Aerospace Annual Requirements Symposium Nov. 16-18 in Perry, GA
October 24, 2010 by cs
The Warner Robins Chamber of Commerce Aerospace Industry Committee (AIC) 8th Annual Requirements Symposium is being held November 16 – 18, 2010 at the Georgia National Fairgrounds & Agricenter in Perry, Georgia.
The “Requirements Symposium” is a unique 3-day event where senior leaders and managers at Robins Air Force Base share their current and future requirements and organizational vision of the future. This insight into requirements at Robins AFB and the Air Logistics Center allows aerospace industries and businesses to appropriately plan for capabilities to meet the needs at Robins AFB and the Warfighters they service, today and tomorrow.
You can find registration links to this event — and to many more upcoming events of interest to government contractors — at http://gtpac.org/2010/09/upcoming-vendor-conferences-valuable-if-you-do-your-homework. This same link contains many tips to consider when preparing to attend vendor events.
Contracting market set to shrink in fiscal 2011
October 15, 2010 by cs
After a decade of booming contract spending, the federal acquisition market is expected to tighten considerably in fiscal 2011, with fewer opportunities for companies to win major awards, according to an industry research group. Technology deals are likely to be among the exceptions.
The fiscal 2011 budget shows a nearly 5 percent decrease in overall contract spending and market experts expect intense competition among vendors for a smaller pool of taxpayer dollars.
“The government is doing everything possible to consolidate and spend as little money as possible in this upcoming year,” said Ashley Bergander, manager of federal programs at FedSources, a McLean, Va., research firm.
Much of the drop in contract spending, she said, can be attributed to the Obama administration’s efforts to bring jobs back in house. The Defense Department announced in August that it was cutting its spending on service contractors by 10 percent during each of the next three years. Many of the jobs contractors currently perform will be insourced to federal workers, particularly at the military services, although other tasks could be eliminated altogether, Defense officials said.
“It’s been a big push by the current administration to hire more government workers, especially to complete a lot of services,” Bergander said. “So we are seeing a lot less contracting out there for actual services.”
Earlier this week, FedSources released its annual report detailing the top 50 contract opportunities — based on their size and relative importance for the government — in fiscal 2011, which began on Oct. 1.
With few exceptions, most of the largest upcoming contracts are recompetes of expiring deals, in which agencies are seeking multiple vendors, rather than a single source, to perform the work. The procurements generally will be firm fixed-price, incorporate full-and-open competition and involve more small businesses, Bergander said.
For example, during the first quarter of the fiscal year, the Homeland Security Department is expected to recompete its $22 billion Enterprise Acquisition Gateway for Leading Edge Solutions requirement. The departmentwide contract for information technology services and commodities will be divided into two source selections: one that is unrestricted and another reserved for small businesses.
Homeland Security’s EAGLE contract is expected to be the second-largest award of fiscal 2011, behind the $30 billion Enhanced Army Global Logistics Enterprise contract, also known as EAGLE. The hotly anticipated Army contract is noteworthy in its value and scope, encompassing a range of domestic and international functions, from training and logistical support to financial tracking, software maintenance and project management. Army’s EAGLE will be available to all government agencies and possibly foreign governments.
Agencies also appear to be taking new approaches to issuing follow-on contracts. A separate report released this week by the market research group INPUT found single contracts frequently are broken into multiple-award, indefinite delivery-indefinite quantity efforts and then rolled into larger and expanded programs.
“Procurements are being reconfigured to accommodate new contracting approaches that are designed to increase opportunities for small business and level the playing field for those firms to compete with their peer group,” the INPUT report said. “This trend makes sense as agencies struggle to conduct acquisitions with a growing shortage of contracting personnel and yet strive to award an increasing percentage of contract dollars to small businesses.”
Overall, FedSources expects an increase in the cybersecurity, health information technology and energy markets, with a declining emphasis on major weapons, aircrafts and NASA space programs. INPUT also is forecasting an uptick in emerging technology approaches, such as cloud computing.
“Any expectations industry may have had regarding a shift in focus to social programs under the Obama administration have not yet materialized in major contract opportunities,” INPUT wrote.
INPUT, recently purchased by Deltek, examined the top 20 upcoming contract opportunities in fiscal 2011, accounting for about $140 billion — a nearly $40 billion decrease from fiscal 2010. Most of the major acquisitions are at Defense, because civilian agencies already awarded many high-value contracts last fiscal year, the group said.
Smaller firms also could see a bigger share of the pie as agencies attempt to introduce more competition and finally meet their small business contracting goals, Bergander said.
The Air Force, for example, is expected to award in early fiscal 2011 its second version of the Consolidated Acquisition of Professional Services contract for technical and acquisition management support at Wright-Patterson Air Force Base in Ohio. The $3 billion contract will be awarded exclusively to small businesses.
The Health and Human Services Department, meanwhile, is planning to award its $20 billion CIO-SP3 total small business governmentwide acquisition contract for health and research information technology.
– By Robert Bronsky – NextGov.com – 10/07/2010
A drumbeat of warnings about impropriety regarding Alaska native corporation contracts
October 6, 2010 by cs
Government officials and the media have produced a drumbeat of reports about possible abuses of the large-scale contracts given to Alaska native corporations without competition.
August 2004: A Los Angeles Times story questioned the Army’s award without competition of contracts worth nearly $1 billion for base security guards to two Alaska native subsidiaries, Alutiiq Security and Technology and Chenega Integrated Systems.
November 2004: A senior aide to Sen. Ted Stevens (R-Alaska), the chief counsel to Sen. Lisa Murkowski (R-Alaska) and others press to have the Transportation Security Administration award a $500 million technology maintenance contract for screening equipment directly to Chenega Technology Services Corp. The TSA rescinds the deal after a story about it appears in The Washington Post.
April 2006: A Government Accountability Office review concludes that spending on ANCs had soared because federal officials found them “a quick, easy and legal method of awarding contracts for any value.” But the review found that government officials did not know the rules for overseeing the firms and cited “an increased risk that an inappropriate degree of the work is being done by large businesses rather than by the ANC firms.”
April 2006: In another report, the GAO also found that the Army paid 25 percent more than necessary on many of the base security guard contracts with Alutiiq and Chenega, even though they knew they could get the lower price through competition. Close to half of the work was passed on to two established security giants, Wackenhut Services and Vance International. Auditors also found that the Army failed to check whether the subsidiaries were doing the required 51 percent of the work.
May 2006: After Hurricane Katrina, the Army Corps of Engineers awarded a $39.5 million contract for temporary classrooms in Mississippi to an Alaska native corporation subsidiary called Akima Site Operations, even though the Corps “had information that the cost for the classrooms was significantly less than what Akima was charging,” according to a GAO report.
June 2006: At a hearing, Rep. Henry A. Waxman (D-Calif.) said ANCs were used to circumvent open competition at great expense to taxpayers: The “Administration has used ANC contracts to manage commercial property in Virginia, renovate buildings in Brazil, and train security guards in Iraq. And much of the work has been done by non-Native companies working as subcontractors.” He added: “Good intentions have been replaced by avarice and indifference to the interests of the taxpayer.”
January 2007: An audit by the Defense Department’s inspector general’s office concludes that a new intelligence agency called the Counterintelligence Field Activity agreed to pay up to $27 million more over 10 years than it would have through proper competition on a $100 million lease-and-construction deal let in 2003. The $100 million contract was awarded without competition to an Alaska native corporation subsidiary called TKC Communications. The audit concluded that the Defense intelligence operation “circumvented numerous laws” in making the expedited arrangements for the lease.
June 2007: The Department of Homeland Security issues an “acquisition alert” about the use of Alaska native corporations, warning contracting officials to be sure that they were getting a fair price and that the native corporations were doing their appropriate share of the work.
October 2007: The Department of Homeland Security inspector general issues a report criticizing a $475 million contract awarded without competition by the then-U.S. Customs Service in February 2003 to the Chenega Technology Services Corp. The work is to maintain thousands of gamma-ray, X-ray and other scanning machines at the nation’s ports and borders. The DHS inspector general says the contract should not have been awarded because the corporation was too large to qualify, a circumstance that prevented qualified small businesses from competing for the work. Some evidence collected by the inspector general suggested Chenega “subcontracted more than the 50 percent allowed by federal regulations and the contract.” But auditors said there was not enough information to come to a definitive conclusion.
April 2008: The Air Force’s Air Combat Command warns all contracting officials about the use of contracts awarded without competition to ANCs and others. Contracting officers had to require written justification for using ANCs and specify the amount of work they were expected to do. “Effective immediately ALL sole source actions over $550K must be approved,” the Air Force memo said.
May 2008: The Defense Department inspector general’s office reported that senior Air Force officers at the Air Combat Command used an Alaska native subsidiary, Chugach McKinley, to direct a $128,000 contract awarded without competition to a favored vendor.
August 2008: Auditors in the Small Business Administration’s inspector general’s office find that two Alaska native corporation subsidiaries had allowed nonnative executives to receive millions in work and fees in violation of SBA rules. APM, a subsidiary of Cape Fox Corp., and Goldbelt Raven, a subsidiary of Goldbelt Corp., received contracts worth more than $833 million between 2003 and 2006. Executives in each agreed to pay more than $23 million over three years to nonnative executives at other companies, with whom they had personal ties, the auditors said.
October 2008: A Washington Post story reveals that officials at the FDA used a subsidiary of the Calista Corp. to direct work to a Washington public relations powerhouse called Qorvis Communications. An FDA official with ties to Qorvis later says that she and others skirted the rules simply as a “a matter of efficiency.” FDA officials immediately suspended the contract and ordered an independent investigation.
July 2009: A study by the Senate subcommittee on contracting oversight finds that few ANC employees are Alaska natives but that the companies have joined the ranks of the government’s largest contractors. The subcommittee’s investigation shows that ANCs have taken advantage of their contracting preferences, “receiving large no-bid contracts and passing through much of the work to other contractors.” The report, prepared for Sen. Claire McCaskill (D-Mo.), said: “The analysis finds that Alaska Native Corporations are multi-million or billion dollar corporations that are now among the largest federal contractors. Although ANCs provide some benefits to their shareholders, those benefits may not be in proportion to the potential for waste, fraud and abuse created by the ANCs’ contracting preferences.”
– By Robert O’Harrow Jr. – Washington Post – September 29, 2010
White House boosts effort to keep fake products out of procurement
October 4, 2010 by cs
The White House has created an interagency working group to stop counterfeit goods from entering the supply chains that support Defense Department weapons systems and private sector electronic goods, the nation’s first intellectual property czar said on Tuesday.
“The implications of DoD procuring counterfeit goods are negative and obvious,” said Victoria Espinel, the U.S. intellectual property enforcement coordinator at the Office of Management and Budget. “Our understanding is that this is a problem that a number of our agencies are struggling with.”
Espinel made her comments at an event hosted by the nonpartisan Information Technology and Innovation Foundation, before the start of a panel discussion on strengthening enforcement of IP rights in countries that systematically extort intellectual property. Congress created the IP coordinator position in 2008, to respond to concerns that government agencies responsible for protecting intellectual property were not coordinating.
This summer, the White House issued a joint strategic plan to combat IP theft that called for establishing a governmentwide working group to study how to reduce the risk of agencies procuring counterfeit parts. The framework stated the task force should include representatives from the National Security Council, Defense, NASA, General Services Administration, Commerce Department, Small Business Administration and Homeland Security Department.
A January 2010 Commerce survey found that nearly 40 percent of entities across the procurement supply chain discovered counterfeit electronics between 2005 and 2008. The semiconductor industry has aired concerns that counterfeit chips mislabeled as military-grade can lead to fatal malfunction in military and aerospace parts, according to the White House’s strategic plan.
On Tuesday, Espinel observed the IP problem is one issue where there is consensus in Congress. “I feel very lucky to be working in an area where there is great bipartisan support,” she said. Democratic Sens. Tom Carper of Delaware and Sherrod Brown of Ohio in an Aug. 6 letter to Ashton B. Carter, undersecretary of Defense for acquisition, technology and logistics, expressed fear about the potential for counterfeit parts to delay military missions and seriously affect the integrity of weapons systems.
The senators’ letter referenced the Commerce study and a March Government Accountability Office report that found Defense did not have specific procedures for detecting and preventing counterfeit parts from infiltrating the supply chain.
China, the country most frequently identified as the source of counterfeit items, should be treated with “a carrot-and-stick approach,” Espinel said. “China is both an economically sensitive issue and a political sensitive issue.”
Pentagon official seeks support for contracting initiatives
September 28, 2010 by cs
The Pentagon’s top acquisition executive told an Air Force audience Wednesday that implementing the set of sweeping acquisition reforms was essential because without them, the nation could not give the troops the capabilities they need as defense budgets get tighter.
And to the Air Force officers and industry representatives in the audience, Ashton Carter said those who hope the department will be unable to achieve the proposed reforms, “you have to consider the alternatives.”
Carter listed as potential consequences: broken or canceled programs, “uncertainty and turbulence in the budget, market uncertainty, difficulty for industry, erosion in the confidence of the taxpayer that they are getting value for their dollars … and foregone military capabilities.”
But on the positive side, Carter said part of the acquisition improvement effort was to “incentivize productivity and innovation in industry” and that “profit is a perfectly appropriate topic” for the defense acquisition executives.
The day after he and Defense Secretary Robert Gates outlined the 23 changes to the contracting process at a Pentagon news briefing, Carter, the undersecretary for acquisition, technology and logistics, told the Air Force Association conference at the National Harbor convention center that the challenge would be implementation.
The acquisition reforms had received a generally favorable review earlier in the day from Aerospace Industry Association President Marion Blakey, who told the AFA audience that many of the initiatives matched the industry’s recommendations.
And as Carter was speaking, the two leaders of the House Armed Services Committee’s acquisition reform panel issued a statement endorsing the new effort.
“We applaud Secretary Gates and Dr. Carter for tackling acquisition reform and for embracing many of the reforms identified in our panel’s report and in the House-passed IMPROVE Acquisition Act to meet this end,” said Reps. Robert Andrews, D-N.J., and Mike Conaway, R-Texas. They said the Pentagon initiatives made it even more important that the Senate pass the House-approved bill.
Carter told the AFA audience that an improved acquisition was necessary because the defense budget was expected to rise only slightly in real terms in future years.
With an end to the double-digit annual increases of the last nine years, he said, the Pentagon leaders concluded “we can’t support the troops with the capabilities they need unless we learn to deliver better value for the defense dollars and thereby achieve the programs we need with the dollars that the taxpayers can afford to give us.”
Carter expressed confidence they could achieve their objectives to save $100 billion over five years from “low value-added activities” so the funds could be shifted to the needs of the warfighters.
He said he was confident of success because they are “reasonable objectives, come at end of a decade of very rapid growth” and have the support of the president, the secretary and Congress.
Carter praised the Air Force secretary, chief of staff and acquisition executive for leading the way on procurement reform, citing their improvements in maintaining the nation’s nuclear weapons system and the effort to build a long-range strike capability at an affordable price.
Addressing a program of high interest for the Air Force, Carter said he could not tell them when officials would announce a winner of the competition to build a new refueling tanker.
“It’s not a secret; it’s unknown. It will be done when it’s done. We’re working very hard to get it right,” he said, reflecting a decade of mistakes and scandal surrounding the program.
– by Otto Kreisher – Congress Daily – September 16, 2010
Devil is in the details regarding Defense spending guidance
September 23, 2010 by cs
Defense Department plans to increase competition and cut overhead costs and red tape associated with procuring goods and services have mainly met with praise from industry leaders and lawmakers — the two constituencies most able to derail reform. But full support will depend on implementation details that Pentagon officials are still working out.
Reps. Rob Andrews, D-N.J., and Mike Conaway, R-Texas, longtime proponents of acquisition reform at the Pentagon, praised Defense Secretary Robert Gates and his top acquisition official Ashton B. Carter for issuing guidance earlier this week aimed at increasing productivity and efficiency in spending.
“We applaud Secretary Gates and Dr. Carter for tackling acquisition reform and for embracing many of the reforms identified in our panel’s report and in the House-passed IMPROVE Acquisition Act to meet this end,” they said in a joint statement, adding, “We must learn more about the department’s plans in the weeks ahead, but we look forward to working with DoD on these efforts.”
Likewise, Aerospace Industries President Marion Blakey welcomed the initiative and the department’s outreach to industry in developing the new objectives. “While we have questions regarding some of the proposals, we are confident that the cooperation between government and industry as these initiatives are developed and implemented will produce results that will benefit all stakeholders — most importantly, the warfighter and taxpayer.”
“I don’t think there’s much objection to the objective,” said Stan Soloway, president and chief executive of the Professional Services Council, an industry trade group. “The message has been they want to be collaborative. The message has been this is not about arbitrarily cutting; it’s about finding better ways to do business.”
Nonetheless, industry officials are concerned about some aspects of the reforms. “One area where I do have concern, not covered in [Carter's] memo, is you have the secretary’s directive to lop off 10 percent of at least some category of service contracting. That seems to run contrary to the strategic approach of the Carter guidance,” Soloway said.
Another issue of concern to service contractors is the question of competition. Carter noted that 28 percent of competitive awards for service contracts had only a single bidder and department officials believe they need to inject more competition into those procurements.
“I don’t disagree that they ought to be doing whatever they can to maximize the competition. That is clearly the right objective,” Soloway said. But it’s not unexpected that some percentage of contracts, especially for work that is being rebid, would not attract more than one bidder if the incumbent contractor is understood to be performing well.
“You’re not going to spend your bid and proposal dollars to compete for something where the chances of winning and unseating the incumbent are really extreme. But that pressure is nonetheless always on the incumbent because they know if they stumble there’s any number of predators ready to pounce,” Soloway said.
Contracting officials should make sure their requirements and performance work statements invite innovation, and thereby attract increased competition, he said. “The government talks about innovation, but it’s not at all clear at the end of the day if that’s what’s they’re rewarding,” he said.
Soloway worries budget pressure is driving many contract awards away from best value bidders to lowest-cost bidders.
“In a tight budget environment, the tendency is to squeeze every nickel you can out of something, but that doesn’t necessarily go along with looking for more innovation and better value,” he said.
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– By Katherine McIntire Peters – GovExec.com – September 16, 2010 – (C) 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED.
How a lawn mowing contract is changing Defense acquisition
September 22, 2010 by cs
The Naval Sea Systems Command decided it didn’t make sense to create one set of contract specifications for lawn mowing services at a base on the East Coast and another set to cut the grass on the West coast, when in fact one contract would work for both places.
Now the leadership at the Defense Department wants to extend this simple concept departmentwide.
Defense spends $200 billion a year, half its annual budget, on services ranging from lawn mowing to software maintenance. Ashton B. Carter, undersecretary of Defense for acquisition, technology and logistics, wants to rein in that spending as part of an overall plan Defense Secretary Robert Gates announced on Tuesday to cut $100 billion from the Pentagon budget during the next five years.
In a memo to Defense acquisition managers issued on Tuesday, Carter said an ever-expanding set of requirements and missions — “missions-requirements creep,” he called it — for services has contributed to an increase in spending during the past decade. “These requirements often require the same function or service to be provided, but are written uniquely so that competition is limited,” he said in his memo.
Carter directed acquisition managers to develop templates for performance work statements, or definitions for what a unit wants to buy that are included in every solicitation. He cited as an example NAVSEA’s SeaPort-e electronic marketplace, which was created to purchase a variety of services from 2,217 vendors — including lawn mowing services. The platform provides a standard way for a diverse group of large and small businesses to bid on solicitations.
Cindy Shaver, SeaPort-e program manager, said NAVSEA’s experience since the buying platform began in 2001 shows standard work statements enhance competition and save the Navy and vendors time and money.
Officials originally developed SeaPort-e to serve only NAVSEA, but it now manages acquisitions for all the systems’ commands, including the Marine Corps and the Defense Threat Reduction Agency.
SeaPort-e first issued the work statements for the acquisition of basic services needed to maintain bases — such as lawn mowing or maintenance — because these could be easily standardized. Potential bidders then could develop standard responses, which would cut bid and proposal costs. The contractors passed those savings on to the Navy, Shaver said.
In addition, the templates for similar services eliminated potential bidders’ concerns that a work statement was developed with a specific vendor in mind, she added.
NAVSEA plans to develop templates for program management support services. Although support for a ship-building program might seem quite different than the support required for a missile program, the services are the same, Shaver said. Preparation of a budget for a ship project is similar to the budget for a weapons program, and by looking for commonality rather than differences, the Navy can enhance competition and save money, she said.
Carter also directed acquisition managers to award more services contracts to small businesses because they provide Defense with “an important degree of agility and innovation,” with lower overhead costs. SeaPort-e has a high percentage of awards going to small businesses. So far in fiscal 2010, it has issued 4,692 task orders with a total potential value of $6.8 billion, with small businesses taking home 85 percent of the awards.
Shaver said increased competition has been the primary reason it has saved money. The Navy’s goal is to have 100 percent competition on every SeaPort-e task order, a goal that will be met more easily with standard work statements, she said.
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– By Bob Brewin - 09/16/10 – NextGov.com – © 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED
Defense insourcing to continue at military services
September 20, 2010 by cs
When Defense Secretary Robert Gates announced in August that the Pentagon was scaling back its insourcing initiative because it wasn’t generating enough cost savings, many in the contracting universe let out a not-so-silent cheer. But the victory party might have been premature.
Military services have continued with previously announced plans to bring thousands of private sector positions back in-house. And those efforts are expected to pick up steam next year.
Department officials confirmed on Tuesday that the Army, Air Force, Navy and Marine Corps are exempt from a fiscal 2011 billet freeze, allowing them to continue with their insourcing plans. Other Defense agencies will see their ranks frozen. Unless contracted work is being inappropriately performed, or “compelling circumstances” for insourcing are provided, those jobs will remain with the private sector, they said.
“Insourcing was not canceled as a result of Secretary Gates’ efficiency directives,” said Thomas Hessel, a senior analyst in the Office of the Undersecretary of Defense for Personnel and Readiness in an e-mail to Government Executive. “No insourcing programs were canceled. Insourcing is a statutorily required workforce-shaping tool/process to appropriately align work between private and public sectors.”
Defense officials explained that the most significant policy change arising from Gates’ speech is that insourcing will no longer result in an automatic or assumed federal position increase to replace contracted services.
As of June 30, more than 16,500 new civilian positions have been established across the department as a result of insourcing contracted services, Hessel said. More than half of these positions were brought in-house because the work was determined to be inherently governmental, closely associated with inherently governmental, or otherwise exempt from private sector performance, he said.
“Moreover, on a case-by-case basis at the organizational level, DoD components are finding that they can generate savings or efficiencies through insourcing certain types of services or functions,” Hessel wrote.
The initiative will add 12,000 new civilian positions in fiscal 2011, Hessel said.
The Pentagon’s insourcing efforts have caused growing confusion and consternation in private industry.
“This has not been a very transparent process,” said John Palatiello, president of the Business Coalition for Fair Competition, an industry group that called on the Obama administration to impose an immediate moratorium on insourcing. “The companies that are involved have not been given a lot of information and they don’t know what the rules and criteria are.”
On Monday, the coalition sent a letter to Daniel Gordon, administrator of the Office of Federal Procurement Policy at the Office of Management and Budget, citing 17 examples of insourcing projects that have continued at Defense in areas such as meteorology services, library administration and anti-terrorism protection.
In each instance, the coalition says the work does not meet the strict criteria for insourcing. Gordon told Government Executive in August that insourcing should be occurring only for positions that are inherently governmental; in critical functions where an agency feels it has lost control of its mission or operation; or when a detailed cost analysis has been conducted to show savings for the government. The group wants Defense or OMB to issue new guidance on the criteria for canceling or moving forward with insourcing projects.
The coalition cited job conversions for the Army and the Air Force, and neither responded to requests for comment about their insourcing plans. The Navy confirmed on Monday that it plans to establish roughly 10,000 civilian positions by fiscal 2015 through insourcing contracted services. The jobs would be focused on acquisition, cybersecurity and financial management, department officials said.
“With guidance from the Office of the Secretary of Defense, the Department of the Navy is continuing to pursue insourcing,” said Cmdr. Victor Chen, a Navy spokesman. “The recent announcement by the secretary of Defense did not cap or freeze the number of authorized and funded manpower billets in the [Navy].”
The Navy’s “insourcing goal is to ensure the appropriate mix of military, civilian and contractor support to perform its functions; rebuild internal capabilities to enhance control of the mission and operations; and reduce workforce costs as appropriate,” Chen said.
In 2009, Defense officials announced they would cut 33,000 service support contractors by 2015. The Pentagon had planned to replace those contractors during the next five years with 39,000 new full-time government employees, many coming from insourcing.
On Aug. 9, Gates said, “We weren’t seeing the savings we had hoped from insourcing.” He noted insourcing projects at nonmilitary departments that were already planned for fiscal 2010 would be allowed to continue, as well as conversions for acquisition support positions.
At military installations throughout the country, little has changed since Gates’ announcement. The Army Aviation and Missile Command at Redstone Arsenal in Alabama, for example, still plans to insource hundreds of private sector jobs — an initiative that is now about 75 percent complete.
“We are executing the plan we laid out to the business community in 2009, based on our guidance from our higher headquarters, Army Materiel Command,” said Kim Henry, a spokeswoman for the command. “We will continue to implement our strategy as planned, until told otherwise by our higher headquarters.”
Several contractors who stand to lose projects to insourcing have hired attorneys and are planning to litigate their cases in court. In at least one case, the Air Force canceled an insourcing proposal when faced with potential court action. Several additional cases have been filed but not yet heard by the court, industry officials said.
Elsewhere contractor employees whose jobs are on the line remain hopeful for a last-minute reprieve.
The Air Force, for instance, announced plans in 2009 to insource 55 firefighter jobs and other contract security and management positions at Air Force Plant 42 in Palmdale, Calif., a government-owned, contractor-operated facility.
“Nothing has changed for the firefighters since Gates made his announcement,” said Capt. Raymond S. Bower, who serves as president of the International Association of Fire Fighters Local I-25. “We have received no news from the [Air Force] regarding any changes.”
A lack of clarity also hangs over the proposed conversion of several hundred flight simulator instructor positions at five Air Force bases in Oklahoma, Texas and Mississippi. The Air Force originally estimated converting the private sector positions to civil service jobs would save taxpayers $480,000 during the next five years — or about 0.2 percent of the total cost of the contract.
According to documents Lear Siegler Services obtained, the incumbent contractor at Vance Air Force base in Oklahoma, the Air Force’s price analysis might have been flawed. Documents show the cost of continuing with the contractor was based on work at five bases, while the price for using federal employees included only four. The contractor suggests the insourcing plan actually would cost taxpayers $27.5 million.
In an e-mail to a Lear Siegler Services employee in August, Air Force Chief of Staff Gen. Norton Schwartz wrote the service “will pursue a course of action consistent with both the guidance from the Department of Defense and the Air Force’s best interests.”
Members of Oklahoma’s congressional delegation wrote to Air Force Secretary Michael Donley in August requesting more information on the insourcing plan — which is scheduled to begin on Oct. 1 — and an explanation of the disputed cost analysis.
The private sector training instructors, meanwhile, are awaiting a final decision on their fate.
“We are all taking unnecessary salary cuts, the cost to the taxpayer and government is drastically increasing, the mission is being negatively affected, and morale is low,” said one contractor employee. “We are all former military officers and pilots and feel like we have been treated much like cattle.”
– By Robert Brodsky – GovExec.com – September 7, 2010
Despite a rocky start, sales on GSA’s Alliant contract top $1.2 billion
September 17, 2010 by cs
After a troubled start, officials at the General Services Administration said they are pleased with first-year sales on the signature multibillion-dollar contract federal agencies can use to buy information technology services.
Alliant, which GSA launched on May 1, 2009, has posted $1.2 billion in sales as of Sept. 3, for fiscal 2010. The agency expects sales to jump at least $2 billion when it awards contracts to companies supporting the construction of the Homeland Security Department’s National Capital Region headquarters in Washington.
“Sales are going very well,” said Casey Kelley, director of GSA’s enterprise governmentwide acquisition contract Center West, which manages Alliant.
The program, which initially was scheduled to kick off in 2007, had a slow start. In March 2008, a federal judge ruled in favor of a protest filed by eight companies that submitted unsuccessful bids for the original Alliant contract, saying GSA had been “arbitrary and capricious” in making awards to 29 companies. Agency procurement specialists reworked the contract and a year later gave 59 companies a chance to sell their wares through the contract. Alliant has a $50 billion ceiling and options to operate for 10 years.
Since the program went live, GSA awarded 66 task orders, with many more expected before the end of the fiscal year, Kelley said. In September 2009, for example, Alliant filled 13 contracts.
Of the 66 orders, 48 were for the Defense Department. The department accounted for $1 billion of the $1.2 billion in sales, with about $660 million of that for the Air Force, Kelley said.
GSA managers said they were pleased with sales, given the contract’s turbulent start. “We overcame a lot of challenges,” Kelley said. “There was a lot of undeservedly negative [media coverage] with the contract.”
Of the 59 vendors on the contract, 29 have been issued at least one task order. “We never expected all 59 to bid on every acquisition that comes up,” said Mike O’Neill, director of the GSA GWAC program. “Each decides what they go after. We provide them a level playing field to compete.”
“We’re very pleased with the diversity of those Alliant clients that have won,” Kelley added.
Some vendors also are pleased with the business Alliant has afforded them. “It’s been fantastic, better than expected,” said David MacRae, executive vice president of Smartronix, a global solutions provider.
As a midtier company, Smartronix is lost when competing against larger companies, according to MacRae. He said the company has won six task order awards on Alliant and GSA has been “really getting the word out” for smaller companies.
Although Alliant’s first-year sales are slightly off the pace to reach the $50 billion ceiling over 10 years, GSA expects the contract to grow. But the “proof is in the pudding,” O’Neill said. “They have proved the ability to provide competitive solutions in a way that undermines risk.”
Kelley said he wouldn’t be surprised if Alliant’s sales exceeded a total of $6 billion by its second year anniversary, May 1, 2011.
Defense agency seeks 10 percent price reduction from suppliers
September 10, 2010 by cs
Under the Defense Department’s widespread effort to streamline operations and redirect $100 billion during the next five budget cycles to needed personnel and weapons programs, the Defense Logistics Agency is looking to its suppliers to help cut costs.
“First, we will pursue price reductions by as much as 10 percent in selected areas by providing greater focus on price reasonableness, incorporating price reduction factors in strategic sourcing opportunities and establishing more long-term contracts,” said Vice Adm. Alan Thompson, director of DLA.
Additionally, the logistics agency will upgrade its enterprise business system to consolidate procurement of depot-level parts and supplies for all the military services into a single contracting instrument. “This will allow us to make larger buys, which will be targeted at reducing costs,” Thompson said.
After that, DLA will consolidate a number of legacy information technology systems for managing energy purchases. About half of the agency’s business is in buying fuel.
Thompson and Defense Comptroller Robert Hale spoke to reporters by telephone Wednesday from Columbus, Ohio, where they were participating in a conference with military contractors.
“We have a lot of rules the private sector doesn’t need to observe to satisfy the Congress, and those factors don’t always lead to efficiency,” Hale said. Nevertheless, many Defense agencies are performing fairly efficiently, especially those like DLA that operate within the department’s working capital fund, which requires them to cover their own operating costs.
The agency’s enterprise business system, which it implemented a few years ago, has allowed DLA to improve its ability to forecast demand, leading to better efficiency, according to Thompson. “We don’t want to under-buy and we don’t want to over-buy as this adds extra costs to our supply chain,” he said
DLA executes more than 10,000 transactions a day, so changes in its business practices will be felt relatively soon, Thompson said. Typically, consumable items, such as food and fuel, are purchased and delivered within months. “The payoff from our pressure on pricing should be realized near term,” he said.
While overall dollar savings targets have not been established yet, the agency is “focused on a 10 percent price reduction across the board,” Thompson said.
As DLA leverages its buying power by consolidating purchases across the agency, some of its small business contractors might have to build relationships with larger firms, where they can function as subcontractors, Thompson said.
He added DLA also would step up efforts to keep counterfeit parts out of the defense supply chain, an issue of growing concern to lawmakers.
“We must weed out those suppliers and individuals who knowingly supply parts that don’t meet specifications or are counterfeit,” he said.
– By Katherine McIntire Peters – GovExec.com – August 25, 2010