FEMA searching for contracting expertise

The Federal Emergency Management Agency is having a job fair to fill 50 positions, 41 of which are for their Procurement Division. This Homeland Security agency is seeking to get up to a 95 percent hiring level, but has fallen short in the past.

Their procurement division has had its challenges. They hired a contractor to help in the short term right after Hurricanes Rita and Katrina, had to justify themselves before Congress, and were even impersonated by thieves.

They have a dynamic leader in Deidre Lee and are trying to get themselves together. Now, it seems, if you need a change, this might be a great time to move to FEMA.

DHS procurement woes and opportunity for improvements- Part 2

The second article I saw about the challenges facing the Department of Homeland Security (DHS) addressed improving the professionalism of their acquisition workforce. While this is an oft-used solution to procurement issues, perhaps in the case of DHS, it is an appropriate step.

Legislation has been introduced (DHS Procurement Improvement Act (H.R. 803)) to create specific curriculum and training programs, plus stregthens policies that will improve the quality of contracts. This bill, if approved will

require a new Council on Procurement Training, to be headed by the deputy chief procurement officer (CPO) at DHS, to advise and make policy recommendations to the CPO.

These steps may be important to DHS. In testimony before the the House Oversight and Government Reform hearing last week, the Comptroller General, David Walker, stated that the acquisition workforce of DHS has not changed much since the merger of all the agencies that created DHS following the attack on America, Sept 11, 2001.

Part of the challenge, he says is that

Of the 22 components that initially joined DHS from other agencies, only 7 came with their own procurement support. An eighth office, the Office of Procurement Operations, was created anew to provide support to a variety of DHS entities—but not until January 2004, almost a year after the department was created.

Add to this the fact that these 7 agencies have essentially the same people now as before the merger, he feels there needs to be a change.

Now, with this bill, getting a better-educated procurement workforce may make it easier to get world class procurement solutions and lessons-learned throughout the organization.

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.

Small business update

Check out the updated post on small business.

DoD Moves toward Procurement Competency

This GovExec article expresses interest in the Director of Defense Procurement's model to

help gauge the capabilities of its acquisition workforce and determine what areas need strengthening or realignment

The competency models are explained at the DPAP website. There should be a final compentency report early this year with the models to roll out Department-wide by June 2007. They will be used to assess the workforce, identify skill gaps and work to close those gaps.

Everyday, someone comes out with accusations about the poor job contracting has done, whether in Iraq or for some weapon system or another. The Defense contracting community has worked the hardest to put trained and effective professionals into the field. Its training scheme is now being used to train the rest of the contracting community as the Federal Acquisition Institute is now co-located with the Defense Acquisition University at Fort Belvoir, VA.

This competency model concept seems to me to be another tool to ensure we are as effective as we can be. Let's keep an open mind and be objective about it when it is announced.

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.

Small business that become "large" complain about no preferences

[Updated on Feb. 6, 2007- The SBA has decided to re-look the size standards for IT manufacturers. This should take care of the complainers for now. I don't know about you but a $23 million company is pretty big. If our store made that much money you would be reading about the health benefits of dark chocolate written by me from some resort somewhere.]

This article bemoans the reality that when small businesses grow too large, they lose their preferences and must compete against other large businesses. One company says,

If you have a company that has just won a new contract and its revenue is
over $23 million, then SBA believes that [the company] can compete on the
same level as multibillion international companies,” said Matt Hoffman, vice
president and corporate counsel for Maryland-based IT provider CNSI. “The
difference between $23 million and $5 billion is enormous.

Maybe I am getting cold and cruel in my old age, but small business preferences in government contracting should not replace the marketplace nor create an endless supply of business to companies. Instead, they should allow small businesses to get their feet under themselves and become competitive and dynamic organizations. Yes, they will face competition. That is life in business. Yes, they may have compete against really big companies. They will have to compete against small ones, too (who will have preferences in the government marketplace).

However, those companies that have a viable business concept- a real market-based reason for existence- will be helped by the small business program and be ready for success when they graduate. They will identify their particular niche in the marketplace and find ways to exploit it.

They may even wish to graduate faster because success is measured in how much business you do, not the number of government contracts you have.

That is what the role of the Small Business Administration and its programs should be.

On the lighter side: Its Phantom Flu and other rare disease season

Just thought you'd like to read how some people get time off to do their personal business during the middle of the day.

Read and enjoy...

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.

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.”

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.

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.

"Gray pallor" to be cast over small businesses due to new certification rules...sure

The new SBA recertification rules (see my post from late last year) are creating a stir because they may make some small businesses less attractive to be purchased by large businesses. I can see where this might be a problem, especially for those folks who create a small company strictly to win a portfolio of lucrative contracts and then sell the whole thing to a large company and take the money and run.

Supporting that type of activity is really in the spirit of helping small businesses grow and expand the industrial base (isn't that the original goal of SBA preferences?)- NOT.

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...