GSA to make new bid for agency customers

GSA to offer contracts in the areas of cloud computing, transparency

The General Services Administration is gearing up to offer help to federal agencies looking to participate in the Obama administration’s initiatives on transparency and cloud computing, a GSA official said today.

GSA hopes to win customers that otherwise might have developed their own contracts or services.

“We see the administration’s requirements, we respond by initiating some kind of contract action, and make it fast and easy for government agencies to use,” said Ed O’Hare, the new assistant commissioner for Integrated Technology Services (ITS) at GSA's Federal Acquisition Service. He spoke at a FedSources breakfast meeting.

Obama administration officials have created numerous Web sites, such as Recovery.gov and Data.gov, to offer more information to the public. The new chief information officer, Vivek Kundra, is also moving ahead on the use of cloud computing.

O’Hare described cloud computing as a data center wrapped up with software as a solution. He wants to make it possible for agencies to buy such services using government credit cards, especially when they’re under deadline.

“You don’t have to go to the CIO, you don’t have to go plan it, you don’t have to go buy servers or digital maps or do” certification and accreditation, O’Hare said. Instead, he would like agencies to be able to log onto a Web site, answer a few questions about their needs and then, “Boom, check out, you got it.”

With O’Hare as the chief of ITS, experts now expect greater attention to day-to-day operations. They say he has been on the industry side of GSA and worked inside the agency, and therefore understands how ITS runs.

When John Johnson retired earlier this month as assistant commissioner for ITS, major contracts had been awarded and customers were placing orders. That leaves O’Hare to deal with how the office runs.

“My job is to make it work,” O'Hare said. He wants to make ITS and GSA’s information technology services faster, better and cheaper than what other agencies can offer.

He also talked about reducing the time it takes to get an IT contract on GSA’s Multiple Award Schedules program. Contractors are frustrated because it can take months to get on the IT Schedule 70 or modify one of those contracts.

“I know we’ve got to do better,” O’Hare said.

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Obama signs law to reform weapons buying

The law puts checks on big-ticket weapons acquisitions to keep them on schedule and hold down costs.

President Barack Obama signed legislation yesterday to change how the Defense Department buys and tracks acquisitions of major weapons systems.

“When it comes to purchasing weapons systems and developing defense projects, the choice we face is between investments that are designed to keep the American people safe and those that are simply designed to make a defense company or a contractor rich,” Obama said before signing the bill.

The Weapons Systems Acquisition Reform Act (S. 454) requires DOD to appoint senior officials to assess a project’s performance and analyze underlying causes for any of its shortcomings, such as unrealistic expectations, too little funding, or poor work by a contractor or DOD.

It requires officials to encourage competition, including 10 competition-promoting measures to consider when setting acquisition strategies. It also deals with organizational conflicts of interest, requires a study of earned value management, and sets checkpoints at certain milestones in projects.

The law's purpose is to limit cost overruns before they spiral out of control, Obama said. "Wasteful spending comes from exotic requirements, lack of oversight and indefensible no-bid contracts."

Obama also said this is the first step in fixing how the government buys things. “It reforms a system where taxpayers are charged too much for weapons systems that too often arrive late,” he said. Obama signed a memo March 4 designed to improve the procurement system.

However, acquisition experts say the vast majority of purchases are received as agencies requested.

“By and large the government gets what it wants, when it wants it, for the price it’s wiling to pay,” said Alan Chvotkin, executive vice president and counsel at the Professional Services Council, who spoke this week at a panel discussion about the federal acquisition workforce. However, he said the procurement system still has room for improvements.

At the same discussion, Steven Schooner, an associate law professor and co-director of the Government Procurement Law Program at George Washington University, pointed out the Obama administration views contractors as lining their pockets at the taxpayers’ expense. Schooner said the president, Congress and the news media can’t treat contractors as pariahs because the government can’t operate without contractors’ support.

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Experts: Acquisition jobs offer few incentives

Federal contracting careers losing appeal

Federal acquisition employees have no good reason to continue their careers in government procurement, a panel of experts said May 19.

Contracting specialists have been relegated to ordinary positions at agencies after once being held in high esteem, said Steve Kempf, assistant commissioner of acquisition management at the General Services Administration’s Federal Acquisition Service.

“I think we’ve lowered them in the food chain,” said Kempf, a career acquisition employee. When Kempf entered the field two decades ago, contracting officers were revered and had their own offices. He said today though they’ve been downgraded to cubicles.

His point was an underlying theme of a discussion among eight government acquisition experts hosted by the congressional Smart Contracting Caucus. They said the acquisition community is being criticized by Congress and the news media, which pounce on mistakes regardless of whether they are fraud or honest errors.

“Contracting officers get beat down a lot,” Kempf said, adding that one mistake could end a career.

“Frankly, they have every reason to fear for their careers,” said Steve Schooner, an associate law professor and co-director of the Government Procurement Law Program at George Washington University.

Scott Amey, general counsel at the Project on Government Oversight, said oversight and accountability aren’t punishment. However, overseers inside and outside government need to determine when an error is fraud or an honest mistake.

Despite the fear of making a career-ending error, contracting officers today focus on accomplishing as much as possible in a short time, the experts said.

“Their incentive is volume,” said John Needham, director of acquisition and sourcing management at the Government Accountability Office.

Government spending has increased dramatically in recent years — nearly doubling since 2000 — and the size of the overall workforce has increased only minimally. The workload pressures are stressful for acquisition employees. They hope they don’t make a major mistake, but they don’t have time to check all the details of each acquisition, experts said.

There are few other incentives for acquisition employees to stay with the government. The private sector can offer them more money and benefits. Furthermore, the government retirement system creates incentives for employees to leave for the private sector, said Rep. Darrell Issa (R-Calif.), a caucus member and ranking member of the House Oversight and Government Reform Committee. Experts also said it takes months to get a job with the government because of its broken hiring system.

Overall, the field has lost its luster because it’s now an administrative job, the panelists said.

Members of the younger generation recognize that and are not attracted to the acquisition field. Schooner said the descriptions of government openings on USAJobs.gov are generic and boring. “The jobs just don’t smell good,” he said.

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Supplemental bills would restrict award fees

Congress is working to restrict award fees for contractors’ work.

The House passed its fiscal 2009 Supplemental Appropriations Act (H.R. 2346) on May 14 with a provision that would not allow the Defense Department to spend its money on award fees to defense contractors unless DOD judged their work using set criteria.

The bill would boost the importance of the guidance on award fees in the fiscal 2007 National Defense Authorization Act. That law required the defense secretary to write rules on how DOD should appropriately link award fees to acquisition outcomes. The law bolstered checks on what is good contractor performance worthy of the extra money.

In particular, the authorization law required, among other things, guidance on how to judge performance, determine if a contractor should get even a percentage of the award for satisfactory work, and analyze whether award fees actually work to improve contractors' work.

Also on May 14, the Senate Appropriations Committee also approved its version of the supplemental bill (S. 1054) that has a similar provision that would restrict award fees.

The provisions align with a March 4, 2009, memo from President Barack Obama designed to stop the use of cost-reimbursement contracts, including ones that would pay for contractors’ cost plus an award fee for reaching certain performance measures.

“We will end unnecessary no-bid contracts and cost-plus contracts that run up the bill that is paid by the American people,” Obama said at a press conference in March. Obama predicted his reforms would save the government $40 billion each year.

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Acquisition Workforce: Clerk vs. Businessman

Government officials have been concerned for several years about the coming wave of retirements by federal employees, especially in the field of acquisition. But the Obama administration sees a real upside.

In its fiscal 2010 budget proposal’s Analytical Perspectives, the administration writes:

The retirement wave also presents an opportunity to reform and re-energize the federal workforce by re-evaluating what the workforce does and how it does it. It will provide an opportunity to transform the government’s workforce capacity to address 21st-century challenges by implementing 21st-century systems and processes to acquire, develop, engage, compensate, recognize and effectively retain talented employees.

At a procurement conference on Thursday, a former Army contracting officer said the retirement wave will allow the acquisition workforce to become a new breed of thinkers and strategists. And the days of procurement clerks who have for decades pushed their papers and rarely taken time to consider business strategies will fade away, he said. Meanwhile, he said the incoming workforce will arrive with a business-savvy outlook, instead of the bureaucratic rubber-stamping of program managers’ demands.

He said the retirees’ replacements will come with a 21st-century mindset and want to be more involved throughout the process. They will want to find the best solutions for a contract — sort of like bargain hunters. The incoming generation of new workers wants to make a difference in their field, and that will make a huge difference in contracting. The incoming generation won’t clock out of work as soon as their shift is over as “the clerk generation” does, he said but they will stick around until the work is done.

That workforce will also learn that the actual procurement is only one small piece of a broader process known as acquisition. It’s a change in thinking that acquisition leaders are trying to incorporate today. Purchasing along with planning out strategies before and managing contracts after they’re awarded entail acquisition. Contracting officers, contracting officer’s technical representatives and even program managers are parts of the acquisition.

However the former contracting officer said, the mentality of the 21st-century workforce may not take hold until the retirement wave hits.

Will the retirement wave have such an effect?

IG finds conflict in the acquisition regulation

The Federal Acquisition Regulation may have conflicting language, Defense Department auditors said in a report.

The FAR requires that small businesses get an advantage over other companies if a contracting officer can find two responsible small companies that can offer reasonable bids. That is known as the Rule of Two, and last year the Government Accountability Office ruled that it applies to task and delivery orders.

Meanwhile, another section of the FAR states: “The contracting officer must provide each awardee a fair opportunity to be considered for each order exceeding $3,000 issued under multiple delivery-order contracts or multiple task-order contracts.”

In a report released May 6, DOD's inspector general’s office found the conflict as it audited the Navy’s SeaPort Enhanced (SeaPort-e) indefinite-delivery/indefinite-quantity contracts.

The IG’s auditors said the SeaPort-e program manager failed to adequately compete 39 of 133 audited task orders when the manager allowed small business set-asides. The 39 orders were worth $469.3 million. The program manager deviated from the FAR by not ensuring contracting officers performed adequate market research on the small business set-aside task order contracts. As a result, Navy officials may not always receive the best value for the SeaPort-e customer, the IG said.

However, the manager argued that the Small Business Administration supported the set-asides and large contractors signed agreements that included language on the set-asides. Nevertheless, the IG wrote, “Neither the SeaPort-e program manager nor the Small Business Administration has the authority to override” the fair opportunity provision of the FAR or the statute on which it's based.

The Defense Acquisition Regulations Council and the Federal Acquisition Regulations Council should determine if the FAR needs more specificity on what’s allowed when setting aside a task order for small businesses, the IG wrote. Navy Department officials intend to bring up the conflict to regulators for a clarification, the report states.

In the IG’s discussions with GAO's General Counsel Office, GAO said its October 2008 decision on the Rule of Two has caused confusion on the topic of small-business set-asides and full competition. GAO officials said legislative action will likely be necessary to clarify the intent of the Rule of Two, according to the IG’s report.

The Rule of Two is in FAR Part 19. The fair opportunity provision is in FAR Part 16.

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The hidden force in acquisition

Some of the most influential people in the federal acquisition community are also the least well known.

They make critical decisions at every step of the acquisition process, yet the Federal Acquisition Regulation does not mention them. Any reform initiative that does not take them into account is bound to fail, yet the Office of Federal Procurement Policy rarely takes note of them in memos.

But that is beginning to change. Slowly but surely, federal agencies are coming to realize that contracting officer’s technical representatives (COTRs) play an essential — if underappreciated — role in government contracting.

Even the Government Accountability Office is trying to get a handle on the community.

“We have no really clear picture of how many of those there are, what their training and skills are, and so forth,” said John Needham, director of acquisition and sourcing management at GAO, during an April 28 congressional hearing on the Defense Department’s acquisition workforce. “That’s one area we saw as a need.”

COTRs serve as a vital link between their better-known colleagues — program managers and contracting officers — and help translate operational requirements into executable and manageable contracts.

“They’re the principal people who bring these worlds together,” said Robert Burton, former deputy administrator at OFPP and now a partner at Venable law firm.

COTRs also keep tabs on how well contractors are meeting their requirements. Agencies have learned the hard way that they cannot hand that task to new employees or pile it on an already overworked acquisition staff.

So as contracting spending rises and the complexity of contracts increases, COTRs have become the linchpin of government contracting.

Performance pressure points

Agencies are finally beginning to appreciate COTRs because agencies are spending much more money on services compared to a decade ago. For example, DOD spent $202 billion through services contracts in 2008, compared to $92 billion 2001.

“There are a lot more moving parts to keep hold of and a lot more contracts to manage today,” said Mary Davie, assistant commissioner of the Office of Assisted Acquisition Services at the General Services Administration’s Federal Acquisition Service.

Davie took a job as a COTR in 1989, when she was 23 years old. It was a good way to get some on-the-job training, she said. She made sure that products came in on time and in good condition. “They were sort of turning to me for getting what was needed and keeping the project on schedule,” she said.

In recent years, agencies have been under pressure from the White House and Congress to determine whether they are getting their tax dollars’ worth from contracts, said Elizabeth Miller, vice president of Government Horizons, a nonprofit acquisition training organization.

Therefore, they are trying to develop more sophisticated ways to measure contractor performance. Those metrics and disciplines such as earned value management can get complicated when it comes to technical services contracts.

COTRs are responsible for building such metrics into contracts and sounding the alarm when contractors go astray. Communication must happen early and often, Miller said. “It’s not about waiting for the monthly progress report to find out, ‘Oh, we have a problem.’”

Davie said COTRs also explain to contractors what the program managers need and what the contracting language requires of them.

In addition, COTRs must keep in close touch with contracting officers about progress and suggest modifications if things are off kilter, experts say.

“The COTRs go back and forth,” Burton said.

COTRs come of age

With President Barack Obama’s push to put more contracting information online for public consumption, several experts said COTRs’ duties will become more visible, which will force them to manage projects even more carefully.

With billions of stimulus dollars to spend, the increased burden on COTRs worries many inspectors general. They know agencies will have their hands full managing that money, which comes with new demands from the administration to track where the money is going and what it yields.

Numerous IGs have issued reports recently detailing their concerns about their acquisition workforces. The American Recovery and Reinvestment Act’s requirements seem to demand larger acquisition workforces than agencies have. Existing employees are already struggling to manage increasing sums of money and transactions, even without the stimulus funds.

Procurement officials expect that actions associated with the stimulus funding will be complex, requiring more rigor and oversight. That will, in turn, increase the demands on COTRs and other contract specialists, according to a recent report from the Energy Department’s IG.

In today’s environment, COTRs can’t be young people fresh out of college, as they often were in the past, officials say. They must be savvy and experienced experts in their fields who understand both the procurement and program management sides of acquisition.

In recent years, “there was a shifting expectation for a higher level of competence in understanding and collaborating on the ‘how’ versus the ‘what,’” said Chuck Harris, a former Air Force contracting officer and now president and chief executive officer of Inflection Point Solutions, a training and consulting company.

It hasn’t always been that way. DOD, the world’s biggest buyer, has not always filled the slots for contracting officer’s representatives -- DOD's equivalent to the COTR -- with the best people. It is not uncommon for CORs overseas in war zones to have no training. And generally, all COR training is geared for times when operations are slow, so it is barely adequate when situations get tense, the Senate Armed Services Committee wrote in a report last year.

Assigning a soldier to the role of a COR would seem like a good way to boost someone’s career by providing a launching point into the contracting field. But too often, the soldier who takes on that role doesn’t have any relevant experience, the committee wrote. Then the situation gets worse.

“The COR assignment is often used to send a young soldier to the other side of the base when a commander does not want to have to deal with the person,” the committee wrote.

The Army wants to correct the situation. Officials are spreading the word about CORs’ role in contracting and are teaching Army commanders, staff members and people outside contracting the value of CORs.

“The COR’s role is key to ensuring that the government is getting what it is paying for with appropriate oversight,” Edward Harrington, deputy assistant secretary of the Army for procurement, told a House subcommittee in March.

In April, Jeffery Parsons, executive director of the year-old Army Contracting Command, said an entire division is dedicated to fixing its COR program. And the Army published the “Deployed COR Handbook” to supplement CORs’ training when they’re out in the field.

Sizing up the COTRs

But even as COTRs grow in importance and receive more recognition, officials are still struggling to form a clear picture of the community.

One official called it a mysterious group because agencies and analysts know so little about them. They’re often hidden behind full-time jobs in areas such as information technology or engineering.

In its 2008 report on the acquisition workforce, the Federal Acquisition Institute said it couldn’t identify COTRs because agencies’ records and official guidance about them are so ambiguous. It deferred analysis of COTR demographics until the role is better defined and agencies keep better records.

Officials recognize that the COTR’s role is also growing in importance because the future of government contracting will likely mirror the recovery act rules.

“The program managers rely on them, and the contracting officers rely on them,” Burton said. “They’re really the bridge.”

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GSA schedules might get state, local business

Cities and states soon might have more access to the General Services Administration’s Multiple Award Schedules contracts, if several new bills reach the president’s desk.

Last week, Edolphus Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee, introduced legislation that would allow state and local governments to use stimulus money to buy from among the more than 11 million supplies and services available on the schedules contracts.

Towns’ bill, the Enhanced Oversight of State and Local Economic Recovery Act (H.R. 2182), pushes forward his notion that the schedules contracts should be open to more than federal agencies. In 2008, President George W. Bush signed Towns' Local Preparedness Acquisition Act, which gave states and cities access to law enforcement and security-related schedule contracts.

Similarly, Rep. Kendrick Meek (D-Fla.) introduced the Green Acquisition Act (H.R. 1766) on March 26. It would grant state and local governments access to the schedules contracts for environmentally preferable commodities and services. The bill was sent to Towns’ committee for consideration, and the legislation received a positive response, said Adam Sharon, a spokesman for Meek.

Meek introduced the bill after talking with several Miami-Dade County officials about the money they would save by buying green products from the federal schedules contracts.

“The ability to obtain green goods and services with this method will make our taxpayers’ dollars go a long way,” County Commissioner Sally Heyman said in April. She estimated that state and local governments would add $1 trillion in additional sales annually by opening GSA’s schedules.

Since 2002, state and local governments have been allowed to buy information technology products and disaster recovery products from GSA schedules using cooperative purchasing agreements.

Those agreements have boosted GSA’s sales on its IT Schedule specifically. Orders from states and localities jumped from $17.9 million in fiscal 2003 to $521.8 million in 2008, according to Input, a market research firm. And 2009’s orders are outpacing 2008, despite the economic downturn.

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