How a lawn mowing contract is changing Defense acquisition
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
Agencies are getting too attached to incumbent contractors, watchdog finds
September 3, 2010 by ei2admin
Federal agencies are failing to maximize opportunities to make contracts competitive, often because of poor management or because officials have grown comfortable with incumbent contractors, according to a new report from the Government Accountability Office.
The watchdog reviewed trends in noncompetitive contracts during the past several years and discovered a number of questionable business practices by contracting officials and program managers. GAO found 44 percent of all federal contracts in fiscal 2009 either were not placed up for competition or attracted only one bid.
The report (GAO-10-833), which the House Oversight and Government Reform Committee requested, highlighted contracts that appeared to be written with such narrowly defined requirements that only one company could reasonably compete. In other instances, program offices pressed for follow-on contracts to be awarded without competition to the existing company because it would be more expeditious since the offices already had formed a relationship with the firm.
“A Navy program official stated that, when one contractor has been performing a requirement for many years, it is easier to go back to the contractor personnel who understand the requirement rather than taking the time to find a new vendor,” the report said.
From fiscal 2005 to fiscal 2009, the reported obligations for noncompetitive contracts declined from 36 percent of total procurement spending to 31 percent, investigators found. But contracts in which only one offer was received remained steady at around 13 percent.
The report cited a host of reasons for contracts with only one bid. Often, companies are scared off by a competent incumbent contractor considered an overwhelming favorite to continue with the work, the watchdog said. Other times, solicitations might appear to favor one company, the report noted. In addition, some vendors that might have competed for work are forming teams to submit one offer, industry officials told GAO.
“Given the nation’s fiscal constraints, it is not acceptable to keep an incumbent contractor in place without competition simply because the contractor is doing a good job, or to resist legitimate suggestions that competition be imposed even though it may take longer,” the report said.
GAO recommended the Obama administration assess the reasons contracts are receiving only one offer. Daniel Gordon, administrator of the Office of Federal Procurement Policy at the Office of Management and Budget, has argued that one bid is not enough to constitute competition and that the practice limits agencies’ ability to consider qualified alternatives.
Recent OFPP guidance requires agencies to begin separating data collected on these contracts and to code them as “noncompetitive procurements using competitive procedures.” Gordon concurred with GAO’s recommendation.
But, it might be difficult to get sound data on contract competition. GAO randomly selected a sample of 107 contracts and orders that were coded as noncompetitive or receiving one bid, and reviewed the contract files. Eighteen percent of the contracts were coded incorrectly — as either not competed when they had been, or as competed with one offer received when they had not been competed at all, the report said.
In fiscal 2009, the Navy and the Air Force had some of the worst competition rates, with about 45 percent of contracts not competitive, GAO said. The Energy Department and Office of Personnel Management had among the lowest rates of noncompetition, at 7 percent and 5 percent, respectively.
The most common explanation for failing to conduct any competition was that “only one reasonable source” was available to perform the work, according to the GAO sample. In some cases, such as an Immigrations and Customs Enforcement contract for communications equipment and supplies, one contractor essentially owns the market.
In other instances, particularly with Defense Department weapons programs, the government is hamstrung by a lack of access to proprietary technical data, according to the watchdog. Companies’ expertise, experience and reluctance to sell technical data for a reasonable price generally preclude the possibility of competition, the report said.
Several contracting officials blamed the lack of competition on receiving short notice from program offices for acquisitions. With little time to conduct market research or properly define requirements — elements of a robust acquisition process — contracting officials often turn back to the incumbent, investigators said.
The second most frequently cited exception to competition was the authority to award sole-source contracts to firms in Small Business Administration’s 8(a) business development program. Through the program, agencies are encouraged to award participating 8(a) firms noncompetitive contracts worth less than $3.5 million when procuring services, or less than $5.5 million for manufacturing.
– by Robert Brodsky – GovExec.com – August 26, 2010