risk assessment | The Contracting Education Academy

November 21, 2013 By AMK

Acquisition training among starting points recommended by GAO for DoD procurement reform

The Department of Defense (DoD) must get better outcomes from its weapon system investments, which in recent years have totaled around $1.5 trillion or more. This opinion comes from the Government Accountability Office (GAO) in an Oct. 29, 2013 report entitled, “Defense Acquisitions: Where Should Reform Aim Next?”

DoD’s acquisition of major weapon systems has been on GAO’s high risk list since 1990. Over the past 50 years, Congress and DoD have continually explored ways to improve acquisition outcomes, including reforms that have championed sound management practices, such as realistic cost estimating, prototyping, and systems engineering. Too often, GAO reports on the same kinds of problems today that it did over 20 years ago.

Recently, there have been some improvements in DoD procurement, owing in part to reforms. For example, cost growth declined between 2011 and 2012 and a number of programs also improved their buying power by finding efficiencies in development or production and requirements changes. Still, cost and schedule growth remain significant; 39 percent of fiscal 2012 programs have had unit cost growth of 25 percent or more.

DoD’s acquisition policy provides a methodological framework for developers to gather knowledge that confirms that their technologies are mature, their designs stable, and their production processes are in control. The Weapon Systems Acquisition Reform Act of 2009 and DoD’s recent “Better Buying Power” initiatives introduced significant changes that, when fully implemented, should further strengthen practices that can lead to successful acquisitions. GAO has also made numerous recommendations to improve the acquisition process, based on its extensive work in the area. While recent reforms have benefited individual programs, it is premature to say there is a trend or a corner has been turned. The reforms still face implementation challenges and have not yet been institutionalized within the services.

Reforms that focus on the methodological procedures of the acquisition process are only partial remedies because they do not address incentives to deviate from sound practices. Weapons acquisition is a complicated enterprise, complete with unintended incentives that encourage moving programs forward by delaying testing and employing other problematic practices. These incentives stem from several factors. For example, the different participants in the acquisition process impose conflicting demands on weapon programs so that their purpose transcends just filling voids in military capability. Also, the budget process forces funding decisions to be made well in advance of program decisions, which encourages undue optimism about program risks and costs. Finally, DoD program managers’ short tenures and limitations in experience and training can foster a short-term focus and put them at a disadvantage with their industry counterparts.

Drawing on its extensive body of work in weapon systems acquisition, GAO’s latest report recommends several areas of focus regarding where to go from here:

at the start of new programs, using funding decisions to reinforce desirable principles such as well-informed acquisition strategies;
identifying significant risks up front and resourcing them;
exploring ways to align budget decisions and program decisions more closely; and
attracting, training, and retaining acquisition staff and managers so that they are both empowered and accountable for program outcomes.

These areas are not intended to be all-encompassing, but rather, practical places to start the hard work of realigning incentives with desired results.

A copy of GAO’s complete 17-page report can be downloaded here: http://www.gao.gov/assets/660/658615.pdf

September 16, 2013 By AMK

Anti-contractor rhetoric as common as Fed-bashing, industry group says

With collaboration between agencies and contractors at a “low ebb,” government should centralize services acquisition-related human capital planning to confront a retirement-wave brain drain and align itself with industry trends, a key contractor group recommends.

Current budget constraints, curbs on contracts and congressional hostility toward the federal workforce have combined to create a climate in which “anti-contractor rhetoric has become at least as common a political tool as public employee bashing,” a leadership commission convened by the Professional Services Council wrote in a report released Monday.

“This lack of collaboration and communications has a palpable impact on program outcomes and quality as well as on innovation,” said the report, produced by industry executives and chaired by Robin Lineberger of Deloitte Consulting and Ellen Glover of ICF International Inc. The authors noted that government is concerned that company proposals “lack originality and innovation,” while industry feels “compelled to propose only within the lines they believe the customer is willing to consider.”

Keep reading this article at: http://www.govexec.com/contracting/2013/09/anti-contractor-rhetoric-common-fed-bashing-industry-says/70102/?oref=river

August 26, 2013 By AMK

DOT cost-reimbursement awards did not comply with revised FAR rules, IG says

Administrations within the Transportation Department did not fully comply with revised Federal Acquisition Regulation requirements on the use of cost-reimbursement contracts due to a lack of guidance from the DOT on how to implement the revised regulation, an Aug. 5 DOT inspector general report says.

The IG reviewed 31 cost-reimbursement awards – 11 contracts and 20 task orders – from six administrations in the DOT that were entered into between July 1, 2011, and May 31, 2012.

Section 864 of the 2009 National Defense Authorization Act required amendments to the FAR to provide further guidance on circumstances when cost-reimbursement contracts are appropriate as well as how to support the selection of a cost-reimbursement contract and the resources necessary to award and manage a cost-reimbursement contract.

Keep reading this article at: http://www.fiercegovernment.com/story/dot-cost-reimbursement-awards-did-not-comply-revised-far-rules-ig-says/2013-08-08

May 9, 2013 By AMK

NSA logistics chief comments on the acquisition process and overcoming challenges

Note: ExecutiveGov recently spoke with Dr. Harvey Davis, director for installations and logistics at the National Security Agency. Dr. Davis has held a variety of roles over his 30 years of service to the agency, where his responsibilities have included leading recruitment and overseeing billions of dollars in infrastructure construction. This article is the third in a series.

ExecutiveGov: What’s the personal value that you’ve taken from your different roles? What’s given you a sense of appreciation for your job?

Dr. Davis: From the growth perspective, one of the things that I did during my career is to never say no to a job that was offered to me. And the jobs that are most attractive to me are the jobs that nobody wants. Which means that you can go in there and you can craft it and you can do the things that you need to do.

As I went through my career, the recruitment, the HR work, the contracts work, and the facilities and logistics work, they all had in common that there were areas that needed to be addressed from a problematic perspective and smoothed out. One of the great things about this agency is this agency is a city. A municipality requires every skill under the sun, and you can move and change focus. If I was in the private sector, I probably couldn’t move from being an HR director to somebody who was in charge of construction across the country and managing billions of dollars of construction.

From a psychological perspective, some of the construction that we’ve done across the country, to see it go from the back of a napkin, where we first thought about it, into brick and mortar, into big buildings, helps you get a psychological sense of achievement. It’s a more tangible sense of achievement than you would have gotten otherwise.

Keep reading this interview at: http://www.executivegov.com/2013/04/dr-harvey-davis-on-his-nsa-career-the-acquisition-process-and-overcoming-challenges/

March 14, 2013 By AMK

Outsourcing at the local level: Examining the role of the Chief Procurement Officer in the decision-making process

Outsourcing in the public sector means “contracting out” functions that historically have been provided by public employees. The belief that there are functions best performed by the private sector is not new, and moving these functions from the public to the private sector requires a fair and open process in the public’s best interest.

The Institute for Public Procurement recognizes that the outsourcing of particular governmental functions can be a fiscally sound tool of responsible public administration. However, identifying and assessing the elements of public performance most appropriate for outsourcing — and ensuring a successfully executed outsourcing decision – is a substantial challenge for everyone.

Public procurement offers a uniquely qualified and professional resource for government decision-makers considering outsourcing alternatives. The Chief Procurement Officer (CPO), Procurement Director or Purchasing Manager serves a strategic role in a public entity’s decision to outsource. The CPO is central to a fair, transparent and effective outsourcing process. While the decision is ultimately reserved for an elected body or senior executive, the CPO is prepared to provide informed insight on market structure, cost, risk, competitive methods and contract form as these factors impact the quality and cost of services. The CPO is uniquely positioned to help design and manage a process to achieve a successful public outsourcing effort. It is therefore important to engage the CPO early as a strategic partner to assess and to administer any ensuing selection and contract formation process.

Keep reading this article at: http://govpro.com/resource_center/procurement_prof/public-sector-outsourcing-201212-201301/

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