5 things you need to know to close deals as fiscal year ends
September 15, 2011 by cs
Just a few weeks remain in the most turbulent federal fourth quarter in memory. On Oct. 1, a new fiscal year will launch without a budget of its own. In the meantime, you’ve still got fiscal 2011 to close out.
At this point, your sales group must swerve into expediting mode in order to close as much business as possible in the remaining month until the end of the fiscal year.
While marketing and business development really can’t do much for the current fiscal year, you still have time to close sales.
Here’s how: Concentrate your expediting activities on making sure contracting officers receive complete, signable packages they’ll be willing to move on. Keep in mind, they are in a mode of only signing and moving packages entailing the least friction for them.
To ensure closure, make sure you can affirm the following statements.
1. My customer has completed its market survey.
Program people — those with the mission and budget — must identify best value options for the contracting officer, so your proposals must explain your value, and not just your technical chops.
2. My customer is solid on its requirements and has justified use of my product by name.
Government buyers are taught to state requirements without naming a brand. To make sure your brand gets procured, it must uniquely fill a requirement. That information must make its way into the requirements document that accompanies the purchase request.
3. The money is there.
Agency comptrollers decide whether or not expenditures map to the congressional intent for the money about to be spent. But the documentation must be transmitted to the contracting officer.
4. The contracting officer has identified a preferred vehicle against which to execute the purchase.
That’s the fastest way for a contracting officer to obligate funds, placing an order against an existing vehicle. Make sure the contracting officer has everything needed to comply with ordering procedures of that particular vehicle. Keep in mind, managers of the big government-wide acquisition contracts are themselves doing what they can to help ordering contracting officers to max out year-end sales, but they can’t cut corners.
5. I’m tuned into fair-notice/fair-opportunity notices for my contract vehicles.
Each vehicle has its own process. The closer you get to Sept. 30, your sales team must be ready to respond as cycle times compress.
Remember, a sale in the federal market isn’t a sale until a contracting officer signs an order or awards a contract. That makes federal sales different from commercial sales, where you can pretty much count on an order once it’s in the purchasing department. Federal contracting officers don’t report to program managers who manage the money, write the requirements and send purchase requests to the contracting officers.
Yet, even now, hundreds of millions of dollars remain uncommitted. Contracting officers don’t want to be deliberately obstructionist. But like the program and technology managers they serve (and you are selling to), they are looking at future uncertainty, the current time crunch and more oversight. Sellers who can help federal customers tie orders to authorized requirements and smooth the last-minute speed bumps will be able to maximize their fiscal 2011 revenue.
And here’s a bonus: By expediting last minute sales in this way, you’ll be able to deliver more accurate sales forecasts to headquarters. That’ll help maintain their faith in the federal market even as they look at the national headlines.
– by Steve Charles in Washington Technology. Published Sept. 14, 2011 at http://washingtontechnology.com/articles/2011/09/14/end-fiscal-year-sales-tips.aspx?s=wtdaily_150911
MacDill AFB small business expo set for Dec. 7-8 in Tampa
September 13, 2011 by cs
The 2011 MacDill Air Force Base Conference & Expo for Small Business, with emphasis on service disabled veteran owned small businesses and veteran owned small businesses, will be held December 7-8, 2011 at the Tampa Convention Center, Tampa, Florida.
The conference is being hosted by 6th Air Mobility Wing at MacDill AFB, in partnership with United States Special Operations Command, University of South Florida, the Florida Procurement Technical Assistance Center (PTAC), and the Armed Forces Communications and Electronics Association (AFCEA), St Petersburg Pelican Chapter.
The event will feature plenaries, educational workshops, an exhibit hall, as well as business matchmaking sessions. Last year, there were 180 exhibitors and over 1,100 attendees, including representatives of all levels of federal, state, and local government agencies, the small business community, large/prime contractors, minority educational institutions, and many more.
Program details may be found at http://www.macdillsdvosb.net/conference/program-schedule.
More information about exhibit booth sign up, exhibit booth packages, sponsorships and registration are available at http://www.macdillsdvosb.net/.
Early bird registration has been extended to Sept. 30, 2011.
New features of this conference for 2011 include:
- 1-Day Expo Passes - A 1-day Expo Pass for Thursday, December 8, 2011 is available at only $125. Please note: Expo Visitors will have access to the Exhibit Hall only during regular show hours on December 8 and will include lunch.
- Exhibitor Packages now include conference Registration(s) – Depending on the size of booth chosen, a minimum of one conference registration is included.
- An online version of the Program & Conference Guide – Click HERE to view the 2010 Program Guide. The 2011 Online Program Guide will offer a new feature – a hyperlink to your business website – and will be available online until the 2012 Conference.
See www.macdillsdvosb.net for additional information.
and
registration costs
Congressman questions agencies on small-business advocates’ authority
August 16, 2011 by cs
Senior executives at several Cabinet-level departments received letters Aug. 5 that asked why their small-business advocacy offices have not been given the authority the law dictates.
Rep. Mick Mulvaney (R-S.C.), chairman of the Small Business Committee’s Contracting and Workforce Subcommittee, wants to know why departments’ office of small and disadvantaged business utilization (OSDBU) officials don’t have access to top officials to deal with small-business problems, such as contract bundling and paying firms promptly.
The Small Business Act requires that heads of a department’s OSDBU should “be responsible only to, or report directly to, the head of such agency or to the deputy of such head.”
It’s not happening, according to a Government Accountability Office report from June.
Only nine of the 16 federal agencies that GAO reviewed were in compliance with that part of the Small Business Act. The remaining seven agencies failed to comply with the law. Those agencies’ OSDBU directors reported to lower-level officials or had delegated OSDBU responsibilities to officials who did not meet the reporting requirement, GAO wrote.
Further, these agencies were not in compliance when GAO last examined them in 2003.
In GAO’s latest review, Social Security Administration officials said they fixed the problem. Officials at the Interior Department agreed to re-evaluate their reporting structure.
On the other hand, the Commerce, Justice, State and Treasury departments disagreed with GAO, saying they were in compliance. The Agriculture Department also got a letter because officials delegated the OSDBU director’s authority in a way that was contrary to the law.
Mulvaney wants to know more details about each agencies’ OSDBU, including the assigned functions and budget. He also asked when the OSDBU will actually have access to top officials, in addition to a copy of the new organizational chart. He expects responses by Aug. 31.
The subcommittee is planning a hearing in September to look further into this situation.
– About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. Published Aug. 8, 2011 at http://fcw.com/articles/2011/08/08/osdbu-direct-access-department-secretary-rep-mick-mulvaney.aspx.
Veteran-preferred contracting programs rife with fraud, say VA OIG, GAO
August 8, 2011 by cs
Fraud pervades the Veterans Affairs Department’s contracting program for veteran-owned small businesses, a July 28 House panel was told.
The VA Office of Inspector General and the Government Accountability Office have found the program so rife with deceit that one lawmaker suggested the entire program be scrapped.
“I think if the American people really paid attention…[they] would blow this whole program up and start from scratch again. It is that bad,” Rep. Phil Roe (R-Tenn.) told the House Veterans Affairs’ subcommittee on oversight and investigations.
“Hopefully it will get better, ’cause it can’t get much worse.”
Seventy-six percent of the businesses reviewed by the VA Office of Inspector General in a recent audit were ineligible for either the program and/or the specific veteran-owned small businesses or service-disabled veteran-owned small businesses contract award, said Belinda Finn, assistant inspector general for audits and evaluations at the VA OIG. This could total $2.5 billion in contract awards to ineligible businesses over the next five years, Finn estimated.
“Thirty-eight percent of the reviewed businesses were not owned or controlled by a veteran and over half did not meet federal incurred cost and subcontracting thresholds. In many cases ineligible businesses passed through the majority of the contracts’ work requirements and funds to non-veteran-owned businesses,” added Finn.
Ineligible businesses received awards because VA’s office of small and disadvantaged business utilization was not thoroughly reviewing business documentation and performing site visits to verify the veteran-owned status, said Finn. The OIG also found that contracting officers did not always check VA’s enterprise veterans database, business size classification codes, or properly assess subcontracting and partnering agreements.
“This program is highly-vulnerable to fraud and abuse,” said Gregory Kutz, director of forensic audits and investigative service at GAO, who added that while the veteran business verification program has made some progress, it “has a ways to go.”
“We recommend that the Congress consider providing VA with the additional authority and resources necessary to expand the verification program governmentwide. Only 30 percent of service disabled veteran contracts are with the Department of Veteran Affairs. Thus, for the other 70 percent we continue to have a self certification program,” suggested Kutz.
Finn said VA’s verification system provides strong controls, but it also needs to strengthen it’s contracting practices, she said.
“I wouldn’t give up on it yet,” said Finn.
– by Molly Bernhart Walker – Fierce Government – Aug. 2, 2011 at: http://www.fiercegovernment.com/story/veteran-preferred-contracting-programs-rife-fraud-say-va-oig-gao/2011-08-02
What are the industry benefits of IT Schedule 70?
August 3, 2011 by cs
IT Schedule 70 is a streamlined, convenient, money-saving and time-saving tool for government to obtain the commercial goods and services needed to satisfy requirements. The Coalition for Government Procurement (CGP) represents more than 300 firms selling commercial services and products to the federal government and advocates for common sense in government acquisition. According to Roger Waldron, CGP’s President, “the true value of the $16 billion IT Schedule 70 program is its ability to streamline acquisitions, making it easier for federal agency buyers as well as industry partners to transact business.”
Waldron maintains the sheer size of IT Schedule 70, along with the many features and capabilities offered, creates a cost-effective contract channel for government contractors to market their products and services. “Typically, bid and proposal costs are expensive. IT Schedule 70, with its pre-negotiated terms and conditions, along with the ability to use eBuy to post RFQs, enhances competition, streamlines response times, and improves communications for agency buyers and contractors. The Schedule allows suppliers to focus on agency statements of work, to speed the process of acquisitions,” he said.
Mentor-Protégé Program Delivers Small Business Opportunities
GSA’s Mentor-Protégé Program is designed to encourage and motivate GSA prime contractors to assist small businesses and enhance their performance on GSA contracts. The program is intended to foster the establishment of long-term relationships between small businesses and GSA prime contractors and increase the overall number of small businesses that receive GSA schedule awards. Under the Mentor-Protégé Program, eligible small businesses can act as suppliers or provide services or subcontractors for any prime contractor with an approved subcontracting plan negotiated with GSA. Protégé firms are selected by mentors, which can open new markets for their businesses, said Anthony Eiland, Program Manager of GSA’s Mentor-Protégé Program and Program Manager of Veterans Affairs Outreach Initiatives.
For firms that have never done business with GSA, this special program teaches them how GSA works and how to interact with other agencies, Eiland said. “Small businesses use this program to gain acceptance and viability as a contractor serving the needs of large federal agencies such as USDA,” he said.
Seven Benefits of Holding a GSA Schedule
1. Builds brand recognition by providing a ‘preferred vendor’ status.
2. Provides a door-opener into the government market.
3. Differentiates suppliers from non-Schedule vendors with same services and products.
4. Offers a multi-purpose contracting device.
5. Reduces contract time from solicitation to award. GSA has reported a reduction from 268 days under standard agency RFPs to 30 days under an IT Schedule 70 RFQ.
6. Increases the speed for the government to buy from industry partners. Saves time during the acquistion process.
7. Offers fastest and least expensive entry into public sector market.
- Source: GSA ITS
For mentors, the biggest benefit of the program is a strong sense of giving back, said William Jaffe, Senior Vice President and General Manager of Technical and Project Engineering LLC (TAPE), based in Alexandria, Va. TAPE is a mentor with one protégé. The company serves as a mentor to help smaller companies learn the ropes of selling through the GSA schedule. “Mentors typically start out seeking partner suppliers to fill out their small business set-aside requirement,” Jaffe said.
Gregory Olson, Associate Vice President of Operations at Catapult Technology Ltd., an IT services and management consulting firm based in Bethesda, Md., is a mentor to three protégé firms. “As a recent graduate of the 8(a) program, we are always seeking partners to build strategic teams that can help us meet agency small business/8(a) requirements,” he explained.
Customers and Industry Have Their Say
Customers and industry partners alike benefit from all that IT schedule 70 has to offer. Julia Lopez, Purchasing Manager of Applied Research Laboratories at the University of Texas at Austin, chose to purchase from GSA’s IT Schedule 70 because the approvalprocess was faster than seeking formal bids. The lab purchased custom configured high-performance servers and other IT equipment using the schedule program. “The beauty of GSA is the speed at which procurements can be approved without additional bidding,” said Lopez.
Discounted pricing was another incentive for UT Austin, along with pre-approved terms and conditions, which helps streamline the decision process for utilizing the program, she added. “I can count on solid service from the GSA Schedule holder to assist with an upgrade or reconfiguration if needed. I know he’ll stand behind his products with good customer service and support.”
In 2010, Hewlett-Packard did $500 million in business on the IT Schedule 70 contract, said Kitty Klaus, Senior Program Manager of GSA Programs for HP Enterprise Services. Klaus especially appreciates BPA programs due to the opportunity for long-term commitments with customers. “This allows us to work closely with government customers to provide the best possible pricing,” she explained.
With IT Schedule 70’s pre-established terms and conditions and fair and reasonable pricing, “we can focus more attention on the agency’s requirements in each schedule award,” she continued, adding that GSA eBuy is another key advantage because “we are able to see the RFQs from agencies all in one place.”
Ultimately the IT Schedule 70 program brings more competition and greater transparency to government acquisitions. “It’s a good value for customers, while also serving the needs of taxpayers,” Klaus said.
“I’m a big fan of the SmartBUY program,” said Roy Stephan, Vice President of Technology Solutions for Intelligent Decisions Inc., a Data at Rest (DAR) and situational awareness and incident response (SAIR) SmartBUY contract holder based in Ashburn, Va. Stephan is looking forward to more SmartBUY programs to help address the many regulations federal agencies must take into account during acquisitions. “GSA raises the bar for all industry partners by setting government-wide technical requirements in the SmartBUY program. This will ensure customers can quickly buy products and services that comply with known federal laws and regulations, without costly and redundant
acquisition evaluations,” he said.
John Keese, President of Autonomic a GSA cloud computing provider was first awarded a DAR, then a SAIR contract, and is now offering Infrastructure as a Service (IaaS) cloud computing on his roster of available solutions offered via the SmartBuy BPA program under IT Schedule 70. “SmartBuy BPAs help customers in federal, state and local governments to address key areas of concern regarding cyber security, and now cloud computing, by allowing them to purchase products and services that are pre-certified to meet stringent federal security requirements,” he said.
Particularly at the state and local government level, Keese said the key advantage of this program is avoiding a painful vetting process. States can now purchase a pre-vetted solution that complies with the Federal Information Security Management Act has been aggressively discounted to address government-wide requirements. “On their own, the states simply can’t achieve the same level of volume discounts they can find via the SmartBUY program,” he added.
– This report was commissioned by the Content Solutions unit, an independent editorial arm of 1105 Government Information Group, originally published at http://gcn.com/microsites/2011/gsa-schedule/4-industry-benefits-it-schedule-70.aspx.
Government gets a B in 2010 small-business contracting
June 28, 2011 by cs
•The Small Business Administration gave the government a B grade for its attempts to reach small-business contracting goals, including the annual 23 percent overall goal, an agency official said June 23.
The government awarded 22.7 percent of its contracting dollars to small companies in fiscal 2010, compared to 21.9 percent the previous year. It awarded $97.9 billion to small businesses in 2010, compared with $96.8 billion in 2009, a $1.1 billion increase.
The B grade means that the government met 90 percent to 99 percent of its goals for the year.
In 2010, the government improved in four of the five categories of small businesses compared to SBA’s previous score card. There were increases in contract dollars and performance against statutory goals, except in the Historically Underutilized Business Zone (HUBZone) category.
Small disadvantaged businesses received $34.4 billion, or 8 percent of contracting dollars. The government surpassed the 5 percent goal for the category, as it did in 2009.
Woman-owned small businesses received $17.5 billion, or 4 percent of contracting dollars, in 2010. It was less than a point short of the 5 percent annual goal. In 2009, such companies received 3.7 percent of contracting dollars.
Small businesses owned by service-disabled veterans received $10.8 billion, or 2.5 percent of contracting dollars. The government was 0.5 percent below the 3 percent goal for such companies, although the percentage increased from just under 2 percent in 2009.
The HUBZone small-business category was the only one to experience a decline in 2010. Such companies received $11.97 billion, or 2.77 percent of contracting dollars. The goal is 3 percent. In 2009, the government had awarded HUBZone businesses $12.41 billion, or 2.81 percent of contracting dollars.
Joe Jordan, associate administrator of government contracting and business development at SBA, said the parity issue played a part in the HUBZone decrease.
Last year, Congress settled a disagreement among the administration, lawmakers, the U.S. Court of Federal Claims and the Government Accountability Office about whether agencies are required to offer small-business set-aside contracts to HUBZone companies first. The debate was over the word “shall” in the law. In legislation passed toward the end of the year, Congress replaced the word with “may,” clearing up any confusion about the equality of small-business categories. Read more about the debate.
“I think the confusion around parity during 2010 had some contracting officers skittish around HUBZones and what they should and should not do,” Jordan said. “And that’s why it’s so great that parity is now the law of the land. There is no more confusion.”
About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week – June 24, 2011 at http://washingtontechnology.com/articles/2011/06/24/sba-small-business-score-card-2010.aspx?s=wtdaily_270611
$2.5B more allotted for small, women-owned firms
June 14, 2011 by cs
Danya Chandler plans to add employees and floor space to her Springbor, OHo engineering and manufacturing business in anticipation of winning a slice of $2.5 billion in additional contracts the federal government wants to award to small, women-owned businesses.
A Small Business Administration (SBA) program unveiled in April — more than a decade after its creation by Congress — aims to award 5 percent of all federal contracts to companies such as Chandler’s Connective Design Inc., which currently employs 10 workers in a business park just south of the new Austin Boulevard Interchange at Interstate 75.
While excited at the prospects, Chandler said she has conflicting feelings about qualifying for minority set-asides offered to women by the federal government after 20 years struggling for a level playing field in a male-dominated industry.
About 7.8 million of 27.1 million American firms are owned by women, and women-owned businesses generated $1.2 billion of $30.2 billion in total sales
those firms recorded in 2008, according to the latest U.S. Census data available.
Congress passed the law establishing the new set-aside programs for small, women-owned businesses in 2000.
More than a decade later, the program took effect April 1 after it was added to federal acquisition regulations.
“It was a priority for the Obama administration to implement this program and make it effective,” said Michele Chang, SBA’s senior adviser for the Office of
Government Contracting and Business Development. “Federal contracts can provide women-owned small businesses with the oxygen they need to take their business to the next level.”
Now SBA is conducting outreach programs with the hope of having companies certified and ready to compete for federal contracts in the third quarter of
this year “when the largest percent of small business contracts are awarded,” according to an SBA fact sheet.
Last year, the federal government awarded about $400 billion in contracts. Under the new program, up to 5 percent, or about $20 billion, in contracts will be set aside for small, women-owned businesses — about $2.5 billion more than were awarded to small, women-owned businesses in 2010, according to SBA.
To be certified for the program as a women-owned small business, or WOSB, companies must be at least 51 percent owned, controlled and primarily managed by one or more female U.S. citizens. Additional funds are available for “economically disadvantaged” companies in which the principals net worth is less than $750,000.
“Now we find out we’re disadvantaged,” Chandler said. “It’s kind of a sore spot.”
Small, women-owned businesses “weren’t getting their cut” of federal contracts, Chandler added. Started in a Miamisburg basement in 1991, Connective
Design Inc. is one of about 250,000 small, women-owned businesses in Ohio.
The company moved from Franklin into a new building off Ohio 741 south of the Austin interchange in October 2010 and recently increased its work force from seven to 10.
Originally a distributor of electrical components, it is now a manufacturer and custom and reverse engineering firm specializing in production of contacts,
connectors and assemblies for companies including DRS Environmental Systems, Florence, Ky., which provides air-quality equipment to military bases around the world.
In anticipation of continued growth, largely due to the new federal program, Chandler is eyeing expansion into an empty office and manufacturing space next door and plans to hire a quality manager, technical engineer and assembly workers by the end of the year.
Other area small, women-owned businesses are assessing the program as well.
Brenda Westendorf, president of VMI Corp., a plumbing company in Dayton, was excited to learn of the new federal program.
“I think it’s really acknowledging women,” she said. “Anybody can use all the help they can get from the government.”
Incorporated in 1996, VMI has already begun government contract work providing maintenance and repair services for metropolitan housing authorities
in Dayton and Butler County.
“There’s a lot of paper, a lot of forms, a lot of registration you’ve got to go through,” she said, but “I would love to go as far as I can with it.”
Shelly Robinson-Heller is skeptical about whether the new programs will help her company, Moraine-based Allied Shipping and Packaging.
“Working with the government is extremely time-consuming,” Robinson-Heller said.
Allied already is certified through the Women’s Business Enterprise National Council, qualifying it to participate in other programs designed to help women-owned businesses.
Still, Robinson-Heller said the new set- asides were a “step forward, but 5 percent of government contracts is not that much.”
For information, www.sba.gov/wosb
– By Lawrence Budd, Staff Writer – Middletown (OH) Journal – 4:45 PM Saturday, June 11, 2011 at http://www.middletownjournal.com/news/middletown-business-news/-2-5b-more-allotted-for-small-women-owned-firms-1182852.html
Marine Corps’ Albany base sponsors small business trade show Aug. 4 & 5
June 13, 2011 by cs
If you’re interested in learning about what and how the Marine Corps Logistics Command buys, then you ought to consider being in Albany, GA on Aug. 4 and 5, 2011.
The Albany Marine Corps base is hosting a two-day trade show specifically focused on procurement and acquisition that support of Warfighter requirements.
The Command is looking for exhibitors and attendees specializing in:
- Logistics
- Industrial Electronics
- Communications
- Information Technology
- Engineering
- Parts Obsolescence
- Repair/Maintenance
- Storage
- Warehousing (including Supplies)
- Material Handling
- Green Initiatives
- Construction
- Structure Ventilation/Controlled Environments for Workers
On Thursday, Aug. 4th, an anticipated 100 exhibitors — representing both small business and large business as well as local, state, and federal government agencies – are expected to be on hand at the Albany Civic Center. Opening ceremonies will begin at 8:00 a.m.
Mid-day on Thursday, attendees will gather for lunch across the street from the Civic Center at the Albany Hilton Garden Inn to hear featured keynote speaker, Lieutenant General Frank A. Panter, Deputy Commandant, Installations and Logistics, Headquarters, U. S. Marine Corps.
Following lunch, activities will resume in the exhibit hall at the Civic Center from 1:30 until 4:00 p.m.
On Friday, Aug. 5th at the Albany Civic Center there will be eight (8) workshops running concurrently, each repeated on the hour at 8:00, 9:00, 10:00, and 11:00 a.m. Workshop topics include: The Mission and Function of the Marine Corps Logistics Command Centers (including Distribution Management, Maintenance Center, and Supply Management); Expert Services for Entrepreneurs; Acquisition Courses for Contractors; the Federal Logistics Information System and the Internet Bid Board System; Construction Requirements of the Marine Corps Logistics Base; Small Business Program Updates; Getting on GSA Schedules; and Doing Business with the Marine Corps Systems Command (MARCORSYSCOM).
There is a registration fee of $100 to attend this two-day event. The registration fee includes access to all events both days, including one lunch ticket for Aug. 4th.
Companies wishing to exhibit at the event must make arrangements and pay a fee in advance. The exhibition fee for large businesses is $550, and the exhibition fee for small businesses is $450. Each of these exhibitor registration packages covers two attendees and two lunch tickets. (Exhibitors must set-up at the Civic Center on Wed., Aug. 3rd, between 12:30 and 4:30 p.m. Exhibit teardown takes place on Thurs., Aug. 4th between 4:00 and 5:00 p.m.)
Pre-registration is required to attend this event. The deadline for registration is Thursday, June 16, 2011. Complete details may be found at: http://www.logcom.usmc.mil/sbpo/files/trade-show/2011/Key-Information.pdf.
- The Industry Exhibitor registration form is at: http://www.logcom.usmc.mil/sbpo/files/trade-show/2011/Industry-Exhibitor-Reg.pdf
- The Industry Attendee registration form is at: http://www.logcom.usmc.mil/sbpo/files/trade-show/2011/Industry-Attendee-Reg.pdf
- The Government/Non-Profit registration form is at: http://www.logcom.usmc.mil/sbpo/files/trade-show/2011/Govt-Reg.pdf
DOD to negotiate prices more aggressively
May 2, 2011 by cs
Defense Department officials have told acquisition employees to fight for lower prices on contracts, even when there’s only one bidder.
In an April 27 memo, DOD officials gave more guidance to their acquisition offices on bargain for lower prices, as the department aims for more competition and lower spending in general. One area to find that savings is by negotiating lower prices from a contractor.
The initiative started last November, when defense officials told contracting officers to cancel a solicitation if it’s been in the market for less than 30 days and only one bid has come in. After the cancellation, they have to send out another solicitation for an additional month. If there’s still only one bidder, the contracting officer has to work to get a lower price than proposed.
Shay Assad, director for defense procurement and acquisition policy, wrote in the new memo that officers should not pay the contractor’s proposed price, even if the cost seems reasonable based on market research and having hosted a fair competition.
Instead, Assad wants officers to make sure the final price, which both sides agree to, is fair and reasonable in and of itself. He tells them to do careful analysis of the price and cost. Then the government needs to bring their analyses to the negotiating table to discuss pricing. Read the Federal Acquisition Regulation on contract pricing.
However, the new order means finalizing contracts will take more time, despite overly busy acquisition offices.
“I recognize that implementation of this policy may have the unintended consequence of increasing the contracting community’s workload, but given today’s scarcity of resources we need to ensure effective competition to the maximum extent possible,” Assad wrote at the end of the memo.
DOD officials have been under heavy pressure to make spending cuts. In 2010, Defense Secretary Robert Gates and Ashton Carter, undersecretary of defense for acquisition, logistics, and technology, issued a 23-point memo on acquisition reforms.
Competition for contracts is one of the key points of Gates and Carter’s reforms, along with controlling growth in costs, improving acquisition workforce’s know-how of buying services, and launching affordable projects.
– About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week – posted at http://fcw.com/Articles/2011/04/28/Defense-Department-contract-competition.aspx?p=1 on Apr. 28, 2011.
Administration set to order contractors to disclose campaign contributions
April 26, 2011 by cs
Prospective federal contractors would be required to disclose to government procurement officials political contributions dating back two years prior to bidding on a new project, according to controversial guidance being drafted by the Obama administration.
The draft executive order, which has circulated on the blogosphere for about a week and which was independently obtained by Government Executive, would require companies bidding on agency contracts to release a list of contributions or political expenditures that total in excess of $5,000 made on behalf of federal candidates, parties or political action committees.
“It is incumbent that every stage of the contracting process — from appropriations to contract award to performance to post-performance review — be free from the undue influence of factors extraneous to the underlying merits of contract decision-making, such as political activity or political favoritism,” the order states. “It is important that the contracting process not only adheres to these principles, but also that the public have the utmost confidence that the principles are followed.”
The disclosure would be required whenever the aggregate amount of the contributions and expenditures made by the company, its directors or officers, or any affiliates or subsidiaries within its control, exceeds $5,000 to a recipient in a given year, the order states. The rule essentially would require inquiries about contributions from individual officers that come out of their wallets and not out of corporate accounts.
The order would not apply to public-sector unions or grantees, which historically have tended to support Democrats. Most influential federal contractors either stay out of politics or contribute money to members of both parties — typically giving to the chairmen and ranking members of congressional committees with jurisdiction over their program’s purse strings — and lobby lawmakers on specific issues. Becoming tied to an individual politician or party, some have argued, can damage a company’s long-term prospects for doing business with the government.
Political opposition has already emerged. “This order is a purely political act offered under the benign label of disclosure,” said Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee and one of several Republicans to publicly condemn the document. “The order would not impose the same requirements on the labor unions or other organizations that support the president. Furthermore, it unnecessarily politicizes the procurement process.”
The order would require contractors to disclose contributions to third-party nonprofit groups — known as a 501(c)(4) organizations — in which the company has the “reasonable expectation” that the funds would be used to pay for electioneering communications such as paid advertisements.
The Supreme Court, in its landmark Citizens United v. Federal Election Commission case in January 2010, ruled that companies, labor unions and trade associations can make unlimited “independent expenditures” on advertisements supporting candidates through these third-party groups.
The disclosed contractor data would be made publicly available in a centralized, searchable database at Data.gov, a federal website.
The proposal appears to be modeled on a new law in Illinois, which created similar disclosure requirements for state contractors.
An administration official told Government Executive in a statement that additional disclosure is needed to ensure that contracting decisions are not influenced by politics. “Taxpayers deserve to feel confident that federal contracting decisions are based on merit alone and are not influenced by political favoritism,” the official said. “That said, this document is a draft EO that is still moving through the standard review and feedback process. It is not a final document. But the president is committed to bringing more accountability and transparency to a federal contracting system that has long needed reform.”
But some observers suggest the procurement system is already insulated from politics and that bid decisions are based on factors such as price, technical expertise and past performance. They disagree with the administration’s assumption that the system is vulnerable to politics.
“Why would a contracting officer need to see this?” said one acquisition expert familiar with the memo. “Why not just have the company report quarterly or on an annual basis? There is a level of political gamesmanship at play.”
The source noted that the timing of the required disclosure — prior to the award of a contract — “strongly suggests that political donations will be a consideration during the source selection process.”
Some industry officials said the plan shows a lack of awareness of the realities of the procurement system. “The draft order says it is necessary to ensure that politics are not allowed to impair the integrity of the procurement process,” said Stan Soloway, president of the Professional Services Council, a contractor trade group. “But by force-feeding irrelevant information to government contracting officers, who would otherwise never consider such factors in a source selection, the rule would actually do precisely what it is intended to stop — inject politics into the source selection process.”
Soloway noted that campaign contribution data are already publicly available in the FEC’s disclosure database and in the congressional lobbying database.
The order appears to revive and amend aspects of the 2010 DISCLOSE Act, a bill that would have prohibited the funding of campaign ads by government contractors, corporations with at least a 20 percent foreign ownership and recipients of Troubled Asset Relief Program bailout funds. The bill passed the then-Democratically controlled House but did not receive a vote in the Senate.
While the proposed executive order would not impose a ban as envisioned by the DISCLOSE Act, critics believe the result will be the same, and that it could scare companies away from contributing to political opponents of the administration.
“I am concerned that this ill-conceived policy draft could have a chilling effect on the First Amendment rights of individuals to contribute to candidates of their choice,” said Sen. Susan Collins, R-Maine, ranking member of the Homeland Security and Governmental Affairs Committee. “It troubles me that the draft executive order could be perceived as making political contributions a factor to be considered in awarding federal contracts.”
The order also could prevent some small businesses from working with the government, according to House Small Business Committee Chairman Sam Graves, R-Mo. Graves sent a letter to President Obama on Thursday afternoon calling on him to abandon the order.
“This order will either intimidate contractors not to get involved in politics, or make them believe that they need to contribute to the party in power if they want to compete for contracts,” Graves wrote.
The plan does have support among transparency advocates. “The public needs to know who is giving how much to which candidates, and no person or corporation should be allowed to hide behind a shroud of secrecy and prevent the people from seeing who is trying to influence government and policymaking through political contributions,” Gary Bass, executive director of the nonpartisan OMB Watch, wrote on his blog.
The watchdog group, however, has a number of questions about how the order would be implemented, including how subsidiaries and affiliates would be defined and what would be the penalties for providing false or misleading information.
The draft order requires the Federal Acquisition Regulatory Council to adopt implementation regulations by the end of 2011. Depending on the effective date of the regulations, the order could be implemented before the 2012 election, when Obama is once again on the ballot.
– By Robert Brodsky – GovExec.com – April 21, 2011
This article was updated to clarify which online databases were being referred to as sites where contribution information is already public.