A new term for the contracting professional: Acquisition malpractice

Thanks to Mr. John Thos. Brown for pointing this out of an otherwise overlooked news article in his blog, Blogged Down in Procurement. We want to be considered as professionals and as such we need to practice our craft accordingly. Sometimes that means calling attention to our errors and Mr Frank Kendall, the new DoD Chief of Procurement (actually his title is Acting Under Secretary of Defense for Acquisition, Technology and Logistics) is doing so.

Regardless of how busy we become, it is important to take time to make the good decisions. It is also important to remember that this is a profession and our ongoing professional development includes learning from the mistakes of others.

And add "acquisition malpractice" into your vocabulary.

No wonder program offices don't understand

This article looks at the subject of acquisition planning from the program office perspective. The author writes about how program offices perceive acquisition planning and how they tend to have difficulty with contracting officers that demand competition after they have done all that work already:

Let's suppose the program people at a customer agency did a thorough job of analyzing and pricing several different technologies and options over the course of 18 months. Various manufacturers had competed hard during this period to show that their technology was the best value. [Emphasis mine]

Later in the artcle, he says,

When these activities [acquisition planning in accordance with the agency's IT plan] are performed, there is an abundance of meaningful competition during which each manufacturer seeks to prove that it offers the best value. During this sales process, it usually becomes quite apparent which product is best for a particular situation, and everyone knows it. [Again, my emphasis]

What is occurs to me is that the requiring activity does not understand that the "competing"and "sales process" is not part of their job.

The contracting rules were designed to allow fair and open- transparent- transactions between the government and its contractors. These rules have placed responsibility on two groups. The requiring activites- the program offices- and the contracting officers.

The program offices represent the end users of what is being purchased. They are the subject matter experts, the planners and engineers. They are responsible for determining what performance parameters- those key features, specifications, certifications, etc.- that are the minimum requirement to meet the needs of the government.

The contracting community, then, creates the opportunity for vendors across the country to determine if they can meet the government's need in a cost-effective way. They do it in a formal process (controlled by rules and regulations enacted way above their pay grades) that allow a maximum number of vendors to compete in a standardized manner, with transparency to the entire transaction.

This means that the formal acquisition process- and those pesky contracting officers- is where the "competing" and "sales process" takes place on a level playing field, in the full light of the rules and regulations of US Code and the FAR. Working that way, the author and his program colleagues would notice far fewer justifications and approvals needed (J&As).

If the program office does not know what they need and must rely on "competing" vendors to "sell" them on a solution, perhaps they are not doing the job the government is expecting of them.

Am I wrong on this? Comment below.

2008 Defense Appropriations Bill fills up, but not with money...

I wrote earlier about Rep. Jim Moran (D-VA) wanting to reform acquisition in the 2008 Defense Appropriations Bill to be considered when Congress gets back to work soon. Now, Rep. Ike Skelton (D-MO) has his own ideas and is readying them for the same legislation. He hopes to form a Defense-Industry partnership that can solve some tough procurement issues- getting the military's equipment stocks built up and able to reinforce troops heading into harm's way.

To help take advantage of the country's industrial capacity, Rep. Skelton hope to use this council to "mobilize this nation and its industrial base" and "bold action is needed" to do that.

Rhetoric aside, we may need some sort of group to help, but adding to the appropriations bill in such a way just adds to the procurement confusion.

The three approaches to logistics

Earlier, I posted about the British attempts to create weapon systems maintenance/service contracts based on availability. The British have expanded their use of "through life" contracts. In fact, the US Air Force awarded a maintenance contract for similar type of arrangement for their B-2 stealth bomber.

While examining that issue, I came across this effort to explain the three ways to accomplish logistics for a weapon system. Scroll down the page to the "BAE Systems" logo. Here, former British Air Vice Marshal and current BAE Director of Military Aircraft System Support Steve Nicoll discussed his take on the 3 approaches to logistics.

1) The Forrest Gump approach is based on the movie's famous line that "My momma always said, 'Life was like a box of chocolates. You never know what you're gonna get.' " It can be rephrased more briefly as "stuff happens," and links to a well tried, 2,000 year-old military philosophy: because stuff
happens, take lots of spares etc. with you.
(2) Then there's the Scotty approach, based on the famous Star Trek engineer...where knowing initial conditions well enough lets you predict what will happen next. In short, a linear investigation/ statistical approach.
(3) Then there's Dirk Gently of "Dirk Gently's Holistic Detective Agency". This is more of a systems approach that believes everything to be interconnected.

What a great analogy. Read the rest of the article to find out how the "Dirk Gently" approach seems to be catching on among logisticians and program managers.

Ending revolving doors of contracting officers- again

Lately. there has been a lot of attention on

1. the "problems" with contracting officials' ethics
2. the trouble ahead when all the contracting officers retire (at once, presumably)

Here are two different attempts to correct these problems. The first, Rep. Henry Waxman's (D-Calif) Executive Branch Reform Act extends the amount of time- from one to two years- before you can award a contract to a former employer or work for the same part of a company you had dealings with as a "procurement official."

The second, I posted about the other day. I didn't notice anything in that bill, but Paul Denett, the OFPP administrator, is still looking at it.

Still, if you a big, influential government procurement official (like a military service secretary), you still have options. You could still get a job as a "consultant" with one of the big companies and do work on "big picture" stuff (providing policy analysis-type input to the board, for instance) or work in some division of the firm that is totally unrelated to what your expertise is. You can still ride the "rubber chicken" speaking tour, expounding on the good things or bad things that you saw/did while working in government (depending on what you saw/did would determine the payday for each speech).

Under this proposed legislation, you'll still have income and you will stay busy. The only difference (as I see it) is that you just have to do it for two years instead of one. Your pals will still be your pals. If they "owe you," they will still owe you.

A better strategy might be to run for Congress and change it all again. Better save that discussion for another time.

To the point here, the "famous" contracting ethics problems will not be solved by waiting an extra year. One problem was with a high-level official still in her job. She got caught and did the time. New laws would not have prevented this.

If they are still jealous of Mr. Cheney, it has been way more than two years since he left Halliburton. That is besides the point that he probably has kept a great distance away just to avoid this sort of fallout.

It is not a problem of insufficient legislation. It is in treating everyone with sufficient respect they will 1) want to work for the government and 2) not be tempted to violate the public's trust in them. Is this too much to expect? Maybe, but there are plenty of laws out there now. Especially on this topic.

Army raked over coals for third tier subcontractor actions

A subcontractor for a subcontractor for a subcontractor to the Army's Logistics Civil Augmentation Program, or LOGCAP, contract turns out to be a private military contractor (PMC). The "news" is that this company used armed guards to protect the transportation of cash used to pay vendors and employees and were part of a contract that does not allow contracting for armed security.

Since the prime contractor is a Halliburton subsidiary (KBR) and the security firm is Blackwater, Inc, from Moyock, NC, it makes headlines and a congressional hearing.

What is interesting to me is that the KBR contract administrator recognized the problem with this and understood his firm's role in flowing the proper clauses down to the subcontracts. He recommended not following the direction that the eventual sub-sub-subcontract went.

Of course, he wrote all this in an email and for some reason "top officials" at KBR were unaware of it. It seems logical that all email traffic is not forwarded to the senior officials at this company that has 57,000 employees.

That happens to me all the time. No one at the Pentagon ever reads these important postings nor my emails and nor takes my opinion seriously. I can't understand why KBR doesn't do a better job with far fewer employees.

I am not sure what the true issue is here. Is it the numbers of contractor personnel in Iraq? Is it the number of contractors that are needed to protect other contractors? Or is this something not contract-related at all- perhaps an issue of rules of "behavior" in-theater- or maybe it is just politics.

The GAO's high risk concerns in the news again.

You may have seen the headlines about the GAO's high risk series. There is not a lot of new issues here. This report contains a good bibliography of GAO products that address issues of contract management and transformation. The areas of high risk (out of a total of 27) that are of interest to DoD procurement people and when they made "the list:"

Area Year designated high risk
DOD Supply Chain Management 1990
DOD Weapon Systems Acquisition 1990
DOE Contract Management 1990
NASA Contract Management 1990
DOD Contract Management 1992
DOD Financial Management 1995
DOD Business Systems Modernization 1995
DOD Support Infrastructure Management 1997
DOD Approach to Business Transformation 2005
Management of Interagency Contracting 2005

Read the report, look at the references and get ready for more oversight.

Looking for federal case law to back up your "hunch?"

Here is a great website find federal court decisions. Featuring Supreme Court, Courts of Appeal and others, if you need to find it, it seems to be here.

Good luck on your search for answers.

Acquisition schools standardize coursework

Standardizing the curriculums of both the Federal Acquisition Institute (FAI) and Defense Acquisition University (DAU) are will result in a common level of training across the federal government. In the past, for non-DoD contracting officers to move to DoD jobs, they often had to go through more scrutiny. DoD contracting folks going to other agencies were welcomed with open arms.

Now, maybe there won't be an "us versus them" mentality when hiring federal contracting professionals.

Modernization, force protection and the environment also get House attention.

This post wraps up our review of The Oversight Plan of the House Armed Services Committee for the 110th Congress. Looking at Congressional oversight plans can give us insights into procurement issues for the coming year.

Military Modernization
The committees seeks to ensure that that the

highest priority requirements of the nation’s active, guard and reserve land,
sea, and air forces are properly resourced.

Force Protection
The HASC plans to pay significant attention to personnel body armor, tactical wheeled vehicle armor protection and countermeasures to improvised explosive devices (IED) in Iraq and Afghanistan.

In something that should be a good thing for our community, the committee will explore innovative acquisition policies and procedures in an effort to provide sufficient flexibility in support of:

• requirement identification [more requirement focus],
• research and development,
• immediate procurement, and
• rapid operational testing and fielding of additional capabilities.

Environmental Programs
Directly impacting installations and installation contracting, the committee will significantly increase its oversight of the Department and military services’ environmental management. Perhaps the increased emphasis is directly due to the new composition of the committee (and Congress).

Cost growth in weapons systems gets HASC laser vision

More on the priorities of the current House Armed Services Committee.

A recurring issue throughout their Oversight Plan is controlling costs. So it comes as no surprise that they plan to conduct hearings and briefings to look at how weapons systems procurements get out of hand. They believe that the causes of cost growth, schedule delays, and/or performance degradation from envisioned capabilities include:

• too many programs competing for too few resources;
• requirements determination, definition, and growth [second notice that requirements determination is a focus];
• failures of cost estimation;
• unrealistic program schedules related to immature technology and insufficient funding;
• instability in funding profiles;
• labor and material cost increases; and
• management shortfalls.

That is an ambitious goal. It seems that the operational side of this process- those of us who are "in the field"- have long known that requirement generation is an issues that needs addressed. Perhaps Congressional attention to it in the weapon systems arena may bring changes all the way to the supplies and services contracting done at local installations around the world.

Acquisition issues come into the view of the HASC

Continuing our look at the priorities of the House Armed Services Committee for the 110th Congress...

There are many issues that the committee could have chosen in the area of Department of Defense procurement/acquisition. Here is what they are going to pay most attention to.

In their role of oversight and management, the committee intends to pay particular attention to the Acquisition System and Acquisition Policy. They plan to:

• Oversee “…the defense acquisition system and address growing concerns about cost growth [Note this area] in major defense acquisition programs and the responsiveness of the system to compelling military needs.”
• Examine in depth [my emphasis] the "military requirements process [Note this area, too- you will see it again]… (that) continues to produce outcomes which do not reflect the jointness that the military has achieved at the operating level.”
• Monitor revisions to laws concerning the reporting of cost growth [Here it is again] in weapons systems, controlling the government’s interest in technical data rights, and governing the management structure for contracting for services to recommend further revisions where necessary.
• Continue to push for accountability and integrity in contracting with the Panel on Contracting Integrity and working in part through the reconstituted Subcommittee on Oversight and Investigations, to identify and eliminate as many contracting vulnerabilities as possible (my emphasis).

Cost growth and requirements generation are certainly areas of concern to the committee.

In addition to acquisition policy, the committee wants to improve the Defense Industrial Base and Technology Transfers. They plan to:

• Give close examination to the health of the defense industrial base and those suppliers (which) appear to be struggling to generate profit margins large enough to justify long-term investments in infrastructure and technology. These long-term investments are vital to the health of the defense industrial base.

[Helping companies that are struggling with profit margins and controlling cost growth seem to be conflicting goals and should bear watching.]

• Examine the effects of mergers, acquisitions, and consolidation of second and third tier suppliers on competition and “the extent to which contractors may be taking on management roles previously performed by the government.
• Continue to review issues surrounding contractors on the battlefield and the outsourcing of inherently governmental operational functions.

[Here is another look at how the "contractorization" of government is being examined.]

The HASC focus on financial/resource management will include examining the “causes of the DOD’s inability to consolidate its financial information and monitor closely the … dollars being spent on business systems modernization programs … proposed to address [DoD’s] financial management problems.”

HASC looks at military readiness and civilian personnel

Focusing on the readiness of military forces, the House Armed Services Committee plans to

• Increase their oversight in the “service’s readiness programs to ensure that military units possess the required resources and training to complete their assigned full-spectrum combat mission.”
• Conduct “vigorous oversight [my emphasis] of all of the Department of Defense’s (DOD) readiness plans and programs to ensure military units are fully trained and equipped for combat.”

Such emphasis on readiness is important as we continue an extended war on terrorism and other actions around the globe. For us in the procurement community, that is welcome news.

Since many of us are government employees, it is helpful to learn of the approach the committee intends to take toward civilian personnel. The committee plans to:

• Significantly increase oversight of civilian personnel pay and policies…(paying) close attention to implementation of the pay for performance system, and developments with the DOD attempt to modify the collective bargaining and employee appeal rights portions of NSPS.
• “…increase its oversight of the Department's use of authorities such as A-76 to contract out DOD activities... and will closely examine the cost-benefit analyses of the existing and future contracting out of functions done by DOD employees or military members.”

A close look as NSPS was not unanticipated, regardless who had won in November. However, I suspect the closer scrutiny of the collective bargaining provisions of NSPS is a result of the new members of Congress.

Some in government have said that the A-76 process may have gone too far. This is against what the President's direction has been during thepast 6 years. Perhaps it is due a closer look.

House Armed Services Committee sets their priorities

The new Congress has begun its work, releasing its priorities for federal procurement. As I become aware of them, I will try to help you follow them here. Thanks to Debbie Emerson for passing this one on to me.

The House Armed Services Committee (HASC) has issued their Oversight Plan for the 110th Congress (current session). If you are not aware, this committee has oversight over the entire Department of Defense and its activities, so is particularly important to us in DoD procurement. In addition, the House of Representatives is responsible for all appropriations legislation, so the findings and priorities of this committee find their way to funding bills.

They have oversight over everything DoD, but this influential group plans specific focus areas for this coming year. This topic will be examined in several posts today to break up the topic and perhaps improve the discussion.

Is British concept to "contract for availability" an idea for BASOPS?

Based on Britain's Defence (it's spelled "defence" there) Industrial Strategy, procurement is taking a real turn for performance based contracting. In their strategic document, they state that

(they) also recognise that the bedrock of (their)procurement policy has to be long-term value for money.

This is a principle that we in U.S. federal procurement also believe in.

In fact, they are taking this to great lengths by contracting for aircraft availability, rather than for spare parts or maintenance. The outcome contracted for, then, is having each aircraft available to fly missions.

They call it "through-life support" or lifetime support. They are using it to improve their industrial capabilities. Perhaps, that is a practice we could employ with our vehicle maintenance practices- oh that's right, AMC will be taking that over. How about some of our other recurring contracts.

Let's think about how that might work out by improving our installation capabilities, as well.

It is getting to be time for political appointees to move on

Emily Murphy, the head of GSA procurement, is leaving her position to take a new private sector job. Why?

"On Jan. 20, 2009 ... I turn into a pumpkin."

I guess we will see more of that in the next 24 months. Hang on!

P.S.- [Looking at the silver lining to all of this...] Anyone want an interim position to add to your resume? Might be some short-term openings...

And speaking of more oversight...

The GovExec.com blog and FCW.com (Federal Computer Weekly's daily news report) reports that the House Government Reform Committee has a new name: the Committee on Oversight and Government Reform.

The GovExec article includes a brief history on that committee and how it has transformed since its founding in 1927.

Returning "oversight" to its name means there will be probably more attention to micromanaging what we do.

More from the Acquisition Advisory Panel draft report

Two more articles provide more information about the SARA panel's decisions. First, the panel believes that by using commercial business practices, competition will increase. Here how the article puts it

...move away from time-and-materials contracts because they take too much effort to oversee. Instead, the panel favors performance-based acquisitions. But other significant recommendations include setting up a new General Services Administration schedule for professional services, redefining stand-alone commercial services, applying the three-bid minimum requirement for Defense Department services over the simplified acquisition threshold governmentwide, and amending the Federal Acquisition Regulation (FAR) to improve transparency in government contracting.

The second article says the panel believes that the acquisition workforce doesn't know who it is and that they are not being sufficiently trained. In addition, they will conduct a study to see, among other things, whether there should be a government-wide version of DAU.

Of course, since DAU has an organic "systems acquisition" leaning (notice who their Defense AT&L Magazine is aimed at), they are missing helping those of us who spend the other 60% of federal procurement dollars!

From their writer's guidelines at the end of the magazine:

The purpose of Defense AT&L magazine is to instruct members of the DoD acquisition, technology & logistics (AT&L) workforce and defense industry on policies, trends, legislation, senior leadership changes, events, and current thinking affecting program management and defense systems acquisition [my italics], and to disseminate other information pertinent to the professional development and education of the DoD Acquisition Workforce.

Perhaps a services acquisition university might be a good thing. Let's see what they propose.

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!

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.