DoD seeks 10-year extension of small business mentoring program

The Defense Department intends to request a 10-year extension of a program that improves the ability of socioeconomically disadvantaged small businesses to compete for defense contracts, the program’s manager said yesterday.

The Small Business Mentor-Protege Program began in 1991 as a way to foster small businesses and improve technology transfer between the Defense Department and industry, Robert Stewart said in a DoD News interview.

Despite having been in existence for nearly 25 years, the program is still categorized as a pilot and must be reauthorized in a National Defense Authorization Act every few years, he said.

Stewart said that through regular outreach with industry representatives, his office has learned that the periodic reauthorizations give the impression that the program isn’t permanent. This has a chilling effect on participation — particularly as the reauthorization period approaches, he said.

“Whenever we’re about a year, year and a half out from an authorization — since it’s a pilot program and it’s still crafted in language as a pilot program — industry does what’s called a chilling-off,” Stewart said. From the perspective of a business owner, he said, “If I’m not sure something’s going to be reauthorized, I’m going to be less apt to put business development dollars into helping facilitate small business.”

Extending the program’s authorization period would provide stability, reassure industry and save the department money, he said.

How to Participate

Small businesses seeking to become prime contractors with the department first choose a mentor from one of the more than 50 larger companies participating in the program, he explained. Part of that selection process is ensuring that the strategic goals of the two companies align, Stewart noted.

“We try to put them in a position to be as successful as possible,” he said.

The larger company provides training and mentorship, and in exchange, receives credit toward their small business contracting goals, Stewart said. If the training is provided through a procurement technical assistance center, a small business development center, minority institution or a historically black college or university, they can claim up to four times the amount spent for credit toward their actual small business participation levels.

The agreements may not last longer than three years, and once an agreement is fulfilled, the small business graduates from the program and is able to serve as a prime contractor for DoD contracts.

“Now you have a small business who’s a prime contractor [and] whose overhead is significantly lower than your traditional government contractors,” Stewart said. “They can do the exact same work, sometimes faster, sometimes cheaper, oftentimes better than larger, more cumbersome agencies or entities.”

This is a win-win situation for industry and the Defense Department, Stewart said. Larger businesses now have a pool of capable, responsive partners with which to team up and seek defense contracts, while small businesses gain better-trained employees and, by piggybacking on the capabilities of their larger partner, they can compete for contracts that they otherwise wouldn’t have been able to support.

“It works out in a lot of areas,” he said. “We’re helping grow the manufacturing-industrial base by ensuring that we’re going through our [procurement technical assistance centers], small business development centers, minority institutions and [Historically Black Colleges and Universities], but also identifying tech transfer companies that allow the United States government to be able to fight the threat that the Googles, the Amazons, the Microsofts, the Oracles face every day.”

The Way Ahead

“One of the things that we’re looking for going forward … [is that] we want to focus on the evaluation and criteria and factors to drive contracting commands across the DoD enterprise to utilize Mentor-Protege as a way to meet those subcontracting small business participation goals,” Stewart said.

To accomplish this, he said, the Office of Small Business Programs plans to develop a defense acquisition regulation that would give participants in the Mentor-Protege Program greater weight during the bid solicitation process.

“You’re going to get credit toward being already involved in DoD — you know DoD’s business, you’ve already got an established working relationship with the DoD,” Stewart said.

Source: http://www.defense.gov/news/newsarticle.aspx?id=128014

Businesses, Pentagon agree this program doesn’t work — Congress saved it anyway

Over the past quarter century, the Defense Department has been testing a contracting program that was intended to help small businesses obtain a larger share of federal work. However, Pentagon officials and small business leaders say the initiative has not only failed to help small contractors, it’s actually hurt them.

In other words, neither those running the program nor those it was supposedly intended to help believe the program works. Thus, many expected the experiment to come to an end when its most recent congressional approval expires on Wednesday.

But that’s not happening.

In what critics are calling another victory for Washington’s massive contracting darlings at the expense of small businesses, Congress has approved legislation extending the contracting initiative, called the Comprehensive Subcontracting Plan Test Program (CSPTP), for another three years. It’s the eighth time the program has been revived.

Keep reading this article at: http://www.washingtonpost.com/business/on-small-business/businesses-pentagon-agree-this-program-doesnt-work-congress-saved-it-anyway/2014/12/30/80d72aa0-9066-11e4-ba53-a477d66580ed_story.html

For government contractors, 2015 is in full swing

Contractors with their eyes on hot-button issues such as cybersecurity legislation, information technology (IT) acquisition reform, and strategic sourcing policy have plenty to consider in the 2015 National Defense Authorization Act (NDAA) and a recent policy memorandum issued by Office of Management and Budget (OMB) Administrator Anne Rung. Some key items to consider:

  • Cybersecurity: In 2015, the Department of Defense must issue rules requiring “operationally critical contractors” to report cyber incidents in their network and information systems.
  • IT Acquisition Reform: Under the Federal Information Technology Acquisition Reform Act (FITARA), Chief Information Officers in Federal agencies will take key roles in the acquisition process, which could affect the nature of IT-related acquisitions for years to come.  FITARA also sharpens the Government’s FOCUS on strategic sourcing.
  • Strategic Sourcing and Category Management: In an initiative that complements strategic sourcing, OMB has established “category management” as a key Federal acquisition strategy, which will foster Government-wide purchasing of items, such as IT hardware and software, by one source instead of through multiple agencies.

For a broad array of contractors, those “operationally critical contractors” working with the DoD, providers of IT-related supplies and services, and those supplying “categories” of supplies throughout the Federal government, these changes will affect their daily operations and how they market and sell to their Federal customers in 2015 and beyond.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=362362

Federal contractors now find opportunities for growth in healing, not war

Two years ago General Dynamics, one of the biggest federal contractors, reported a quarterly loss of $2 billion. An “eye-watering” result, one analyst called it.

Diminishing wars and plunging defense spending had slashed the weapons maker’s revenue and left some subsidiaries worth far less than it had paid for them. But the company was already pushing in a new direction.

Soon after Congress passed the landmark Affordable Care Act, the maker of submarines and tanks decided to expand its business related to health care. Its 2011 purchase of health-data firm Vangent instantly made it the largest contractor to Medicare and Medicaid, the huge government health plans for seniors and the poor.

“They saw that their legacy defense market was going to be taking a hit,” said Sebastian Lagana, an analyst with Technology Business Research, a market research firm. “And they knew legislation was coming up that was going to inject funds into the health-care market.”

Keep reading this article at: http://www.washingtonpost.com/business/federal-contractors-now-find-opportunities-for-growth-in-healing-not-war/2014/12/04/3ed2ff08-7a63-11e4-9a27-6fdbc612bff8_story.html

Former CEO of defense contractor pleads guilty to bribery

The former chief executive of a Northern Virginia defense contractor pleaded guilty to a federal charge of providing gratuities to a federal contracting official, and the company agreed to pay a $300,000 fine for its involvement in the bid-rigging scheme, the Justice Department said Tuesday.

Harry Martin, who stepped down as the head of Intelligent Decisions last month, pleaded guilty to charges that he and other company officials paid illegal gratuities to an Army procurement official based in South Korea, spending more than $10,000 on dinners and golf outings and, in one case, agreeing to spend more than $30,000 on a Lexus ES350 for the official to use, according to the department.

In return, the company received lucrative contracts from the official, identified as Seon Lim, and preferential treatment on Army subcontracts worth up to $4 million.

Keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/former-intelligent-decisions-ceo-pleads-guilty-to-bribery-charges/2014/11/25/f3ae43d0-74c1-11e4-bd1b-03009bd3e984_story.html

An interview with the Pentagon’s small-business director

Andre Gudger has heard the argument many times that, as he puts it, “small businesses don’t build planes and ships and nuclear weapons.”

It’s his job — or at least part of it — to change that perception.

A Maryland native, Gudger has been the director of the Defense Department’s Office of Small Business Programs since 2011. During the three years prior to his arrival, the share of the agency’s contracts awarded to small companies had shrunk every year. Moreover, in the more than three decades since federal small-business contracting goals had been put in place, the agency had never once accomplished them.

In the three years since, even amid budgetary constraints, small-business participation in Defense Department projects has expanded each year. In fact, this past year, the agency for the first time eclipsed not only its small-business goal, but also the federal government’s target, awarding roughly 23.4 percent of defense contracting dollars, representing about $53 billion, to small employers.

Keep reading this article at: http://www.washingtonpost.com/business/on-small-business/operation-small-business-an-interview-with-the-pentagons-small-business-director/2014/10/23/216d4cc8-5a12-11e4-b812-38518ae74c67_story.html

 

Top federal contracting vehicles offer highest value in five years

The top 20 federal opportunities for the 2015 federal fiscal year offer $220.3 billion in total contract value, representing the highest value of the past five fiscal years; a continued increase from a low of $92.2 billion in fiscal 2013; and a $59.6 billion increase over the top 20 combined contract value of $160.7 billion in fiscal 2014.

Information Technology opportunities total $161.5 billion, representing 73 percent of the top 20 total contract value, a shift from last year when professional services opportunities dominated.

Driving the increase in IT value are several large follow-on contract programs expected to be solicited this year. Follow-on opportunities account for 99 percent of the value in the top 20 opportunities.

The split between this year’s defense and civilian top 20 opportunities is the most even of the past five years — essentially 50/50, with near-even values and 10 opportunities each.

Keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/deltek-top-federal-contracting-vehicles-offer-highest-value-in-five-years/2014/10/17/59d03918-53dc-11e4-809b-8cc0a295c773_story.html

Contractors, expect 72-hour rule for disclosing corporate hacks

Look for the whole government to take a page from the Pentagon and require that firms notify their agency customers of hacks into company-owned systems within three days of detection, procurement attorneys and federal officials say.

Right now, vendors only have to report compromises of classified information and defense industry trade secrets. The trade secret rule is new and covers breaches of nonpublic military technological and scientific data, referred to as “unclassified controlled technical information.”

That new reporting requirement kicked in Nov. 18, 2013 and applies to all military contracts inked since.

Keep reading this article at: http://www.nextgov.com/cybersecurity/2014/09/contractors-expect-72-hour-rule-disclosing-corporate-hacks/95399/

As the Army’s future takes shape, so does the Defense market

For two years, the U.S. Army has been pitching new ways it could stay relevant and play a more prominent role in the Pentagon’s pivot to the Pacific, a region where the Navy and Air Force are expected to play a more prominent role. Now, after a turbulent year in which Russia invaded Ukraine over land and Army soldiers have deployed on high-profile missions to Iraq and Africa, there is a wider-spread recognition that the ground service will have a significant role to play after Afghanistan.

But despite this resurgence in missions, that doesn’t mean work will be easy to come by for defense companies. Defense firms descend on Washington this week for the Association of the United States Army, or AUSA, annual convention and arms exposition. This year’s gathering comes after the Army announced major changes to its makeup, including cutting tens of thousands of soldiers from its ranks. But it lands right when a leader like Army Chief of Staff Gen. Ray Odierno has signaled he will revisit those plans to shrink the force – and the budget — thanks to ISISand Russia.

Keep reading this article at: http://www.defenseone.com/management/2014/10/armys-future-takes-shape-so-does-defense-market/96329

A quarter century later, Pentagon’s test program for small businesses still untested

During its approval of the defense budget back in 1989, Congress added a new test program intended to simplify the subcontracting process for large defense contractors. In theory, proponents said, the tweak would lead large prime contractors to pass more work along to small businesses.

A quarter century later, some of the world’s largest defense contractors are still taking advantage of the program — which, oddly enough, remains in “test” mode. Odder still, the test has yet to be evaluated.

Called the Comprehensive Subcontracting Plan Test Program, the initiative allows large defense contractors to establish company-wide or division-wide subcontracting plans that outline how the US DoD logocompany or each of its units generally intends to partner on any work awarded by the federal government. Any time one of the participating companies competes for work, it can present the general subcontracting strategy.

Normally, prime contractors are required as part of the bidding process to submit a specific subcontracting plan for each individual project, which details how much of the work they plan to outsource and to what type of companies.

Keep reading this article at: http://www.washingtonpost.com/business/on-small-business/a-quarter-century-later-pentagons-test-program-for-small-businesses-still-untesed/2014/09/26/4beec2a2-4422-11e4-b437-1a7368204804_story.html