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August 8, 2011 By AMK

Veteran-preferred contracting programs rife with fraud, say VA OIG, GAO

Fraud pervades the Veterans Affairs Department’s contracting program for veteran-owned small businesses, a July 28 House panel was told.

The VA Office of Inspector General and the Government Accountability Office have found the program so rife with deceit that one lawmaker suggested the entire program be scrapped.

“I think if the American people really paid attention…[they] would blow this whole program up and start from scratch again. It is that bad,” Rep. Phil Roe (R-Tenn.) told the House Veterans Affairs’ subcommittee on oversight and investigations.

“Hopefully it will get better, ’cause it can’t get much worse.”

Seventy-six percent of the businesses reviewed by the VA Office of Inspector General in a recent audit were ineligible for either the program and/or the specific veteran-owned small businesses or service-disabled veteran-owned small businesses contract award, said Belinda Finn, assistant inspector general for audits and evaluations at the VA OIG. This could total $2.5 billion in contract awards to ineligible businesses over the next five years, Finn estimated.

“Thirty-eight percent of the reviewed businesses were not owned or controlled by a veteran and over half did not meet federal incurred cost and subcontracting thresholds. In many cases ineligible businesses passed through the majority of the contracts’ work requirements and funds to non-veteran-owned businesses,” added Finn.

Ineligible businesses received awards because VA’s office of small and disadvantaged business utilization was not thoroughly reviewing business documentation and performing site visits to verify the veteran-owned status, said Finn. The OIG also found that contracting officers did not always check VA’s enterprise veterans database, business size classification codes, or properly assess subcontracting and partnering agreements.

“This program is highly-vulnerable to fraud and abuse,” said Gregory Kutz, director of forensic audits and investigative service at GAO, who added that while the veteran business verification program has made some progress, it “has a ways to go.”

“We recommend that the Congress consider providing VA with the additional authority and resources necessary to expand the verification program governmentwide. Only 30 percent of service disabled veteran contracts are with the Department of Veteran Affairs. Thus, for the other 70 percent we continue to have a self certification program,” suggested Kutz.

Finn said VA’s verification system provides strong controls, but it also needs to strengthen it’s contracting practices, she said.

“I wouldn’t give up on it yet,” said Finn.

— By M. Bernhart Walker – Fierce Government – Aug. 2, 2011 at http://www.fiercegovernment.com/story/veteran-preferred-contracting-programs-rife-fraud-say-va-oig-gao/2011-08-02

Filed Under: Government Contracting News Tagged With: fraud, GAO, SDVOSB, small business, VA, veteran owned businesses, VOSB

July 28, 2011 By AMK

Acquisition workforce showing signs of change

The acquisition workforce has long been the victim and scapegoat for all that is wrong with federal procurement.

Dan Gordon, however, said that is starting to change. The administrator of the Office of Federal Procurement Policy said agency contracting officers, program managers and others are starting to show signs of morale and process improvements.

“The idea we now have a network of a group, which calls themselves rising acquisition professionals-they did this on their own, I didn’t go out there and tell them to do it-a governmentwide informal network of relatively junior acquisition professionals,” Gordon said in a recent exclusive interview with Federal News Radio in his office in Washington. “People are proud to be in this business and happy to be doing public service. That morale component is a very important one.”

Gordon said new leadership at the Defense Acquisition University and the Federal Acquisition Institute as well as the efforts by the Veterans Affairs Department’s Acquisition Academy are helping to lead this transformation.

Additionally, the Office of Management and Budget has focused on specific areas of the acquisition workforce that needs to be addressed. One is program managers for IT projects. Federal chief information officer Vivek Kundra made creating a career path for IT program and project managers one of the goals of the 25-point plan.

And the Office of Personnel Management late last week met that goal by publishing the Competency Model for IT Program Management.

“The competencies identified through the study will be used to develop an IT program management career path,” wrote OPM Director John Berry in a memo to agency Chief Human Capital Officers. “We included IT project managers in the competency study to assist with the career path effort.”

OPM developed the model based on the results of their January 2011 survey to identify critical skills and abilities for IT program and project management.

The model details IT program and IT project general and technical competencies by grade level starting with GS-13. It also ranks the skills the survey showed are most important for each position, and defines each competency.

“The competencies identified may be used in such agency efforts as workforce planning, training and development, performance management, recruitment and selection,” Berry wrote. “When used for selection, the competencies must be used in conjunction with the appropriate qualification standard.”

This is the second major change for IT program managers. In May, OPM made IT program management part of the 2210 job series.

Gordon said training is an important part of acquisition reform.

He said OFPP will ensure there is training ready before the Federal Acquisition Regulations Council issues new rules.

“We can’t have the situation where there is a new FAR rule and there is no training on it,” he said. “I sense a real change when I’m out at the agencies-and I’m out at the agencies a lot-there is a renewed commitment to their work, a renewed belief in their work and their ability to make a difference in improving contracting and saving taxpayer’s funds.”

RELATED STORIES: IT Program managers now part of IT job series

OMB plans 25-point IT reform

CIO Council to survey IT worker skills

— by By Jason Miller, Executive Editor, Federal News Radio, July 20, 2011 at http://www.federalnewsradio.com/?sid=2462847&nid=35 – Copyright 2011 by FederalNewsRadio.com. All Rights Reserved.

Filed Under: Government Contracting News Tagged With: acquisition strategy, acquisition training, DAU, FAI, information technology, IT, OFPP, procurement reform, VA

June 3, 2011 By AMK

Are inventories of service contracts worthless?

Some agency officials fear their in-depth inventories of service contracts will not be very useful, according to a new letter from the Government Accountability Office, released May 27.

A service contract inventory aims to help an agency understand how they are using contracted services to support operations and whether the agencies are using contractors’ skills appropriately.

GAO wrote that officials had mixed opinions about cataloging the service contracts. For instance, officials at the Veterans Affairs Department had doubts about the helpfulness of the inventory. They have concerns that the VA will be unable to implement any decisions based on it due to uncertainty over having enough people to do the work as well as funding.

Energy Department officials also said they foresee budgetary problems. If they planned to restructure their contracted activities, they told GAO, the department would need more money to have more federal employees carrying out the department’s work.

Other officials said that while they were still early in their analysis of the inventories, they were finding contracts that should have been left to agency employees rather than outsourced, GAO wrote.

Overall though, agencies are doing better than predicted in their inventory reviews. Seven of nine agencies have started their analyses as of April. Earlier in the year, agency officials were unsure if they could finish their analyses by June, GAO wrote.

In the fiscal 2010 Consolidated Appropriations Act, Congress required civilian agencies to annually submit to the Office of Management and Budget an inventory of service contracts.

About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week.  Published 5/31/2011 at http://washingtontechnology.com/articles/2011/05/27/service-contract-inventory-usefulness-gao.aspx?s=wtdaily_010611.

Filed Under: Government Contracting News Tagged With: budget cuts, OMB, service contracts, VA

February 10, 2011 By AMK

Contracting spending dips for the first time in 13 years

For the first time in 13 years, the government has cut its annual spending on federal contracting, Obama administration officials announced on Thursday.

Federal agencies spent $535 billion to purchase private sector goods and services in fiscal 2010, compared to $550 billion in fiscal 2009, according to Jeffrey Zients, deputy director for management at the Office of Management and Budget.

“We have reversed the trend of uncontrollable growth [in federal contracting],” Zients said in a conference call with reporters. “We’re saving money and making sure every taxpayer dollar is being well-spent.”

President Obama previously had called for a combined 7 percent reduction in baseline contract spending in fiscal 2010 and fiscal 2011 for a total savings of $40 billion. The administration says it is on pace to meet those targets, since the goal of the initiative was to reduce the overall rate of procurement spending. If the government had continued at its previous pace of contract spending, it would have spent roughly $615 billion in fiscal 2010, Zients said.

The decline in contracting spending is largely a reflection of agencies buying smarter — and often less from the private sector, said Daniel Gordon, administrator of the Office of Federal Procurement Policy at OMB.

For example, the Veterans Affairs Department has reduced its purchases of new information technology systems while the Justice Department eliminated an expensive case management system. The Housing and Urban Development Department, meanwhile, saved $44 million by eliminating a financial management system.

Several agencies also have focused on consolidating their purchases through strategic sourcing, introduced enhanced competition into their acquisitions and improved their contract management oversight, Gordon said.

“We have made real measurable progress,” he added, “progress that you can measure in dollars.”

The administration, however, is not willing to link the contract savings to its governmentwide insourcing initiative. The effort to bring some contractor functions back in-house, according to Gordon, is focused on the government regaining control of its core operations and less about taxpayer savings.

“We don’t view [insourcing] as a cost saving initiative,” he said. “We view it as a cost management initiative.”

While agencies met their overall goal of spending less on contracting, they failed to hit a series of targets for reducing their expenditures in several high-risk categories. A July 2009 memo from OMB called on agencies to reduce by 10 percent their use of sole-source, cost-reimbursement, and time-and-materials contracts. Gordon acknowledged those targets have not yet been met.

The procurement chief said the percentage of sole source contracts in fiscal 2010 dipped by 6 percent, although the percentage of contracts with only one bid declined by 11 percent.

The administration also made progress in cutting its spending on time-and-materials contracts, which are considered the highest risk to taxpayers because of the potential for escalating costs. It appears, however, that most of those contracts were converted to cost-reimbursement vehicles rather than fixed-price contracts, the administration’s preferred contracting type, Gordon said.

OMB did not immediately provide details on the time-and-materials or cost-reimbursement spending figures in fiscal 2010.

Contract spending, particularly for professional and technical services, is expected to decline further in the coming years. The administration plans to call for a 10 percent reduction on spending in these two categories, which Gordon loosely defined as the work contractors provide in assisting agency acquisition shops.

Zients, who will head up an effort to reorganize federal agencies to eliminate redundancy in government operations, declined to discuss the effort on Thursday, saying it was in its early stages.

– by Robert Brodsky – GovExec.com – February 3, 2011

Filed Under: Government Contracting News Tagged With: acquisition workforce, federal contracting, government trends, insourcing, Justice Dept., OMB, reorganization, spending, VA

September 20, 2010 By AMK

$1B in stimulus money at VA poorly tracked, IG says

The Veterans Health Administration is falling short on oversight of $1 billion in economic stimulus funding for modernization, maintenance and energy projects at veterans hospitals, according to a new report from the Office of Inspector General.

Belinda Finn, assistant inspector general for audits and investigations at the Veterans Affairs Department, found that while the VHA consistently met most competition and contacting requirements for price and bid evaluations, its oversight was inadequate in two areas.

First, the VHA did not ensure that all its contracting officers properly evaluated the prospective contractors’ ability to perform required work before they awarded contracts and orders. In reviewing 65 contract awards and task orders, the IG found that there were 60 awards totaling $83 million that had inadequate determinations in that regard. That represented 92 percent of the awards reviewed.

For example, for 43 contracts and orders totaling $56 million, contracting officers did not adequately assess contractors’ financial resources to determine whether the contractor is at high risk of seeking legal relief from creditors or ceasing operations without paying creditors.

 “We determined that the six contractors rated as high financial risks are still actively working on $9 million in awarded VHA Non-Recurring Maintenance Recovery Act awards and that two contractors with insufficient financial information received $5.2 million in awards,” Finn wrote.

In other cases, the VHA contracting officers did not adequately review contractors’ performance and delivery schedules. Those oversight problems occurred because the VA’s guidance did not address all elements of the required responsibility determinations, “and some contracting officers relied heavily on their prior experiences with prospective contractors to make responsibility determinations,” Finn wrote.

Second, the IG found that the VHA did not include clauses required under the stimulus law in 13 contract awards.

The IG recommended that the VA’s undersecretary for health improve the contractor responsibility determinations and stimulus law clauses, and the Office of Acquisition, Logistics and Construction develop policies and procedures for evaluating contractors’ past performance.

VA management agreed with the findings and recommendations, according to the report.

— by Alice Lipowicz – Sept. 20, 2010 – Federal Computer Week

Filed Under: Government Contracting News Tagged With: ARRA, financial risk, oversight, VA

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