Government tries to downplay questionable small business data, according to American Small Business League
September 8, 2010 by cs
The Obama Administration has released its fiscal year (FY) 2009 Small Business Procurement Scorecard, reporting that the government missed its 23 percent small business contracting goal. In its scorecard, the government claimed to have awarded a mere 21.89 percent to small businesses, while also failing to meet congressionally mandated contracting goals for women, Service Disabled Veteran Owned Small Businesses and HUBZone firms. The Obama Administration missed 4 of its 5 contracting goals (http://www.businesswire.com/news/home/20100827005701/en).
The American Small Business League (ASBL) maintains that based on a recent evaluation of FY 2009 small business contracting data, the actual percentage of contracts awarded to small businesses is closer to 5 percent. In June, the ASBL conducted a review of the top 100 recipients of federal small business contracts for FY 2009. Within its sample, the ASBL identified 60 large firms, which received 64.5 percent of the total dollars the government claimed to have awarded to small businesses. (http://www.asbl.com/documents/ASBL_2009_dataanalysis.pdf)
The ASBL also identified a series of Fortune 500 corporations and other large firms in the government’s 2009 contracting data. Recipients of small business contracts included: Lockheed Martin, Boeing, Raytheon, L-3 Communications, British Aerospace (BAE), Northrop Grumman, General Electric, Booz Allen Hamilton, Thales Communications, General Dynamics, and Dell Computer.
Since 2003, more than a dozen federal investigations have found billions of dollars a month in federal small business contracts flowing into the hands of corporate giants. (http://www.asbl.com/documentlibrary.html)
The ASBL believes the Obama Administration has dramatically inflated the percentage of contracts awarded to small businesses by under-reporting the actual federal acquisition budget and by including billions of dollars in contracts awarded to large businesses. The actual federal acquisition budget for foreign, domestic, classified and unclassified projects is roughly $1 trillion. The Obama Administration’s goaling achievement is based on a number that is less than half of the actual federal acquisition budget.
As the American Small Business League predicted, the Obama Administration released its FY 2009 small business contracting numbers near the close of business on Friday afternoon. The late release of data is a clear indication the Obama Administration was trying to avoid scrutiny from the mainstream media. (http://www.huffingtonpost.com/lloyd-chapman/obama-administration-fabr_b_693359.html, http://www.huffingtonpost.com/lloyd-chapman/obama-administration-will_b_674073.html)
“President Obama is not fooling anyone. These 5 o’clock Friday afternoon press releases are like sending up a signal flare that the data is fabricated,” ASBL President Lloyd Chapman said. “Every year billions of dollars in federal contracts are diverted to Fortune 500 corporations and other large businesses, and every year the government fabricates its numbers. It is time for Congress and the Obama Administration to pass H.R. 2568, the Fairness and Transparency in Contracting Act, and end this abuse once and for all.”
– published by the American Small Business League, August 30, 2010 – Christopher Gunn, 707-789-9575
September 7, 2010 by cs
Some agency officials say they are following a well thought-out approach to spending what’s left in their fiscal-year information technology budgets — a game plan that defies the myth that departments rush to spend funds before they become unavailable after Sept. 30.
The phenomenon of the year-end spending sprees first came to light in 1980, when the Senate Governmental Affairs Subcommittee on Oversight of Government Management issued a report that found the hurry to obligate expiring funds before the end of the fiscal year often led to a lack of competition, inadequately negotiated contracts and the purchase of low-priority items.
In a 1998 follow-up to that study, the Government Accountability Office concluded agencies’ spending patterns were hard to assess because quarterly budget data, which could show a spike in fourth-quarter spending, was unreliable. Since then, federal auditors haven’t evaluated the issue much, and information on last-minute expenditures can be hard to obtain, according to some academic researchers.
Ramji Balakrishnan, an accounting professor at the University of Iowa who co-wrote a 2007 report on the subject, recently told Federal News Radio that he was able to access figures on year-end spending at U.S. Army hospitals largely because his co-author, a veteran, had contacts inside the military. According to the paper, which was published in the Journal of Management Accounting Research, administrators stockpiled supplies toward the end of a fiscal year, but then saved more money than they spent during the year-end splurge at the start of the next fiscal year.
A trend of precalculated buying seems to be occurring at several agencies with large IT budgets, including the General Services Administration and Veterans Affairs Administration, according to government officials.
In April, Administrator Martha Johnson directed GSA’s chief information officer, Casey Coleman, to complete five high-priority IT projects within 18 months — a feat that Coleman said the agency finished in 10 weeks. The agency’s IT budget for fiscal 2010 is $605.9 million. By quickly wrapping up the projects, which included boosting the capacity of GSA’s networks and adding remote private networks for teleworkers, Coleman was able to focus late-year spending on supplemental purchases for the agency’s increasingly mobile workforce, she said.
“By doing that we really set the foundation for IT modernization for the agency,” Coleman said in an interview with Nextgov. “Now we are in Phase 2 of our modernization program.”
Phase 2 involves purchasing green products. Johnson this summer challenged GSA to eliminate the federal government’s adverse effects on the environment, what’s known as creating “a zero environmental footprint.”
The agency plans to spend its IT money in September on products and services that support the zero e-emissions goal, Coleman said. GSA will invest in videoconferencing equipment; shared printing workstations to replace individual desktop printers, which are rarely used; and a cloud computing tool for e-mail, scheduling and other interoffice communications. Cloud computing is an arrangement that provides online access to hardware and software, eliminating the need to rely on energy-hungry, in-house data centers for IT services.
A contract for cloud services is expected to be awarded in October using fiscal 2010 money earmarked for spending in September.
GSA was unable to provide information on remaining money the agency returned to the treasury at the end of the last fiscal year.
The thinking is that GSA, as the nation’s biggest storefront, can expand the green IT market governmentwide — and perhaps nationwide — by purchasing environmentally responsible goods. Experimenting at the departmental level also might enable GSA to eventually offer governmentwide, eco-friendly IT contracting vehicles, agency officials said.
Veterans Affairs, which has a $3.3 billion IT budget, will spend its remaining fiscal 2011 funds on rolling out systems that can quickly exchange patient records via the Web, VA officials said. Such expenditures should increase access to health care, including mental health services, they added. September money also will support upgrades to benefits delivery systems and the department’s IT infrastructure.
At the end of fiscal 2009, Veterans Affairs let $462,000 in IT-related funding lapse, or become unavailable for new purchases.
In the past, officials at the Environmental Protection Agency spent all of their IT money by the end of the year, but only after careful planning, they said. Last year, EPA did not return any IT-related funding to the treasury. The agency’s enacted IT budget for fiscal 2010 is $465 million.
A significant portion of EPA’s technology infrastructure spending is managed under a business model that quantifies IT needs at the beginning of each fiscal year, officials said. “This process promotes spending that is thought-out and forecasted, and minimizes a potential end-of year spending surge,” EPA spokeswoman Latisha Petteway said.
– By Aliya Sternstein – NextGov.com - 08/26/2010
September 3, 2010 by cs
Federal agencies are failing to maximize opportunities to make contracts competitive, often because of poor management or because officials have grown comfortable with incumbent contractors, according to a new report from the Government Accountability Office.
The watchdog reviewed trends in noncompetitive contracts during the past several years and discovered a number of questionable business practices by contracting officials and program managers. GAO found 44 percent of all federal contracts in fiscal 2009 either were not placed up for competition or attracted only one bid.
The report (GAO-10-833), which the House Oversight and Government Reform Committee requested, highlighted contracts that appeared to be written with such narrowly defined requirements that only one company could reasonably compete. In other instances, program offices pressed for follow-on contracts to be awarded without competition to the existing company because it would be more expeditious since the offices already had formed a relationship with the firm.
“A Navy program official stated that, when one contractor has been performing a requirement for many years, it is easier to go back to the contractor personnel who understand the requirement rather than taking the time to find a new vendor,” the report said.
From fiscal 2005 to fiscal 2009, the reported obligations for noncompetitive contracts declined from 36 percent of total procurement spending to 31 percent, investigators found. But contracts in which only one offer was received remained steady at around 13 percent.
The report cited a host of reasons for contracts with only one bid. Often, companies are scared off by a competent incumbent contractor considered an overwhelming favorite to continue with the work, the watchdog said. Other times, solicitations might appear to favor one company, the report noted. In addition, some vendors that might have competed for work are forming teams to submit one offer, industry officials told GAO.
“Given the nation’s fiscal constraints, it is not acceptable to keep an incumbent contractor in place without competition simply because the contractor is doing a good job, or to resist legitimate suggestions that competition be imposed even though it may take longer,” the report said.
GAO recommended the Obama administration assess the reasons contracts are receiving only one offer. Daniel Gordon, administrator of the Office of Federal Procurement Policy at the Office of Management and Budget, has argued that one bid is not enough to constitute competition and that the practice limits agencies’ ability to consider qualified alternatives.
Recent OFPP guidance requires agencies to begin separating data collected on these contracts and to code them as “noncompetitive procurements using competitive procedures.” Gordon concurred with GAO’s recommendation.
But, it might be difficult to get sound data on contract competition. GAO randomly selected a sample of 107 contracts and orders that were coded as noncompetitive or receiving one bid, and reviewed the contract files. Eighteen percent of the contracts were coded incorrectly — as either not competed when they had been, or as competed with one offer received when they had not been competed at all, the report said.
In fiscal 2009, the Navy and the Air Force had some of the worst competition rates, with about 45 percent of contracts not competitive, GAO said. The Energy Department and Office of Personnel Management had among the lowest rates of noncompetition, at 7 percent and 5 percent, respectively.
The most common explanation for failing to conduct any competition was that “only one reasonable source” was available to perform the work, according to the GAO sample. In some cases, such as an Immigrations and Customs Enforcement contract for communications equipment and supplies, one contractor essentially owns the market.
In other instances, particularly with Defense Department weapons programs, the government is hamstrung by a lack of access to proprietary technical data, according to the watchdog. Companies’ expertise, experience and reluctance to sell technical data for a reasonable price generally preclude the possibility of competition, the report said.
Several contracting officials blamed the lack of competition on receiving short notice from program offices for acquisitions. With little time to conduct market research or properly define requirements — elements of a robust acquisition process — contracting officials often turn back to the incumbent, investigators said.
The second most frequently cited exception to competition was the authority to award sole-source contracts to firms in Small Business Administration’s 8(a) business development program. Through the program, agencies are encouraged to award participating 8(a) firms noncompetitive contracts worth less than $3.5 million when procuring services, or less than $5.5 million for manufacturing.
– by Robert Brodsky – GovExec.com – August 26, 2010
September 2, 2010 by cs
Every year, the Equal Employment Opportunity Commission releases its annual report, informing the president and Congress of the state of equal-employment opportunity in the federal workforce. But critics say the annual report serves one other purpose: It magnifies what is currently wrong with the federal government’s EEO system.
The recently released 2009 report reveals a stunning lack of compliance, commitment and accountability by a number of agencies and agency leadership—especially when compared with the best practices being employed by The DiversityInc Top 50 Companies for Diversity®.
Consider this sampling of numbers from EEOC’s latest 2009 report:
- Only 79 percent of federal departments and agencies submitted Management Directive 715 (MD-715) reports. The reports detail agency employment by race, national origin, sex and disability and are required under law to be submitted, reviewed and approved annually by the EEOC, which is responsible for enforcing federal laws against employment discrimination.
- Only 61 percent of federal departments and agencies heads issued written policy statements, expressing their commitment to EEO and a workplace free of discriminatory harassment, despite an EEOC mandate that this statement “be issued at the beginning of their tenure [and] disseminated to all employees.”
- Only 74 percent of agency EEO directors report directly to their agency head, despite a mandate that they do so.
So what happens to the 21 percent of agencies that do not submit MD-715 reports? Or the 39 percent of agency heads who did not issue written policy statements? Or the 26 percent of agencies that don’t have an EEO director reporting directly to the top person at a department?
“There is absolutely no accountability for those agencies who do not wish to comply with the regulations,” says Carol Dawson, president of EEO Guidance, a national consulting and training company based in Jeffersonville, Ind. “There is nobody doing anything about the percent that is not in compliance; there are no consequences whatsoever.”
In March, DiversityInc released the findings of its second annual DiversityInc Top Federal Agencies for Diversity list in Washington, D.C. The findings demonstrated that while participating federal agencies have made strides in ensuring that their workforces reflect the changing needs and faces of their constituents, they lagged far behind the DiversityInc Top 50 in a number of key areas of diversity management and representation, including:
- Strategies used to promote and show commitment for diversity throughout the organization
- Workforce and recruitment representation for Blacks, Latinos, Asians, women and people with disabilities
- Communications about employee-development programs, such as employees and managers participating in employee-resource groups and in mentoring programs
DiversityInc will follow up with federal agencies on Nov. 9 with a program entitled “The Next Steps to Effective Diversity Management.” Expected speakers include John Robinson, chief diversity officer of the State Department, Cari Dominguez, former head of the EEOC, and chief diversity officers of several DiversityInc Top 50 companies. For information on this diversity event, click here.
Dawson worked at the Office of Federal Contract Compliance for 25 years, the agency responsible for ensuring that private-sector employers doing business with the federal government—specifically, all federal contractors that employ 50 or more employees and have government contracts of $50,000 or more—comply with the EEO laws and regulations requiring nondiscrimination.
She said the federal government does not tolerate the same kind of behavior within the private sector that it allows in its own ranks. “In private industry, we take them to court. We take their federal contracts away. We put their names out there. We make them miserable. They will suffer greatly if they are not in compliance with far stricter EEO laws,” Dawson says.
But while EEOC is charged with monitoring federal-agency compliance with EEO laws, it does not have the funds or the manpower to monitor what is arguably the largest employer in the United States—the federal government, she said.
Dawson likens the current system to a fox-watching-the-hen-house scenario. Unlike the private sector, federal agencies themselves are responsible for their own internal EEO compliance and for processing and investigating charges of discrimination filed against them by their own employees.
“Until the federal government removes internal compliance and enforcement from the agencies and places it in neutral hands [EEOC], nothing will change,” Dawson says. “The federal agencies must be held accountable, or there is no real need for the EEO regulations.”
Dexter Brooks, the director of federal-sector programs at the EEOC, acknowledges that lack of compliance with EEO guidance and mandates is a problem at a number of federal agencies and departments. “What is our enforcement mechanism? We issue this report to the president and Congress every year stating which agencies are in compliance because they actually control the agencies’ budgets and the way in which they are lead. So that is one way in which we try to seek compliance,” he says. “Actually, it’s the primary way right now because we don’t have sanctioning authority.”
Brooks says the only time the EEOC can issue binding orders to an agency or department is when a deficiency manifests itself into an actual employee complaint.
He says the EEOC has issued a notice of proposed rulemaking to “slightly strengthen” the way the EEOC enforces its mandates. “This is not something we take lightly,” he says. “We are trying to get a full understanding of how far we can go to achieve compliance in federal agencies.”
Brooks says when the EEOC finds an agency or department failing to comply with a particular mandate or directive, “we note it as a deficiency and we give feedback to the EEO program and the agency head noting what we find as deficiencies.”
In its annual report, the EEOC also submits “tips” on how to have a more effective EEO program in the federal government. Brooks says another compliance mechanism is the actual complaint process, which he says is more reactive. “Employees who believe they have not received equal opportunities can file complaints of discrimination,” he adds. “We are trying to get agencies to do the proactive work before they see us on the reactive side, which is the complaint side.”
In fact, federal employees are filing more complaints alleging employment discrimination on the basis of race, color, sex, national origin, religion, age, disability and reprisal. Federal employees filed 16,947 discrimination complaints in fiscal year 2009, 195 more than in 2008, according to a new EEOC report. The increase is smaller than the previous year’s increase: In 2008, there were 584 more discrimination complaints than in 2007.
The rise in 2009 over the previous year is not big, but it is significant because it represents the second year of an increase, reversing what has been a decade of steady declines. “We are watching this trend,” Brooks says.
Asked whether the rise in complaints could be related to the number of agencies and departments that are not complying with EEO guidance mandates, Brooks says he is not sure but “logically, it needs to be explored.”
“It makes sense that if you are not in compliance, you might have higher complaints,” he says. “That makes a lot of sense and it’s something we are going to be studying and tracking.”
– By Sam Ali – Aug 27, 2010 – Diversity Inc. – http://diversityinc.com/article/8013/No-Accountability-21-of-Federal-Agencies-Dont-Submit-EEO-Reports/
September 1, 2010 by cs
The Social Security Administration expects to award by October a contract potentially worth more than $2 billion for information technology support during the next eight years, agency officials confirmed late Friday.
The huge purchase is an extension of an IT services contract currently held by Lockheed Martin Corp. that has reached its cap of $525 million. The scope of work for this follow-on will extend beyond the previous contract that was primarily for software development and maintenance to include health information technology as well as new management responsibilities. The award may be split between multiple companies.
In June, Social Security officials described the procurement as consisting of many technical areas, including application and business planning; systems administration for the operating systems z/OS, Unix, Windows and IBM WebSphere; and emerging technology applications, such as data mining, cloud computing and voice recognition.
The new contract also will continue the work being performed under SSA’s current agreement with Lockheed, the Agencywide Support Services Contract. That award, announced in November 2004, covers application development, testing and maintenance; document management, and software engineering. Lockheed has provided software support to Social Security since 1989 under various task orders.
The impending contract award comes at a time when SSA is under pressure from lawmakers and applicants to reduce disability hearing backlogs partly through videoconferencing, expedite claims processing and offer more online services. Given the rising tide of baby boomer enrollees and applicants suffering economic hardship, the agency’s infrastructure is strained. Social Security already processes 4.7 million retirement claims annually and pays 60 million beneficiaries a total of more than $700 billion a year.
The contract winners will be responsible for ensuring continuity of citizen services and remote disaster recovery as the agency renovates its 30-year-old database system, according to the request for proposals.
The health IT responsibilities for the program are exhaustive. Social Security manages the largest repository of imaged medical information in the world, according to SSA officials. The agency currently stores more than 250 million medical documents and adds 2 million more per week.
The contractor must create business models for exchanging electronic medical records, expand Internet services for Medicare and supplemental security income applicants, and enable the agency to request and receive medical data automatically through health information exchanges.
Such tasks require expertise in the areas of health IT standards, clinical terminology, multiple formats of electronic health records, patient confidentiality procedures, the medical community’s financial transactions and analysis of health care legislation.
This activity will “set them up for compatibility and interoperability with the pending growth of health IT among commercial providers who will be taking advantage of the HIT incentives that were legislated” in the 2009 Recovery Act, said Ray Bjorklund, chief knowledge officer for FedSources, a market research firm. Starting in 2011, doctors and hospitals that install certified electronic health records systems will be eligible for receiving bonus Medicare and Medicaid payments.
Several federal market specialists presume the government will award the contract to more than one vendor to boost competition, which should drive down prices, for individual task orders. The trade-off might be a lack of consistency in services, but the net benefits should generally outweigh the negatives, Bjorklund said.
He predicted multibillion-dollar contracts like SSA’s project will soon disappear in civilian agencies given tight budgets. In addition, the government is moving toward shared services, through which multiple agencies use a common IT infrastructure. The Obama administration particularly is pushing cloud computing, a type of shared services arrangement that provides IT products and services online and on-demand.
“For the civilian agencies this could be one of the last big ones for a while,” Bjorklund said. “But the pendulum swings.
August 31, 2010 by cs
Agencies have until Sept. 1 to tell the White House what they think of the strategy to reduce federal greenhouse emissions.
The administration extended the comment deadline from Aug. 16 to give agencies more time to understand the governmentwide requirements for calculating and reporting greenhouse gas emissions associated agency operations.
The draft calls for agencies to report their baseline 2010 greenhouse gas emission inventory by January 2011.
“The data required to develop an agencywide inventory will likely be drawn from multiple levels throughout an agency’s organizational structure,” the draft strategy states. “This guidance has been developed to provide federal agency users, whether representing facility-level activities or headquarters-level functions, with the necessary information to fulfill reporting requirements.”
One way several agencies are not only reducing their carbon footprint, but saving money as well is through the Energy Department’s Energy Service Companies (ESCOs) contracts. And soon, DoE will provide agencies with a dashboard to better understand and track energy efficiencies through the program.
“These contracts are used by federal agencies basically to tap into the technological and financial resources of the private sector to implement energy savings from renewable energy projects and related activities that generate savings to the agency’s utility bill,” said Skye Schell, a supervisor in the Federal Energy Management Program, which is part of DoE’s Energy Efficiency and Renewable Energy department.
Schell said agencies can benefit from upgraded infrastructure and modernized plants.
“They cover a wide range of technologies,” he said. “Really any efficiency technology implementation you can think of probably has been included in Energy Savings Performance Contracts (ESPCs) over the year. Different renewables, wind projects, solar thermal, photovoltaics, geothermal, all have been aspects of ESPCs. It’s quite a breadth of technology.”
He added that the investments are in the tens of millions of dollars as agencies may replace a central heating plants or converting a fossil fuel infrastructure to a biomass plant.
The cost of a typical project can run between $8 million and $10 million. The company bids on the work using a type of share-in-savings approach.
Schell said the one big difference is the energy companies’ estimate and the agency agrees to the projected savings on the front end of the deal.
“We do ongoing measurement and verification to determine if the savings were in fact achieved, and if so, then the energy savings companies gets their share of savings,” Schell said.
Usually on share-in-savings contracts, vendors make the upfront investments and receive money as the savings come in. Agencies have used this type of contract in the past for recovery audit initiatives.
Agencies also receive savings from paying less for electricity or water or other types of energy.
More and more agencies are starting to use the program. Schell said in 2008, the vehicle saw about $300 million in terms of investment value in projects. A year later, the investment increased to $450 million, and Schell expects the value to increase by another $100 million to $550 million in 2010.
He said about 19 agencies have active projects with DoE, the Justice Department and the Navy among the biggest agency users of the contract.
Schell said these contracts usually are long-term deals where companies invest more than $10 million and are paid back with interest on average over 18 years.
Over the next six months, Energy will give agencies more data to better understand how to reduce their greenhouse gas emissions and carbon footprints.
Schell said Energy will make its ESPC dashboard available for government officials and contractors.
“We are tracking key indicators of program performance,” he said. “The dashboard answers questions such as trends in agency uses of the program, which Energy Service Companies are participating, what is the pipeline of projects and awards, the time it takes from inception to award, the cost of borrowing associated with the program, and the cost of BTU saved associated with the program. It really gives us a decent snapshot of the program efficiency and effectiveness.”
Energy has used the dashboard since 2008, mostly for internal tracking. But Schell said by the end of the calendar year, Energy will have removed any sensitive data and ensured the information in the dashboard is accurate and open it up to agency users.
“Agencies using our program may be interested in information and trends to compare their experiences with others, and also this might be a tool we use to put out report cards for ESCOs for agencies to review against different parameters,” he said.
– by Jason Miller – August 19, 2010 - FederalNewsRadio.com
August 30, 2010 by cs
Small businesses won a record $96.8 billion in federal prime contracts in Fiscal Year (FY) 2009 (Oct. 1, 2008-Sept. 30, 2009), an increase of more than $3 billion from FY 2008, according to the U.S. Small Business Administration’s fourth annual small business procurement scorecard released today. This dollar amount represents 21.89 percent of all federal spending – an improvement over FY2008. Additionally, performance in each of the government’s socioeconomic subcategories increased for FY2009.
There was an increase in both dollars and contracting share for every small business category. This represents real progress, but not enough, we must reaffirm our commitment to ensuring that the 23 percent goal is met and exceeded,” SBA Administrator Karen Mills said. “Federal contracts awarded to small businesses are a ‘win-win’ – providing small businesses with the opportunity to grow and create jobs, and offering innovative services and essential goods to the government at great value to the taxpayers.”
Small Business Goaling Summary Report
2009 Goal 23%
2009 Percentage 21.89%
2009 Contract Dollars $96.8 billion
2008 Percentage 21.5%
2008 Contract Dollars $93.2 billion
Women Owned Small Business:
2009 Goal 5%
2009 Percentage 3.68%
2009 Contract Dollars $16.3 billion
2008 Percentage 3.40%
2008 Contract Dollars $14.7 billion
Small Disadvantaged Businesses:
2009 Goal 5%
2009 Percentage 7.57%
2009 Contract Dollars $33.5 billion
2008 Percentage 6.76%
2008 Contract Dollars $29.3 billion
Service-Disabled Veteran Owned Small Business:
2009 Goal 3%
2009 Percentage 1.98%
2009 Contract Dollars $8.8 billion
2008 Percentage 1.49%
2008 Contract Dollars $6.4 billion
2009 Goal 3%
2009 Percentage 2.81%
2009 Contract Dollars $12.4 billion
2008 Percentage 2.34%
2008 Contract Dollars $10.1 billion
SBA is required to report to the President and Congress on achievements by federal agencies and departments against their annual goal to ensure greater accountability. The small business Procurement Scorecard fulfills that requirement by providing an assessment of federal achievement in prime contracting and subcontracting to small businesses by the 24 Chief Financial Officers Act agencies. It also measures progress that departments are making to ensure small business opportunities remain an integral part of their acquisition of goods and services to meet mission objectives.
The fourth annual Scorecard is an assessment tool (1) to measure how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals, (2) provide accurate and transparent contracting data and (3) report agency-specific progress. The prime and subcontracting component goals include goals for small businesses, small businesses owned by women, small disadvantaged businesses, service-disabled veteran owned small businesses, and small businesses in located in HUBZones.
As it does every year, the SBA has closely examined federal procurement reporting and data to ensure the greatest level of transparency possible.
After identifying anomalies in initial reports, the SBA has worked collaboratively – and will continue to work – with agencies across the government to correct as many data issues as possible, and improve the integrity of all small business federal contracting reporting moving forward.
The Recovery Act and small business contracting
The American Recovery and Reinvestment Act (ARRA) provided additional resources to federal agencies in fiscal year 2009, providing additional opportunities for small businesses to win federal contracts. Through early August, small businesses have secured over 30 percent of Recovery Act Contracts. This preliminary data underscores the priority the Administration and the SBA have placed on increasing small businesses access to federal contracts so that they can grow and create jobs.
About the Scorecard
SBA graded 24 agencies on each of the individual prime contracting goals established by Congress and used a new A+ through F letter grade system rather than the previous red, yellow, and green ratings. The new scorecard format was implemented this year to provide greater clarity and transparency on how well each agency is doing in meeting its individual small business prime contracting goals.
Each federal agency has a different small business contracting goal, determined annually in consultation with SBA. SBA ensures that the sum total of all of the goals meets the 23 percent target established by law.
Each agency’s overall grade will show an A+ for agencies that meet or exceed 120 percent of their goals, an A for those between 100 percent and 119 percent, a B for 90 to 99 percent, a C for 80 to 89 percent, a D for 70 to 79 percent and an F for less than 70 percent. An agency’s overall grade was comprised of three quantitative measures: prime contracts (80 percent), subcontracts (10 percent) and its progress plan for meeting goals (10 percent).
The scorecards released Aug. 27, 2010 by SBA, as well as a detailed explanation of the new scorecard methodology, is available online: http://www.sba.gov/aboutsba/sbaprograms/goals/index.html.
As part of its ongoing efforts to increase access to contracting opportunities for small businesses, the SBA is continuing to work with federal agency procurement staff to strengthen the integrity of contracting data, including providing tools to facilitate public review of data, improvements to systems and training to improve accuracy.
Release Date: August 27, 2010
Contact: Tiffani Clements (202) 401-0035 Hayley Matz (202) 205-6948
Release Number: 10-48
Internet Address: http://www.sba.gov/news
August 27, 2010 by cs
Some contractors are welcoming the White House’s threat to cut off funding for risky information technology projects as a moment that could be financially advantageous to them.
The Office of Management and Budget on Monday released a list of roughly 30 at-risk, mission-critical IT projects worth about $30 billion that need reworking. Simultaneously, OMB officials are deciding the fate of about 30 financial system projects a historically costly class of IT systems that the White House halted on June 28. Agencies must downsize the projects or scrap them to start afresh.
The drastic measures are part of the Obama administration’s effort to end the traditional practice of rolling out complex IT systems that take years to build and often fail.
OMB now wants agencies to break projects into smaller chunks that can be deployed more quickly and cheaply. This means some system contractors will be paid less while agencies stop to redirect wayward projects.
That’s just fine for some suppliers of easy-to-configure software, even though they were affected by the pause in the projects. Executives from these companies said they could receive more business when departments recompete canceled projects, or when they buy smaller systems in the future.
“When you get beyond the fear and anxiety of, ‘Oh my God! I’m on the list,’ most people who’ve been around will confide in you that this [megaproject] model has to go,” said David Lucas, chief strategy officer for Global Computer Enterprises, which provides Web-based hardware and software for financial management. GCE is the contractor for the Labor Department’s new financial system, which is one of the projects OMB put on hold.
GCE specializes in delivering small, incremental functions that take less than 18 months to deploy, an approach that aligns with what the administration is encouraging all agencies to embrace, Lucas said.
He claimed the company has attracted more attention from chief information officers and chief financial officers since the White House put the freeze on financial system development.
Industry group TechAmerica, of which GCE is a member, came out with a statement on Monday that raised concerns about the criteria the White House used to identify projects in need of adjustments. The trade group has argued that instituting blanket freezes on IT projects will force contractors to raise prices to protect themselves from financial losses if work is halted.
But Lucas said, “You have to be able to say, ‘Maybe I am going to make less this year, but the end goal is to be able to help the agency in the long term.’”
Executives with software maker Agilex view the acquisition reforms as a business opportunity rather than a risk. The company produces computer programs using a process called agile software development, which sticks to a specified budget and deadline but leaves open the scope of a system’s capabilities. Often, White House directives, congressional mandates and agencies’ changing priorities will demand projects add or eliminate requirements. Agilex officials said the company’s practices allow agencies to inspect and try products during coding to decide whether they meet constantly evolving needs.
“Agile software development really focuses on exactly the business process that the government is really trying to achieve: incrementalism, chunking. I can’t wait 12, 18, 24 months to see if something is working,” said Larry Albert, an executive vice president for Agilex. “Just don’t show me slides. I need to see active working code.”
Agency managers also can access an internal Agilex website that displays performance metrics for each application as it is being created.
Albert said a number of agencies have approached the firm since late June, when OMB began issuing memos detailing IT acquisition changes. Agencies, however, have not yet talked to Agilex about any of the projects OMB called out on Monday, he said.
GCE and Agilex said the move to deploy systems more quickly should benefit most providers of cloud computing applications, which are IT services accessed via the Internet that users can turn on and off on demand. The Obama administration has been prodding agencies to consider cloud-based IT as a way to save energy and money.
– By Aliya Sternstein – NextGov.com – 08/24/2010
August 26, 2010 by cs
A new law will make public a database on contractors’ past behavior that is now available only to the government, and some contracting groups worry the information could be misinterpreted.
The Federal Awardee Performance and Integrity Information System, dubbed FAPIIS, was established through 2008 legislation to ensure the government, before making major awards to contractors, is aware of past problems such as criminal convictions, fines, suspensions and contracts terminated due to default.
Supplemental war funding legislation signed by President Obama earlier this summer mandated that all of the information — with the exception of past performance reviews — be made publicly available on a Web site.
The Project on Government Oversight, a nonprofit organization that has operated its own contractor misconduct database since 2002, lauded the decision. Neil Gordon, an investigator with the organization, said the public database will provide a window into the government’s decision-making processes.
“We’ve always thought that a database that contains information about federal contractors will, first of all, help the government make more responsible contracting decisions, but also help the public be able to better track how the money is spent,” Gordon said.
But the Professional Services Council, an industry trade group, said the data might be misinterpreted by users unfamiliar with contracting, including Congress, reporters and public interest groups.
“Government officials, contracting officers and source selection people have experience evaluating past-performance information and making judgments about data,” said Alan Chvotkin, executive vice president and counsel at the PSC. “The database will be used for a lot of purposes having nothing to do with what it’s originally intended to do.”
Gordon dismissed those concerns, noting that a lot of the information is already public. The database, he said, just gathers it together to be more accessible.
The law tasks the General Services Administration with making the database available. The GSA said it does not yet have a date for the public site’s rollout, but is working with the administration on implementation.
– By Marjorie Censer, Monday, August 23, 2010, The Washington Post
August 25, 2010 by cs
In February 2009, the United States had fallen into what many economists called the deepest economic slowdown since the Great Depression.
The housing bubble had burst, unemployment was nearing its highest level in almost three decades and the once-freewheeling banking sector had turned tightfisted.
At the urging of President Obama, Congress passed a $787 billion economic stimulus bill on Feb. 10, 2009, to get federal dollars flowing into the U.S. economy.
Eighteen months later, the administration estimates that about 85 percent of the jobs it expected to create or save in the first two years have indeed been created or saved. The economy is rebounding slowly, and the worst effects of the recession have softened. Unemployment, while still high, is better than it otherwise would have been.
For the most part, mainstream economists such as those at the Congressional Budget Office agree with those conclusions. But an examination by McClatchy Newspapers and the Medill News Service has found that some parts of the country have benefited far more from the American Recovery and Reinvestment Act than others, that some sectors of the economy are benefiting far more than others, and that it’s difficult to detail exactly where all the money has gone.
Among the findings:
• The jobless rates in the states had little to do with where major portions of the stimulus package were distributed. Some states with the lowest unemployment rates received some of the highest per-capita spending for stimulus projects.
• Job creation on the local level has been uneven. By the White House’s numbers, for example, Nebraska created 74 percent of the expected jobs, while North Dakota and Massachusetts created 100 percent.
• The Obama administration won’t be able to fulfill its vow to track every stimulus dollar. The mechanism that’s used to account for the expenditures is complicated, flawed and at times inaccurate.
“I know it’s political rhetoric to say we have to know where every penny is spent,” said Raymond Yee, a lecturer at the University of California-Berkeley’s School of Information. “But it’s difficult to even understand where every billion dollars is spent.”
• Much of the stimulus money has yet to go out the door. As of July, $127 billion in contracts, grants and loans had been awarded, but that’s less than half the $275 billion allocated for those projects.
That’s partly by design and partly because it was difficult to get systems in place to spend money quickly for the array of new programs that the stimulus bill funded.
The White House projected creating or saving about 3.5 million jobs in the first two years after the stimulus bill passed. In a July report, the administration estimated that it’s created or saved about 3 million of them, about 85 percent of the expected total.
(Using different economic models, the administration calculates the added-jobs tally at either 2.5 million or 3.6 million and averages them out to 3.1 million.)
Benefit to states is uneven
While they agree that the stimulus package has created jobs, other economists are less optimistic than the White House is. The CBO says the job boost could be as low as 1.4 million or as high as 3.4 million. Three other economic organizations – all of which the White House cited in its July report – put the jobs tally at 1.8 million, 2.1 million or 2.2 million.
It’s clear from the McClatchy-Medill analysis of stimulus spending and unemployment, however, that some states have fared much better than others have.
North Dakota has had one of the nation’s lowest unemployment rates for the past year. In June, it hit 3.6 percent. Yet the analysis found that it’s scheduled to receive more stimulus spending, per capita, than is Nevada, where the unemployment rate climbed to 14.2 percent in June.
Economists who’ve studied the stimulus package say there’s little connection between which states have the worst unemployment and where the stimulus dollars have been spent. Edward Glaeser, a Harvard University economist, wrote in March: “Stimulus aid was not particularly well-matched with need.”
Veronique de Rugy of George Mason University testified before the House Committee on Transportation and Infrastructure in March that she and other researchers could not find any relationship between unemployment in a given area and the amount of stimulus dollars spent there.
“No matter how we measure unemployment, we find no correlation,” she said.
Though other economists recognize de Rugy’s findings, some disagree with her and Glaeser that funding stimulus programs without regard for local unemployment or economic conditions is a problem.
“If you say, ‘Let’s target states that are doing worse, places that saw the property crash in the worst way,’ ” said Timothy Taylor, managing editor of the Journal of Economic Perspectives, “is that really the right goal here? This wasn’t just inflicted on them like a lightning bolt. Rewarding failure is never the best plan.”
“I think giving (money) to the state governments was probably about as targeted as one could reasonably do,” he said. “It was no more unfair than other possibilities could have been. To have the federal government try to fix things county by county seems insane, especially if you take timely as an important task.”
Administration officials also disagree that targeting communities with high jobless rates would have been a better approach.
“Economic need isn’t bound by county or state lines and, fortunately, neither are the economic benefits of recovery act programs and projects,” said Elizabeth Oxhorn, recovery act spokeswoman for Vice President Joe Biden. “And when it comes to supporting the hardest-hit among us, assistance like unemployment benefits, tax relief and health care are directly targeted to those who need it most, regardless of where they live.”
“Bottom line: It’s working,” Oxhorn said. “Before the recovery act, our economy was losing an average of 750,000 jobs each month. In the first five months of this year, the economy has created nearly half a million new private-sector jobs.”
hard to track spending
Obama also pushed the stimulus bill with a promise that the American people would be able to account for “every penny” that was spent.
However, a year and a half later – despite spending $18 million to launch an unprecedented system for tracking stimulus bill spending – much of the reported funding information doesn’t match the dollars the federal government says it’s paid.
Although the administration reports how much each government agency has spent, that’s only half the story.
When stimulus dollars are spent, they’re funneled through states, agencies and contractors to the “sub-recipients” that build roads, do research or retrain unemployed workers. After they receive the money, states and recipients are supposed to record how they spend it and report those totals to the federal government.
That’s where things get confusing.
The $280 billion set aside for the states came fast and without clear accounting procedures. Moreover, the federal government didn’t include any money for states to hire the people necessary to track the deluge of money.
“I joke that the (stimulus) money came in the nick of time and the worst time,” said Kinney Poynter, executive director of the National Association of State Auditors, Comptrollers and Treasurers. “Many states were already short-staffed. And really there were no policies and procedures that happened this quick and of this magnitude before.”
– Graydon Gordian, Kelsey Snell and Michael Beller – Medill News Service, Aug. 8, 2010 – as published in the Arizona Daily Star