Reps. Moran and Davis comment on Acquisition Reform

Check it out...both of Northern Virginia's representatives have a vision for acquisition reform. Rep. Davis believes

(Y)ou get the best acquisition officials you can find. If you give them a tool box of different contracting vehicles so that they can decide what’s best for the government, and you train them well and allow them to do their job, if you do that right — they will make a mistake once in a while — but most of
the time you’re going to get a good outcome.

Rep. Moran is taking a slightly different tack. According to this article, he believes that

Government contracting desperately needs oversight and reform, especially regarding the contracting workforce and small-business support.

He also says that more government employees should be scrutinizing contracts.

We have got, as far as I am concerned, to move people from the private sector into the public sector to provide those inherently governmental
functions

I guess we have a lot of reform to look forward to.

Proposed rule looks at small business and subcontractors

Here is a collection of articles that deal with a proposed FAR rule. As the introduction to the rule states,

Federal Funding Accountability and Transparency Act of 2006 (FFATA) (Pub. L. 109-282) requires the existence and operation of a searchable website that provides public access to information about Federal expenditures

This proposed rule puts into place the FAR requirements to make this happen. Among the issues this raises is the public access to subcontractor information that has not be available in the past. This information will eventually be captured and searchable at federalspending.gov.

A secondary issue is that small businesses, which have received a pass on a lot of accountability issues, will be faced with the government wanting- and getting- more details about how they do business.

Emily Murphy, the General Services Administration’s former chief acquisition officer, says that the government will have more information than ever on small businesses, so they need to better manage their government contracts.

Murphy said many small businesses have not mastered the intricacies of their contracts. For example, FAR small-business set-aside provisions limit how much of the contract’s subcontracting work can go to large businesses.

That means more work for them, reducing their ability to be fully functioning business partners.

[Note: Rep. Jim Moran says that about "ninety percent of the companies receiving small-business set-aside contracts will go out of business." Another encouraging word.]

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.

Contracting becomes a political issue

Using contractors to perform the government's work has become a political issue. Mrs. Clinton is calling on cutting 500,000 government contractor jobs. According to the article, this ups John Kerry's call to cut 100,000 contractors during the last election cycle.

Based on the reports, there wasn't a discussion of which, if any, government functions would be cut or if the federal workforce would increase to account for the lost contractor support.

Regardless, contracting issues are becoming issues of interest in political arenas. Stay tuned...

More acquisition reforms coming in defense spending bill

The operative word is more! This article says that there will be more attention to contracting and subcontracting contained in the 2008 Defense Appropriations bill, just now being staffed on Capitol Hill.

That is in addition to the other "reforms" that the "new" Congress has in mind.

For instance, the Accountability in Contracting Act is already in play (the Supplemental Appropriations bill- with it attached- is in the hands of the Senate). Now Rep. Jim Moran (D-VA) on the House Appropriations Committee’s Defense Subcommittee wants more oversight. According to the article, his aim is

(m)ore government employees should be scrutinizing contracts

That should be good new for us, but I can't believe that means more people to do the scrutinizing. Maybe even more contractors to help with the scrutinizing.

Regardless, we need to watch for new developments.

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.

Flunking Subcontracting Limitation is a proposal acceptability issue, not responsibility issue

The Governement Accountability Office sustained (Case B-298364.6; B-298364.7, TYBRIN Corporation, March 13, 2007) the protest of a total small business set aside contract where the apparent winner did not meet the limitations on subcontracting. The Air Force tried twice to get that contractor qualified (note: adding the work actually performed by the contractor with the work of small business subcontractors does not count), eventually getting an SBA Certificate of Competency.

The GAO's response to that was:

[the] Air Force’s determination that [the apparent winner's] proposal failed to comply with a material term of the solicitation (the subcontracting limitation) and, [thus] could not form the basis for award under the RFP, the agency should have found [their] proposal to be unacceptable, rather than finding [them] nonresponsible and forwarding the matter to the SBA for its consideration.

The SBA disagreed. It believes that whether or not a small business contractor will perform the contract is a responsibility issue. However, the GAO's "final" comment is:

the issue here does not concern whether a bidder or offeror can or will comply with the subcontracting limitation requirement during performance of the contract (where we recognize that the matter is one of responsibility) ...but
rather, whether the bidder or offeror has specifically taken exception to the subcontracting limitation requirement on the face of its bid or proposal.
Given that [this] circumstance involves the evaluation of a bid or proposal for compliance with a material term of the solicitation, the determination is one of responsiveness or acceptability, rather than responsibility.

It is simply a matter of the contractor meeting the requirements in the RFP.

Agencies need a plan to validate FPDS-NG data

No kidding! OFPP expects the agencies to come up with a plan to ensure the information in FPDS is accurate and up-to-date. If that happens, all the taskers we normally get should go away and we can get back to the business of buying stuff.

We all need goals and dreams.

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.

Size standards, burdensome regulation top complaints to House panel

The House Small Business Committee, chaired by Rep. Nydia Velazquez (D-N.Y.) is looking into how to make the federal government more responsive to the needs of small businesses. I have already chronicled the complaints of those multi-million dollar companies complaining they cannot compete with "larger" companies, so want to continue to be "small" businesses.

While I am a big believer in eliminating regulations, especially "burdensome" ones, and I agree that taxation is a big problem to small businesses (as is the minimum wage issue, social security, unemployment taxes and others) I think that in many cases federal oversight of small businesses is heavy-handed and often hampers innovation and the flexibility that small businesses need.

Perhaps we need a "Mom and Pop Business Administration" to help those businesses that are truly small and deserving of assistance in getting government contracts.

Small business gets own team on FAR council

As reported on FCW.com, the FAR Council has added a sixth team for small business. The Administrator of the Office of Management and Budget, Paul Denett, issued a memo creating this new team to:

focus on small business issues and to coordinate with the Small Business Administration (SBA) on concurrent SBA and FAR rulemaking

With the new legislative agendas, this may be a preemptive strike to ensure small business issues are included in executive department decision-making. The House Small Business Committee Chairwoman Rep. Nydia Velazquez (D-N.Y.) is busy working on her favorite pet peeve- the Small Business Adminstration. I'll have to cover that separately.

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.

Yahoo (the exclamation not website)!! Law maker says give us money, give us bonuses.

At last, someone on Capitol Hill is talking sense. Rep. Tom Davis, speaking before the Association of Government Accountants, told the group that trained, effective contracting professionals are very important to the whole procurement process.

In the article, he said,

You've got a lot of good [acquisition] people in government, but if you're not training them on an ongoing basis, you're losing out," Davis told the
auditors. "I would pay them, I would bonus them." [I added the italics]

He also blasted last congressional session's Clean Contracting Act (see my post here regarding Rep. Henry Waxman's current iteration of that legislation ) as creating too much oversight for the effort involved and potential savings.

On the subject of Government Purchase Cards (GPC), he said that efforts to restrict them are detrimental to the procurement process. He points to a:

misguided focus on the relatively small downside of abuse, rather than the large
administrative savings the cards generate

Read the whole article for more interesting details. Considering it is a group of accountants, that turned out to be a good meeting to have attended.

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.

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.

DFAR keeps up with T&M and Labor Hour changes

This Defense Federal Acquisition Regulation Supplement (DFARS) case is an update to payment options brought on by the the new FAR change (see below) to allow Time and Material (T&M) and Labor Hour contracts for commercial services.

There were three payment options specified in the FAR rule. The Defense Department narrows them to one. Here is how the DFAR case explained it:

DoD believes it is in the best interests of the Department to select, and make mandatory... requiring separate fixed hourly rates that include profit for each category of labor performed by the contractor and each subcontractor, and for each category of labor transferred between divisions, subsidiaries, or affiliates of the contractor under a common control.

That is the way DoD hopes to keep the final outcome of T&M and Labor Hour contracts to be as predictable and controllable (manageable???) as possible.

The DoD head of procurement has a good overview of this change on their DFARS site. There is even a chart comparing before and after use of T&M and labor hour contracts. Just scroll down the page a little to the heading, "Labor Reimbursement on DoD Non-Commercial Time-and-Materials and Labor-Hour Contracts (DFARS Case 2006-D030)."

Rules expand Time and Materials (T&M) plus Labor Hour contracts to commercial services

[This post includes an addition of information regarding T&M and Labor Hour contract D&Fs for contracts over 3 years]
Perhaps you noticed that the FAR got a revision (FAC 2005-15 dated Dec. 12, 2006) to allow T&M and Labor Hour contracts for commercial services. In their deliberations, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council worked to implement the Services Acquisition Report Act of 2003 (SARA). One of the provisions of SARA was to allow using T&M and Labor Hour contracts to purchase services that are commercial in nature.

This new change to the FAR keeps a decided preference for fixed price contacts for services.

Briefly, here is how to use these contract types to buy services (new FAR Part 12.207):

First, the contracting officer needs a determination and finding (D&F) that states a T&M or Labor Hour contract is the only type of contract appropriate for this requirement. Also, for IDIQ contracts, a similar D&F is needed for each task order. [The D&F has some specific requirements that need to be included, so be certain to check them out (FAR 12.207(b)(2)). Also, the D&F authority is HCA for contracts longer than 3 years (FAR 16.601(d)(1)(ii))]

Next, there must be a ceiling price beyond which another determination must be made.

Further:

• The contract must be a competitive award (or small business set aside)
• If using an "other than full and open competition" Justification and Approval (J&A), must have 2 or more offers/proposals or are placing an order under the fair opportunity procedures of a multiple award delivery order contract.

Keep this type of contract arrangement in mind and remember to properly justify its use and make the proper determinations.

Consolidated site to find rules, regs and regs awaiting public comment

There is a new "one face to government regulation" website. It is now the only place where Federal Acquisition Circulars will be posted. In addition, all the Federal Register notices will be at this one spot too.

One point (you probably will not have a problem with it)...When searching for a rule or FAC, click the "All Documents" radio button. Otherwise, the only results that you will see are those items that are still awaiting public comments. If you are looking for something that is already a rule, it will not show in your results list.

Go to it and bookmark it.

Remember to type the "http" before procurementanalyst.blogspot.com

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.