Energy Department announces contractor pay freeze
December 23, 2010 by cs
Energy Secretary Steven Chu announced Friday the department would freeze salaries and bonus payments for its site and facility management contractor employees.
The move came after President Obama proposed a two-year pay freeze for civilian federal employees.
“As our nation continues to recover from these challenging economic times, households and small businesses across the country are making sacrifices,” said Chu. “In this spirit, we are asking our contractor employees, who are doing important research, operations and environmental cleanup work, to join the federal workforce in playing a part.”
Energy’s freeze would affect people who manage day-to-day operations at 28 sites and facilities, including the department’s famed national laboratories.
The freeze would affect about 75,000 contract workers. Energy is one of government’s largest employers of contractors, with an outsourced workforce much bigger than its own staff.
The freeze takes effect Jan. 1, 2011. For sites that already have approved contractor salary increases for next year, it would take effect at the beginning of the next pay increase cycle and last for the following two years.
Katherine McIntire Peters reported in the December issue of Government Executive that Energy’s management of its contracts has been on the Government Accountability Office’s list of high-risk federal programs since the list was created in 1990. Cleanup of nuclear weapons sites, which comprises much of the department’s work, is a highly technical process requiring a skilled workforce on both the government and contractor side.
– by Tom Shoop – GovExec.com – December 17, 2010
Agencies slow to respond to requests for contractor data
November 12, 2010 by cs
Some federal procurement officers are refusing to publicly release contractor ratings data that may show agencies are not properly evaluating the performance of vendors who receive billion-dollar contracts, according to a consulting practice that regularly files Freedom of Information Act requests for the data.
In June, Jeff Stachewicz, founder of the FOIA Group, tried to obtain contractor evaluations from several agencies, including the departments of Defense, Energy and Interior, the Environmental Protection Agency and NASA. Interior and NASA released their contractor performance ratings, a move that Stachewicz applauds and attributes to President Obama’s push for greater transparency.
But it took months for FOIA officers to respond to the requests. Stachewicz believes that’s because some contracting officials did not want the public to see incomplete ratings contained in the Past Performance Information Retrieval System, and the application used to capture the information, the Contractor Performance Assessment Reporting System. Some agencies, such as the Defense, Homeland Security and Justice departments, denied his requests. Several of his other inquiries are still pending.
To better understand what was holding up his inquiries, Stachewicz filed a FOIA request to obtain e-mail correspondence between various agencies and Defense, which controls the databases. Two weeks ago, Energy provided him nearly 30-pages of redacted e-mails to and from Defense officials, including one exchange of messages indicating Energy had trouble obtaining its information from Defense.
In that exchange, an Energy official asked, “Is there someone within DOD that can or will release DOE performance data?” In reply, a Defense official in the database’s program office stated that a senior procurement analyst at the Pentagon had advised that the office “will not provide any ratings information in electronic or other format. DOD has not released this information in the past.”
Stachewicz says the e-mail indicates Defense was trying to block the information from consideration for release under FOIA at other agencies.
“That was the smoking gun. That one response was, ‘We don’t want to give that data out.’ In my opinion, that’s not proper. They were deliberately trying to avoid the FOIA by not giving it to the agencies to make a decision,” he said. “This flies in the face of the Obama transparency doctrine. It’s a report card . . . Let them kind of man up to their score.”
Stachewicz said while contractors are accountable for their scores, procurement officials who manage the scoring systems also are responsible for maintaining up-to-date, accurate and complete assessments. The procurement officials “are not trying to hide what’s there. They are trying to hide what’s not there,” he said.
In the past, federal auditors have sharply criticized agencies for filing insufficient evaluations of contractors that failed to provide project managers with information necessary to pick the best suppliers. Part of the difficulty is that the Office of Federal Procurement Policy has not established a way to standardize ratings scales across agencies nor made thorough documentation a priority, according to a 2009 Government Accountability Office report. Until such problems are resolved, the report said, the Past Performance Information Retrieval System “will likely remain an inadequate information source for contracting officers. More importantly, the government cannot be assured that it has adequate performance information needed to make sound contract award decisions and investments.”
Energy officials did not respond to several requests for comment.
Defense officials said it is not true that anyone stopped the department’s employees from releasing ratings information to the agencies. “If an agency has come to the CPARS or PPIRS program offices and requested a copy of the data they have submitted for their own review for potential FOIA release, we have provided it,” Defense spokesperson Cheryl Irwin said.
But “there are additional factors,” she said, listing several issues that have caused delays in distributing the ratings. Historically, for example, Defense has not released certain evaluations because of concerns about disclosing vendors’ competitive and confidential information. In addition, Stachewicz’s group submitted requests to many agencies, all of which landed in the Defense program’s office simultaneously.
“DoD coordinated with the Office of Federal Procurement Policy to understand if they wanted to make a governmentwide decision about releasability of the data,” Irwin said. The office, which is part of the Office of Management and Budget, has not done so, but has held conference calls with several agencies to gain an understanding of how each is handling the requests, she said.
Because there is no governmentwide policy on publicly releasing data from the contractor ratings systems, Defense is sending the information to the agencies for them to make decisions about disclosure, Irwin added.
“It has taken a couple of weeks to clear up some of the confusion from [such issues] and accomplish the necessary coordination with OFPP,” she said.
OMB officials confirmed that OFPP is convening conference calls with certain agencies about providing contractor ratings in response to FOIA requests. But each agency has discretion in choosing whether to publicly release its own data. Officials added they are unaware of any cases in which Defense has not provided agencies with their own ratings data or pressured agencies not to disclose their data.
The Office of Government Information Services, a new organization within the National Archives and Records Administration responsible for resolving FOIA disputes, said it is working with OMB and several federal agencies to examine procedures for consistently responding to FOIA requests for access to contractor performance ratings.
Agencies are getting too attached to incumbent contractors, watchdog finds
September 3, 2010 by cs
Federal agencies are failing to maximize opportunities to make contracts competitive, often because of poor management or because officials have grown comfortable with incumbent contractors, according to a new report from the Government Accountability Office.
The watchdog reviewed trends in noncompetitive contracts during the past several years and discovered a number of questionable business practices by contracting officials and program managers. GAO found 44 percent of all federal contracts in fiscal 2009 either were not placed up for competition or attracted only one bid.
The report (GAO-10-833), which the House Oversight and Government Reform Committee requested, highlighted contracts that appeared to be written with such narrowly defined requirements that only one company could reasonably compete. In other instances, program offices pressed for follow-on contracts to be awarded without competition to the existing company because it would be more expeditious since the offices already had formed a relationship with the firm.
“A Navy program official stated that, when one contractor has been performing a requirement for many years, it is easier to go back to the contractor personnel who understand the requirement rather than taking the time to find a new vendor,” the report said.
From fiscal 2005 to fiscal 2009, the reported obligations for noncompetitive contracts declined from 36 percent of total procurement spending to 31 percent, investigators found. But contracts in which only one offer was received remained steady at around 13 percent.
The report cited a host of reasons for contracts with only one bid. Often, companies are scared off by a competent incumbent contractor considered an overwhelming favorite to continue with the work, the watchdog said. Other times, solicitations might appear to favor one company, the report noted. In addition, some vendors that might have competed for work are forming teams to submit one offer, industry officials told GAO.
“Given the nation’s fiscal constraints, it is not acceptable to keep an incumbent contractor in place without competition simply because the contractor is doing a good job, or to resist legitimate suggestions that competition be imposed even though it may take longer,” the report said.
GAO recommended the Obama administration assess the reasons contracts are receiving only one offer. Daniel Gordon, administrator of the Office of Federal Procurement Policy at the Office of Management and Budget, has argued that one bid is not enough to constitute competition and that the practice limits agencies’ ability to consider qualified alternatives.
Recent OFPP guidance requires agencies to begin separating data collected on these contracts and to code them as “noncompetitive procurements using competitive procedures.” Gordon concurred with GAO’s recommendation.
But, it might be difficult to get sound data on contract competition. GAO randomly selected a sample of 107 contracts and orders that were coded as noncompetitive or receiving one bid, and reviewed the contract files. Eighteen percent of the contracts were coded incorrectly — as either not competed when they had been, or as competed with one offer received when they had not been competed at all, the report said.
In fiscal 2009, the Navy and the Air Force had some of the worst competition rates, with about 45 percent of contracts not competitive, GAO said. The Energy Department and Office of Personnel Management had among the lowest rates of noncompetition, at 7 percent and 5 percent, respectively.
The most common explanation for failing to conduct any competition was that “only one reasonable source” was available to perform the work, according to the GAO sample. In some cases, such as an Immigrations and Customs Enforcement contract for communications equipment and supplies, one contractor essentially owns the market.
In other instances, particularly with Defense Department weapons programs, the government is hamstrung by a lack of access to proprietary technical data, according to the watchdog. Companies’ expertise, experience and reluctance to sell technical data for a reasonable price generally preclude the possibility of competition, the report said.
Several contracting officials blamed the lack of competition on receiving short notice from program offices for acquisitions. With little time to conduct market research or properly define requirements — elements of a robust acquisition process — contracting officials often turn back to the incumbent, investigators said.
The second most frequently cited exception to competition was the authority to award sole-source contracts to firms in Small Business Administration’s 8(a) business development program. Through the program, agencies are encouraged to award participating 8(a) firms noncompetitive contracts worth less than $3.5 million when procuring services, or less than $5.5 million for manufacturing.
– by Robert Brodsky – GovExec.com – August 26, 2010
Energy contracts help agencies reach green goals
August 31, 2010 by cs
Agencies have until Sept. 1 to tell the White House what they think of the strategy to reduce federal greenhouse emissions.
The administration extended the comment deadline from Aug. 16 to give agencies more time to understand the governmentwide requirements for calculating and reporting greenhouse gas emissions associated agency operations.
The draft calls for agencies to report their baseline 2010 greenhouse gas emission inventory by January 2011.
“The data required to develop an agencywide inventory will likely be drawn from multiple levels throughout an agency’s organizational structure,” the draft strategy states. “This guidance has been developed to provide federal agency users, whether representing facility-level activities or headquarters-level functions, with the necessary information to fulfill reporting requirements.”
One way several agencies are not only reducing their carbon footprint, but saving money as well is through the Energy Department’s Energy Service Companies (ESCOs) contracts. And soon, DoE will provide agencies with a dashboard to better understand and track energy efficiencies through the program.
“These contracts are used by federal agencies basically to tap into the technological and financial resources of the private sector to implement energy savings from renewable energy projects and related activities that generate savings to the agency’s utility bill,” said Skye Schell, a supervisor in the Federal Energy Management Program, which is part of DoE’s Energy Efficiency and Renewable Energy department.
Schell said agencies can benefit from upgraded infrastructure and modernized plants.
“They cover a wide range of technologies,” he said. “Really any efficiency technology implementation you can think of probably has been included in Energy Savings Performance Contracts (ESPCs) over the year. Different renewables, wind projects, solar thermal, photovoltaics, geothermal, all have been aspects of ESPCs. It’s quite a breadth of technology.”
He added that the investments are in the tens of millions of dollars as agencies may replace a central heating plants or converting a fossil fuel infrastructure to a biomass plant.
The cost of a typical project can run between $8 million and $10 million. The company bids on the work using a type of share-in-savings approach.
Schell said the one big difference is the energy companies’ estimate and the agency agrees to the projected savings on the front end of the deal.
“We do ongoing measurement and verification to determine if the savings were in fact achieved, and if so, then the energy savings companies gets their share of savings,” Schell said.
Usually on share-in-savings contracts, vendors make the upfront investments and receive money as the savings come in. Agencies have used this type of contract in the past for recovery audit initiatives.
Agencies also receive savings from paying less for electricity or water or other types of energy.
More and more agencies are starting to use the program. Schell said in 2008, the vehicle saw about $300 million in terms of investment value in projects. A year later, the investment increased to $450 million, and Schell expects the value to increase by another $100 million to $550 million in 2010.
He said about 19 agencies have active projects with DoE, the Justice Department and the Navy among the biggest agency users of the contract.
Schell said these contracts usually are long-term deals where companies invest more than $10 million and are paid back with interest on average over 18 years.
Over the next six months, Energy will give agencies more data to better understand how to reduce their greenhouse gas emissions and carbon footprints.
Schell said Energy will make its ESPC dashboard available for government officials and contractors.
“We are tracking key indicators of program performance,” he said. “The dashboard answers questions such as trends in agency uses of the program, which Energy Service Companies are participating, what is the pipeline of projects and awards, the time it takes from inception to award, the cost of borrowing associated with the program, and the cost of BTU saved associated with the program. It really gives us a decent snapshot of the program efficiency and effectiveness.”
Energy has used the dashboard since 2008, mostly for internal tracking. But Schell said by the end of the calendar year, Energy will have removed any sensitive data and ensured the information in the dashboard is accurate and open it up to agency users.
“Agencies using our program may be interested in information and trends to compare their experiences with others, and also this might be a tool we use to put out report cards for ESCOs for agencies to review against different parameters,” he said.
– by Jason Miller – August 19, 2010 - FederalNewsRadio.com
Existing procurements got bulk of Recovery Act contract dollars
July 30, 2010 by cs
The federal government awarded more than two-thirds of the $26 billion in Recovery Act contract obligations through acquisition vehicles in place before the stimulus bill became law, according to a new report.
Pressure to act quickly on high-priority projects drove officials toward existing contracts, the Government Accountability Office reported on July 21. Officials were not concerned that a contract had been awarded before the American Recovery and Reinvestment Act was enacted in February 2009. When the contract was originally awarded, officials said the government had met its competition requirements, GAO reported.
RELATED STORY: Administration alters reporting rules for stimulus money
As of May, the government has awarded 68 percent of the $26 billion through pre-existing contracts, and 32 percent through new contracts. Of the newly awarded contracts, 89 percent of the funds were awarded competitively. The other 11 percent of the money, awarded without competition, went to companies in small-business programs, GAO reported.
Directed by the Obama administration to spend the stimulus money quickly, program and contracting officials found programs, projects and contracts that would allow them to award the money in a short time. In talking to contracting officers at five federal agencies, GAO said the officials considered both the risks of using non-competitive contracts and the benefits of spending the money faster than going through the process of awarding a new contract.
For example, a sole-source, small-business contract took the Army Corps of Engineers roughly four months to award, while a new competitive contract would have taken more than a year, GAO reported.
The administration objects to sole-source contracts, but GAO found agencies justified their reasons for awarding a contract without competition.
In addition, GAO found that early on inspectors general dedicated more time focusing on work that they believed was of higher risk, rather than looking at contract spending, including contracts awarded without competition.
GAO said it was okay to attend to the riskier projects when agencies were under pressure to spend the money. However, GAO officials are concerned that a lot of contracts have been awarded without competition — and without audits — through the Small Business Administration’s 8(a) Business Development program without audits, according to the report.
It’s significant, GAO said, because, while the 8(a) program has safeguards, they aren’t always set up properly.
In response, Joseph Jordan, SBA’s associate administrator for government contracting, objected to GAO’s implication that the 8(a) program is more susceptible to fraud than other programs.
“Suggestions of wrong-doing without supporting evidence are detrimental to the 8(a) program and its thousands of eligible program participants,” Jordan wrote. Even so, SBA officials have worked to prevent fraud, he added.
Inspectors general from the Defense Department and NASA said they were beginning audits on Recovery Act money. NASA’s IG told GAO it intends to launch audits of the funds, which includes seven contracts that were awarded through the 8(a) program.
In addition, the Energy Department IG didn’t consider its Recovery Act contracting as a high-risk area because a significant portion of the department’s funds went out through grants, according to its response to the GAO report.
– About the Author - Matthew Weigelt is acquisition editor for Federal Computer Week. Published in Washington Technology – July 22, 2010
Small businesses face big hurdles to joining Gulf of Mexico oil spill cleanup effort
June 24, 2010 by cs
Actor Kevin Costner’s latest role as a small-business owner trying to convince oil companies that his cleanup equipment is just what they need to deal with an oil spill like the one in the Gulf of Mexico, has been anything but a star turn.
Costner told the Senate Small Business and Entrepreneurship Committee on Thursday that while he recently got a call from BP Chief Operating Officer Doug Suttles saying his “machines worked,” lots of small companies with innovative solutions can’t get to first base.
“You should know that negotiating your way through the bureaucratic maze that currently exists is like trying to play a video game that nobody can master,” Costner said.
BP has ordered 32 of the machines produced by Costner’s Ocean Therapy Solutions, and BP and Costner plan a news conference to discuss the deal today.
Heather Baird, vice president of Massachusetts-based MicroSorb Environmental Products, which produces “oil-eating microbes” that the company says would clean the spill without the environmental hazards of dispersants, said getting BP or the government to respond has been a frustrating battle.
“Simply put, we were not clear on who is really making the decisions, and I am not sure that any business, small or large, knows how best to be heard,” Baird said.
Though the Coast Guard set up an interagency alternative technology assessment program June 4 to evaluate innovative proposals, Rear Adm. Ronald Rabago testified that only one of the 1,900 concepts offered has been submitted to federal agencies for consideration and none has been accepted.
Members of the committee said they’ve been hearing from constituents who can’t even get a response, never mind an actual meeting or assessment of their products from anyone in authority.
Sen. Mary Landrieu, D-La., the panel’s chairwoman, said the federal response to small-business applications is clearly unacceptable. Though she said her office just got an e-mail from Louisiana remediation firm that recently received a contract, “there are thousands still waiting.”
Sen. David Vitter, R-La., said he has done something he “normally doesn’t do,” using his Blackberry to e-mail requests to federal officials to consider what he views as innovative solutions by three Louisiana companies. But all he gets is “automated responses” with no solid information.
“It seems to go into a black hole,” Vitter said.
Rabago said the Coast Guard is expanding efforts to evaluate proposals by small businesses and now has access to BP’s website where small businesses and individuals are presenting their suggestions. The Coast Guard, he said, will try to go through all of the thousands of suggestions.
Eric Smith, associate director of the Tulane University Energy Center in New Orleans, suggested the government contract with universities to evaluate the proposals by small businesses to separate promising ideas from those without merit.
Small-business representatives, he said, have contacted him and other Tulane officials with the same message: “They feel they are being ignored or stalled by the authorities at the Unified Command Center, at BP at the Minerals Management Service, at the Coast Guard and other state and federal agencies involved in spill response activities,” Smith told the Senate committee.
Costner said that for 17 years he had his equipment tested, and made presentations to oil companies and federal officials, seeking to get his equipment on the ready to respond immediately to oil spills.
Now, Costner hopes that, before President Barack Obama ends his six-month moratorium on deep-water drilling, the nation finally will be prepared to wage an effective oil spill response.
“Before you lift the moratorium, before you do that, please have clean-up technology in place or at least on the way in a specific time, that is designed to meet and match with full force the worst-case scenario that can be presented to us,” Costner said.
Sen. Olympia Snowe, R-Maine, said the government has to find a way to evaluate promising technologies.
“Yet, regrettably, small businesses often continue to find themselves ensnared in a bureaucratic quagmire as a result of a process with no unified approach for evaluating and approaching their entrepreneurial solutions to this unparalleled catastrophe,” Snowe said.
Published: Thursday, June 17, 2010, 7:19 PM – Updated: Thursday, June 17, 2010, 7:36 PM – Bruce Alpert, Times-Picayune – © 2010 NOLA.com. All rights reserved.
IG: Virginia is failing to track Recovery Act program funds
June 7, 2010 by cs
A preliminary audit of a Virginia state agency’s administration of $94 million in Recovery Act funds for helping low-income residents make their homes more energy efficient revealed a string of management failures.
The report by George Collard, Energy’s assistant inspector general for national security and energy audits, found that Virginia’s Department of Housing and Community Development failed to conduct any on-site financial monitoring of the work, verify the accuracy of documentation local agencies submitted, reconcile amounts paid to actual costs, maintain vehicle and equipment inventories as required by federal regulation and directives, or accurately report program results to the Energy Department.
“These control and reporting weaknesses increase the risk that Recovery Act objectives may not be achieved and that fraud, waste or abuse can occur and not be detected in this critically important program,” Collard wrote.
The Energy Department received $5 billion under the 2009 American Recovery and Reinvestment Act for its weatherization assistance program. The money is disbursed through grants to the states, where the programs are administered.
Because of the unprecedented level of funding for the program and the risk for waste and abuse, the IG has been conducting audits in a number of states. Last December, Inspector General Gregory Friedman issued a management alert over the program’s implementation in Illinois after finding egregious problems there.
In Virginia, DHCD administers the program through 22 local community action agencies. These agencies, or subgrantees, are responsible for determining applicant eligibility, weatherizing homes, and conducting home assessments and inspections.
The $94 million in Recovery Act funds for the program in Virginia in 2009 represented more than a tenfold increase in the program’s funding level. State officials expect to weatherize about 9,200 units during the life of the grant, a huge increase over the 1,475 units previously planned in 2009.
Despite the funding increase, state officials did not make a single on-site financial monitoring visit to any of the 22 subgrantees as required under the Recovery Act, the report said.
“Because of the lack of supporting documentation and inadequate financial monitoring, the accuracy of DHCD’s payments to subgrantees could not be verified,” the report said.
There were other problems as well: Vehicles and equipment purchased with federal funds must be recorded and reported as program assets, yet no such inventory information was maintained. When auditors asked DHCD to use its procurement systems to identify vehicles and equipment that met the reporting threshold, the information was incomplete.
In addition, the number of weatherized homes that DHCD reported to the Energy Department was significantly different from the number of homes that subgrantees reported.
Auditors attributed problems in large part to inadequate reporting systems and insufficient staffing at DHCD, which had only one full-time person assigned to the program.
Auditors recommended the state conduct on-site monitoring, as required; review prior subgrantee billing and seek reimbursement for amounts erroneously charged; periodically reconcile the amount of funds invoiced and reimbursed to actual costs; maintain inventories of vehicles and equipment; and correct reporting weaknesses.
The IG also recommended Energy Department project officials conduct financial reviews during on-site monitoring visits.
Kathleen Hogan, deputy assistant secretary for energy efficiency, concurred with Collard’s report and outlined steps Energy was taking to assist Virginia in meeting its reporting and oversight responsibilities.
– by Katherine McIntire Peters – GovExec.com – June 2, 2010