Congressman questions agencies on small-business advocates’ authority

August 16, 2011 by

Senior executives at several Cabinet-level departments received letters Aug. 5 that asked why their small-business advocacy offices have not been given the authority the law dictates.

Rep. Mick Mulvaney (R-S.C.), chairman of the Small Business Committee’s Contracting and Workforce Subcommittee, wants to know why departments’ office of small and disadvantaged business utilization (OSDBU) officials don’t have access to top officials to deal with small-business problems, such as contract bundling and paying firms promptly.

The Small Business Act requires that heads of a department’s OSDBU should “be responsible only to, or report directly to, the head of such agency or to the deputy of such head.”

It’s not happening, according to a Government Accountability Office report from June.

Only nine of the 16 federal agencies that GAO reviewed were in compliance with that part of the Small Business Act. The remaining seven agencies failed to comply with the law. Those agencies’ OSDBU directors reported to lower-level officials or had delegated OSDBU responsibilities to officials who did not meet the reporting requirement, GAO wrote.

Further, these agencies were not in compliance when GAO last examined them in 2003.

In GAO’s latest review, Social Security Administration officials said they fixed the problem. Officials at the Interior Department agreed to re-evaluate their reporting structure.

On the other hand, the Commerce, Justice, State and Treasury departments disagreed with GAO, saying they were in compliance. The Agriculture Department also got a letter because officials delegated the OSDBU director’s authority in a way that was contrary to the law.

Mulvaney wants to know more details about each agencies’ OSDBU, including the assigned functions and budget. He also asked when the OSDBU will actually have access to top officials, in addition to a copy of the new organizational chart. He expects responses by Aug. 31.

The subcommittee is planning a hearing in September to look further into this situation.

– About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week.   Published Aug. 8, 2011 at http://fcw.com/articles/2011/08/08/osdbu-direct-access-department-secretary-rep-mick-mulvaney.aspx.

Veteran-preferred contracting programs rife with fraud, say VA OIG, GAO

August 8, 2011 by

Fraud pervades the Veterans Affairs Department’s contracting program for veteran-owned small businesses, a July 28 House panel was told.

The VA Office of Inspector General and the Government Accountability Office have found the program so rife with deceit that one lawmaker suggested the entire program be scrapped.

“I think if the American people really paid attention…[they] would blow this whole program up and start from scratch again. It is that bad,” Rep. Phil Roe (R-Tenn.) told the House Veterans Affairs’ subcommittee on oversight and investigations.

“Hopefully it will get better, ’cause it can’t get much worse.”

Seventy-six percent of the businesses reviewed by the VA Office of Inspector General in a recent audit were ineligible for either the program and/or the specific veteran-owned small businesses or service-disabled veteran-owned small businesses contract award, said Belinda Finn, assistant inspector general for audits and evaluations at the VA OIG. This could total $2.5 billion in contract awards to ineligible businesses over the next five years, Finn estimated.

“Thirty-eight percent of the reviewed businesses were not owned or controlled by a veteran and over half did not meet federal incurred cost and subcontracting thresholds. In many cases ineligible businesses passed through the majority of the contracts’ work requirements and funds to non-veteran-owned businesses,” added Finn.

Ineligible businesses received awards because VA’s office of small and disadvantaged business utilization was not thoroughly reviewing business documentation and performing site visits to verify the veteran-owned status, said Finn. The OIG also found that contracting officers did not always check VA’s enterprise veterans database, business size classification codes, or properly assess subcontracting and partnering agreements.

“This program is highly-vulnerable to fraud and abuse,” said Gregory Kutz, director of forensic audits and investigative service at GAO, who added that while the veteran business verification program has made some progress, it “has a ways to go.”

“We recommend that the Congress consider providing VA with the additional authority and resources necessary to expand the verification program governmentwide. Only 30 percent of service disabled veteran contracts are with the Department of Veteran Affairs. Thus, for the other 70 percent we continue to have a self certification program,” suggested Kutz.

Finn said VA’s verification system provides strong controls, but it also needs to strengthen it’s contracting practices, she said.

“I wouldn’t give up on it yet,” said Finn.

– by Molly Bernhart Walker – Fierce Government – Aug. 2, 2011 at: http://www.fiercegovernment.com/story/veteran-preferred-contracting-programs-rife-fraud-say-va-oig-gao/2011-08-02

Small businesses share in SEWP sales

August 1, 2011 by

The portion of sales going to small businesses in the Solutions for Enterprise-Wide Procurement (SEWP) IV reached 42 percent last year, an increase of 7 percent from the previous year, according to SEWP IV officials.

“The NASA SEWP program office has always promoted the use of small businesses,” said Joanne Woytek, SEWP IV program manager. “Two of our four contract groups are forms of small business set-asides, which all agencies can utilize to help meet their small business goals.”

• 42 percent of SEWP IV spending goes through SEWP’s small businesses.
• 7.2 percent of SEWP IV spending goes through SEWP’s Service-Disabled Veteran-Owned Small Businesses (SDVOSB).

[Download a .pdf version of this special report at http://download.1105media.com/GIG/Custom/2011PDFS/SEWP2011.pdf.]

SEWP IV has 38 contract holders, including 21 small businesses. Of the 21 small businesses, six are 8(a) small, disadvantaged businesses and 10 are veteran-owned small businesses, including seven service-disabled veteran-owned small businesses (SDVOSBs). SEWP IV has set-aside authority for small business task orders and SDVOSB task orders. Last year, SEWP IV sales going to SDVOSBs reached 7.2 percent, up from 6 percent the previous year.

SEWP IV’s pool of small businesses also includes woman-owned businesses, Alaska Native businesses, and businesses in historically underutilized business (HUB) zones. Agencies can hold competitions among all small businesses, but then give preference to these other sub-categories in addition to the 8(a) companies.

– from Washington Technology, 7/29/2011 at http://washingtontechnology.com/microsites/2011/sewp2011/07-sewp-iv-small-business-utilization.aspx

SBA names third-party WOSB certifiers

July 8, 2011 by

The Small Business Administration (SBA) has approved four organizations to act as Third Party Certifiers under the recently-adoped woman-owned small business (WOSB) program. The four organizations and contact information are contained in the listing below:

Women Owned Small Businesses may elect to use the services of a Third Party Certifier to demonstrate eligibility for the program, or they may self-certify using the process outlined here on this website. SBA will only accept third party certification from these entities, and firms are still subject to the same eligibility requirements to participate in the program.

For complete details on the WOSB program, please read: http://gtpac.org/2011/05/heres-how-to-upload-documentation-to-sbas-wosb-repository/

White House plans cuts to support service contracts

July 8, 2011 by

The Obama administration will require federal agencies to cut spending for management support service contracts by 15 percent by the end of fiscal year 2012.

As part of the White House Campaign to Cut Waste, Office of Management and Budget officials will announce Thursday their plans to reduce the bill for those services from $40 billion in fiscal year 2010 to $34 billion.

Management support services include such functions as program management, acquisition planning and information technology development. Spending on those services rose four-fold from fiscal year 2000 through 2010, according to administration figures.Most of that jump occurred during President George W. Bush’s administration, which vastly increased the government’s contractor workforce, while allowing the corps of federal employees assigned to oversee the work of contractors to remain flat. As a result, in some cases contractors ended up managing contractors.

Jeffrey Zients, the administration’s chief performance officer and a deputy OMB director, and Dan Gordon, the federal procurement administrator, will lead the White House Forum on Accountability in Federal Contracting. Officials from the Department of Homeland Security, the Defense Department and the U.S. Agency for International Development also are on the agenda.

White House figures show that government spending on outside contractors declined last year for the first time in 13 years.

– By Joe Davidson – The Washington Post – 06:00 AM ET, 07/07/2011 at http://www.washingtonpost.com/blogs/federal-eye/post/white-house-plans-cuts-to-support-service-contracts/2011/04/15/gIQAz9IR1H_blog.html

Cloud is next step for HUD’s IT infrastructure

July 5, 2011 by

The Department of Housing and Urban Development already outsourced much of its network infrastructure under its HITS contract. Now the agency wants to take its infrastructure one step further and put it in the cloud.

HUD held its second industry day June 24 for its HUDNet program, which eventually will replace the $800 million HITS program, run by Lockheed Martin and Hewlett-Packard.

“HUDNet is a program that is looking at all the constituent pieces of the HITS program, all of its management pieces, the management framework around HITS,” said Mark Day, HUD’s chief technology officer, at a recent conference. “We are in the acquisition strategy phase. There will be RFPs coming out of this, but I can’t go much further than that.”

Day said the difference between outsourced or managed service contract and cloud is the elasticity. He said in a sense, HUD is in a private cloud that is virtualized, highly scalable and fairly agile.

“What is not there in a managed services contract is the business model of cloud. We do not have the elasticity. Prices do not go down when we use less,” Day said. “Managed services is what you might consider the high water mark price. If we ever bought that much of the infrastructure, we pay for that much of the infrastructure. In a cloud, you go up and down as your needs change. That is really what we are doing. It’s not a technical move for us. It’s a business model move in the procurement realm.”

Along with the two industry days, HUD issued a request for information in February.

In the RFI, the agency detailed five main areas, including hosting of its infrastructure in the cloud, self provisioning of capacity as needed and end-to-end monitoring of performance.

HUD is accepting comments, suggestions and recommendations on how to proceed through July 22.

HUD awarded Lockheed and EDS, which HP eventually bought, the HITS contract in 2005 to provide essentially all of HUD’s IT infrastructure, information processing, telecommunications, storage, enterprise middleware, operating systems, end user computing and communications devices (except desktop telephony) and related needs on a nationwide, agencywide basis, as organized around 24 core functions reflecting HUD’s various service needs.

No matter the approach HUD eventually chooses for its infrastructure, Day said the agency will need to do a few things, starting with improving the skills of its workforce.

“Now I need very savvy people to oversee that outsourced work. They need to understand IT, they need to understand metrics and management and remote management, if you will,” he said. “And that is an interesting grouping of skills when in fact they will never do actual IT work for you. So how do you get the right people with both a savvy understanding of the subject and an understanding of the management of that subject and how to measure that subject? It’s an interesting problem.”

Day said HUD is looking at career ladders for employees to gain both of these skills.

Metrics is another challenge for HUD. He said the TechStat sessions has helped ensure the agency has the right ones for a limited number of high priority programs.

“We have used TechStat to inform the interest level of our programs and others in doing our internal approach,” he said. “When they see they’ve got to do in front of OMB, it’s very easy to decide we ought to do it internally first. We ought to have the practice right. We ought to have the answers right. And we ought to in fact emulate that because it has driven good decision making.”

Day added TechStat sessions helped HUD focus in on the projects and metrics that really matter the most and how do they drive the agency’s mission. HUD culled their list down to seven from 38 major IT projects.

“The ones that are the same are the obvious ones schedule, budget and time and that type of thing. But really the other metric most people are not doing well is what is the business outcome for this project and how well are we actually meeting the business outcome? And if we are off schedule, what is the opportunity loss? If we are overbudget, what is the cost of that budget compared to the return on investment for that project?”

He added it’s a matter of figuring out the business goal of each project and then measuring what success looks like.

Day said TechStat also has helped HUD instill more rigor into the oversight of their IT programs.

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– by Jason Miller, Executive Editor, Federal News Radio – July 5, 2011 – Copyright 2011 by FederalNewsRadio.com. All Rights Reserved. Published at http://federalnewsradio.com/?sid=2446919&nid=35

GSA blames poor wording for STARS contract snafu

June 29, 2011 by

The General Services Administration is blaming “ambigous” language in an email to bidders on its $10 billion 8(a) contract for giving the mistake impression that it had made contract awards.

The email was intended to give notice that GSA was extending the selection process for the Streamlined Technology Acquisition Resources for Services (STARS) II governmentwide acquisition contract, according to a statement made June 23 by Mary Davie, assistant Federal Acquisition Service commissioner for integrated technology service at GSA.

Davie said the agency intends to award its major governmentwide small-business IT contract by the end of July, although it may have caused some confusion about awards.

GSA asked for a monthlong extension to try to get better prices from the companies bidding on its five-year, $10 billion contract. But because of the language issues some companies believe they had a spot on the IT GWAC and then lost it, Davie said.

A first correspondence, sent June 1, intended to say that officials, who are reviewing bids for STARS II, were continuing their review of submissions. The second letter, sent June 21, gave companies an opportunity for written discussions and called for a final proposal and pricing revision, Davie wrote.

“The second letter did specifically rescind a portion of earlier communications, which appeared to indicate that offerors were considered to be ‘apparently successful.’ This phrasing was ambiguous and should not have been used in these communications,” Davie said.

That second e-mail message, sent to companies, states: “Any part of previous communications from GSA stating or implying that offerors were deemed apparently successful is hereby rescinded.”

GSA was giving the small businesses time to re-examine the prices they offered in their initial bid proposals and adjust the pricing to “amplify its potential to be favorably considered,” the second message also states. Officials included the median price and prices in the 25th percentile as a guide for companies to make their revisions.

GSA had to get the extension to get better prices, Davie said.

“It would not have been possible to ask for more competitive pricing without going back to offerors to ask for an extension, provide them with an opportunity for additional discussions, and then request a final proposal revision,” Davie said.

She added that GSA’s GWAC program office is responding to contractors’ questions as part of the written discussions.

Although GSA’s follow-up message may be awkward, Larry Allen, president of Allen Federal Business Partners, said it’s better than being criticized throughout the life of the contract because of high prices.

About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week – June 24, 2011 at http://washingtontechnology.com/articles/2011/06/24/gsa-stars-ii-gwac-davie-ambiguous.aspx?s=wtdaily_270611

Government gets a B in 2010 small-business contracting

June 28, 2011 by

•The Small Business Administration gave the government a B grade for its attempts to reach small-business contracting goals, including the annual 23 percent overall goal, an agency official said June 23.

The government awarded 22.7 percent of its contracting dollars to small companies in fiscal 2010, compared to 21.9 percent the previous year. It awarded $97.9 billion to small businesses in 2010, compared with $96.8 billion in 2009, a $1.1 billion increase.

The B grade means that the government met 90 percent to 99 percent of its goals for the year.

In 2010, the government improved in four of the five categories of small businesses compared to SBA’s previous score card. There were increases in contract dollars and performance against statutory goals, except in the Historically Underutilized Business Zone (HUBZone) category.

Small disadvantaged businesses received $34.4 billion, or 8 percent of contracting dollars. The government surpassed the 5 percent goal for the category, as it did in 2009.

Woman-owned small businesses received $17.5 billion, or 4 percent of contracting dollars, in 2010. It was less than a point short of the 5 percent annual goal. In 2009, such companies received 3.7 percent of contracting dollars.

Small businesses owned by service-disabled veterans received $10.8 billion, or 2.5 percent of contracting dollars. The government was 0.5 percent below the 3 percent goal for such companies, although the percentage increased from just under 2 percent in 2009.

The HUBZone small-business category was the only one to experience a decline in 2010. Such companies received $11.97 billion, or 2.77 percent of contracting dollars. The goal is 3 percent. In 2009, the government had awarded HUBZone businesses $12.41 billion, or 2.81 percent of contracting dollars.

Joe Jordan, associate administrator of government contracting and business development at SBA, said the parity issue played a part in the HUBZone decrease.

Last year, Congress settled a disagreement among the administration, lawmakers, the U.S. Court of Federal Claims and the Government Accountability Office about whether agencies are required to offer small-business set-aside contracts to HUBZone companies first. The debate was over the word “shall” in the law. In legislation passed toward the end of the year, Congress replaced the word with “may,” clearing up any confusion about the equality of small-business categories. Read more about the debate.

“I think the confusion around parity during 2010 had some contracting officers skittish around HUBZones and what they should and should not do,” Jordan said. “And that’s why it’s so great that parity is now the law of the land. There is no more confusion.”

About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week – June 24, 2011 at http://washingtontechnology.com/articles/2011/06/24/sba-small-business-score-card-2010.aspx?s=wtdaily_270611

Oops, GSA takes back major contract awards

June 24, 2011 by

General Services Administration officials quickly rescinded an e-mail message
sent to small businesses telling them they had won spots on its major small
business governmentwide IT contract, according to an e-mail message obtained by
Washington Technology and Federal Computer Week.

Officials wrote in a follow-up message, which came a day after the award
notice, that they were checking prices again for the 8(a) Streamlined Technology
Acquisition Resources for Services (STARS) II contract. The message contained an
unsubtle suggestion that bidders might want to offer lower prices.

“Any part of previous communications from GSA stating or implying that
offerors were deemed apparently successful is hereby rescinded,” agency
officials wrote. “This discussion e-mail serves as notice that GSA has made the
decision to hold additional discussions, with an emphasis on pricing.”

STARS II is a 5-year, $10 billion indefinite-delivery, indefinite-quantity
(IDIQ) IT contract. GSA issued the first solicitation for the GWAC in July 2009.
Officials expect an award this month, according to GSA.gov.

GSA officials didn’t immediately respond to requests for comment..

Prices are becoming a central theme in the government as Congress and the
Obama administration attempte to rein in spending.

GSA is giving the 8(a) small businesses time to reexamine the prices they
offered in their initial bids and adjust the pricing to “amplify its potential
to be favorably considered,” according to the follow-up message.

The opportunity for price revisions is not merely a request for an update,
but it will play into GSA’s evaluations. “This is a competitive 8(a) procurement where comparative analysis with other
offerors’ pricing in response to this [Final Proposal Revision] opportunity, and
possibly other price analysis, will occur in order to assess price
reasonableness [or] unreasonableness,” GSA wrote.

In the rescission e-mail message, GSA gave companies pricing averages from
the initial bids as a guide for what’s been offered so far to let companies know
where their prices compare to other bidders.

Observers speculated that someone may have sent out an email too soon, or a
senior management official could have recognized in the 12th hour that the
agency needed look over the prices again.

“Oops,” Larry Allen, president of Allen Federal Business Partners, said about
the initial message.

Either way, the STARS GWAC is “a crown jewel” of GSA and its small business
contracts. It’s next to the GSA’s Schedules in importance to the agency, he
said.

The follow-up rescission message may be awkward, but, Allen said, it’s better
than being criticized throughout the life of the contract because of high
prices.

Nevertheless, the small-business aspect, such as getting a good mix of
various business types, likely would get officials’ attention from the outset
before prices, he said. STARS offers customer agencies an avenue to boost their
small-business contacting percentages, which has helped to make the GWAC
successful.

Across the government though, pricing has become another essential topic in a
time when funding is set to diminish. It’s important enough that the Defense
Department made Shay Assad, a senior procurement policy official, the first
director of defense pricing in May.

That appointment points to the weight of the pricing issue, said Hope Lane, a
government contract consultant at Aronson Consulting.

“The government has to start implementing austerity measures,” said Lane, who
focuses on GSA Schedules.

It isn’t surprising that GSA may have rescinded its award notice in order to
make contractors improve their prices, she said. As agencies hunt for the best
value for their money, GSA’s STARS GWAC has to prove that it can actually save
money, or GSA will lose business to another IDIQ hosted by another agency, she
said.

“IT, in particular, is a competitive market among GWACs,” she said.

This mix-up may cost GSA by way of protests to the contract. Allen said the
likelihood of protests just jumped much higher.

About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week -
June 22, 2011 – http://washingtontechnology.com/Articles/2011/06/22/GSA-rescinds-STARS-II-GWAC-award.aspx?p=1

A good IT idea for government could win you $50K

June 16, 2011 by

Money talks. Or in this case, the sponsors of a new contest to find “the best idea to fix government,” hope it will persuade people far and wide to submit viable technology solutions to improve federal operations.

The Merit Awards contest, sponsored by MeriTalk, which describes itself as an IT community network of contractors, federal employees, and others, is accepting ideas until 6 p.m. Aug. 1. The program includes eight categories: citizen engagement, defense, emergency response, entitlement reform, workforce management and motivation, back office operations, results achievement and waste.

The contest is open to virtually anyone — individuals or teams, government employees or contractors, says MeriTalk’s Mark Meadows. What’s more, entrants may submit ideas however they see fit — from full-blown theses to Twitter messages. That should certainly make things interesting for the judges.

According to MeriTalk, judges will include Rep. Gerald Connolly, D-Va.; former Republican congressman Thomas M. Davis III; Mark Forman, the first administrator for e-government and IT at the Office of Management and Budget; Vivek Kundra, the federal CIO; Vint Cerf, Google executive and Internet pioneer; and MeriTalk’s founder, Steve O’Keeffe.

O’Keeffe, who described Washington as “an innovation wasteland,” said in a statement: “Let’s sic the power of good ol’ American ingenuity on Uncle Sam. And, let’s go further. Innovation knows no borders — nor does it need a green card. We invite Chinese, Indian, any nomination from the four corners of the globe.”

MeriTalk will announce the winner Aug. 23, at the Innovation Nation Forum in Washington.

– by Katherine McIntire Peters – NextGov – 06/13/11 07:16 am ET at http://techinsider.nextgov.com/2011/06/have_a_good_it_idea_for_government_you_could_win_50000.php?zone=NGtoday