraditional vendors a pathway for doing business with the government and introducing new and innovative ideas. In fiscal year 2019, the Army awarded 854 other-transaction agreements valued at roughly $4.9 billion.

FAR and DFARS contract clauses that are required to “flow down” from prime contractors to subcontractors, especially commercial subcontractors, are excessive and create additional burdens on DOD’s supply chain. In response, the Section 809 panel updated the FAR and DFARS to reduce burdens on DOD’s commercial supply chain, to decrease cost, prevent delays, remove barriers and encourage innovation in the military services.

The panel recommended minimizing the number of government-unique terms in commercial buying. The panel noted that when the Federal Acquisition Streamlining Act was established in 1994, there were only 57 FAR and DFARS clauses applicable to commercial buying. Today there are 165, according to the panel. The proliferation of clauses applicable to commercial buying at the prime contract level directly affects the number of government-unique clauses to subcontractors offering commercial products and services.

The 2018 NDAA amended the Truth in Negotiations Act to increase the threshold for contractors submitting certified cost and pricing data from $750,000 to $2 million. Contracting officers may still require cost or pricing data without certification, as they are tasked with ensuring that the cost or pricing data is fair and reasonable. However, this change is widely embraced by contractors doing business with the government.

Finally, the 2018 NDAA made changes to the bid and protest procedures relative to the Competition in Contracting Act and allows for enhanced post-award debriefing rights for DOD. What that means for DOD acquisitions is that, when a protest is filed, the “five-day period” to file a bid protest to trigger an automatic stay of award does not start until after the government delivers a written response to the offeror. Per the NDAA, a disappointed offeror may submit, “within two business days after receiving a post-award debriefing, additional questions related to the debriefing.” The law requires that “ … [t]he agency shall respond in writing to any additional question … within five business days” and that “the agency shall not consider the debriefing to be concluded until the agency delivers its written responses.”

ARMY CONTRACTING REFORM

The Army awards thousands of contracts yearly to support military forces worldwide. In FY19, the Army awarded 212,094 contract actions estimated at $94.59 billion. This does not include grants, government purchase-card buys, cooperative agreements or other authorized transactions that increased the estimate to $104.89 billion.

In 2017, the secretary of the Army directed initiatives to reform Army contracting, issuing “Army Directive 2017-32 (Acquisition Reform Initiative #6: Streamlining the Contracting Process),” which mandated streamlining practices within Army contracting to reduce the time it takes to develop and award a contract.

In accordance with this reform initiative, the deputy assistant secretary of the Army for procurement (DASA(P)) embarked on extensive reformation initiatives. They include:

1. Developed a centralized policy to standardize contracting policies across the Army.

2. Created policies and procedures that will facilitate the efficient implementation of category management. One policy, currently in coordination, aligns contracting activities to categories. This policy will promote habitual relationships among the contracting centers, category managers and customers. The draft policy stipulates that customers shall only submit their requirement to the designated contracting office. Aligning contracting activities with categories will assist in enforcing standard levels of services, limit standard levels of service end-run actions, and limit contract-action shopping among contracting centers.

3. Of 312 authorities identified in the FAR and DFARS, the Army delegated 159 authorities to a level lower than the assistant secretary of the Army for acquisition, logistics and technology (ASA(ALT)). This increased efficiency and eliminated the requirement to staff packages to ASA(ALT) for signature and approval, thereby saving time, money and resources.

4. Established “reform managers” to lead changes to contracting processes and develop new streamlined procedures, e.g., source selection, pricing cell, etc.

5. DASA(P) is also embracing “data-driven decision-making in contracting.” This type of contracting involves making decisions based on actual raw data derived from the automated contract systems. Data-driven decision-making improves how requirements are communicated between major stakeholders such as financial managers, program managers, requirements activities and industry partners. The bottom line is that everybody wins through increased productivity in procuring goods and services for the warfighter.

CONCLUSION

On Sept. 30, 2019, in a message to the Army force, Secretary of the Army Ryan D. McCarthy said, “We must maintain a sustainable level of readiness to meet current demands while executing an aggressive modernization strategy to ensure the total Army remains the most lethal ground combat force in the world.”

To achieve that end, the contracting pendulum must swing toward less restrictive acquisition policies and procedures.

For more information, go to https://spcs3.kc.army.mil/asaalt/procurement/SitePages/PAMHome.aspx#&panel1-3 

This article was published in the 2020 Winter issue of Army AL&T Magazine.  See: https://www.dvidshub.net/news/357393/contracting-pendulum

Filed Under: Government Contracting News Tagged With: acquisition methods, acquisition reform, acquisition workforce, Army, DFARS, DoD, FAR, innovation, NDAA, OFPP, OMB, procurement reform, simplified acquisition, TINA

December 31, 2019 By cs

Acquisition leans into automation

Automation is gaining traction in federal acquisition.

“When we met with senior leaders a few weeks ago, they had a list of processes they wanted automated by that week,” Lesley Field, deputy administrator for federal procurement policy at the Office of Management and Budget, said at a panel discussion at the 2019 Presidential Rank Awards Leadership Summit on Dec. 17.  She said the acquisition workforce is enthusiastic about developing robotics process automation tools within the government.

Soraya Correa, chief acquisition officer at the Department of Homeland Security, noted that automation technologies offer a number of advantages, including limiting problems that can stem from data bias.

“With automation, we can get to a fairer process,” he said. “Right now, we engage more data bias because we’re limited by what we can do as long as we’re telling industry what we’re willing to do and where we’re going to go look for this information.”

Keep reading this article at: https://gcn.com/articles/2019/12/24/acquisition-automation.aspx

Filed Under: Government Contracting News Tagged With: acquisition management, acquisition methods, acquisition workforce, AI, artificial intelligence, automation, DHS, federal contracting, government trends, OFPP, OMB

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