OFPP | The Contracting Education Academy

February 19, 2011 By AMK

OFPP zeroes in on acquisition workforce

With much of the focus on contracting reform aimed at communication between government and industry, some government officials want to make sure front-line contracting feds aren’t overlooked.

Dan Gordon, administrator of the Office of Federal Procurement Policy (OFPP), said the acquisition workforce isn’t equipped to manage the large number of government contracts. His office wants to change that.

“Our number one priority is strengthening the acquisition workforce,” Gordon said Thursday at a government-industry forum sponsored by AFFIRM in Washington.

Gordon said over the past 15 years the government has been on an unsustainable path of increased contracting and a flat acquisition workforce.

“Putting that tsunami of spending onto an acquisition workforce that had shrunk and wasn’t getting the investment and training was a recipe for problems, and we’ve had a good number of problems,” Gordon said.

The Office of Management and Budget announced Feb. 3 the first year-over-year decline in contract spending since 1997. Gordon said that trend is positive, but on its own won’t be enough to solve the problem with the acquisition workforce.

Last year the president’s budget proposal requested more than $150 million to invest in the acquisition workforce. This year’s request is slightly smaller at around $140 million.

Gordon said despite general support from the Hill, he isn’t optimistic either request will be met.

However, Gordon said agencies can help the existing acquisition workforce by improving internal communication. He said poor communication within agencies leads to significant problems with contract design.

“We have our IT shops that are often focused on sophisticated IT solutions,” Gordon said. “We have the program shops – the people who actually need what the contract is for – who may not be explaining to the IT people what they need properly. We have a contract shop that doesn’t define requirements. They just listen to make sure they’ve got requirements that make sense in terms of ‘will this be a competitive situation’, but contract people can’t define requirements. They need input from the program people and the IT people to do that.”

Gordon also said he wants to increase training for the acquisition workforce. One of OMB’s goals in scaling back contract spending was to reduce the number of high risk contracts such as time-and-materials and labor-hours contracts.

But Gordon said selecting the appropriate type of contract isn’t always simple. Even though fixed-price contracts are considered the safe type of deals, cost-reimbursement agreements make more sense.

“We’re not telling agencies to go fixed-price no matter what,” Gordon said. “Sometimes is just a matter of looking. Have we come far enough that we can define our requirements and switch to fixed price? Then we should. But we shouldn’t switch to fixed price without thinking.”

Gordon said insufficient contract management personnel also is a significant challenge. He said agencies have increased the number of 1102 series positions between 7 – 12 percent but he wants to see even more hiring — especially of contracting officer’s technical representatives (COTRs).

He said when agencies don’t have a COTR, they end up contracting out project oversight instead of doing it themselves.

“Of course we need contractors, but contractors support us in the federal government, which means that we have to be in charge,” Gordon said. “There are too many situations where there is no federal employee that has oversight of what’s going on, or there aren’t enough federal employees so that they maintain control. That is an unbalanced, unhealthy situation.”

But Gordon emphasized the important role of contractors and encouraged agencies to increase dialog with vendors. OMB and OFPP recently launched a mythbusting campaign to educate the federal workforce about rules around contracting.

Gordon said existing Federal Acquisition Regulations (FAR) allows for broad communications but agencies don’t understand the rules. He said he wants to create an environment in which acquisition officers are comfortable sharing information with industry in order to improve contracts.

“Share information,” Gordon said. “We benefit from that information being shared. We’re not doing it as a favor to industry — we’re doing it to make the procurement system work better. Refusing to share information is foolish, counterproductive, and causes the government to lose.”

Gordon said he conducts monthly calls with senior procurement executives to listen to challenges they face and ideas they have about the educational campaign.

Next month, OFPP will hold a working group of federal acquisition professionals to help design an online community of practice.

February 4, 2011 By AMK

OMB calls for better communication with vendors to bust contracting myths

The Office of Management and Budget (OMB) issued a lengthy memorandum on Feb. 2, 2011 outlining 10 myths commonly-believed by businesses about government contracting. The myths were compiled as a result of outreach sessions held by the Office of Federal Procurement Policy (OFPP) with industry representatives, acquisition professionals, agency procurement attorneys, and others to identify and address core misconceptions about communication between the government and industry during the pre-award acquisition process.

OMB pointed out that it wishes to address these misconceptions as a part of a “myth-busters” educational campaign, one of the key tenets of the OMB’s 25-Point Implementation Plan to Reform Federal IT Management.

OMB is calling for all agencies to develop “vendor communications plans” to provide for “clear, consistent direction to their workforce and industry partners about how to engage with industry prior to the award of contracts.”

OFPP is to work with the Federal Acquisition Institute (FAI), the Defense Acquisition University (DAU), and agency training practitioners to conduct an awareness campaign to eliminate unnecessary barriers to engagement.

Further, OFPP is pledging to work with federal agencies to identify best practices, training opportunities, samples of guidance, and other information that may be helpful in developing these communication plans. Suggested elements of the communications plans are:

1. Statement of agency commitment to: a) Communicate early, frequently, and constructively with industry; b) Include small businesses and subgroups of small businesses in communications with industry; c) Include vendors that the agency has not worked with in the past; d) Identify, in the agency’s published procurement forecast, which procurements are likely to involve opportunity for additional communication with industry; and e) Protect non-public information including vendors’ confidential information and the agency’s source selection information.

2. Identification of senior agency and bureau (if applicable) official responsible for promoting vendor engagement;

3. Brief description of efforts undertaken or planned to reduce barriers and promote engagement;

4. Criteria for identifying which acquisitions must include vendor input in the pre-award phase and the extent of the required engagement as a condition of approval by the agency’s investment review board (or similar body). At a minimum, acquisition plans for high-risk, large-dollar, and complex programs, such as those for major IT systems and for re-competitions that need to attract new entrants to ensure adequate competition, should include a comprehensive vendor engagement strategy that:

includes at least one industry day or a pre-solicitation or pre-proposal conference; and
allows for a reasonable amount of one-on-one engagement; and
allows time for discussions, as needed and in accordance with FAR Part 15, during the proposal evaluation process; or
requires a written justification as to why those steps are unnecessary.

5. Publication of engagement events to include industry days, small business outreach sessions, pre-solicitation conferences, RFP question and answer sessions, etc. These shall be posted and updated regularly using the existing “special notices” function on www.fedbizopps.gov and on other sites as identified by the agency.

6. Brief description of roles and responsibilities of the: a) Contracting Officer; b) Program Manager; c) COR/COTR; d) General Counsel; e) Ethics Officers; f) OSDBU; and g) Other Officials.

7. Training and awareness efforts for employees and contractors.

8. Links to existing policies.

9. Plans to follow-up with employees and industry representatives within 6 months of posting the vendor engagement plan, to further refine and improve communication, (e.g., post-award surveys of the contracting officers, program managers, and offerors for large, complex procurements, focus group meetings for general feedback).

A recap of the “Top 10 Contracting Myths” compiled by OMB appears below:

Misconception #1 – “We can’t meet one-on-one with a potential offeror.”

Fact – Government officials can generally meet one-on-one with potential offerors as long as no vendor receives preferential treatment.

Misconception #2 – “Since communication with contractors is like communication with registered lobbyists, and since contact with lobbyists must be disclosed, additional communication with contractors will involve a substantial additional disclosure burden, so we should avoid these meetings.”

Fact – Disclosure is required only in certain circumstances, such as for meetings with registered lobbyists. Many contractors do not fall into this category, and even when disclosure is required, it is normally a minimal burden that should not prevent a useful meeting from taking place.

Misconception #3 – “A protest is something to be avoided at all costs – even if it means the government limits conversations with industry.”

Fact – Restricting communication won’t prevent a protest, and limiting communication might actually increase the chance of a protest – in addition to depriving the government of potentially useful information.

Misconception #4 – “Conducting discussions/negotiations after receipt of proposals will add too much time to the schedule.”

Fact –Whether discussions should be conducted is a key decision for contracting officers to make. Avoiding discussions solely because of schedule concerns may be counter-productive, and may cause delays and other problems during contract performance.

Misconception #5 – “If the government meets with vendors, that may cause them to submit an unsolicited proposal and that will delay the procurement process.”

Fact – Submission of an unsolicited proposal should not affect the schedule. Generally, the unsolicited proposal process is separate from the process for a known agency requirement that can be acquired using competitive methods.

Misconception #6 – “When the government awards a task or delivery order using the Federal Supply Schedules, debriefing the offerors isn’t required so it shouldn’t be done.”

Fact – Providing feedback is important, both for offerors and the government, so agencies should generally provide feedback whenever possible.

Misconception #7 – “Industry days and similar events attended by multiple vendors are of low value to industry and the government because industry won’t provide useful information in front of competitors, and the government doesn’t release new information.”

Fact – Well-organized industry days, as well as pre-solicitation and pre-proposal conferences, are valuable opportunities for the government and for potential vendors – both prime contractors and subcontractors, many of whom are small businesses.

Misconception #8 – “The program manager already talked to industry to develop the technical requirements, so the contracting officer doesn’t need to do anything else before issuing the RFP.”

Fact – The technical requirements are only part of the acquisition; getting feedback on terms and conditions, pricing structure, performance metrics, evaluation criteria, and contract administration matters will improve the award and implementation process.

Misconception #9 – “Giving industry only a few days to respond to an RFP is OK since the government has been talking to industry about this procurement for over a year.”

Fact – Providing only short response times may result in the government receiving fewer proposals and the ones received may not be as well-developed – which can lead to a flawed contract. This approach signals that the government isn’t really interested in competition.

Misconception #10 – “Getting broad participation by many different vendors is too difficult; we’re better off dealing with the established companies we know.”

Fact – The government loses when we limit ourselves to the companies we already work with. Instead, we need to look for opportunities to increase competition and ensure that all vendors, including small businesses, get fair consideration.

— compiled and published by The Contracting Education Academy at Georgia Tech, Feb. 3, 2011.

December 9, 2010 By AMK

Small-business contracts under scrutiny from several federal agencies

A half-dozen federal agencies are looking into alleged abuses of small-business contracts, some involving Alaska native corporations that have received hundreds of millions of dollars in recent years under special set-aside rules.

Contracting specialists and government officials said the flurry of enforcement efforts signals a shift toward more oversight of contracts by the Obama administration in the wake of reports about questionable contracting practices. “This is a warning to everybody,” said Stan Soloway, president and chief executive of the Professional Services Council, a national trade group of government contractors. “Clearly, there is a signal here.”

Daniel Gordon, administrator of the White House Office of Federal Procurement Policy, said the administration supports set-aside contracts for small business and Alaska native corporations, or ANCs, but only with sufficient oversight. “We can only do that if the public . . . are confident that we are protecting those programs from fraud,” Gordon said. “The days of ‘No one is checking’ are over. For too long, there was inadequate oversight.”

The government requires agencies to devote about a quarter of procurement spending to small businesses – almost $100 billion last year. In some cases, though, small firms and ANCs allegedly have operated as fronts to pass on work and revenues to traditional companies, in violation of small-business rules.

In September, President Obama signed legislation that provides billions in new loan guarantees and other support for small businesses, with the aim of helping spur job growth and stimulating the flagging economy.

The surge in enforcement follows an unprecedented action by the Small Business Administration in October to suspend a large contractor, GTSI, from all government business. The SBA said it had evidence that GTSI had used two small firms to illegally get work from a $3 billion contracting program at the Department of Homeland Security.

Those measures came after The Washington Post detailed the relationships between the companies in a series of articles that began in September. The series has focused on abuses in the government’s small-business programs for Alaska native corporations, subsidiaries of which have received more than $29 billion in contracts over the past decade.

Among the recent enforcement and oversight efforts:

l Justice Department civil enforcement authorities are considering how to recover money from firms involved in questioned small-business contracts. The companies under scrutiny include GTSI and the two firms it worked with – EG Solutions and MultimaxArray Firstsource, according to people with knowledge of the inquiry.

In a statement, the U.S. Attorney’s Office in the District said the department is working with the SBA on civil fraud cases, but it declined to identify the companies it is reviewing.

“The U.S. attorney’s office is committed to working with SBA and inspectors general to examine whether the United States may be entitled to monetary damages and penalties from companies that abuse the small business contracting rules,” the statement said.

l Senior procurement officials at the Department of Homeland Security have launched a “comprehensive review” of the agency’s small-business contracting program, known as First Source. Officials plan to examine whether the businesses are doing the proper amount of work themselves and not handing it off to subcontractors, according to a DHS e-mail obtained by The Post.

“In light of the recent SBA’s suspensions and The Washington Post article regarding abuses in the First Source program, DHS intends to undertake a comprehensive review of all 11 First Source contracts to ensure that the program can continue forward without further risk or abuse,” the e-mail said.

In a statement, a DHS spokesman said the agency “takes very seriously the issues that resulted in the recent SBA suspensions of two of the First Source contractors.”

l The Army Criminal Investigation Command and the Defense Criminal Investigative Service have joined with the Interior Department Inspector General’s Office to examine a $250 million Army contract given to an inexperienced Alaska native corporation subsidiary, United Solutions and Services (US2).

That investigation came after The Post reported that the subsidiary received the large contract without competition, even though it could not do the work itself. Army officials said they used the company to avoid a contracting competition. They also said they knew that the firm was not doing at least half the work during much of the contract period, something that is required under SBA rules.

A spokesman for US2 said the firm “is confident that any review of this kind will show that the company and government agencies acted properly and responsibly. US2 will fully cooperate with any such inquiry in this matter.”

The SBA Inspector General’s Office also is investigating First Source contractors that SBA officials said “entered in a relationship with a subcontractor in order to defraud the government.”

The SBA is continuing to examine GTSI, even though the suspension of the company was lifted, officials said. As part of an agreement with the SBA to resume contracting, two senior GTSI executives resigned, and three others were suspended until the probe is complete.

SBA officials later also suspended the two small businesses that worked with GTSI, EG Solutions and MultimaxArray. In suspension letters to the companies, the SBA said it has evidence that the firms worked with a large company to “defraud the Government.”

Eyak Corp., the parent of EG Solutions, said in a statement that the firm is working with the SBA “to demonstrate its compliance with all relevant SBA regulations in an effort to lift the suspension and restore the company’s good standing. We are not aware of the status of any U.S. Attorney’s Office investigation but will certainly fully cooperate with any such inquiry.

“We will also work with DHS to ensure that the First Source program will continue to operate in the highly ethical manner EG Solutions adheres to.”

A spokesman for GTSI declined to comment on recent developments. An executive at MultimaxArray did not respond to inquiries.

Lars Anderson, a contracting attorney who represents a First Source contractor who raised questions about GTSI to Homeland Security officials, said there “appears to be a bellwether shift in enforcement” by the SBA and other agencies.

“I believe that this recent SBA action represents the start of a crackdown on the widespread abuses of programs meant to assist small businesses, and it is long overdue,” Anderson said.

Soloway, the trade group president, said he does not believe the problems are endemic. He said some of them stem from confusion about the government’s complex small-business rules – by contractors and government regulators alike. He said the enforcement efforts present an opportunity to clarify the regulations. “We need to be looking at the laws,” he said. “It becomes a learning moment as well as a legal moment.”

– by Robert O’Harrow Jr. – Washington Post – December 9, 2010

November 8, 2010 By AMK

Agencies slow to respond to requests for contractor data

Some federal procurement officers are refusing to publicly release contractor ratings data that may show agencies are not properly evaluating the performance of vendors who receive billion-dollar contracts, according to a consulting practice that regularly files Freedom of Information Act requests for the data.

In June, Jeff Stachewicz, founder of the FOIA Group, tried to obtain contractor evaluations from several agencies, including the departments of Defense, Energy and Interior, the Environmental Protection Agency and NASA. Interior and NASA released their contractor performance ratings, a move that Stachewicz applauds and attributes to President Obama’s push for greater transparency.

But it took months for FOIA officers to respond to the requests. Stachewicz believes that’s because some contracting officials did not want the public to see incomplete ratings contained in the Past Performance Information Retrieval System, and the application used to capture the information, the Contractor Performance Assessment Reporting System. Some agencies, such as the Defense, Homeland Security and Justice departments, denied his requests. Several of his other inquiries are still pending.

To better understand what was holding up his inquiries, Stachewicz filed a FOIA request to obtain e-mail correspondence between various agencies and Defense, which controls the databases. Two weeks ago, Energy provided him nearly 30-pages of redacted e-mails to and from Defense officials, including one exchange of messages indicating Energy had trouble obtaining its information from Defense.

In that exchange, an Energy official asked, “Is there someone within DOD that can or will release DOE performance data?” In reply, a Defense official in the database’s program office stated that a senior procurement analyst at the Pentagon had advised that the office “will not provide any ratings information in electronic or other format. DOD has not released this information in the past.”

Stachewicz says the e-mail indicates Defense was trying to block the information from consideration for release under FOIA at other agencies.

“That was the smoking gun. That one response was, ‘We don’t want to give that data out.’ In my opinion, that’s not proper. They were deliberately trying to avoid the FOIA by not giving it to the agencies to make a decision,” he said. “This flies in the face of the Obama transparency doctrine. It’s a report card . . . Let them kind of man up to their score.”

Stachewicz said while contractors are accountable for their scores, procurement officials who manage the scoring systems also are responsible for maintaining up-to-date, accurate and complete assessments. The procurement officials “are not trying to hide what’s there. They are trying to hide what’s not there,” he said.

In the past, federal auditors have sharply criticized agencies for filing insufficient evaluations of contractors that failed to provide project managers with information necessary to pick the best suppliers. Part of the difficulty is that the Office of Federal Procurement Policy has not established a way to standardize ratings scales across agencies nor made thorough documentation a priority, according to a 2009 Government Accountability Office report. Until such problems are resolved, the report said, the Past Performance Information Retrieval System “will likely remain an inadequate information source for contracting officers. More importantly, the government cannot be assured that it has adequate performance information needed to make sound contract award decisions and investments.”

Energy officials did not respond to several requests for comment.

Defense officials said it is not true that anyone stopped the department’s employees from releasing ratings information to the agencies. “If an agency has come to the CPARS or PPIRS program offices and requested a copy of the data they have submitted for their own review for potential FOIA release, we have provided it,” Defense spokesperson Cheryl Irwin said.

But “there are additional factors,” she said, listing several issues that have caused delays in distributing the ratings. Historically, for example, Defense has not released certain evaluations because of concerns about disclosing vendors’ competitive and confidential information. In addition, Stachewicz’s group submitted requests to many agencies, all of which landed in the Defense program’s office simultaneously.

“DoD coordinated with the Office of Federal Procurement Policy to understand if they wanted to make a governmentwide decision about releasability of the data,” Irwin said. The office, which is part of the Office of Management and Budget, has not done so, but has held conference calls with several agencies to gain an understanding of how each is handling the requests, she said.

Because there is no governmentwide policy on publicly releasing data from the contractor ratings systems, Defense is sending the information to the agencies for them to make decisions about disclosure, Irwin added.

“It has taken a couple of weeks to clear up some of the confusion from [such issues] and accomplish the necessary coordination with OFPP,” she said.

OMB officials confirmed that OFPP is convening conference calls with certain agencies about providing contractor ratings in response to FOIA requests. But each agency has discretion in choosing whether to publicly release its own data. Officials added they are unaware of any cases in which Defense has not provided agencies with their own ratings data or pressured agencies not to disclose their data.

The Office of Government Information Services, a new organization within the National Archives and Records Administration responsible for resolving FOIA disputes, said it is working with OMB and several federal agencies to examine procedures for consistently responding to FOIA requests for access to contractor performance ratings.

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