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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

December 3, 2019 By cs

DHS acquisitions are steady despite CIO departure

Technology procurement at the Department of Homeland Security remains on steady ground despite the departure of CIO John Zangardi earlier this month for an industry job.

“We’re going to miss Dr. Zangardi, but the next CIO will come in,” said Soraya Correa, the chief acquisition officer at DHS, said on the sidelines of an industry event hosted by the Association for Federal Information Resources Management. “What I’ve seen is that CIOs are pretty much aligned with things like cloud and the strategies we’re trying to implement.”

Correa added: “Leadership changes are going to happen. That’s the nature of government. The question is: do goals and strategies still align. Dr. Zangardi and his staff knew where we were trying to go. He brought his deputy in, and we started working those strategies.”

DHS Deputy CIO, Beth Cappello, is expected to move into the acting CIO post.

On the procurement front, DHS has yet to issue its solicitation for the General Services Administration’s $50 billion, 15-year, next-generation telecommunications contract.

Keep reading this article at: https://fcw.com/articles/2019/11/21/dhs-acquistion-cio-change.aspx?m=1

Filed Under: Government Contracting News Tagged With: advanced technology, DHS, emerging technology, federal contracting, GSA, OMB, technology, telecommunications

November 4, 2019 By cs

Is Congress in the dark on supply chain risk?

Top senators on the Senate Homeland Security Committee have warned the Office of Management and Budget that IT professionals in Congress and the federal judiciary may not be getting all the supply chain risk information they need to secure their computer systems and networks as they make acquisitions.

The senators wrote to OMB Director Mick Mulvaney ″urging” the Federal Acquisition Security Council (FASC) to develop a strategic plan for sharing supply chain security information with Congress and the judiciary. The letter is signed by Chairman Ron Johnson, R-Wisc.; Ranking Member Gary Peters, D-Mich.; Sen. Tom Cotton, R-Ark.; and Sen. Ron Wyden, D-Ore.

The FASC is responsible for increasing information sharing within the federal government regarding supply chain risk and creating guidelines and practices for risk management. The FASC distributes the intelligence community’s supply change risk management (SCRM) threat analysis to federal civilian agencies making acquisitions decisions. But the senators said that the information from FASC is not reaching the other two branches of government and supply chain solutions that work for executive agencies don’t necessarily work for the “whole of government.”

Keep reading this article at: https://www.fifthdomain.com/civilian/omb/2019/10/11/is-congress-in-the-dark-on-supply-chain-risk/

Filed Under: Government Contracting News Tagged With: acquisition planning, Congress, FASC, Federal Acquisition Security Council, industrial base, IT, national security, OMB, supply chain, supply chain management

October 15, 2019 By cs

How OMB can make ‘agile government’ not an oxymoron

Over the last 18 months, the Office of Management and Budget (OMB) painstakingly went over nearly every federal technology policy that came out in the last 20 years with an eye toward modernization.

Every new policy, whether for cloud or identity management or data center consolidation and optimization, that came from that effort included a list of rescinded regulations which had grown old and held no value any more.

The most recent update to the Trusted Internet Connections (TIC) initiative rescinded four policies, some dating back 12 years.

The identity management policy from May terminated five policies, of which some went back to 2004.

As you can see, OMB did more than a little spring cleaning.

This exercise over the last two years or more has led to a new way of thinking about policymaking. OMB and other agencies are taking a page out of the agile software development playbook and applying this methodology to policymaking.

Keep reading this article at: https://federalnewsnetwork.com/reporters-notebook-jason-miller/2019/09/how-omb-can-make-agile-government-not-an-oxymoron/

 

Filed Under: Government Contracting News Tagged With: agile, agility, identity management, modernization, OMB, technology, TIC, Trusted Internet Connections

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