October 4, 2010 by ei2admin
The Small Business Administration finally has started to implement a contracting program for women who own small firms, one decade after Congress first authorized it.
On Monday, SBA filed a final rule creating the long-awaited procurement program, which focuses on 83 industries in which women are underrepresented in the federal contracting marketplace. Program participants will be eligible for set-aside deals of less than $3 million for most contracts and $5 million for manufacturing. The rule will appear in the Federal Register on Thursday.
“Despite their growth and the fact that women lead some of the strongest and most innovative companies, women-owned firms continue to be underrepresented in the federal contracting marketplace,” SBA Administrator Karen Mills said. “This rule will be a platform for changing that by providing greater opportunities for women-owned small businesses to compete for and win federal contracts.”
The final rule closely mirrors a proposal the Obama administration first floated in March. SBA received more than 1,000 comments on the proposed rule, but ultimately made mostly minor changes.
To be eligible for the program, a firm must be 51 percent owned, controlled and primarily managed by one or more women who are U.S. citizens. The firm also must qualify as “small” in its primary industry.
SBA officials identified the 83 eligible industries based on a combination of the share of contracting dollars awarded to women-owned firms and the share of contracts awarded. This is a departure from the previous rule by the George W. Bush administration, which identified only four industries in which women-owned small businesses were underrepresented, based solely on the share of contracting dollars.
Women-owned small businesses will be allowed to self-certify for the program, or be certified by a third party, such as an industry association. Companies will be required to submit proof of eligibility to an online document repository that SBA will maintain.
To avoid the fraud that has plagued many of the other small business socioeconomic programs, the agency will examine firms’ documentation and seek punitive actions against ineligible businesses that improperly attempt to participate.
Advocates expect the program will help the government reach, for the first time, the federal statutory goal of awarding 5 percent of all contract dollars to women-owned small businesses.
“The shortfall between the contracting dollars awarded to women and the paltry 5 percent goal has been in the range of $5 [billion] to $8 billion annually,” said Margot Dorfman, chief executive officer of the U.S. Women’s Chamber of Commerce. “We are confident that, with this program, the federal government will finally have the tool necessary to bring fair access to contracts for women-owned firms. We look forward to reviewing the final rule — and hopefully, to seeing an end to our legal claim against the SBA.”
The women-owned small business program has gone through a host of delays, rewrites and litigation during the past 10 years.
In 2000, President Clinton signed the Equity in Contracting for Women Act, allowing the government to reserve contracts for women-owned small businesses in industries where females historically were underrepresented.
The program sputtered, however, during the Bush administration. A 2004 Women’s Chamber of Commerce lawsuit forced Bush officials to draft a proposal. But the 2008 plan set off a firestorm of complaints from lawmakers and women’s advocates, who accused SBA of choosing the narrowest methodology for determining underrepresentation. The Obama administration decided last year to scrap existing proposals and draft a new, comprehensive rule.
SBA now has 120 days to implement the program. The agency plans to use that time to educate and train federal contracting officers on the new requirements and to finalize a database of eligible companies. The program should be officially up and running by early February 2011, according to SBA spokeswoman Hayley Matz.
- by Robert Brodsky – GovExec.com – October 5, 2010
September 29, 2010 by ei2admin
In the span of just two days last week, three government offices issued advice about improving the $550 billion per year federal procurement system long plagued by waste and inefficiency.
On Sept. 14, the Office of Management and Budget outlined in a memo ideas about how to “save money, reduce risk and get better results” from government contracts. On the same day, the Defense Department released guidance for “obtaining greater efficiency and productivity in defense spending.” On Sept. 15, a presidential task force published its recommendations for improving federal contracting opportunities for small businesses.
The flurry of top-level attention is a welcome sign that the Obama administration is serious about reforming procurement at a time of fiscal constraint and budget deficits.
But the recent directives also unintentionally underscore the immediate need for better coordination among agencies and a more coherent reform agenda. Examined side by side, they reveal conflicting guidance that could sow even more confusion in a world so complex it vexes the most sophisticated lawyers and accountants. “The rule set becomes further confusing through these many efforts, and makes me worry what exactly will be the ‘real’ rules as those leading these initiatives depart and new ones arrive,” former Air Force Secretary Michael Wynne said in an interview.
Consider, for example, last week’s guidance about how the government should go about finding the best vendors and suppliers. The OMB memo recommended “pooling the federal government’s buying power” in pursuit of strategic sourcing. The president’s small business task force, on the other hand, urged “strategies to prevent unjustified contract bundling,” or aggregating in one contract supplies or services “previously provided or performed under separate smaller contracts.”
So what should a procurement official do? Create efficiencies and drive cost savings through pooling, or create more opportunities for small business by eschewing bundling?
To be sure, there could be scenarios in which these two policies actually can complement each other, but that’s not necessarily self-evident to procurement officers and others involved in government contracts on a day-to-day basis.
There are other potential conflicts in the directives. All three documents urge data standardization, for example. But the small business task force focuses on a coding system called the North American Industry Classification System while the Defense memo prefers the Product Service Code. And there are other standards out there, such as the United Nations Standard Products and Services Code used in two governmentwide systems. The documents’ diverging guidance on competition and contract types also could confound government contracting officers.
To avoid such confusion there must be better coordination among the offices entrusted with the important work of reducing costs and eliminating waste in federal acquisitions. Here are some suggestions:
- Governmentwide procurement reform should be centrally coordinated, preferably at OMB. That doesn’t mean every initiative must be run from the White House, but there should be enough central oversight to identify and address potential conflicts.
- The implementation of reform initiatives should be formally designed with other efforts in mind. “With the plethora of rules that govern the procurement system, it is important that we provide adequate implementation guidance to avoid creating more confusion on the part of the workforce,” says Steven Kelman, a public policy professor at Harvard University’s John F. Kennedy School of Government and a former administrator of the Office of Federal Procurement Policy.
- The reform must speak in a unified voice. Ultimately, the success of these initiatives rests in the hands of thousands of government professionals, as well as the vendor community. Leadership across all agencies must commit to and deliver the same message with as little ambiguity as possible.
These communication problems are not insoluble, but left unaddressed they could hamper the administration’s admirable and intense focus on improving procurement. The stars do seem to be aligned, for the first time in years, in support of meaningful reform. We must not miss this opportunity.
By Raj Sharma – GovernmentExecutive.com – September 24, 2010 – Raj Sharma is a visiting fellow at the Center for American Progress who focuses on improving government procurement and supply chain management practices.
September 28, 2010 by ei2admin
The Pentagon’s top acquisition executive told an Air Force audience Wednesday that implementing the set of sweeping acquisition reforms was essential because without them, the nation could not give the troops the capabilities they need as defense budgets get tighter.
And to the Air Force officers and industry representatives in the audience, Ashton Carter said those who hope the department will be unable to achieve the proposed reforms, “you have to consider the alternatives.”
Carter listed as potential consequences: broken or canceled programs, “uncertainty and turbulence in the budget, market uncertainty, difficulty for industry, erosion in the confidence of the taxpayer that they are getting value for their dollars … and foregone military capabilities.”
But on the positive side, Carter said part of the acquisition improvement effort was to “incentivize productivity and innovation in industry” and that “profit is a perfectly appropriate topic” for the defense acquisition executives.
The day after he and Defense Secretary Robert Gates outlined the 23 changes to the contracting process at a Pentagon news briefing, Carter, the undersecretary for acquisition, technology and logistics, told the Air Force Association conference at the National Harbor convention center that the challenge would be implementation.
The acquisition reforms had received a generally favorable review earlier in the day from Aerospace Industry Association President Marion Blakey, who told the AFA audience that many of the initiatives matched the industry’s recommendations.
And as Carter was speaking, the two leaders of the House Armed Services Committee’s acquisition reform panel issued a statement endorsing the new effort.
“We applaud Secretary Gates and Dr. Carter for tackling acquisition reform and for embracing many of the reforms identified in our panel’s report and in the House-passed IMPROVE Acquisition Act to meet this end,” said Reps. Robert Andrews, D-N.J., and Mike Conaway, R-Texas. They said the Pentagon initiatives made it even more important that the Senate pass the House-approved bill.
Carter told the AFA audience that an improved acquisition was necessary because the defense budget was expected to rise only slightly in real terms in future years.
With an end to the double-digit annual increases of the last nine years, he said, the Pentagon leaders concluded “we can’t support the troops with the capabilities they need unless we learn to deliver better value for the defense dollars and thereby achieve the programs we need with the dollars that the taxpayers can afford to give us.”
Carter expressed confidence they could achieve their objectives to save $100 billion over five years from “low value-added activities” so the funds could be shifted to the needs of the warfighters.
He said he was confident of success because they are “reasonable objectives, come at end of a decade of very rapid growth” and have the support of the president, the secretary and Congress.
Carter praised the Air Force secretary, chief of staff and acquisition executive for leading the way on procurement reform, citing their improvements in maintaining the nation’s nuclear weapons system and the effort to build a long-range strike capability at an affordable price.
Addressing a program of high interest for the Air Force, Carter said he could not tell them when officials would announce a winner of the competition to build a new refueling tanker.
“It’s not a secret; it’s unknown. It will be done when it’s done. We’re working very hard to get it right,” he said, reflecting a decade of mistakes and scandal surrounding the program.
– by Otto Kreisher – Congress Daily – September 16, 2010
September 23, 2010 by ei2admin
Defense Department plans to increase competition and cut overhead costs and red tape associated with procuring goods and services have mainly met with praise from industry leaders and lawmakers — the two constituencies most able to derail reform. But full support will depend on implementation details that Pentagon officials are still working out.
Reps. Rob Andrews, D-N.J., and Mike Conaway, R-Texas, longtime proponents of acquisition reform at the Pentagon, praised Defense Secretary Robert Gates and his top acquisition official Ashton B. Carter for issuing guidance earlier this week aimed at increasing productivity and efficiency in spending.
“We applaud Secretary Gates and Dr. Carter for tackling acquisition reform and for embracing many of the reforms identified in our panel’s report and in the House-passed IMPROVE Acquisition Act to meet this end,” they said in a joint statement, adding, “We must learn more about the department’s plans in the weeks ahead, but we look forward to working with DoD on these efforts.”
Likewise, Aerospace Industries President Marion Blakey welcomed the initiative and the department’s outreach to industry in developing the new objectives. “While we have questions regarding some of the proposals, we are confident that the cooperation between government and industry as these initiatives are developed and implemented will produce results that will benefit all stakeholders — most importantly, the warfighter and taxpayer.”
“I don’t think there’s much objection to the objective,” said Stan Soloway, president and chief executive of the Professional Services Council, an industry trade group. “The message has been they want to be collaborative. The message has been this is not about arbitrarily cutting; it’s about finding better ways to do business.”
Nonetheless, industry officials are concerned about some aspects of the reforms. “One area where I do have concern, not covered in [Carter's] memo, is you have the secretary’s directive to lop off 10 percent of at least some category of service contracting. That seems to run contrary to the strategic approach of the Carter guidance,” Soloway said.
Another issue of concern to service contractors is the question of competition. Carter noted that 28 percent of competitive awards for service contracts had only a single bidder and department officials believe they need to inject more competition into those procurements.
“I don’t disagree that they ought to be doing whatever they can to maximize the competition. That is clearly the right objective,” Soloway said. But it’s not unexpected that some percentage of contracts, especially for work that is being rebid, would not attract more than one bidder if the incumbent contractor is understood to be performing well.
“You’re not going to spend your bid and proposal dollars to compete for something where the chances of winning and unseating the incumbent are really extreme. But that pressure is nonetheless always on the incumbent because they know if they stumble there’s any number of predators ready to pounce,” Soloway said.
Contracting officials should make sure their requirements and performance work statements invite innovation, and thereby attract increased competition, he said. “The government talks about innovation, but it’s not at all clear at the end of the day if that’s what’s they’re rewarding,” he said.
Soloway worries budget pressure is driving many contract awards away from best value bidders to lowest-cost bidders.
“In a tight budget environment, the tendency is to squeeze every nickel you can out of something, but that doesn’t necessarily go along with looking for more innovation and better value,” he said.
– By Katherine McIntire Peters – GovExec.com – September 16, 2010 – (C) 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED.
September 22, 2010 by ei2admin
The Naval Sea Systems Command decided it didn’t make sense to create one set of contract specifications for lawn mowing services at a base on the East Coast and another set to cut the grass on the West coast, when in fact one contract would work for both places.
Now the leadership at the Defense Department wants to extend this simple concept departmentwide.
Defense spends $200 billion a year, half its annual budget, on services ranging from lawn mowing to software maintenance. Ashton B. Carter, undersecretary of Defense for acquisition, technology and logistics, wants to rein in that spending as part of an overall plan Defense Secretary Robert Gates announced on Tuesday to cut $100 billion from the Pentagon budget during the next five years.
In a memo to Defense acquisition managers issued on Tuesday, Carter said an ever-expanding set of requirements and missions — “missions-requirements creep,” he called it — for services has contributed to an increase in spending during the past decade. “These requirements often require the same function or service to be provided, but are written uniquely so that competition is limited,” he said in his memo.
Carter directed acquisition managers to develop templates for performance work statements, or definitions for what a unit wants to buy that are included in every solicitation. He cited as an example NAVSEA’s SeaPort-e electronic marketplace, which was created to purchase a variety of services from 2,217 vendors — including lawn mowing services. The platform provides a standard way for a diverse group of large and small businesses to bid on solicitations.
Cindy Shaver, SeaPort-e program manager, said NAVSEA’s experience since the buying platform began in 2001 shows standard work statements enhance competition and save the Navy and vendors time and money.
Officials originally developed SeaPort-e to serve only NAVSEA, but it now manages acquisitions for all the systems’ commands, including the Marine Corps and the Defense Threat Reduction Agency.
SeaPort-e first issued the work statements for the acquisition of basic services needed to maintain bases — such as lawn mowing or maintenance — because these could be easily standardized. Potential bidders then could develop standard responses, which would cut bid and proposal costs. The contractors passed those savings on to the Navy, Shaver said.
In addition, the templates for similar services eliminated potential bidders’ concerns that a work statement was developed with a specific vendor in mind, she added.
NAVSEA plans to develop templates for program management support services. Although support for a ship-building program might seem quite different than the support required for a missile program, the services are the same, Shaver said. Preparation of a budget for a ship project is similar to the budget for a weapons program, and by looking for commonality rather than differences, the Navy can enhance competition and save money, she said.
Carter also directed acquisition managers to award more services contracts to small businesses because they provide Defense with “an important degree of agility and innovation,” with lower overhead costs. SeaPort-e has a high percentage of awards going to small businesses. So far in fiscal 2010, it has issued 4,692 task orders with a total potential value of $6.8 billion, with small businesses taking home 85 percent of the awards.
Shaver said increased competition has been the primary reason it has saved money. The Navy’s goal is to have 100 percent competition on every SeaPort-e task order, a goal that will be met more easily with standard work statements, she said.
– By Bob Brewin - 09/16/10 – NextGov.com – © 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED
September 7, 2010 by ei2admin
Some agency officials say they are following a well thought-out approach to spending what’s left in their fiscal-year information technology budgets — a game plan that defies the myth that departments rush to spend funds before they become unavailable after Sept. 30.
The phenomenon of the year-end spending sprees first came to light in 1980, when the Senate Governmental Affairs Subcommittee on Oversight of Government Management issued a report that found the hurry to obligate expiring funds before the end of the fiscal year often led to a lack of competition, inadequately negotiated contracts and the purchase of low-priority items.
In a 1998 follow-up to that study, the Government Accountability Office concluded agencies’ spending patterns were hard to assess because quarterly budget data, which could show a spike in fourth-quarter spending, was unreliable. Since then, federal auditors haven’t evaluated the issue much, and information on last-minute expenditures can be hard to obtain, according to some academic researchers.
Ramji Balakrishnan, an accounting professor at the University of Iowa who co-wrote a 2007 report on the subject, recently told Federal News Radio that he was able to access figures on year-end spending at U.S. Army hospitals largely because his co-author, a veteran, had contacts inside the military. According to the paper, which was published in the Journal of Management Accounting Research, administrators stockpiled supplies toward the end of a fiscal year, but then saved more money than they spent during the year-end splurge at the start of the next fiscal year.
A trend of precalculated buying seems to be occurring at several agencies with large IT budgets, including the General Services Administration and Veterans Affairs Administration, according to government officials.
In April, Administrator Martha Johnson directed GSA’s chief information officer, Casey Coleman, to complete five high-priority IT projects within 18 months — a feat that Coleman said the agency finished in 10 weeks. The agency’s IT budget for fiscal 2010 is $605.9 million. By quickly wrapping up the projects, which included boosting the capacity of GSA’s networks and adding remote private networks for teleworkers, Coleman was able to focus late-year spending on supplemental purchases for the agency’s increasingly mobile workforce, she said.
“By doing that we really set the foundation for IT modernization for the agency,” Coleman said in an interview with Nextgov. “Now we are in Phase 2 of our modernization program.”
Phase 2 involves purchasing green products. Johnson this summer challenged GSA to eliminate the federal government’s adverse effects on the environment, what’s known as creating “a zero environmental footprint.”
The agency plans to spend its IT money in September on products and services that support the zero e-emissions goal, Coleman said. GSA will invest in videoconferencing equipment; shared printing workstations to replace individual desktop printers, which are rarely used; and a cloud computing tool for e-mail, scheduling and other interoffice communications. Cloud computing is an arrangement that provides online access to hardware and software, eliminating the need to rely on energy-hungry, in-house data centers for IT services.
A contract for cloud services is expected to be awarded in October using fiscal 2010 money earmarked for spending in September.
GSA was unable to provide information on remaining money the agency returned to the treasury at the end of the last fiscal year.
The thinking is that GSA, as the nation’s biggest storefront, can expand the green IT market governmentwide — and perhaps nationwide — by purchasing environmentally responsible goods. Experimenting at the departmental level also might enable GSA to eventually offer governmentwide, eco-friendly IT contracting vehicles, agency officials said.
Veterans Affairs, which has a $3.3 billion IT budget, will spend its remaining fiscal 2011 funds on rolling out systems that can quickly exchange patient records via the Web, VA officials said. Such expenditures should increase access to health care, including mental health services, they added. September money also will support upgrades to benefits delivery systems and the department’s IT infrastructure.
At the end of fiscal 2009, Veterans Affairs let $462,000 in IT-related funding lapse, or become unavailable for new purchases.
In the past, officials at the Environmental Protection Agency spent all of their IT money by the end of the year, but only after careful planning, they said. Last year, EPA did not return any IT-related funding to the treasury. The agency’s enacted IT budget for fiscal 2010 is $465 million.
A significant portion of EPA’s technology infrastructure spending is managed under a business model that quantifies IT needs at the beginning of each fiscal year, officials said. “This process promotes spending that is thought-out and forecasted, and minimizes a potential end-of year spending surge,” EPA spokeswoman Latisha Petteway said.
– By Aliya Sternstein – NextGov.com - 08/26/2010