Procurement integrity put to the test- 144 years ago

President Ulysses S. Grant received a letter written to warn him about a scrupulous group of businessmen about to pay him an office call. The letter details the bid fixing plan and how the other members of the group would buy-out any other bidders.

He details contracts awarded to the highest (or a long way from lowest) bidder and other shenanigans.

Even (way) back in the "good old days..."

Effective contract administration methods

Much has been said about ensuring contractors properly perform on their contracts during the Iraq War. Check out how they improved contractor performance during the Civil War.

Looking at the big picture of PBSA

The Procurement Round Table is a group of procurement folks who meet to try to make sense of federal contracting and how to make it better. Earlier this year, this group issued a white paper to the acquisition advisory panel, working on improving services acquisition.

The paper introduced the concept of "relational contracting" for discussion purposes. The other purpose of the paper is to help explain why services contracting is supposed to be performance-based but often is performance based in name only.

Looking at the members of the Round Table and the members of the AAP, there is a lot of overlap. Maybe they are just trying to encourage discussion amongst the rest of us.

So...what do you think?

Thanks to Mary Paige for pointing this white paper out to me.

Size does matter- Part II

As an addition to the earlier post regarding small business certification, here is a decision by the Court of Federal Claims where the Air Force required a new certification by the business when they were going to issue a task order to an IDIQ contract.

One of the contactors had been a small business when they won their part of the basic contract. However, now they are a large company. By asking for a certification of business size, the Air Force caused the company to be ineligible for award. The contractor didn't like that and took them to court- and lost.

This is a way to keep small business preferences from being misused. The SBA's rules (see earlier post) are a partial fix.

Contracting officers can ensure small businesses get their preferences by requiring certification each time. It takes little effort on the contractor's part to recertify and keeps the integrity of the preference program intact.

Keep a watchful eye- careful contract administration is still important

Every once in a while, it is good to remember that we are responsible for and entrusted to protect our nation's resources. The best way we can is to create business relationships based on sound, ethical practices.

This website is about those business relationships that contractors and sometimes government employees (there is even a contracting officer listed here) made that were not sound nor ethical.

Come back to this site occasionally to keep in mind the ways that others can commit procurement fraud and erode the trust that the rest of us have been trying to build through our actions day-to-day.

New Acquisition Advisory Panel Report is drafted.

The Acquisition Advisory Panel, formed as a result of the Services Acquisition Reform Act of 2003 (SARA) has put together its draft report. Youmay have seen discussions of it in various places. One such place is Steven Kelman's column in FCW.com. He is starting a series of discussions about the report. This report drew the opposition of panel member Marshall J. Doke.

FYI, other board members are:

• Louis M. Addeo, President, AT&T Government Solutions;
• Frank J. Anderson, Jr., President, Defense Acquisition University;
• Allan V. Burman, President, Jefferson Solutions and former Administrator for Federal Procurement Policy;
• Carl DeMaio, President and Founder of the Performance Institute;
• David Drabkin, Deputy Associate Administrator for Acquisition Policy, General Services Administration;
• Jonathan Etherton, Vice President, Legislative Affairs, Aerospace Industries Association of America, Inc., and former staff member of the Senate Armed Services Committee;
• James A. Hughes, Jr., Deputy General Counsel for Acquisition, Department of the Air Force;
• Deidre A. Lee, Director of Management and Chief Acquisition Officer for the Federal Emergency Management Agency;
• Tom Luedtke, Assistant Administrator for Procurement, National Aeronautics and Space Administration;
• Marcia G. Madsen, Partner, Mayer, Brown, Rowe and Maw, and past Chair of the ABA Section of Public Contract Law;
• Melanie R. Sabelhaus, Deputy Administrator, Small Business Administration;
• Joshua I. Schwartz, Professor of Law and Co-Director of the Government Procurement Law Program, George Washington University Law School;
• Roger D. Waldron, Director, Acquisition Management Center, General Services Administration.
• Laura Auletta, Chairperson of the Civilian Agency Acquisition Council, will serve as the Panel’s Designated Federal Officer (Executive Director).

You are welcome to read the draft and the two columns that pick at the decisions. I think that services acquisition is so important that it rates it's own Aquisition University (DAU is for systems acquisition). Since DoD spends as much on services as systems, it is that important!

The US spends 3 times as much per person on defense as does Europe

This interesting article shows graphically how much the US spends on defense and how much of the world's freedom is shouldered by our country.

To me, the most telling is the statistic that shows that only 4% of Europe's soldiers are deployed throughout the year and that 16% of America's fighting men and women are deployed (some of our troops are deployed to Europe and are included in this total, I presume).

This is who is defending freedom world-wide.

I'd like to say that the rest of the world (England and Australia excepted) should pick up their share of the load, but that never has happened and may never happen.

Government Internet initiatives face real challenges

After reading (and writing) about the soon-to-be-adopted (by 2014) web-based contracting systems, I remembered this recent article. It cites the use of federal Internet sites by citizens throughout the country. [A similar article is here]

Maybe the explanation is in the traditional government practice of rice-bowling. Here is what the article says,

Karen Evans, administrator of OMB's Office of Electronic Government and Information Technology, said it is one thing for agencies to offer a service, but it is another for them to actually shut down their similar service and use the governmentwide solution. [my italics, of course]

That is why there is an Army Single Face to Industry website and FedBizOpps, a USAJobs site and the Army CPOL website (the Air Force has one and the Navy, too).

Of course, what about all the legacy systems that are procurement-related that can barely even talk to themselves.

The Coast Guard's contract writing system (see the article or read the report, see page 8) that doesn't talk to the federal government's new repository of procurement-related data (FDPS-NG) nor to other DHS contracting systems. The report says

Currently, however, DHS has several different contract writing systems that do not automatically interface with its Federal Procurement Data Systems - Next Generation (FPDS-NG) – a government-wide procurement reporting system accessible by the public. Some of the systems may need to be replaced. Additionally, not all DHS procurements are entered into FPDS-NG. For example, grants, mission assignments, and purchase card data may not be entered into FPDS-NG, resulting in an understatement of DHS’s procurement activities.

Wow! Why can't we just get along?

Interesting perspective on federal contracting in the future

Commercial practices in federal procurement as a "hot" issue may be back in style. A new report by Government Futures (get your copy of the report in .pdf format or view the webcast) talks about using commercial business practices. We are used to hearing about such practices as buying commercial, off the shelf items, for example.

However, this time, commercial business practices include such things as using web-based buying, tracking and spend analysis systems, strategic sourcing and something they call aggregate buying (buying in bulk throughout the "enterprise" (the whole Army, for instance, not the space ship)).

[Is it legal to have parenthesis inside parenthesis? Just wondering...]

The "quote of the article" is by the president of Government Futures who is quoted as saying

Pockets of excellence sit side by side with shops where innovation is not rewarded

Very interesting take on this topic. The most interesting thing to me, though, is the graphic that estimates how long it will take for federal government adoption of such practices. This report expects widespread adoption by 2014 of web-based procurement systems.

We may get SPS Increment 3 by then.

NASA's GWAC contract gets recertified

OFPP Chief says that Government Wide Acquisition Contracts (GWACs) are not a problem and that they solve strategic requirements for a narrow range of products and services.

Earlier this week, we discussed GWACs and interagency contracts. Now, NASA gets a shot to keep theirs.

Do you think GWACs and other interagency contracts are needed/desired? Do you think they serve a purpose?

How about intra-agency contracts (such as Army contracts used by the Navy, etc.). Do they have the same issues as interagency and GWACs?

Acquisition is a challenge at DHS, too!

Even at DHS- that includes the US Coast Guard- there is trouble in Contract Land. They need a new contract writing system. We have heard about Increment 3 of SPS and maybe that would be a great way to introduce our Coastie friends to our misery!

From before the blog: Size does matter

[Occasionally, I will resurrect something that I have found from the past and bring it to your attention.]

Cost for certifying as a small business as part of a GSA schedule proposal: $0
Cost for competitor to protest size certification: $.39
Cost for misrepresenting a large company as a small one: NOT Priceless- One million dollars!

Seriously, folks (I can't believe I said that)... There is a current controversy with large companies buying small companies and reaping small business contracting preferences. In fact, this fall, the Small Business Administration came up with new regulations to combat this issue.

Is that enough? Is that too much?

Another report saying "contract administration first!"

Once again, GAO manages to state the obvious, that contract administration is lacking in contracts for forward deployed contractors. One of the issues that GAO thinks is important is how many contractors and their employees there are.

There seems to be two issues here. First is a micro issue of how many employees need to be housed/fed/cared for at forward deployed installations. If this is an issue, perhaps something more than an annual report should be required.

Secondly, since we are buying performance and outcomes (FAR Part 37.1 says performance based contracting is still the method of choice), it is not relevant to the buying decision, so we don't require the contractor to report it anywhere, except for the Army's annual contractor manpower report.

There seems to be some sort of agenda in the Beltway about how many contractors are doing government work.

[Note: of course, some proposals have work breakdowns that include labor projections, however, contractors are not bound by them in most cases.]

The purpose of the A-76 and performance based contracting, as I understand it, was not to decrease or increase the workforce, but to save the government money. That should be the measure, not the number of employees.

Send me your comments. Post them right down here at the bottom of the post.

Not George Group wins Lean contract

The Army has relied on one sole contractor for Lean Six Sigma support. However, the Air Force is moving forward quickly using contractors located near their installations to move Lean throughout their manufacturing and depot processes.

Maybe the Army should re-focus on getting Lean Six Sigma to the field and not to getting more work for their contractor-of-choice.

Army seeks digital coaches

Just thought this was a cool requirement- digital coaches. If they can pull this off, it might be something that can transfer thoughout the Army, including contracting.

Hundreds of interagency contracts available for use

According to the results of a recent survey, there are over 250 interagency contracts. In case you didn't know, using interagency contracts is "not well understood."

While the chief of OFPP thinks 12 Government Wide Acquisition Contracts (GWACs) is not too many, but his deputy doesn't think so.

If someone comes up with a good contracting solution, why should we re-invent the wheel? Just need to get the details sorted out so we have better contract administration.

DOD & GSA agree on acquisition processess

There are 22 separate areas of agreement in a new DoD/GSA memorandum of agreement. Besides increasing financial oversight (to reduce "parking" of funds or holding onto expired funds), the agreement says that GSA will ensure that pricing on GSA schedules will be reasonable and best value on all contracting actions.

This seems to be what their SOP should have been from the beginning. I guess this is just a way to have the assurances of GSA that they will do thing the right way.

The GovExec.com reporting of this agreement adds that GSA

has agreed to honor the Defense Department's interpretation of appropriations law when placing orders for Defense buyers.

That should really help in keeping the money separated and obligated in a timely and legal manner.

NASCAR champ breaks wrist in golf cart incident

While I am away at class, I thought you might be interested to know that no matter how good you are at something, there is always a chance that you will get your comeuppance- as NASCAR champ Jimmie Johnson meets an embarrassing press conference.

OFPP to adopt GAO framework for acquisition

The OFPP chief is looking at ways to improve the way the federal government purchases goods and services. He plans to implement a year-old framework presented by GAO in September 2005.

During remarks delivered at an NCMA conference in the Beltway last week, he said, "“It is too easy to say that the number of procurement people has gone down and the money has gone up, ergo we need more people,” said Denett. “We have to find out if we have the right people."

But then, he continues and I hope he did not mean to start name calling when he says, "Do we have round people in square jobs? It is not one size fits all.”

There are a lot of round people in the procurement offices I have worked- including me.

Mr. Denett, are you talking to me???? I hope you aren't talking to me.

Iraq Study Group urges agencies to order civilians to Iraq (12/6/06)

Bipartisan panel urges agencies to order civilians to Iraq (12/6/06) The actual words in the article is "directed assignments." Since using civilians as contracting officers throughout the Army (and to a lesser extent the Air Force), you would have thought this would have come much sooner.

Thank goodness it didn't.

Robert Gates brings new eyes to Sec Def position

During the furor surrounding Robert Gates' confirmation hearing on Capitol Hill, it is interesting that there are few voices addressing acquisition and procurement reform issues. All I have found so far is that Mr. Gates "avoided most questions on DOD management, " would review DoD's reliance on service contractors, "will continue to implement DOD’s National Security Personnel System," and on the important (to us) issues of "defense acquisitions reform and weapons systems growth, Gates said he was not familiar with the details of those problems and would study them upon taking office."

I figured we hear more from the past president of Texas A&M about how we, as government procurement experts, would be the executive department's 12th man.

Interesting ethical reading

The DoD Office of General Counsel has an entertaining and ethically informative publication, called the Encyclopedia of Ethical Failure. It includes a lot of examples and explanations regarding the rules of proper ethical behavior.

It is amazing what some people will do with Uncle Sam's (and our) taxpayer money.

The new acquisition professional

The current Government Executive Magazine has a long article about the acquisition career field, showing how attractive what we do really is. When they put it online, I will link to it.

In the meantime, a couple of juicy quotes:

(From page 51) Federal contracting isn't the most tantalizing of career choices. It involves details, paperwork and lots of rules. Contracting officers...are among the most scrutinized of government professionals. Contracting's deadly reputation for being boring yet stressful undoubtedly is part of the reason that procurement people are so hard to recruit.

Really makes you want to sign up, doesn't it? Here's a great recruiting slogan (page 56),

There are a lot of people retiring, why don't you give it a shot?

On the plus side, there is a of discussion of appealing to 20- and 30-somethings and their need for "meaningful" work and on how government employers might make more attractive work environments, including,"giv(ing) workers what they want, whether its working from home or bringing their dogs to work...(page 56).

This is an interesting article. Look for it around the office or wait until it comes online (they usually put it online a week or so after it comes in the mail).

Interim payments for cost-reimbursable contracts need this clause

Sometimes we forget that our business is in the details. Here is another reminder.

If you have a cost-reimbursable contract, make sure you add Alternate I to the Prompt Payment clause and modify the standard payment time to 14 days. This allows contractors to receive quicker payments and to deflect DoD IG audit concerns.

Tracking federal contract actions

The new law that requires a single source for keeping track of all federal contracting actions (both contracts and grants) is beginning to get attention in the media and elsewhere. This article is a good summary of the law and the deallines to watch for.

With our experience with FPDS-NG and our business intelligence systems, implementing this should be pretty exciting to watch.

Planning for Procurement Process Improvement

Lean Six Sigma. We have heard about it. It is something about making things work better. However, you know that it began in some factory somewhere and you don't work in a factory.

There is a lot of discussion, including books, about applying these principles to office/administrative type work. Michael George made that case in his book, "Lean Six Sigma for Services" (this link is provided for informational purposes but doesn't necessarily indicate any endorsement). Some call what we do "transactional" work.

How can we make something better that seems to be different for each contracting action we work?

This article makes a case for workload planning as a way to do just that. Author Dan Markovitz, president, TimeBack Management says that:

A well-written project implementation plan breaks complicated and/or long-term projects into simple, sequenced, discrete steps with clearly assigned
responsibilities and interim due dates. Workers schedule time in their calendars to complete each task for which they are responsible (or to follow up with the person responsible for a given task).

He recognizes that, unlike production workers, we are pulled many ways (participate in multiple value streams is "lean speak" for this) at the same time. However, the author, recommends that

every project, every meeting and every action that consumes time must be rigorously entered into the calendar. Only by doing so can (you) see the total
demand on (your) time, identify capacity constraints in advance, and by applying
heijunka (leveling the workload), adjust (your) commitments appropriately. The result is fewer crises, better allocation of resources, and lower stress for everyone.

So, think of the work in your inbox. Determine when it is due, count back the days you need for review, approvals and research, then schedule that time. Do that with the other items in your inbox and see if you find those days when your workload is less and schedule some work from your heavier work days.

This a first step to a lean office.

Let's continue this discussion on Lean Six Sigma in contracting.

Government Purchase Card program needs regular oversight

This is a story of GPC misuse. Once again, someone is given the responsibility to do things faster, better, cheaper and only thought of themselves. Just remember, he will always be known as the guy who bought $682.50 in golf balls for $1,409 and may get 15 years in jail.

Note his creative writing skills. There will be quite a future for him as a jailhouse lawyer and author!

Crime still doesn't pay.

JWOD becomes AbilityOne

As reported in GovExec.com, the Javits-Wagner-O'Day Act programs are getting a face lift beginning with a name change. A federal procurement preference program dedicated to employing people with disabilities, JWOD has a long history of providing products and services to the federal government. Now, under this fresh start, AbilityOne hopes to expand its service to its constituents and the community.

Providing jobs to 48,000 people who are blind or have other severe disabilities, the JWOD Program is the single largest source of employment for people who are blind or have other severe disabilities in the United States. Two organizations oversee this program- National Industries for the Blind and NISH (a proponent for the severely handicapped).

Government facilities around the country benefit from the JWOD program. Military commissaries, snack bars, lawn maintenance services, military base supply stores and Skilcraft pens are just some of the products and services where you may have been touched by the program.

I have been a big supporter of the JWOD program for years . For the most part, shelter and workshop managers are doing great things, providing a future for thousands of handicapped American. I hope that this change will create a better "brand," increasing public awareness and acceptance. The long term effect will be the betterment of the country as a whole.

Strategic sourcing comes to procurement of services

This is the next step in the consolidation and bundling of services- without using the words consolidation and bundling. This is a natural progression. We do it ourselves. We figure out what we need a lot of and buy it in bulk at Costco or Sam's Club or BJ's Wholesale. We don't have a lot of personal experince at services...perhaps if neighbors shared a lawn service, they may get a cheaper rate. I may have to think a little longer on a services example.

Regardless, it may be a good thing for federal procurement, but preference programs and overseers will not let this occur easily.

Pricing tool to make price decisions easier

The Defense Acquisition University (DAU) is starting to add quite a few new items to its repertoire. In addition to is courses and knowledge base information, it is adding tools that might prove helpful. Here is a tool that can be used to make pricing decisions for commercial, modified commercial and non-commercial products.

New small business recertification rules

The Small Business Administration announces new recertification rules. This helps to keep large businesses from buying up small businesses and taking advantage of preferences programs to get even more business. The html link is here. [For future reference, this was announced in the Federal Register, November 15, 2006 (Volume 71, Number 220) Page 66434-66444]

In case you missed this...

Just before the end of last fiscal year (September 28, 2006) new thresholds were established for micro purchase and others. The full text, in html, is here.

All except Defense and Homeland Security still under continuing resolution

The continuing resolution for the remaining 9 appropriations bills may not become firm until March. Read how this happened and how it may affect what the federal government must do until then.