OFPP | The Contracting Education Academy

February 28, 2011 By AMK

Federal contract spending slowdown just beginning, OMB official says

There are about 50 percent fewer federal contract specialists today than there were in 2001 because for the past 15 years the government has failed to invest adequately in the federal acquisition workforce and its training, a senior official at the Office of Management and Budget told a meeting of contractors and government officials.

However, “we’re not in a situation where we face a nonfunctioning system,” Dan Gordon, director of OMB’s Office of Federal Procurement Policy, Thursday told members of the Association for Federal Information Resources Management. “On the contrary, our acquisition system works pretty well. People sometimes forget that.”

In an address titled “Mythbusting 101: How Government-Industry Collaboration Enhances Contracting,” Gordon laid out three priorities.

“Our No. 1 priority is strengthening the acquisition workforce,” he said, adding that recently there have been hiring increases in the Defense Department and civilian agencies “of between 7 percent and 10 percent.”

Gordon said his No. 2 priority is to strengthen fiscal responsibility because between 2001 and 2008 federal procurement spending more than doubled to over $500 billion spent annually on goods and services, which is an unsustainable path, he said.

“That has stopped. In fiscal 2010, the federal government spent less on goods and services through contracts than it did in 2009. And I cannot imagine that that trend is going to be reversed any time soon,” he said. “We simply cannot afford to increase our spending on contracts. We don’t have the money. You see it with DOD, you see it with civilian agencies. The picture is very similar across the federal government.”

“Putting that tsunami of spending” in the hands of a depleted workforce that wasn’t getting the needed investment in training “was a recipe for problems, and we’ve had a good number of problems,” Gordon said.

Among other problems, he cited the government’s too great reliance on cost reimbursement, sole-source and time-and-materials contracts.

But there are times when those types of contracts do make sense, Gordon said, urging the need for flexibility in contracting.

“Fiscal responsibility means spending less to the extent that we’re able to, and it means buying smarter whenever we can,” he said.

As an example, he said there are increasing opportunities for strategic sourcing on IT contracts.

Gordon said his No. 3 priority is to rebalance in the relationship between the government and the contractor communities, citing current issues within the federal acquisition workforce.

He derided what he called the many myths that continue to hamper better contracting, such as a false belief among many contracting officials that they should avoid contact with contractors for fear they will precipitate protests or jeopardize proprietary information.

“Partly because of that wave of demand for contracts hitting an unprepared and understaffed acquisition workforce, there have been too many situations where we’ve contracted out unthinkingly, including functions that need to be reserved for federal employees,” he said.

“There have been situations, including in contract shops themselves, but also in IT offices and in mission offices, where there is no federal employee that has oversight of what is going on,” Gordon continued.

“There are not enough federal employees so [that] the federal employees maintain control. That is an unbalanced, unhealthy situation,” he said.

Federal employees need to oversee federal contractors, he said, and that means there must be an adequate number of trained contracting officers “so that the federal employees maintain control of the federal agencies’ missions and operations.”

Acknowledging the federal government’s need for contractors, Gordon said, “But contractors support us in the federal government, which means that we have to be in charge.”

— by David Hubler – Washington Technology – Feb. 18, 2011

February 22, 2011 By AMK

Jenkins to be FAI director

Donna Jenkins will be the next official director of the Federal Acquisition Institute.

Jenkins has been the acting director of FAI since last Aug. 23. She expects to get the new title Feb. 27.

The institute, which is under the auspices of General Services Administration, works to develop the federal acquisition workforce by providing training for civilian agencies’ employees.

Senators have pushed for reforms in the FAI. In 2010, the Senate passed Sen. Susan Collins’ (R-Maine) legislation to strengthen the institute with more authorities over the acquisition workforce training fund, as well as clearing up ambiguities about whom FAI reports to.

The legislation would also have put the choice of who would lead FAI into the hands of the administrator of the Office of Federal Procurement Policy and move the director of the institute to the Office of Management and Budget’s procurement policy office. However, the House never considered the bill, and such a bill has not been introduced in the current Congress.

— by Matthew Weigelt – Federal Computer Week – Feb. 18, 2011 at 1:25 PM

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

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