Risk | The Contracting Education Academy

April 19, 2019 By cs

Senate Armed Services Subcommittee on Cybersecurity holds hearing to discuss responsibilities of the industrial base

On March 26, 2019, the Senate Armed Services’ Subcommittee on Cybersecurity held a hearing to receive testimony assessing how the Department of Defense’s (DoD) cybersecurity policies and regulations have affected the Defense Industrial Base (DIB).

To gain a better understanding of the DIB’s cybersecurity concerns, the Subcommittee invited William LaPlante, Senior Vice President and General Manager of MITRE’s National Security Sector; John Luddy, Vice President For National Security Policy at the Aerospace Industries Association; Christopher Peters, Chief Executive Officer of the Lucrum Group; and Michael MacKay, the Chief Technology Officer of Progeny Systems Corporation.

In their opening remarks, the Chairman of the Subcommittee, Senator Mike Rounds (R-SD), and Ranking Member, Senator Joe Manchin (D-WV), acknowledged industry concerns about the DoD’s lack of clarity and disparate implementation of cybersecurity regulations, such as guidance relating to DFARS 252.204-7012 (DFARS Cyber Rule or Rule) and National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171.

Senator Rounds stated that he “expects [DoD] to come up with measured policies to make improvements in [cybersecurity]” and he “hope[s] DoD takes seriously the concerns of the DIB.” He further noted that DoD “cannot simply apply increasingly stringent cybersecurity requirements on its contractors” and that “doing so without subsidy or assistance is unlikely to particularly improve cybersecurity [for] the DIB” and would likely drive the most innovative small businesses out of the supply chain. Senator Rounds called for putting a program in place to ensure the best possible protections for contractors regardless of size and referred to the “Achilles heel” of this issue as the desire to use a large number of small contractors while still needing to protect sensitive government information. Later in the hearing, Senator Manchin expressed great concern over the cyber incidents experienced by DoD contractors and urged the witnesses to “tell [the Subcommittee] what you need . . . [the Subcommittee] is here to fix it and you’re here to tell us what’s broken.”

Keep reading this article at: https://www.insidegovernmentcontracts.com/2019/03/senate-armed-services-subcommittee-on-cybersecurity-holds-hearing-to-discuss-the-responsibilities-of-the-defense-industrial-base/

April 12, 2019 By cs

The National Defense Strategy: A compelling call for defense innovation

The National Defense Strategy tells the U.S. military – the Department of Defense – what kind of adversaries they should plan to face and how they should plan to use the armed forces.

The National Defense Strategy is the military’s “here’s what we’re going to do” to implement the executive branch’s National Security Strategy. The full version of the National Defense Strategy is classified; but the 10-page unclassified summary of this strategic guidance document for the U.S. Defense Department is worth a read.

Since 9/11 the U.S. military has focused on defeating non-nation states (ISIL, al-Qaeda, et al.) The new National Defense Strategy states that America needs to prepare for competition between major powers, calling out China and Russia explicitly as adversaries, (with China appearing to be the first.) Mattis said, “Our competitive advantage has eroded in every domain of warfare.”

While the National Defense Strategy recognizes the importance of new technologies, e.g. autonomous systems and artificial intelligence, the search is no longer for the holy grail of a technology offset strategy. Instead the focus is on global and rapid maneuver capabilities of smaller, dispersed units to “increase agility, speed, and resiliency … and deployment … in order to stand ready to fight and win the next conflict.” The goal is to make the military more “lethal, agile, and resilient.”

The man with a lot of fingerprints on this document is Deputy Secretary of Defense Patrick Shanahan. Shanahan came from Boeing, and his views on innovation make interesting reading.

People in government rarely make the case for taking more risk. Yet Shanahan said after the strategy was released, “Innovation is messy.” He added, “we’re going to have to get comfortable with people making mistakes.”

Keep reading this article at: https://warontherocks.com/2018/02/national-defense-strategy-compelling-call-defense-innovation/

April 5, 2019 By cs

Other transactions: Do the rewards outweigh the risks?

In recent years, the federal government has made a large shift in how it expends taxpayer dollars on federal contracts. Numerous laws have mandated new or expanded use of rapid procurement processes or other transaction agreements (OTA), which are now a preferred procurement vehicle.

OTAs, while not contracts governed by the Federal Acquisition Regulation (FAR), are legally binding contracts that were once considered tools of last resort because they put taxpayers and the government at risk.

The theory behind OTAs is that nontraditional vendors would be lured into the government contracting marketplace by streamlined procurement processes. The hope is that nontraditional contractors that were unable or unwilling to enter into traditional procurement contracts would come to the table and bring with them innovative solutions that traditional contractors were not offering. The reality, however, is that these speedy buying procedures are being leveraged by large traditional contractors that are looking to boost their bottom line by avoiding normal contract administration, oversight, and accountability protections.

“Other transactions” is a term commonly used to refer to the authority to enter into transactions other than contracts, grants, or cooperative agreements. Agencies have authority to award such agreements in limited circumstances — research, prototype, and now defense follow-on production projects. Unlike a normal government contract, OTA is promoted as a more flexible agreement that can speed up the buying process and be better tailored based on changes in technology and the government’s needs.

Keep reading this article at: https://www.pogo.org/report/2019/03/other-transactions-do-the-rewards-outweigh-the-risks/

March 22, 2019 By cs

Why contracting challenges put VA on the ‘High-Risk’ list

The Department of Veterans Affairs has not updated some of its purchasing regulations since 2008, and the resulting problems created for contracting officers at the agency have caused the Government Accountability Office to designate the problem a high-risk area for 2019.

“The VA acquisition is a huge part of the mission over at the Department of Veterans Affairs. They do about $26 billion in procurements each year, and tens of thousands of procurement actions. Since 2015, we’ve had over 31 recommendations that we’ve done there and, unfortunately, 21 of those remain open, and so the high-risk designation centers on a couple of longstanding weaknesses that they’ve had in the acquisition area,” said Chris Mihm, managing director of the GAO Strategic Issues Team, in an agency podcast.

“First is that they don’t have a consistent and coordinated set of policies and regulations across the department. Second is that there is the importance of just a human capital, to make sure that their people are trained, to make sure that their workloads are being appropriately managed. Third, there’s problems that we’ve seen in terms of data and transparency over the acquisition process. And then fourth, that we’re very concerned about the absence of a strategic approach to procurement at the department.”

Keep reading this article at: https://www.federaltimes.com/management/2019/03/07/why-contracting-challenges-put-va-on-the-high-risk-list/

March 21, 2019 By cs

In acquisition, standing still is the biggest risk

The biggest risk in federal acquisition today is not taking enough risks.

Not reckless risks, but deliberate risks consistent with Federal Acquisition Regulation Part 1 guidance.

The largest chunk of U.S. research and development spending, the most significant technological innovation, and its fastest evolution all reside in the private sector. And the private sector has little interest in slogging through the rule-burdened, prescriptive, intellectual-property-devouring federal procurement process. These facts are driving a tidal wave of change in government buying, especially in Defense organizations.

Here’s the January 2018 National Defense Strategy:

“We must not accept cumbersome approval chains, wasteful applications of resources in uncompetitive space, or overly risk-averse thinking that impedes change. Delivering performance means we will shed outdated management practices and structures while integrating insights from business innovation.”

Not only is the Pentagon challenged in attracting the most innovative companies in America’s most vibrant business sectors, but our adversaries—like Russia and China—have little acquisition oversight or regulation so they are beating us to the cutting edge.

Keep reading this article at: https://www.govexec.com/excellence/promising-practices/2019/03/acquisition-standing-still-biggest-risk/155397

On March 26, 2019, the Senate Armed Services’ Subcommittee on Cybersecurity held a hearing to receive testimony assessing how the Department of Defense’s (DoD) cybersecurity policies and regulations have affected the Defense Industrial Base (DIB).

The National Defense Strategy tells the U.S. military – the Department of Defense – what kind of adversaries they should plan to face and how they should plan to use the armed forces.

In recent years, the federal government has made a large shift in how it expends taxpayer dollars on federal contracts. Numerous laws have mandated new or expanded use of rapid procurement processes or other transaction agreements (OTA), which are now a preferred procurement vehicle.

The Department of Veterans Affairs has not updated some of its purchasing regulations since 2008, and the resulting problems created for contracting officers at the agency have caused the Government Accountability Office to designate the problem a high-risk area for 2019.

The biggest risk in federal acquisition today is not taking enough risks.

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