House panel kicks off Pentagon acquisition reform drive

November 7, 2013 by

The House Armed Services Committee last week kicked off a fresh drive to fix the way the Pentagon buys weapons and services, vowing to “look past Band-Aid fixes and parochial interests” and implement meaningful reforms.

The committee’s chairman, U.S. Representative Buck McKeon, said some successful efforts were already under way, but the U.S. military acquisition system still faced significant challenges including cost overruns and schedule delays, and those would get worse due to mounting pressure on U.S. budgets.

“The Congress, together with the Department of Defense and industry, must be willing to do the hard work to find root causes, look past Band-Aid fixes and parochial interests, and have the courage to implement meaningful, lasting reform,” McKeon said at the start of a hearing on the issue.

McKeon said he had asked Representative Mac Thornberry, a Texas Republican, to lead the long-term effort, aided by Representative Adam Smith, the top Democrat on the committee.

The latest Government Accountability Office report calculates that the Pentagon is slated to spend $1.5 trillion to acquire 85 separate weapons programs in coming years. Those programs are projected to experience $411 billion in cost growth and average scheduled delays of 27 months, the GAO estimates.

Paul Francis, managing director of acquisition and sourcing management for the GAO, told the committee that previous reform efforts had started to slow cost growth, but 39 percent of the weapons programs on the books in fiscal 2012 had experienced cost growth of 25 percent or more.

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GSA issues recommendation for ‘green’ building certification

November 5, 2013 by

U.S. General Services Administration (GSA) has issued a recommendation on the federal government’s use of third-party green building certification systems.  GSA is required by law to issue a recommendation to the Department of Energy (DOE) on how the federal government can best use certification systems to measure the design and performance of the federal government’s construction and major renovation projects.

“GSA has opened this review to an extensive public process, and we’ve made this recommendation using input from the public, industry stakeholders, and sustainability experts,” said Kevin Kampschroer, Director of GSA’s Office of Federal High-Performance Green Buildings, on Oct. 25, 2013. “We’ve found two tools that allow us to measure how federal buildings of all kinds can best save energy, improve overall performance, and cut down utility costs.”

In its recommendation to DOE, GSA recommended the Green Building Initiative’s Green Globes 2010 and the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) 2009 as the third-party certification systems that the federal government can use to gauge performance in its construction and renovation projects. Other certification systems were not selected because they did not align with the government’s requirements. Additionally, under today’s recommendation, GSA will conduct more regular reviews in order to keep up with the latest green building tools that the market has to offer.

Third party certification systems like LEED and Green Globes help in measuring reduction targets for water, energy, and greenhouse gas emissions against industry standards. Agencies can use one of the two certification systems that best meet their building portfolios, which range from office buildings, to laboratories, to hospitals, to airplane hangars.

Federal construction and modernization projects must adhere to the government’s own green building requirements by law and executive orders. No one certification system meets all of the federal government’s green building requirements. Green building certification systems are just one tool that GSA uses to cut costs and meet sustainability and economic performance goals.

GSA has worked to make federal buildings more efficient by reducing water and energy use, which saves taxpayer dollars and reduces the impact on the environment.  GSA’s efforts to increase sustainability are a central part of its mission to deliver the best value in real estate to the government and the American people.

Contractors say shutdown forced them to reprioritize

November 4, 2013 by

As feared, the 16-day government shutdown forced contractors to scramble for cash, revise their schedules, and reconnect with their agency liaisons, according to trade association officials.

“The good news is that most companies are putting folks back to work, which they should have been doing all along had there not been a shutdown,” said Alan Chvotkin, executive vice president and counsel at the Professional Services Council. “Our member survey shows that a large percentage of member companies did receive one or more stop-work orders. And though most, but not all, of those have now been reversed, large numbers of those contracts were unnecessarily and inappropriately stopped.”

Chvotkin said many agencies sent out blanket notices to all their contractors, even though a reading of the law says the notices would not apply to contracts fully funded in fiscal 2013 and contracts that don’t require access to government facilities or significant agency supervision. “So companies are now trying to redo those actions and restart work, which takes significant administrative work and deadlines such as something that was due in 30 days have to be rescheduled.”

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Analyst: Pentagon budget could drop to $415 billion

November 1, 2013 by

The Pentagon’s baseline budget could dip to $415 billion in coming years, with as little as $62 billion in annual authorized procurement, while the active military force shrinks to about 1 million uniformed personnel, according to analyst Todd Harrison of the Center for Strategic and Budgetary Assessments (CSBA).

Harrison provided Washington reporters an outlook Oct. 24 on the effects of the 2011 Budget Control Act (BCA) and its annual threat of automatic, widespread sequestration cuts in fiscal 2014 and beyond. While he did not necessarily see each of the outcomes as probable, when looking at historical trends and accounting for how the 2011 law is written, Harrison said the nadirs in defense spending and capability were nonetheless plausible.

Indeed, one of the unintended consequences of the law and sequestrations is the turnabout that will occur in the ratio of Defense Department procurement to research, development, testing and evaluation (RDT&E), according to Harrison’s report, “Chaos and Uncertainty: the Fiscal 2014 Defense Budget and Beyond.” Since fiscal 1955 the ratio has averaged 2.1, meaning the Pentagon was spending more than $2 in procurement for every $1 of RDT&E. While the actual figure has vacillated and dropped over the decades, it never got below a fiscal 2006 nadir of 1.1. But under decade-long spending caps mandated by the BCA, that ratio will drop below 1.0.

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DoD FY14 Procurement  Request

Fort Gordon post exchange construction begins next week

October 31, 2013 by

The Fort Gordon Post Exchange made possibly its strongest commitment Friday to its slogan, “You save. We give back.”

Using earnings from purchases made by a consumer base that includes 100,000 on- and off-post soldiers and retirees, the shopping complex broke ground on a $21 million project to renovate its nearly 20-year-old facility into a more spacious and modern retail center.

“Today is the realization of a plan that was initiated years ago, and we are finally seeing it come to fruition,” Maj. Gen. LaWarren V. Patterson, Fort Gordon’s commanding officer, said after digging the project’s ceremonial first clump of dirt.

Patterson said the project shows the faith and confidence that both the Department of Defense and the Army and Air Force Exchange Service have in the patronage of Fort Gordon’s Post Exchange.

At a time when U.S. military bases are using early retirement, natural attrition and hiring freezes to battle federal budget cuts and avoid layoffs at its trading posts and strip malls, Fort Gordon has been authorized to nearly double its facility in size from 98,000 to 177,000 square feet.

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Vendors see writing on the wall when it comes to low price acquisitions

October 30, 2013 by

Vendors are on edge and growing more nervous about the state of the federal  acquisition environment. Blame sequestration. Blame the government shutdown. But  the real culprit is LPTA — lowest price, technically acceptable — an  approach to evaluating procurements that is changing the federal acquisition  landscape.

And all signs point to agencies continuing to use this approach in the coming  years to buy goods and services, thus forcing federal contractors to have no  choice but to adjust.

“We have to accept lowest price may just be best value for the government  customer,” said Lisa Dezzutti, president and CEO of Market Connections, during a  briefing to industry on new research and a new survey of how LPTA is impacting the  government market. “We have to pursue new and lower cost business models.”

Lowest price technically acceptable is not really a new concept when it comes to  acquisition evaluations, but it has been gaining favor among agencies,  specifically the Defense Department over the last few years. Through its Better Buying initiative, DoD has  offered LPTA as one of several approaches to improve how they buy goods and  services.

Now it seems civilian agencies are following suit. Centurion Research Solutions  analyzed more than $27 billion in procurements and found the Veterans Affairs  Department is the biggest user of LPTA among non-DoD agencies.

Within DoD, the Army, Air Force and Navy use this concept the most.

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Contractor costs in whistle-blower cases no longer reimbursable

October 29, 2013 by

Contractors and subcontractors can no longer receive reimbursement from the  government for the costs of defending themselves against whistle-blower lawsuits  deemed legitimate.

The fiscal 2013 National Defense Authorization Act (P.L.112-239)  called for the change. On Oct. 22, the Defense Department, the General Services  Administration and NASA published an interim  rule, which was effective Sept. 30, to implement the law.

The Federal Acquisition Regulation previously only forbade contractor reimbursement for legal costs incurred in proceedings brought by a  government–federal, state, local or foreign. The new rule amends the FAR to  include legal costs from proceedings brought by a contractor or subcontractor  employee “submitting a whistleblower complaint of reprisal.”

The rule also broadens the scenarios that render the whistle-blower complaint  legitimate. Previously, the FAR said the contractor would have to be found  liable or fined in a civil proceeding in order to disqualify it from reimbursement. In the case of a criminal proceeding, it would have to be  convicted.

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The interim rule can be found in the Federal Register at:  Comments are due by Nov. 29, 2013.

Shutdown leaves GAO with massive backlog of contractors’ bid protests

October 24, 2013 by

Contractors could, and did, complain plenty during the government shutdown — but what they couldn’t do was lodge those complaints formally.

Bid protests, which allow government contractors to contest a lost contract with the Government Accountability Office, have become an increasingly significant part of the federal procurement process. In fiscal 2012, companies filed nearly 2,500 protests, up from about 1,650 in 2008.Typically, contractors argue that some part of their evaluation for a bid wasn’t fair — that the agency’s contracting officer didn’t give them enough credit for the good work they did in the past or unfairly judged the technical merits of their proposal, for example.

But after the GAO was forced to close Oct. 1, contractors couldn’t officially file new protests and couldn’t get responses to the ones they’d already filed. (The GAO allowed companies to e-mail their protests, but said the protests would be marked as filed the day the government reopened.)

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Do contractors need to take out government shutdown insurance?

October 23, 2013 by

Now that it looks like a deal to reopen the government  and raise the debt ceiling is upon us, I’ve been thinking about where this leaves the government services industry. If the shutdown ends today, we’ll all get back to work, assess the damage, and begin digging out of the hole this lost time has dug. In a month or so, it might seem like we’re back to normal, but I think that’s a bit of a leap.

At the beginning of the shutdown, I posited that this kind of instability in budgeting and appropriations might be the new normal. We’ve had essentially the same debate between Republicans and Democrats since 2010 about entitlement spending and government revenue/taxes with no resolution. The fundamental positions have not changed despite many skirmishes and an election. All signs now point to a 2014 mid-term that might tweak at the margins but will still likely result in a Republican controlled House and a Democratically controlled Senate.

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Federal IT spending to plateau for next 5 years

October 22, 2013 by

Total known and unclassified federal information technology spending will  hover around $70 billion annually through fiscal 2019 when measured in today’s  dollars, predicts the TechAmerica Foundation in its annual near-term forecast.

The forecast, based on federal budget data and interviews with federal IT  executives, assumes an overall discretionary topline lower than the Office of  Management and Budget’s projections but slightly greater in out-years than  Budget Control Act caps. TechAmerica Foundation conducted the research before  the House of Representatives reached an impasse with present year funding bills and so doesn’t take into account the government  shutdown, now in its third week. The foundation is the nonprofit arm of  technology firm lobbying group TechAmerica.

For fiscal 2014, the research finds (.pdf) that IT spending will add up to $70 billion, down considerably from the $86 billion (adjusted for inflation to be in today’s dollars) spent during  fiscal 2009. This year’s figure will stay more or less steady through fiscal  2009, when it’ll reach $72.2 billion in constant dollars, or $78.5 billion in a  number unadjusted for inflation.

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