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December 1, 2010 By AMK

Contract disputes reach an all-time high

For the fourth consecutive year, the number of bid protests filed with the Government Accountability Office has increased significantly, a trend some analysts attribute to recent growth in federal procurement spending and the rising value of individual contract awards.

In fiscal 2010, contractors submitted an all-time high of 2,299 protests, according to statistics GAO released to congressional leaders last week. This represents a 16 percent increase over fiscal 2009, when contractors filed 1,989 contract award challenges.

All but 73 of the 2010 cases have been closed; most were dismissed based on procedural rules, withdrawn by the protester, or resolved through mediation before GAO reached a decision. Of the 441 cases that did make it to the final stage, GAO decided 82, or 19 percent, in favor of the company that filed the protest. That figure is up slightly from fiscal 2009 but down significantly from fiscal 2006, when the sustainment rate peaked at 29 percent.

While the sustainment rate remains relatively low, contractors have found other ways to settle the disputes in their favor. Very often, agencies will eliminate the middle agent and renegotiate directly with the contractor. The 2010 effectiveness rate — based on a contractor receiving “some form of relief from the agency,” frequently the reopening of the contract — was 42 percent, the data show. That’s more than double the sustainment rate.

Agencies heeded GAO’s recommendation in all but three cases in 2010, each of which were filed by small firms operating in Historically Underutilized Business Zones. A 2009 GAO decision found HUBZone contractors legally had a preference over other types of small businesses when competing for set-aside contracts. The Obama administration disagreed and instructed agencies to ignore GAO’s recommendation. Congress restored small businesses parity in September.

The swell of bid protests coincides with an overall increase in the federal government’s contract spending in recent years.

A February 2009 Congressional Research Service report found the number of contracts signed between fiscal 2001 and fiscal 2008 increased by almost 600 percent to more than 4 million, while the total value of those contracts nearly doubled. During that same period, the number of bid protests increased by 37 percent, CRS found. The majority of all contract actions, however, were not disputed.

“Spending on contracts has gone higher and higher and that has led to an increase in the total number of bid protests,” said Ralph White, who heads GAO’s bid protest division.

There are other possible explanations for the spike in contract protests. Some analysts point to the increased dollar value of individual awards and longer contract durations, which make it harder for firms to let go of contract opportunities.

“These are tough economic times and they are getting tighter in the government space,” said Rich Rector, chairman of the government contracts practice at the Washington law firm DLA Piper. “It could drive people not to be as sanguine when they lose a contract.”

GAO’s jurisdiction over contract reviews also has expanded in recent years. In 2007, Congress instructed the watchdog to hear protests for task and delivery orders on existing multifirm contracts, public-private job competitions under Office of Management and Budget Circular A-76, and Transportation Security Administration contracts.

Of the nearly 2,300 fiscal 2010 bid protests, 189 were related to GAO’s new authority over task and delivery orders. In 2009, contractors filed 168 task order protests. GAO no longer keeps separate data on TSA contracts, White said, and there is a governmentwide moratorium on A-76 competitions.

The bid protest figures also can be somewhat deceiving because GAO counts each supplemental filing by a protesting party as a new case. Nonetheless, the supplemental protests filed annually represent a relatively small percentage of the total, White said.

– by Robert Brodsky – GovExec.com – December 1, 2010

Filed Under: Government Contracting News Tagged With: bid protest, GAO, HUBZone, OMB, small business

November 15, 2010 By AMK

Senior acquisition officials question procurement policy direction

Senior federal acquisition officials do not believe that many of the signature procurement policy changes the Obama administration and the Democratic Congress have implemented in recent years are adding significant value to the government’s mission, according to a new report from a pair of industry groups.

The biennial survey by the Professional Services Council, a contractor trade association, and Grant Thornton LLP, a business advisory firm, interviewed 33 officials from across government, including senior acquisition executives, congressional staff and oversight employees, on a host of topics.

On many key issues there appears to be a widening chasm between operational and oversight officials, but they generally concurred that the implementation of major policies and rules — from the insourcing of private sector functions to the push to use fixed-price contracts — were failing to meet their stated objectives.

“The idea of showing contract savings is nothing more than an accounting exercise,” said one interviewee. “When you have policy that doesn’t make sense to subject matter experts, you lose credibility,” another said. All the quotes were provided anonymously, although the officials interviewed were identified at the end of the report.

Stan Soloway, president of PSC, suggested that many senior acquisition officials supported the administration’s overall policy direction, but felt “neutered” by a one-size-fits-all execution approach.

For example, recent legislative and regulatory actions have shown a preference for fixed-price contracts above cost-plus or time-and-materials awards. In many cases, officials are required to provide lengthy written explanations when using the latter contract types. But the survey showed that 71 percent of respondents felt the fixed-price mandates had not resulted in better contract outcomes for the government or the taxpayer.

A similar disconnect between a policy’s intention and result was found in response to questions about insourcing. Many officials argued the concept, while necessary to restore core government capabilities, has not been conducted thoughtfully or strategically and might be moving too rapidly. Meanwhile, a whopping 94 percent of respondents said insourcing will hurt small businesses.

“Insourcing is moving too quickly and it is too focused on hitting metrics,” one interviewee said. “The administration is proceeding without a larger view of how the government does business. The decision should be strategic and not rushed.”

The redefinition of inherently governmental activities, one of the key procurement regulatory changes the Obama administration has embraced, also failed to impress senior acquisition officials.

Two-thirds of all interviewees said the March guidance from the Office of Management and Budget was not clear or actionable. As was the case with several policy proposals, many cited the lack of resources needed to implement the guidance.

The survey also revealed palpable frustration among acquisition and oversight leaders regarding implementation of the Recovery Act. Two-thirds of all respondents felt they were not provided adequate resources to comply with stimulus rules and that reporting requirements were neither manageable nor sustainable. Congress, however, has shown some support for implementing Recovery Act-type requirements for all procurements.

Retired Vice Adm. Lou Crenshaw, a principal at Grant Thornton, suggested that too much focus has been placed on regulatory compliance rather than operational outcomes. “This is rocket science,” Crenshaw said. “It’s a complicated process.”

As in previous surveys, enhancing, training and managing the acquisition workforce remain the biggest operational challenges in acquisition, respondents said. They noted that while the addition of direct hiring authority at some agencies has helped to a point, constant turnover, insufficient training and a reliance on interns have created functional concerns. Acquisition officials suggested the system might be improving, but oversight officials generally were more skeptical.

Contract administrators also appeared to be struggling under the weight of oversight mandates. Nearly 90 percent of those surveyed agreed more resources were devoted to back-end oversight than front-end contract management. Others suggested overly burdensome oversight was inhibiting innovation while stressing rigidity and a focus on lowest cost.

“Resources are absolutely not in balance,” one interviewee said. “They have thrown resources at [inspectors general] and auditors, but they have done nothing to facilitate contract administration.”

The divide was evident in other areas. More than 70 percent of operational executives said existing structures designed to prevent organizational conflicts of interest function effectively. Sixty percent of oversight professionals disagreed. The two sides also disagreed on the need to reform personal conflict-of-interest rules, with operational officials generally in favor of maintaining the existing structure.

While the report did not take sides on the respective issues, it did recommend improving the communication and collaboration between the oversight and operational communities, backing up policy directives with sufficient resources, and avoiding one-size-fits-all mandates.

– By Robert Brodsky – GovernmentExecutive.com –  November 15, 2010

Filed Under: Government Contracting News Tagged With: acquisition workforce, ARRA, conflict of interest, IG, insourcing, OMB, small business

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.


– By Aliya Sternstein – NextGov.com – 11/08/10 – © 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED

Filed Under: Government Contracting News Tagged With: DoD, Energy Dept., FOIA, NASA, OFPP, OMB, performance, PPIRS

July 28, 2010 By AMK

Senate committee approves acquisition institute bill

The Senate Homeland Security and Governmental Affairs Committee today approved a bill designed to strengthen the Federal Acquisition Institute.

The Federal Acquisition Institute Act (S. 2902) would reorganize the training institute to report to the Office of Federal Procurement Policy, which is in the Office of Management and Budget. OMB and the General Services Administration would have to tell Congress about FAI’s budgetary needs and necessary authorities to set governmentwide acquisition training standards.

The governmentwide training standards would include developing certifications, overseeing internship programs and managing rotation assignments for acquisition employees. The measure would also create information on a career in federal contracting to hire and then retain more government employees. FAI would also work with the Office of Personnel Management on workforce issues, according to the bill.

Similar to the Defense Department’s Defense Acquisition University, FAI works on career development and training the civilian acquisition workforce.

Sen. Susan Collins (R-Maine), the committee’s ranking member, introduced the bill because she said FAI gets much less support than DOD’s acquisition university.

The Senate still must vote on the bill before it would go to the House for consideration.

— by Matthew Weigelt – July 28, 2010 – Federal Computer Week

Filed Under: Government Contracting News Tagged With: acquisition training, acquisition workforce, DAU, FAI, GSA, OMB

February 1, 2010 By AMK

Obama proposes expanding acquisition workforce

The acquisition workforce is one of the few areas of federal employment the Obama administration wants to expand, an official said today.

Peter Orszag, director of the Office of Management and Budget, said the number of contracts and government spending has doubled, but the acquisition workforce, which includes employees who handle the work of developing a contract’s requirements, reviewing bids and awarding contract, has had little growth.

“It’s not too hard to figure out that oversight of those contracts has not kept pace with what it should be,” he said at a press briefing on the fiscal 2011 budget proposal.

In 2000, the government had 26,751 contracting officers and the number had grown to only 29,707 by 2008, a 9 percent rise, according federal figures.

The administration is trying to invest in greater oversight of what the government buys, Orszag said. Specifically he said the administration wants to crack down on no-bid contracts, buy goods and services in bulk, and increase the acquisition workforce’s size so the government can better oversee its contracts.

As the administration looks to increase the acquisition workforce, officials said in the budget proposal documents that the world has changed to a knowledge-based economy. “Half a century ago, most white collar federal employees performed clerical tasks, such as posting Census figures in ledgers and retrieving taxpayer records from file rooms,” the proposal states.

The administration proposed spending $24.9 million for training the acquisition workforce. The money would support interagency initiatives and projects that improve the ability of civilian agencies to assess the size and skills of their procurement employees. It would also provide funds for agencies to find the best mix between public employees and private sector contracts carrying out agency work, the budget proposal states.

Over the past year, the Obama administration has emphasized its concerns that agencies have allowed contractors to do too much in conducting their operations.

“The activities supported through this fund are intended to foster and promote the development of the acquisition workforce,” the budget document states.

In addition, the agencies have the Acquisition Workforce Training Fund. The mandatory appropriation of funds is for civilian agencies to train their employees. It’s financed by 5 percent of the fees collected from civilian agencies’ procurements from governmentwide information technology acquisition contracts, the General Services Administration’s Multiple Award Schedules program, and other multi-agency contracts.

Meanwhile, officials are working with the Office of Personnel Management to simplify and streamline the hiring process. They also want easier checkpoints so the people applying for federal jobs can check online to see what’s happening, Orszag said.

— by Matthew Weigelt – Feb. 1, 2010 – Federal Computer Week

Filed Under: Government Contracting News Tagged With: acquisition training, acquisition workforce, OMB

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