October 3, 2010 by ei2admin
The White House has created an interagency working group to stop counterfeit goods from entering the supply chains that support Defense Department weapons systems and private sector electronic goods, the nation’s first intellectual property czar said on Tuesday.
“The implications of DoD procuring counterfeit goods are negative and obvious,” said Victoria Espinel, the U.S. intellectual property enforcement coordinator at the Office of Management and Budget. “Our understanding is that this is a problem that a number of our agencies are struggling with.”
Espinel made her comments at an event hosted by the nonpartisan Information Technology and Innovation Foundation, before the start of a panel discussion on strengthening enforcement of IP rights in countries that systematically extort intellectual property. Congress created the IP coordinator position in 2008, to respond to concerns that government agencies responsible for protecting intellectual property were not coordinating.
This summer, the White House issued a joint strategic plan to combat IP theft that called for establishing a governmentwide working group to study how to reduce the risk of agencies procuring counterfeit parts. The framework stated the task force should include representatives from the National Security Council, Defense, NASA, General Services Administration, Commerce Department, Small Business Administration and Homeland Security Department.
A January 2010 Commerce survey found that nearly 40 percent of entities across the procurement supply chain discovered counterfeit electronics between 2005 and 2008. The semiconductor industry has aired concerns that counterfeit chips mislabeled as military-grade can lead to fatal malfunction in military and aerospace parts, according to the White House’s strategic plan.
On Tuesday, Espinel observed the IP problem is one issue where there is consensus in Congress. “I feel very lucky to be working in an area where there is great bipartisan support,” she said. Democratic Sens. Tom Carper of Delaware and Sherrod Brown of Ohio in an Aug. 6 letter to Ashton B. Carter, undersecretary of Defense for acquisition, technology and logistics, expressed fear about the potential for counterfeit parts to delay military missions and seriously affect the integrity of weapons systems.
The senators’ letter referenced the Commerce study and a March Government Accountability Office report that found Defense did not have specific procedures for detecting and preventing counterfeit parts from infiltrating the supply chain.
China, the country most frequently identified as the source of counterfeit items, should be treated with “a carrot-and-stick approach,” Espinel said. “China is both an economically sensitive issue and a political sensitive issue.”
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.