Georgia Tech Procurement Assistance Center

Defense companies starting to feel effect of the shutdown

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As the partial government shutdown moves into its third week, some American defense firms are starting to get multi-million-dollar IOUs instead of payments.

Even though Pentagon projects are unaffected — the Defense Department is already funded for fiscal 2019 — the shutdown is squeezing contractors who do work for NASA, the Department of Homeland Security, Federal Aviation Administration, and other federal agencies. Many companies aren’t getting paid, even as they continue to pay the salaries of employees shut out of closed government offices.

Take SAIC and Engility, two of the government’s largest service contractors. Executives for the soon-to-merge companies say the payroll for workers idled by the shutdown comes to $10 million every week. And just three weeks into the freeze, they say, the government is some $40 million to $50 million behind in payments.

Keep reading this article at: https://www.govexec.com/contracting/2019/01/defense-companies-starting-feel-effect-us-government-shutdown/154002

Amid $52 billion plus-up, DoD looks to trim spending on service contracts, health care

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As expected, the final 2018 Defense budget the Trump administration submitted to Congress on May 23rd calls for $640 billion in military spending, $52 billion more than the current year and breaking the current budget caps by the same amount.

But even amid a healthy plus-up in the top-line amount, the Pentagon says it’s found some modest ways to produce “efficiency” savings in 2018. Officials billed the budget as a fulfillment of two commitments Defense Secretary James Mattis made when he took office in January: rebuilding the military’s readiness and reforming its business operations.

“There are a number of ongoing activities that we continue to pursue,” said John Roth, the career senior executive who’s currently performing the duties of DoD comptroller. “We’re continuing to look at the major headquarters and to reduce them by 25 percent. We continue with acquisition reform, particularly with Better Buying Power 3.0. We continue to take a hard look at our service support contracts and make sure that they’re appropriate.”

The department said the largest chunk of the savings — $1.2 billion — will come from changes to business processes in the headquarters of the military services and the Office of the Secretary of Defense.

Keep reading this article at: https://federalnewsradio.com/defense/2017/05/amid-52-billion-plus-up-dod-looks-to-trim-spending-on-service-contracts-health-care/

The top 10 government contracting compliance headaches in 2017

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In the government contracting industry, compliance related issues tend to take place.  With administration and party changes, 2017 promises to offer additional complexities.

Confusion amongst government contracting professionals includes: compliance with the Service Contract Labor Standards, DoD source selection procedures and cybersecurity requirements. In addition to keeping your company in line and compliant with the expanding rights of government contractors, budget uncertainty, provisions of the NDAA and bid protests should also be addressed.  Although more compliance issues may arise, it is essential to give attention to the policies that influence government contracting.

See full article published in Contract Management magazine here: http://www.jdsupra.com/legalnews/the-top-10-government-contracting-13317/

Contractors group picks ex-Pentagon logistics exec as chief

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The 400-member Professional Services Council on Tuesday announced that it has selected David Berteau, onetime assistant secretary of Defense for logistics and materiel readiness, as its new president.

Professional Services Council - PSCEffective March 28, Berteau will replace Stan Soloway, another Pentagon veteran who left the contractors group in December after 15 years to launch a consulting firm called Celero Strategies LLC.

“I am excited to have the opportunity to lead such a respected organization in the fields of government technology and professional services,” Berteau said. “Stan Soloway did a great job growing and improving the Council. I’m eager to build on those accomplishments and to promote an open and competitive federal marketplace in which government benefits from the best solutions that industry has to offer.”

Keep reading this article at: http://www.govexec.com/contracting/2016/03/contractors-group-picks-ex-pentagon-logistics-exec-chief/126316

4 government contracting trends to watch in 2016

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Today’s times represent an ongoing shift in the federal services marketplace. The changes are broad and include shifts in technology; acquisition methods; and the economics of being a contractor with significant hurdles and barriers to success.  These market dynamics will play out over the coming months and years – here’s a rundown of the most significant of those changes now well underway.

1. Cloud Computing Continues to Absorb IT Services Opportunities
Federal agencies have moved beyond the 2010 Cloud-First mandate to adopt cloud computing, and have begun embracing the cloud to support their business and mission objectives.  Cloud computing represents a significant change to the way that the federal government had done business. Cloud computing permits the customer to spend less time managing complex IT resources and more time investing in core mission work.  Companies that have cloud-based offerings are winning significant business away from providers that have historically supported “in-house” solutions.

FedRamp opt outAn estimated $20 billion of the federal government’s $80 billion in IT spending is a potential target for migration to cloud computing solutions, according to the White House’s Federal Cloud Computing Strategy. The size and scope of cloud programs are becoming larger, driven in part by the success of smaller projects, and by the manifestation of supporting policies, including FedRAMP, a security “stamp of approval” that lets government agencies know a solution has an appropriate and detailed security plan in place. To date, 48 systems have been authorized FedRAMP compliant.  With the cost of a FedRAMP certification reaching as high as $300,000 and authorizations taking 9 to 15 months, gaining certification is a major commitment for any company.  As a result, many firms, especially small businesses, may be locked out of this segment of the market.

Read all 4 contracting trends to watch in 2016 at: http://www.washingtonexec.com/2015/10/guest-column-4-government-contracting-trends-to-watch-in-2016-by-mark-abel/

GSA changes plans, will keep service Schedules open after all

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The General Services Administration has figured out a way not to have to temporarily close down its services schedules to new offerors after all.

After Federal News Radio reported the Federal Acquisition Service’s plans to suspend the services schedules to new vendors while it put the pieces in place to give the program a facelift, Tiffany Hixson, FAS’s professional services category executive, said her team has now figured out a way to run both the current schedules and the new consolidated schedule at the same time.

“Since the last time we talked, my team really has been looking at the challenge of closing the schedules even for a short period of time. Industry had quite a few concerns with that part of our acquisition strategy,” Hixson said in a follow-up interview Thursday. “So what we decided to do is open the new professional services schedule at the same time that we are going to be transitioning our existing schedules to our new contract environment. So instead of working our process in serial fashion, we are going to be doing that in parallel fashion and that takes care of the problem. So we do not have to close the schedules, which is a big win for us and also for industry.”

Keep reading this article at: http://www.federalnewsradio.com/65/3690349/GSA-suspends-adding-new-vendors-to-services-schedules-

GSA applying its IT model to overhaul of services schedules

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The General Services Administration (GSA) wants to make it easier for agencies to buy professional, management, technology and a host of other kinds of services from the schedule contracts. To that end, GSA will consolidate seven different professional services contracts into what could end up being one mega- schedule.

Tiffany Hixson, GSA’s Federal Acquisition Service’s professional services category executive, said the goal is to consolidate the schedules of as many as 500 vendors by November 2015.

“We are really hoping that will make it much easier for federal contracting officers to get those services, in particular where we have a requirement that covers a number of services areas. So instead of having to compete those services across a number of schedules, they will just be able to go to one,” Hixson said in an exclusive interview with Federal News Radio. “We think that will make it a lot more user friendly from a contracting officer perspective. Additionally, we will be able to reduce our administrative overhead, and for our contractors, it will reduce the cost of administering the number of schedules that we’ve got in the professional services area.”

Keep reading this article at: http://www.federalnewsradio.com/446/3685243/GSA-applying-its-IT-model-to-overhaul-of-services-schedules

Contractors might weather shutdown using prior-year funds

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A key change in Washington since the government shutdown in the mid-1990s is an increased reliance on contractors, industry specialists note, but the damage a spending lapse might inflict on contracting companies this year would depend on their ability to use past-year funds.

“The short-term impact is that no new awards can be made, no options can be exercised and payments for ongoing work may be delayed,” said Alan Chvotkin, executive vice president and counsel at the Professional Services Council, a contractors trade group. “Since many companies already have been awarded contracts paid with prior-year appropriations, that work will continue provided that there’s no need for continuous government supervision or direction,” which is not the case with most contracts.

Trey Hodgkins, senior vice president for national security and procurement policy at TechAmerica, said, “If you have a valid contract in place that has a life beyond fiscal 2013, the funds are available and obligated, and employees are expected to show up at work. The biggest challenge you may find is that your government counterpart may not be there, or the government facility may not be open.”

Keep reading this article at: http://www.govexec.com/contracting/2013/09/contractors-might-weather-shutdown-using-prior-year-funds/71056

 

Pentagon leaders put support contractors on notice for deep cuts

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Defense Secretary Chuck Hagel and his top budget deputy on Tuesday signaled they intend to make deep cuts in contractor personnel who help manage programs in almost every sector of the Pentagon bureaucracy.

The Defense Department today employs an estimated 700,000 service contractors who, in many cases, work side-by-side with the civilian and military workforce at installations across the country and worldwide.

The new shift can be expected to return some clout into the hands of civil service employees who work at half the cost or even less, reversing a decades-old trend of farming out program management increasingly to pricey hired hands in the defense industry.

“We are currently reviewing all contractors, all the contracts we have,” Hagel testified at a Senate Appropriations Defense Subcommittee hearing.

Keep reading this article at: http://www.govexec.com/contracting/2013/06/pentagon-leaders-put-support-contractors-notice-deep-cuts/64715/?oref=national_defense_nl 

Defense contracting cuts might be much smaller than predicted

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Deputy Defense Secretary William Lynn on Tuesday told Virginia lawmakers impending contracting cuts Defense Secretary Robert Gates announced last summer could be far smaller than many predicted, an aide to Rep. Gerry Connolly, D-Va., said.

In an effort to rein in costs and redirect money to weapons and troops needed on the battlefield, Gates announced major cuts to Defense Department contracting and overhead costs in August. Gates said the department would cut service support contracts by 10 percent annually during the next three years.

Confusion over what exactly the Pentagon might cut caused enormous turmoil among Defense contractors, many of whom are Connolly’s constituents. But during a meeting at the Pentagon on Tuesday, department officials said cuts would be made to a narrow band of service support contracts worth about $4.3 billion — which means the value of the reductions themselves is estimated to be about $430 million, said George Burke, a spokesman for Connolly.

“While I am still concerned about the effect of these defense contractor cuts on the economy of Northern Virginia and the Washington area, we are making progress,” Connolly said in a statement. “The impact will be less than was originally thought when Secretary Gates announced his plan last summer. Where we originally feared annual contractor cuts of as much as $14.3 billion per year, it now appears that those three years of cuts will be in the range of $400 to $430 million per year.”

Federal procurement accounts for nearly one-third of Virginia’s economy and defense spending alone is responsible for nearly one-in-five jobs in the Commonwealth.

Stan Soloway, president of the Professional Services Council, an industry association, said the Pentagon meeting provided important clarification.

“Based on today’s discussion, the department’s focus for services contract reductions over the next three fiscal years will be on a subset of advisory and assistance services contracts, primarily involving staff augmentation requirements, which had a baseline of over $4 billion in spending in fiscal year 2009,” Soloway said.

Both Gates and Ashton B. Carter, undersecretary of Defense for acquisition, technology and logistics, have targeted service contracts for greater scrutiny. About half of the $400 billion the Pentagon spends annually on contracts is for services, such as technology support, weapons maintenance, transportation and facilities upkeep.

“We don’t even have a standard way of talking about services,” Carter told reporters during a September briefing on new rules for contracting. “It’s as though you were buying weapons and never distinguished between planes, ships and tanks. There are a lot of different kinds of services; they all require different managerial structures, they all have a different industrial base. This is a very rich area and because there is so much money, we really do believe we can do a lot better for the taxpayer.

— by Katherine McIntire Peters – GovExec.com – December 21, 2010

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