The final Defense Federal Acquisition Regulation Supplement (DFARS), released in February, is an improvement over its predecessor, but its withholding clause could cause problems and payment delays for many Defense Department contractors, experts say.
An April 25 cross-industry panel of contracting experts agreed that the new DFARS is the most comprehensive change in federal contracting in several years.
But they centered their attention on assessing the new withholding clause, which calls for withholding a percentage of the contract payment if the Defense Contracting Management Agency finds “significant deficiencies” in any of six business systems cited in the new rule.
Timothy Callahan, executive director for contracts at DCMA, said the old rule had a variety of regulations, no consistent language in determining whether a contractor’s work was adequate or inadequate, and what and how corrective actions were to be taken.
“Under the way we were operating if a contractor had a deficiency with a business system, they put forward an adequate corrective action plan; that submittal of an adequate action plan oftentimes was sufficient to change the status from a disapproved system to an approved system,” Callahan said.
“And there really wasn’t the follow-through on either the contractor’s part or our oversight to ensure that that corrective action plan was put into place,” he added.
The new DFARS business system clause normally does not apply to small businesses, competitive fixed price contracts or contracts less than $7.5 million, he said, adding that the agency will issue a withhold assessment on contracts valued at more than $50 million.
Callahan said DCMA now will use a four-phase program to determine if any of six contract business systems are judged to contain “significant deficiencies.”
“If it’s one business system, the withhold [amount] is 5 percent. If it’s two or more business systems that are being disapproved, the maximum is 10 percent,” he said.
“The withholds are against the financing arrangements of the contract,” Callahan explained, including progress payments, performance-based payments and interim cost vouchers.
The contractor then has 45 days to turn in its corrective action plan.
“If it’s an adequate corrective action plan the withhold will be reduced by 2 percent,” Callahan said. “We’re trying to minimize the hurt but still keep the pressure on to get this corrective action implemented.”
When the contractor notifies the government of the implementation, the government has 90 days to validate that corrective action has indeed occurred and that the deficiencies have been corrected.
“If we don’t get out there within 90 days, it’s another automatic reduction in the withhold [penalty] of 50 percent,” he said.
Participants at the Compusearch-sponsored panel “Contracting in a Time of Change” agreed there was a definite need for a new DFARs rule.
But Robert Burton, partner at Venable law firm and former deputy administrator in the Office of Federal Procurement Policy, called the business system clause draconian and hard to implement.
Alan Chvotkin, executive vice president and counsel at the Professional Services Council, said there is a lot of mythology surrounding the rule.
However, he praised DFARS for providing “contractor engagement and response at every opportunity. So it’s really moved to a compliance rule rather than a withholding rule.”
Chvotkin said the attributes in each of the six business systems are more clearly defined now than they were early on in the drafting process “But there’s still a lot of ambiguity and a lot of room for interpretation,” he said.
Addressing the ambiguity and need for interpretation, Chvotkin offered several steps contractors need to take even before winning a contract affected by the rule.
He said contractors should always document their own business systems, be aware proactively of the contract clauses and the risks inherent in DFARS.
Robin Schulze, director of the Government Contractor Advisory Services at accountants Baker Tilly Virchow Krause LLP, said she believed the strength of the new DFARS was its peer review requirement.
But she said, “I believe that when you get the initial determination [of a deficiency] if you were able, in your response to that, provide an action plan you could start at 2 percent [withhold] instead of the 5 percent. And the same thing should be true if you voluntarily disclose a deficiency that you’ve identified and have already started working of it.”
Defending the clause and the remediation process, Callahan suggested that if a contractor knows there is a problem and takes corrective action right away, “we can start out with a withhold of 2 percent, it doesn’t have to be 5 percent,” he added.
“We would like this to be a collaborative operation,’ Callahan said, “where we’re communicating as we go along.”
Austerity is here, it’s real and it will be the rule of the road for several years. The president’s fiscal 2013 budget request for defense will likely be about $260 billion less, over the next five years, than the top line projections of just one year ago. The civilian agencies, many of which have been facing fiscal quagmires for several years as a result of a non-stop diet of continuing resolutions, also face real pressures today and further reductions for fiscal 2013, likely in the 3 percent to 5 percent range.
And if sequestration happens, the challenges will be that much more significant. What is not yet clear is what all of this means for both the effective functioning of government and, of course, for the industry that plays such a critical role in supporting it.
Recently, the Professional Services Council, along with the Aerospace Industries Association and the National Defense Industrial Association, submitted to Defense Secretary Leon Panetta and other top DOD leaders a report on the anticipated impacts of the defense spending reductions. They included job losses, reductions in company-funded research and development, investments in people, and the potential loss of key suppliers.
In addition, it is clear that, dosuring the next few years, an already highly competitive market will become even more competitive. With fewer contract opportunities, the number and range of competitors vying for those opportunities will be even greater than they are today.
While the fiscal environment is an unavoidable reality, there are a number of actions companies can and should take to help ameliorate at least some of those impacts. Indeed, these strategies and actions were prominent in discussions with the secretary of defense, the deputy secretary, and the undersecretary for acquisition, technology and logistics, following submission of our industrial base impacts report. These strategies also have applicability across the government.
Key among them is an intensified focus on performance—at all levels. This includes not only programmatic performance, which should always be the principal objective, but also a renewed focus on the financial side, such as fostering a proactive dialogue to help customers identify areas for cost savings—even if those savings might impact company revenue—and tightening company overhead as much as reasonably possible.
At the same time, the government customer must also think and act differently. Despite the budget reductions, the government will nonetheless be spending a huge amount of money through contracts for goods and services. To ensure that those expenditures deliver optimal benefits in both the short and long runs, it is crucial that the government, as the DOD and Office of Management and Budget leaders have said, focus on value and other meaningful value discriminators in the acquisition process. Indeed, DOD leadership has said that given the times, they will be focusing more intently than ever on those discriminators.
Unfortunately, the No. 1 issue identified by our member companies in our report was the government’s growing propensity to do just the opposite, even when buying complex services, including those that generate the kinds of innovation that lead to performance improvements and sustainable efficiencies.
Likewise, government teams must be open to eliminating non-value or limited-value contractual burdens. And the government must get away from its habit of using margins—too often arbitrarily set at unreasonably low levels—as a key cost savings tool. Margins should be linked to the complexity and risk associated with the work being done. Here too, a disconnect between the leadership’s objectives and the field’s implementation is clear and must be addressed.
For every company in the federal market, this must be a time of internal and external reassessment. The same is true for our government colleagues. There are some things that are well beyond either’s control. The key is to focus on those things that we can control and to turn an era of challenge into an era of innovation and opportunity.
There’s some buzz around a provision in the newly introduced Comprehensive Contingency Contracting Reform Act that would eliminate the ability established in the Federal Acquisition Regulation for a contractor unhappy with their past-performance evaluation to enter their own version of events in the file and to appeal the original past-performance evaluation to one level higher in the organization from where the original evaluation was done.
Matthew Weigelt wrote about the provision recently on FCW.com, with a moderately incendiary headline saying the provision would “stifle” contractor responses to past-performance reports. Matthew’s article was a top-five read and emailed article on the FCW site, so the issue is attracting attention.
With a small tweak, this could actually be a really good change. But the tweak is necessary, and I hope the bill’s authors will make it.
The big problem with the current FAR language is that it allows a contractor to appeal a past-performance rating one level above where it was made. In my view, this appeal right has been devastating for the honesty of past-performance ratings, and therefore for the ability of past-performance to be a differentiator in contract awards. For past-performance to work in choosing contractors, the government needs to be able to observe differentiation between better performers, who should be rewarded with new contracts, and poorer ones, who shouldn’t.
The serious shortcomings in the government’s past-performance rating system in turn is really too bad, because judgments, formal and informal, of the past performance of those with whom we do business are an absolutely crucial part of the ability of a market system to work in improving results. If we like the haircut a barber gave us, we go back, and if we didn’t, we don’t – this really provides an incentive for barbers to do a good job.
I was the person, as OFPP administrator, who authorized the current FAR language when the past-performance evaluation system began in the ‘90s. I was concerned at the time that this appeal provision was a mistake, and I believe that subsequent results have confirmed my worries. Contracting officers believe that a bad rating is an invitation to spend countless hours having to defend their judgments, and the easy response, especially with staff shortages and not enough time, is simply to go light on bad comments.
So as the person responsible for the original language, I vote for its repeal.
However, the bill’s provisions go a bit too far. There is no reason to eliminate the ability of the contractor to give their version of events and have it put in the contract file. That just seems like elementary fairness, so others using the past-performance report get to see a different version of what happened, if there is one. I think that at least enlightened elements in the contractor community could support elimination of the dysfunctional appeal process, which undermines the ability of the past-performance system to work at all. But elimination of even the right to comment is sure to arouse the ire of all contractors, as Weigelt’s article seems to show.
Can the bill authors tweak their language so it can help create a real improvement in the government’s past-performance rating system?
– by Steve Kelman, Washington Technology, Mar, 5, 2012 at http://washingtontechnology.com/blogs/lectern/2012/03/contractors-past-performance.aspx?s=wtdaily_060312.
Companies would lose the opportunity to respond to performance reviews written by government officials under a new contracting bill. The reviews often play a major role in winning future contracts.
The Comprehensive Contingency Contracting Reform Act (S. 2139), which was introduced Feb. 29, would revise language in the Federal Acquisition Regulation that gives companies 30 days to comment, provide additional information or rebut a contracting official’s assessment of their work. The same FAR provision requires agencies to provide companies with a copy of the work performance evaluation.
Trey Hodgkins, senior vice president for national security and procurement policy at TechAmerica, said this proposed FAR revision is huge change in procurement. It eliminates the ability for contractors point out mistakes or offer their perspective on circumstances when agency officials view them differently.
“This provision may lead to a bad situation or bad feelings, at least,” Hodgkins said.
A customer agency may be unhappy because it didn’t get what it wanted, although the contractor may have been bound by the firm-fixed price contract that the agency awarded. The result might be a lackluster performance review.
“That’s not unheard of,” Hodgkins said.
Sens. Claire McCaskill (D-Mo.) and Jim Webb (D-Va.) introduced the contracting reform bill, which is based on recommendations from the Commission on Wartime Contracting in Iraq and Afghanistan. McCaskill and Webb created the independent commission in 2007, and the commission issued a final report in 2011.
Among its other provisions, the bill would expand what goes into the Federal Awardee Performance and Integrity Information System, a database of contractors’ past performance and other related information. It would have agencies include information on any of a contractor’s parent or subsidiary entities.
The legislation would elevate oversight responsibilities for procurement officials and enhance management structures for the agencies handling contingency contracting. McCaskill and Webb want procurement training added to education curricula for both professional military and contingency operations. The training would deal with defining requirements and the strategic impacts of contracts on the mission.
The legislation would require justifications for sole-source contracts to handle compelling demands.
The bill has been referred to the Homeland Security and Governmental Affairs Committee for further review.
The Wartime Contracting Commission spent three years investigating contracts in Iraq and Afghanistan. In its final report to Congress, the panel estimated that the United States had lost as much as $60 billion through contract waste and fraud in those countries. The commission also identified major failures in contingency contracting planning, execution and oversight.
It concluded that such waste will increase if officials don’t toughen accountability as U.S. operations wind down, support for programs declines, and major reconstruction projects become unsustainable.
McCaskill, who introduced legislation with Webb to create the commission, has been focused on procurement and contracting reform. She’s chairwoman of the Senate Homeland Security and Governmental Affairs Committee’s Contracting Oversight Subcommittee and also chairwoman of the Senate Armed Services Committee’s Readiness and Management Support Subcommittee.
“When Jim and I got here, nobody was paying attention to the billions of taxpayer dollars being wasted in Iraq and Afghanistan,” McCaskill said in a statement. “But with the roadmap provided by the commission report, we can change the way our government contracts during wartime, and make sure these failures are never repeated.”
If sequestration of federal funds kicks in, agencies will face making deep cuts to programs and that pain will flow down to contractors, experts say.
A sequestration causes automatic, indiscriminate, across-the-board budget cuts. The failure of the so-called supercommittee to find $1.2 trillion dollars in savings over a decade triggered the cuts. They’re set to take effect Jan. 2, 2013.
As a result, contractors too “are hostages in a showdown between the president and Congress over fundamental decisions on taxing and spending,” said John Cooney, former general counsel at the Office of Management and Budget and now a partner at the Venable law firm.
He spoke Jan. 17 at a panel discussion hosted by the Professional Services Council that looked at sequestration in detail. Cooney broke down the possible routes federal officials may take to deal with the cuts.
Cooney expects agencies to:
- Try to avoid terminating contracts. Instead, officials will reduce the amount of money obligated under their contracts.
- Become less willing to extend contracts into their option years.
- Obligate money for one fiscal year at a time on task order and services contracts.
- Possibly use the prospect of the sequester’s cuts to renegotiate contracts.
He also said agency officials will more often decide to not award new contracts.
“This will be a common agency practice in year one of a sequester. Procurements that can be put off will be put off,” he said during the discussion.
With available money, agency officials will maximize contracts that meet their agency’s core duties, said Alan Chvotkin, executive vice president and counsel for the Professional Services Council, who spoke on the panel as well.
Meanwhile he expects agencies to look for more flexibility to avoid hard-and-fast commitments, such as fixed-price contracts and minimum revenue guarantees. And on the other hand, officials may use more time-and-materials contracts, which are based on labor hours and materials.
However, Chvotkin said there are some policy constraints as the Obama administration has railed against this type of contract, which places a lot of risk on the government.
IDIQs and the General Services Administration’s Multiple Award Schedules program may become more attractive to agencies. They allow for more negotiations at the task order level, he said.
Cooney had several suggestions for companies in light of what may happen. Advocate for the importance of a program and stay in close contact with a contracting officer. Realize though that the officer may not know the fate of a program until very late in the process.
Businesses should also emphasize what they can do for the agency, including the options the company is willing to agree to that may even decrease its revenue, Chvotkin said.
He recommended checking the Past Performance Information Retrieval System (PPIRS) and the Federal Awardee Performance and Integrity Information System (FAPIIS). The information needs to be correct, and it should reflect as favorably as possible on the company’s performance.
Contractors can still challenge information tjat goes into the Federal Awardee Performance and Integrity System, but they have just a two-week window before the information becomes public.
The new provision takes affect Jan. 17, 2012. The start date was missing when the final rule was published Jan. 3.
Any information that agencies enter into database from Jan. 17 onward will be subject to a two-week delay before it is transferred to the publicly available part of FAPIIS. Past performance information won’t be published at all. Contractors will receive notice when new information about their company goes into FAPIIS, and they will have 7 days to point out information that should be exempt under the Freedom of Information Act.
In the new Federal Register notice, officials wrote that the delay until Jan. 17 will give agencies time to complete necessary system changes to support the two-week waiting period before contractors’ information goes live.
The current system is designed to automatically transfer information to the publicly available part of FAPIIS. Until officials make the change, companies would not have an opportunity to request withholding the information, the notice states.
FAPIIS is a one-stop website for contracting officers and federal employees to look at the history of companies’ work with the federal government. It includes data from the Performance Information Retrieval System, as well as information from other databases, including the Excluded Parties List System, which cites companies that are suspended or debarred from federal contracting.
The final rule gives companies seven days to find any information that should not be disclosed because it should be considered exempt. In such a case, officials will remove the information from FAPIIS to resolve the issue.
If the government official does not remove the item, it will be automatically released to the public website within 14 days after beginning entered into FAPIIS, according to the notice.
The Obama administration solidified an interim rule that requires agency officials to post a government contractor’s work history in a publicly accessible website.
The Federal Awardee Performance and Integrity Information System (FAPIIS) is a one-stop web site for contracting officers and federal employees to look at the history of companies’ work with the federal government.
FAPIIS includes data from the Performance Information Retrieval System, as well as information from other databases, including the Excluded Parties List System, which lists companies that are suspended or debarred from federal contracting. The overall purpose of FAPIIS is to make it easier for contracting officers to get an overall assessment of a company before awarding a contract by not having to search numerous databases.
A year ago, acquisition officials issued an interim rule making all the information public, except for past performance reviews by agencies.
The final rule took effect Jan. 3.
In the Federal Register notice about the rule, officials recognized the risks about the information going public though.
The final rule gives companies seven days to find any information that should not be disclosed because it should be considered exempt from disclosure. In such a case, officials will remove the information from FAPIIS to resolve the issue.
If the government official does not remove the item, it will be automatically released to the public site within two weeks after the review period began, according to the notice.
Procedures for disqualifying dishonest or incompetent federal contractors are too rarely exploited, according to a consensus of several senators, the White House and cross-agency watchdogs. But there is disagreement over whether the solution is improving application of the rules or whether Congress should make some suspensions and debarments mandatory.
At a Wednesday hearing of the Senate Homeland Security and Governmental Affairs Committee, Chairman Joe Lieberman, I-Conn., expressed alarm that a series of reports from the Government Accountability Office and inspectors general have shown a reluctance of many agencies to refer unsatisfactory contractors to the Excluded Parties List System maintained by the General Services Administration.
A Pentagon report “just last month shows that over a 10-year period, DoD awarded $255 million to contractors who were convicted of criminal fraud; and almost $574 billion to contractors involved in civil fraud cases that resulted in a settlement or judgment against the contractor,” Lieberman said. “Last year, the Department of Homeland Security’s inspector general found 23 cases where the department had canceled a contract because of poor performance, but in none of those cases did DHS suspend or debar the contractor.”
The Federal Emergency Management Agency, despite the existence of an anti-fraud task force following Hurricane Katrina in 2005, has not sent a single name to the list, Lieberman added, noting that the rarity of suspensions and debarments has been a concern of the committee as far back as 1981.
Sen. Claire McCaskill, D-Mo., said she got angry about the issue when a U.S. soldier was killed in Iraq by a negligent truck driver working for a U.S. contractor. The U.S. military continued using the contractor. “It’s a matter of character for our nation,” said McCaskill, who is preparing related legislation to implement recommendations of the recently disbanded Commission on Wartime Contracting.
She regretted that proposals to require more suspensions and debarments founder because of a fear of litigation, because it’s “too much trouble,” some contractors are seen as “too big to fail,” or “it is unclear who is accountable for a failure” to pursue that course, she said. “We need to draw a line in the sand.”
Dan Gordon, the departing administrator of the Office of Federal Procurement Policy, said the Obama administration had made significant progress on the issue over the past three years, but the system’s “weak link” is ensuring that a fraudulent contractor is flagged for action in a timely way. “Sometimes the referral takes too long, as historically agencies have been very bad about sharing, either because officials didn’t check the list, checked it too late, or because of problems in the spelling of an entity’s name,” he said.
He pointed to a memo to agencies released Tuesday by Office of Management and Budget Director Jack Lew that requires agencies to appoint a senior accountable official to “assess the agency’s suspension and debarment program — including the adequacy of available training and resources — review internal policies and procedures,” ensure databases are checked before grants and contracts are awarded, and “take corrective action if an award is improperly made to a suspended or debarred contractor.”
Gordon said OMB has been working with its Interagency Suspension and Debarment Committee to improve training and create detailed agency guidance. But he expressed skepticism toward any prospective legislation making certain referrals mandatory, saying agency cultures differ and mandatory referrals that take away discretion could undermine the role of suspension and debarment officials.
Allison Lerner, the inspector general of the National Science Foundation who co-chairs an IG working group on the issue, said suspensions and debarments “could be used more frequently and effectively.” The resistance comes from misconceptions among agency contracting officials, she said. Some fear jeopardizing investigations by disclosing negative information on contractors and some hold the incorrect beliefs that a decision must be based only on facts uncovered in a judicial process and that IG investigations cannot be cited as evidence against contractors.
Panelists agreed that the model policy is that practiced by the Air Force. Steven Shaw, deputy general counsel for contractor responsibility at the Air Force described two recent suspensions, one involving the Boeing Co.’s launch systems units and the other involving programs within L-3 Communications. Sixty-two percent of his suspensions and debarments are “fact-based,” he said, meaning his team doesn’t wait for the Justice Department to bring criminal charges. “We take a broad view of the type of misconduct, not just criminal fraud but as it relates to business integrity, tax issues, the Foreign Corrupt Practices Act or commercial fraud,” he said.
The Air Force also uses a “carrot-and-stick approach that is aggressive at the front end” but still allows contractors to prevent fraud through risk management and ethics programs.
Ranking committee member Sen. Susan Collins, R-Maine, who as a staff director worked on the 1981 hearing chaired by then-Sen. William Cohen, R-Maine, reminded the hearing that the goal of suspension and debarment is “not to punish contractors but to protect” the taxpayer, and that allowing “bad actors” to win new contracts is “not fair or ethical to the honest contractors.” She said she is considering legislation that would force agencies — she mentioned the Justice Department — to step up use of the tool.
Such a move is opposed by Alan Chvotkin, executive vice president and counsel of the Professional Services Council, a contractors trade group. He praised this week’s OMB memo as good “cross-agency coordination to bring attention” to the appropriate use of suspension and debarment. But he stressed the “very limited circumstances” under which “automatic exclusion” should be applied to a contractor.
“The government has wide flexibility to assess each individual situation to determine whether the government is at risk, including built-in due process procedures,” he said. “Doing it in an arbitrary way would be a mistake and convert it into a punishment, which it is not.”
– by Charles S. Clark - Government Executive - November 16, 2011 at http://www.govexec.com/story_page.cfm?articleid=49355&dcn=e_gvet
Senior defense official cautions against hinging contract awards on past-performance records.
A top defense acquisition policy official said the government should not overemphasize a company’s past work when awarding a contract because its limited database of information might become a barrier for some companies.
At a hearing March 28, Ashton Carter, undersecretary of Defense for acquisition, technology and logistics, said the Defense Department does not have adequate data on past performance on which to base a contract award. He also questioned how DOD would handle cases in which companies want to break into the defense industry but have no work history with the federal government. Even if the company has done similar work for a foreign government, DOD would not have a record of it.
“I think it’s important that we not do anything that erects a barrier to entry for a contractor,” he told the Commission on Wartime Contracting in Iraq and Afghanistan. (Watch the entire hearing.)
That would leave the principal burden on senior officials to get the defense acquisition workforce to collect more reliable information on companies’ work.
In its interim report, the commission recommends aligning past-performance assessments with contractors’ proposals for available awards.
The commission wants revisions to agency policies for contingency-related contracts “to limit contractors’ proposed federal past-performance references to only those contracts that have been recorded in the government’s past-performance database,” the report states.
At the same time, the commission said agency officials do not record detailed evaluations of contractors’ performance on a job because it’s not a priority for them, which could lead to giving contracts to habitual poor performers.
“Agencies’ failure to record contractor-performance assessments is costly,” the report states.
Carter’s comments echoed what other federal officials told the commission in February about the same past-performance recommendation. Maureen Shauket, chief acquisition officer at the U.S. Agency for International Development, said she was concerned about everyone getting a neutral rating on a past performance, “and that’s not in anyone’s interest.”
Dan Blalock, the Navy’s counsel, said defense officials need to make decisions based on each case’s circumstances.
Furthermore, Carter disagreed with the commission’s recommendation to increase the use of suspensions and debarments. The commission has proposed mandating automatic suspensions of indicted contractors and preventing contractors from avoiding suspensions and debarments through administrative maneuvers. Dan Gordon, administrator of the Office of Federal Procurement Policy, also disagreed with that recommendation during the February hearing.
Carter said the government needs to root out fraud early in the process, and agencies must monitor contractors’ work closely.
“My gaze is principally on prevention and detection,” Carter said, and suspending or debarring a company is well beyond the point of acting on a problem.
“We need to get back to the front end of prevention and detection of fraud,” he added.
The commission plans to send its final report to Congress in July. It will include recommendations for improving contracting in war zones.
Here’s your chance, defense contractors, to give the department a piece of your mind.
Defense Department officials want industry input on rules that provide little value while driving up costs.
In a notice in the 2/17/2011 Federal Register, DOD officials said they understand that the various reporting requirements and other acquisition practices make industry adopt processes and make investments that increase costs, especially overhead costs. At the same time, some of those requirements add little value to the overall work.
So, DOD wants to know the policies that industry believes fit that description. It will take submissions through March 31.
The request for industry’s comments is the next stage of DOD’s Better Buying Power Initiative, launched in 2010 by Ashton Carter, undersecretary of defense for acquisition, technology and logistics.
Industry sent defense officials more than 500 suggestions last summer, and Carter incorporated these comments into a Sept. 10 memo. The memo sets out 23 ways the government can improve its performance and incentivize better performance from industry. It is aimed at lowering prices without sacrificing quality.
“It is guidance from me to the acquisition workforce in the Defense Department on how we can get more without more,” Carter said in a Feb. 9 speech at the Cowen Investment Conference in New York, N.Y.
Under the new request for comments, DOD will use the suggestions as part of internal deliberations on the buying initiative, officials said. When contractors submit a suggestion on a costly policy, officials want to know the magnitude of the cost and have the recommendations identify the sources of the costs, backed by credible and convincing data.
“DOD’s goal is to develop a fact-based program to reform cost-inflating practices,” the Federal Register notice states.
With detailed suggestions, officials can evaluate and prioritize them. More specifically, they want to follow up on industry’s recommendations from 2010 on the thresholds related to the provisions in the Truth in Negotiations Act. In particular, they want to review audit practices and certain barriers to correctly balancing industry’s abilities as DOD’s buying shifts and moves based on demands, the notice states.
About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week, published Feb. 17, 2011.