Now it is Cronyism and Corruption

The assault on the federal procurement process continues.

The Center for American Progress, a progressive think tank, uses the words, "cronyism" and "corruption" as the headline of their press release about an "event" featuring Rep. Henry Waxman, the chairman of the House Oversight and Government Reform Committee as its keynote speaker.

Both Federal Computer Week (FCW.com) and Government Executive (GovExec.com) reported on this event and neither one used those words. In fact, the text of the organization's release talked of Rep. Waxman's vision of increasing the size of the government acquisition workforce. The release says that,

He cited the need for more contract managers and government overseers and proposed that 1 percent of federal procurement spending be set aside for
procurement management and oversight.

That doesn't sound like everyone in the federal contracting profession are on the take. However, his remark that,

While government contractors are getting richer, taxpayers are getting soaked

sounds a little more inflammatory.

We must redouble our efforts, as federal contracting professionals to keep our eyes on the goal of being good stewards of the taxpayer's money and earning their continuing confidence on a daily basis.

House passes Small Business Fairness in Contracting Act

Sorry for the delay between posts at this important time for small business issues.

The reports are true, this bill (HR 1873) passed the House and heads for the Senate. An amendment that increased the percent of federal contracting dollars earmarked for small businesses from the current 23 percent to 30 percent was added to the final package sent forward.

The House Small Business Committee chair (Chairwoman Rep. Nydia Velazquez (D-N.Y.) believes that the government understated its compliance with this goal over the past few years.

There is little in this bill to help achieve a 30 percent higher goal.

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.

Accountability in Contracting Act tacked onto Supplemental Appropriations bill

Chairman of the House Oversight and Government Reform Committee, Rep. Henry Waxman (D-Calif.), gained House passage of his contracting bill but had no companion Senate bill to create a law. So, he used the important-to-our-troops supplemental appropriations bill to get it in position to become a law.

If it stays stapled to this bill, along with the other earmarks used to gain passage in the House of their controversial version, this will become law. All in the name of supporting our soldiers, sailors, airmen and marines.

If only I had a project I wanted to get passed. This looks like the gravy train to put it on. Such are our stakeholders up North in the domed building.

Accountability in Contracting Act gathers contractor opposition

This earlier article has been replaced by news that the House "marked up" a version and later passed a similar version of this bill (HR 1362). What is it about?

Its primary purpose is to limit abuse-prone contracts- primarily sole source and cost-reimbursable. How? By:

Restricting the length of any contract over [originally SAP] $1,000,000 and using "other than competitive" procedures to the minimum period necessary [originally 240 days, as passed 1 year].

• to meet the urgent and compelling requirements of the work to be performed and
• to enter into another contract through use of competitive requirements

Also, the originally introduced and passed bills:

• Require plans for reducing the use of sole source and cost-reimbursable contracts, including measurable goals.
• Increase contract oversight, by publicly disclosing J and As and disclosing audits and other reports that describe contractor costs over [Originally $1 million] $10 million that are unsupported, questioned or unreasonable.

[The bill as introduced added funding contract oversight by increasing amounts for hiring, training, contract planning, contract administration,oversight and audits by an amount equal to one percent of the aggregate amount of contracts awarded during that fiscal year. (my emphasis)]

FInally, the bill hopes to close what it perceives as legislative "loopholes" and will deter corruption in contracting by further restricting the time for a federal employee to start working for a contractor.

Check out the articles and bill to see what is coming down the pike. This has to go to the Senate as well, so it is not a done deal, yet.

New bill introduced to fix federal contracting problems

The latest attempt to legislate good contracting practices was recently introduced. Senate bill S-680 has quite a few changes in store for our profession, many of which are outlined in the GovExec article. See the article for such new twists as:

Requiring agencies to publicly announce large sole source contracts shortly after they are awarded

Expand and improve the training of the federal acquisition workforce.

Expand contract award protest rights to allow challenges of large task and delivery awards under multiple award IDIQ contracts.

Have the Office of Management and Budget study the use of interagency contracts

Limit the value of task and delivery orders for services under larger contracts to $100 million.

Include a requirement that prime contractors
subcontract no more than 65 percent of the work on any given contract.

Includes some provisions that resemble recommendations made by the Services Acquisition Reform Act Advisory Committee (see these)

One provision of that bill that would impact our world the most, in my opinion, is the requirement to publish all Justifications and Approvals (J&As) on FEDBIZOPPS and the agency's internal website (such as the Army's Single Face to Industry website).

I am of two minds on this one.

Based on comments from procurement analysts that I know, the quality of J&As may increase exponentially if they were to be published and subject to the same scrutiny of everything else that is published in the contracting world.

Initially, there would be a firestorm of comments and concerns. However, contracting officers would get better at crafting J&As that meet both the federal procurement requirements and the public's requirements. This could be a good thing, long term.

Secondly, though, anything that is published creates an opportunity to be second-guessed by those outside the process and by those trying to influence the process. Soon, there would be a protest procedure for J&As, including some time period for public comments, and there may never be an award made for other than full competition. This would certainly tie the hands (and feet?) of contracting officers simply trying to provide our soldiers, sailors, airmen, marines and other government agencies with what they need to accomplish this monumental task that is running the federal government.

The resulting glacial pace of procurement (if it isn't already)would be due to adding another layer of public hysteria-induced confusion and CYA-induced oversight. I am sure that is not the intent of this proposed legislation.

Government spending website coming soon

The Federal Funding Accountability and Transparency Act of 2006 calls for a single searchable website to allow access to information regarding all federal awards. It defines federal awards as:

grants, subgrants, loans, awards,cooperative agreements, and other forms of financial assistance; [and includes] contracts, subcontracts,
purchase orders, task orders, and delivery orders [but] does not include individual transactions below $25,000; and...before October 1, 2008, does not include credit card transactions.

The linked article is a good overview of the proposed system, describing it as a "Google-like search engine and database."

There are two interesting aspects to this. First is trying to get all the data that this calls for and to keep it updated (there is a requriement all information is updated within 30 days of award). The Federal Procurement Data System-New Generation is supposed to have that, at least for federal contract information, but doesn't. Good luck integrating that data.

The other interesting part to me is the emphasis on subcontracts. Since the focus lately on the sub-sub-sub-contracts of the Army's LOGCAP contracts, this could be quite an expansive system. Of course, the bill calls for contractors to charge for this reporting effort.

This upside, though, is that if it increases the visibility of how important federal procurement is to the U.S. economy, it may be a good thing.

DHS procurement woes and opportunity for improvements- Part 1

Two separate news articles came through this past week that underscores the challenges at the Department of Homeland Security. The first describes the House Oversight and Government Reform Committee conducting a series of hearings last week on the general topic of fraud, waste and abuse. During those hearings, they focused on administrative oversight and, in particular, looked at DHS contracts for the Coast Guard's Deep Water Program and their Secure Border Initiative.

Both programs use "system integrators" and have had problems with costs being higher that expected.

The comment of interest (to me) from this hearing is from the Comptroller General (the head of GAO), David Walker, who said

We ought to be able to pull the plug (for poor performance) and taxpayers shouldn't have to pay a dime

Certainly, DHS uses termination for default clauses. Perhaps they just need better contract administration.

Interagency contracts once again fail procurement regulation test

Both the Department of Defense Inspector General (IG) and Department of Interior IG office issued a report this month detailing the work accomplished by DOI on behalf of DoD. The reports detailed the shortcomings of the GovWorks office in Northern Virginia and the Southwest Acquisition Branch located at Fort Huachucha, AZ. Some of the findings include lack of competition and lack of documentation regarding the price reasonableness of the awarded contracts.

There is also a big issue regarding use of expried funds. There were almost $400 million in "potentially expired" funds parked at the GovWorks office.

Like previous interagency contract reports recently handed down, the DoDIG keeps bandying around the bona fide need rule. As if anyone pays attention to that- at least outside of contracting.

For more, check out the report. Also, the DoD IG site and the DOI IG website are good places to find reports related to contracting.

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.”

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.

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.

Project on Government Oversight seeks allies with new Congress

This traditional adversary of government contracting is looking for allies within the newly elected congressional delgations.

Today, POGO wants Congress hold hearings on enforcing debarrments and suspensions (these are some of the same issues in the SARA report) while reducing the "revolving door" of military and government officials working for contractors.

Once again, following the policies and procedures that are already in place- and including effective contract administration- would eliminate many of the problems that POGO traditionally follows and reports to the Washington Post.

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.