Congressional panel seeks broad Defense acquisition overhaul
March 18, 2010 by cs
By Robert Brodsky - March 11, 2010 – GovExec.com
A congressional panel that has spent the past year studying deficiencies in the Defense Department’s procurement system has recommended the department do a better job of defining acquisition requirements and monitoring contract performance.
“While the nature of Defense acquisition has substantially changed, the Defense acquisition system has not kept pace,” the Defense Acquisition Reform panel’s 49-page March 4 interim report stated. “The system remains structured primarily for the acquisition of weapon systems at a time when services represent a much larger share of the department’s acquisitions.”
The panel, which the House Armed Services Committee established in March 2009 to carry out a comprehensive review of the defense acquisition system, found that the shift to service-based contracting has led to challenges in outlining requirements, setting measurable and performance-based goals and overseeing contractor performance. Agencies spent $200 billion on service contracts in fiscal 2009.
To reform the system, the report recommended that Defense re-examine its guidance on service contracting and establish clear lines of authority for setting acquisition requirements. The group also said Defense must differentiate between information technology acquisition processes and other parts of the procurement system.
The panel deemed the department’s performance on weapon systems acquisition “unacceptable.” In 2009, the Government Accountability Office reported that 96 major Defense weapons programs experienced $296 billion in total cost growth and an average of 22 months in schedule delays.
“Even in the acquisition of weapon systems, the department’s historical strength, the system continues to generate development time frames for major systems measured in decades, an approach which has resulted in unacceptable cost growth, negative effects on industry, and in too many cases, a failure to meet warfighter needs,” Rep. Rob Andrews, D-N.J., the panel’s chairman, said in a statement prepared for the group’s final hearing on Thursday.
Another major problem, the panel found, is the absence of a performance management structure that can objectively determine the value being delivered to the warfighter and taxpayers.
The report recommended that Defense’s new Office of Performance Assessment and Root Cause Analysis track whether organizations throughout the defense acquisition system meet prenegotiated performance goals. Bonuses and potential promotions could provide incentives for doing a better job, according to the report.
“The intent of the performance metrics and performance management recommendations in this report is not to create new layers of bureaucracy,” the group noted. “If the performance management measures envisioned in the panel’s recommendations are implemented properly, program managers could be freed from certain reporting responsibilities specific to their individual program.”
But in his prepared statements for Thursday’s hearing, the department’s top acquisition official questioned whether the plan was feasible.
Ashton B. Carter, undersecretary of Defense for acquisition, technology and logistics, said the PARCA office did not yet have the staffing or capability to conduct the type of performance assessments the panel suggested.
“I am concerned that adding a vast new domain of application to the PARCA portfolio — as this panel suggests — will complicate and delay that effort,” Carter testified.
The panel also recommended that Defense:
• Require workforce certification and mandatory continuing education for the acquisition workforce;
• Improve its financial management and audit readiness, or risk losing congressional funds;
• Proactively notify small businesses of contract solicitations rather than relying on firms to find those notifications on FedBizOpps;
• Repeal a rule that allows agencies to withhold 3 percent of contract payments in anticipation of taxes owed to the Treasury Department;
• Identify contractors and grantees with serious tax delinquencies and include that information in databases relating to past performance and contractor integrity;
• Review and implement recommendations, once they are completed, of an ongoing GAO study of the costs of contracting with firms with questionable employment practices;
• Shift the responsibility for certification of contractor business systems to independent teams within or outside of the Defense Contract Audit Agency.
Industry supported most of the suggestions. “The panel’s report contains a number of common-sense recommendations and reinforces commonly understood constraints on the defense acquisition system — ranging from the requirements identification and definition process to the inappropriate use of rigid rules for selecting contract types to the limitations facing the defense acquisition workforce,” said Stan Soloway, president and chief executive officer of Professional Services Council, a contractor trade association.
PSC argued, however, that since GAO’s contractor employment report has not been released or publicly vetted, it would be inappropriate to implement those yet-unknown recommendations.
The panel’s final report, which will incorporate input from various stakeholders, including Defense officials, will be released in two weeks, Andrews said. Many of its final recommendations will be addressed in the House Armed Services Committee’s version of the fiscal 2011 National Defense Authorization Act.
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(C) 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED.
Audit Blames OMB’s Lack of Guidance for Shoddy Contracting Data
March 17, 2010 by cs
By Emily Long 03/15/10 – NextGov.com -
The Office of Management and Budget has improved the transparency of federal spending but has limited tools to improve data quality and mandate agency compliance, according to observers.
Nextgov on March 12 reported that a Government Accountability Office audit found missing and inconsistent data on USAspending.gov, the federal contract awards database. The report blamed a lack of guidance from OMB for the incomplete and erroneous information.
One problem is the data is difficult to work with, a concern that extends beyond USAspending.gov, said Bill Allison, an analyst at the nonprofit Sunlight Foundation. There are enough “garbage in-garbage out” databases, and it’s difficult to accurately assess performance using shoddy data, he added.
According to the report, OMB has yet to issue specific guidance on how agencies should fill in required data fields and validate the information submitted to USAspending.gov. Spokesman Tom Gavin said OMB expects to release a plan for collecting, reporting and posting data this spring and also will relaunch the Web site with better navigation and search capabilities.
GAO also found that OMB has no system in place for mandating compliance and has relied on agencies to voluntarily submit award information. OMB wouldn’t identify specific steps for holding agencies accountable for complete and accurate reporting, saying only that officials will be aggressive in working with agency leaders to meet goals. In keeping with President Obama’s open government directive, agencies have designated a senior official accountable for the quality and standardization of all federal spending data.
“If you say, for example, restrict funding, that doesn’t help you get to your goal of getting agencies to comply,” said Craig Jennings, director of federal fiscal policy at the nonprofit OMB Watch, adding the government has few punitive options in dealing with delinquent agencies.
Allison agreed that censuring agencies could result in less data being made public. He said one strategy would be to create a career track to reward agency personnel who build transparency effectively.
“It’s one of the biggest problems the transparency community has,” he said. “Plenty of carrots, but what kinds of sticks?”
GAO’s audit also found that OMB so far has not included subcontractor award data on the USAspending.gov site, which was required by January 2009. The agency has not submitted yet an annual report to Congress on site use and reporting burdens on award recipients.
“Collecting data on every dollar the government spends is a huge undertaking,” Gavin said. “But moving forward we’re going to continue to be aggressive to put all the information out there.”
GAO’s investigation examined OMB’s compliance with the 2006 Federal Funding Accountability and Transparency Act, which mandated the creation of a public database of federal awards data. Designed to increase transparency and accountability in the contracting process, the legislation required OMB to establish USAspending.gov by Jan. 1, 2008.
Allison said the Obama administration has an opportunity to execute transparency initiatives better than previous leadership, but this will require better agency compliance and improved openness.
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© 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED