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.

Do you use criminal background checks for contractor responsibility determinations?

The Government Accountability Office (GAO) was asked (by the Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs) to comment on whether criminal background investigations were used to determine contractor responsibility before contract award.

In a nutshell, the GAO said, "no" and that the FAR doesn't say to do that. Then, as part of their discussion, GAO mentioned that the only use of them in the contracting world is when allowing access to military bases or for security clearances.

Perhaps this is another of the "oversight" categories that the current session of Congress will be focusing on. The "good" news is that all the focus on the failings of contractors will mean more emphasis on government employees doing that work.

Until we all retire and go away.

GSA IG to do pre-award audits and surveys

The GSA budget includes funding authority (my recently acquired fiscal law knowledge tells me that means there is no real dollars here, just "permission") to perform pre-award audits and surveys. They will be performing them on a reimbursable basis, so I assume the costs will be included in the service fee charged to their customers.

No comment, just the facts.

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.

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.

DoD IG says requiring activity should justify cost of going to non-DoD contract

The acting DoD IG, Thomas Gimble, appeared before the Senate Armed Services Readiness and Management Sub-committee last week. He listed a lot of reasons that DoD program officials (he really didn't blame DoD contracting folks) went to non-DoD contracts. Among the reasons are:

the non-DoD agency processed the purchases faster than DoD and they could generally get the contractor they wanted

He went on to say that by going to non-DoD contracts, contracting and funding issues were a big problem. Contracting problems such as insufficient competition, failure to determine price fairness and reasonableness, and inadequate contract surveillance. The biggest funding issue is that GSA and Department of Interior helped DoD "park" money that was expiring. According to the report,

Most of the contracting and funding problems were driven by three factors: the desire to hire a particular contractor, the desire to obligate expiring funds, and the inability of the DoD contracting workforce to timely respond to its customers.

Finally, the IG said that DoD requiring activities spent $23 million in surcharges to GSA and DOI for

for purchases that could have been routinely handled by junior DoD contracting personnel. DoD often paid surcharges for GSA and the Department of the Interior to purchase low-cost military equipment or commercial items that could have been obtained from existing DoD contracts.

Finally, the report recognized that the requiring activity shouldered much of the responsibility for correcting this. It also says that when the requirement was initiated, the requiring activity

...did not determine whether it was in DoD’s best interest to make the purchase through a DoD contracting office or pay a 2 to 5 percent fee for assistance from a non-DoD agency.

More trouble for non-DoD contracts

The DoD IG has recently issued two reports regarding use of non-DoD contracts. Both showed that there is a great potential for Anti-Deficiency Act (ADA) violations. The first report focuses on DoD use of Treasury FedSource contracts. According a GovExec.com article, the IG found 21 potential ADA violations, including

funds being kept after the end of the year for which they were appropriated, and spending from the wrong accounts for particular projects.

The next report is an excellent review of ADA guidance and a good reference on potentially deficient practices. Focused on non-DoD contracts, it is a good resource to review (skip down to the section on potential violations- about page 13- for better explanations on ADA and how to avoid a violation).

This report is examining 38 potential violations by GSA and then an additional 69 by other agencies, including NASA and Treasury (all of these were for FY 2005). The report does not reference the other report's 21 for the Treasury. Its count was 25.

How did they fail? According to the report, the majority of failures of ADA were for violations of the bona fide need rule- severable services are covered here- (24 of the 38 and 60 of the 69 were for bona fide need).

Check this out for its potential as a good resource on ADA.

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?

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.