Handling Ethics Related Disputes in Federal Government Contracting

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ETHICS AND DISPUTES

“NATIONAL DEFENSE MAGAZINE”

“Proper business ethics is not only good business, but also required by the Federal Acquisition Regulation.

However, there are times when contractors and the government do not have the same view of what proper business ethics are.”


“Industry executives must know how to handle delicate situations where the government — acting either as customer or as regulator — represents that a contractor’s ethics program or level of ethical business operations are not as robust as they should be.

This discussion must begin with a foundational understanding of the Federal Acquisition Regulation requirements for business ethics and conduct.

According to FAR 52.203-13, contractors must: maintain a written code of business ethics and conduct that is available to all employees performing on government contracts; exercise due diligence to prevent and detect criminal conduct; promote a culture that encourages ethical conduct and a commitment to compliance with the law; comply with the Mandatory Disclosure Rule; and train employees and consider training agents and subcontractors on the code of ethics.

They must also: maintain internal controls and employ timely corrective measures following discovery of issues and problems; have a reasonably high-ranking individual in charge of the compliance program; conduct periodic reviews and evaluations of the ethics and compliance program and address shortfalls; maintain a hotline for reporting concerns; and discipline individuals who fail to “take reasonable steps to prevent or detect improper conduct.”

This rule has been in existence long enough that there is little question about what is required. But take a moment to ponder what is not required. Contractors do not have to spend a certain amount of money on ethics and compliance. They have the ability to scale their programs according to business size and risk. For example, smaller companies do not need to adopt the business ethics programs of multibillion-dollar prime contractors.

Perhaps most importantly, contractors are permitted to make mistakes. They do not have to be mistake-free to continue doing business with the government. After all, we are not infallible as a species.

A common source of friction between the government and contractors concerns the robustness of a company’s business ethics program. It is tempting for the government to represent that because there was a problem, the contractor’s business ethics program is not up to par. But that does not necessarily follow. The Federal Acquisition Regulation expressly calls for prompt corrective action following mistakes, making clear that mistakes are expected even for contractors with the most robust of programs.

The requirement is to address any weakness in controls that permitted mistakes, thereby reducing the likelihood of recurrence. Naturally, prompt and appropriate punishment for missteps will be expected when called for under the circumstances.

Another frequent source of friction is for the government to draw a negative inference from contractors’ profit motives. “They’re only in it for the money” is a common refrain in the government enforcement and integrity communities. The inference being that a desire to maximize profit will cause companies to cut corners or engage in unethical business practices to make a buck. But, for the overwhelming majority of contractors, this suspicion is misplaced. Profit motive drives industry to seek to keep customers happy so they can get the next contract.

These friction points periodically cause government staff to make representations about the lack of robustness of a contractor’s ethics, or the status of its ethics and compliance program. A common industry response to such a representation is to feel like the observations are undeserved but largely without effect, and therefore can be worked through or ignored. But contractors ignore those statements at their peril. The danger in these observations is that the Federal Acquisition Regulation contemplates suspension and debarment — exclusion from federal contracting — and contract-specific responsibility determination refusals to award contracts to companies that lack the requisite satisfactory record of business integrity and ethics. Examples include FAR 9.4 and FAR 9.104-1(d).

Accordingly, contractors are well advised to address these government representations head-on. Asking what, specifically, is the concern and continuing the line of questioning until the government’s concerns are exhausted can help clear the air. Many times, one or two issues that are easily addressed lie at the core of the government’s consternation. Making progress on those points can eliminate the government’s worries and strengthen the relationship with the customer or regulator.

Other times, the concerns relate to matters that are not contractually required; for example, not increasing the contract’s scope without compensation. Those interactions require more delicate handling, but it may be better to have difficult interactions than to permit mistrust to fester.

Further, contractors might consider keeping records of these conversations in their contract file. These contemporaneous records can assist in responding to past performance evaluations and inquiries from suspending and debarring officials that may result from lingering government concerns about contractor ethics.”

http://www.nationaldefensemagazine.org/articles/2018/5/30/how-to-handle-ethics-related-disputes

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American Military Spending Comports Well With Law Of Diminishing Returns

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The MIC and Technology © Jared Rodriguez

Image: © Jared Rodriguez

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

” If the current process remains unchanged, within a generation the United States military will consume $2 trillion a year but will not be able to do much because the few weapons that are purchased will be too precious to place in harm’s way.

That last point will probably be academic because the one fighter plane we could afford will be down for maintenance anyway.”


“There’s no doubt the Military-Industrial-Congressional Complex has an obsession with whiz-bang gadgetry. Hardly a day passes without someone from the defense “intelligentsia” braying about the need for increased taxpayer investments so the United States can maintain its technological overmatch or create stronger partnerships with Silicon Valley to achieve a third offset strategy. These often sound like weighty concepts, worthy of the taxpayers’ money. In the end, however, they are little more than slick sales pitches. The Pentagon’s predilection for choosing needlessly complex and expensive weapons not only threatens to bankrupt the nation’s treasury, it also imperils the national defense by producing a diminishing and far more fragile military force.

The character of American military spending comports quite well with the law of diminishing returns.

The Project On Government Oversight first delved into this problem by publishing a report by retired Air Force Colonel Everest Riccioni titled, Is the Air Force Spending Itself into Unilateral Disarmament? in August 2001. He noted that the F-22, billed as a supersonic fighter capable of flying undetected deep into Soviet airspace to intercept nuclear bombers, had even then already fallen short of the lavish promises used to sell the program. He also predicted the program’s complexity would continue to drive up the costs to a point where the United States would never be able to afford the aircraft in the numbers originally envisioned. “The F-22 fleet initially was projected at 800 aircraft and a total cost of $40 billion. The idea of this fleet was that it would provide the air superiority previously guaranteed by 1600 fighters—400 F-15s and 1200 F-16s, all of which were acknowledged to be wearing out,” he wrote. The lessons and recommendations detailed in the report were soon eclipsed by the September 11 attacks and the subsequent War on Terror. While Colonel Riccioni’s work focused on the Air Force, his basic thesis can be applied across all the services. The character of American military spending comports quite well with the law of diminishing returns. We keep spending more and more on the military and get less and less in return. Nearly two decades of constant war have served only to exacerbate many of these problems, and the United States is, if anything, in an even worse position today.

Colonel Riccioni’s predictions turned out to be prophetic, especially in the case of the F-22. Designed to be a replacement for the F-15 air superiority fighter, the Air Force originally planned to purchase 648 F-22s at a program acquisition unit cost of $133.6 million each. The F-15 program had ultimately delivered more than 1,100 aircraft of all variants to the Air Force. Even from the initial planning stages of the F-22 program, the fleet of air superiority fighters began to shrink. Development costs quickly began their inevitable climb because Air Force leaders and contractors sold the program to Congress by overstating the ease of the development process and underestimating the expected costs. This prompted officials to slash the planned production figures in an attempt to offset the rising costs. First came the Bottom-Up Review in 1993, when the planned fleet shrank to 442. Next came the 1997 Quadrennial Defense Review, when officials slashed planned production to 339. In the end, F-22 production totaled just 187 aircraft at an average cost of $350 million each. When the costs for the 10 separate F-22 upgrade programs (read: programs to complete the development that should have happened in the original program) are divided across the fleet, the cost of each rises to over $377 million.

It is easy to see why government officials became so nervous about the costs. In 2001, the Congressional Budget Office anticipated the Air Force would only be able to afford 100 to 175 F-22s and predicted the cost of each would balloon to $350 million a full 10 years before that nearly exact estimate became manifest. Using that information, Colonel Riccioni created a chart showing the cost history of the F-22. He listed the $200 million per aircraft cost threshold that the program was at the time about to breach as “OBSCENE,” with $300 million as “INSANE.”

The architects of the F-35 program did learn some lessons from their F-22 experience, even if they were the wrong lessons from an effectiveness and affordability standpoint.

Only time will tell what will take place with the F-35 program, but there are gathering storm clouds that suggest it could suffer a similar fate. The spiraling costs to maintain the F-35 have already prompted Air Force leaders to consider cutting the planned production run by a third. The service currently expects to buy 1,763 F-35s but may end up cutting 590 because leaders are unsure of their ability to operate and maintain the originally planned fleet.

The architects of the F-35 program did learn some lessons from their F-22 experience, even if they were the wrong lessons from an effectiveness and affordability standpoint. Program leaders are working to buy as many F-35s as possible before anyone has an opportunity to cut short production as then-Defense Secretary Robert Gates did with the F-22 program. At the current rate, the taxpayers will be on the hook for upwards of 600 F-35s before the design can be proven effective through realistic combat testing.

Techno-Centric Warfare Increases Costs but Not Effectiveness

At the very root of this problem is the U.S. military’s techno-centric approach to warfare. This is based on the assumption that victory in warfare can be achieved only when one side in a conflict possesses more technologically advanced weapons than the other side. This is an incorrect assumption. The ideas a force wields in battle matter far more than any other factor. Weapons are simply tools used to implement tactics, which ultimately achieve the operational and strategic goals. Our military needs quality tools to be successful, but it is important to understand what actually constitutes quality in a weapon system. Conventional wisdom holds that the more complex a weapon is, the higher its quality is. This is the view the Military-Industrial-Congressional Complex (MICC) continually pushes when in reality, simpler systems are almost always more effective.

Complex weapons serve the MICC’s interests well. They require numerous subcontracts, which satisfy Congressional interests, as they can be spread into districts all across the country. The representatives of these districts can then campaign on the number of jobs they “created.”

Complex weapons also require a great deal of time to develop. The defense contractors like this because it allows them to milk the development process for profits as long as possible, particularly in a cost-plus contract. They can confidently run up expenses knowing that the government will eventually reimburse them. For example, costs for the USS Gerald R. Ford aircraft carrier have increased by at least 22 percent, from $10.5 billion to $12.9 billion. The program just recently breached this $12.9 billion figure by $120 million to repair the ship’s propulsion system and correct design deficiencies on its weapons elevators.

The Services, or rather, the Services’ senior leaders, like complex weapons because they help justify larger budgets. And by convincing Congress to authorize the purchase of these systems, military officials help funnel taxpayer money into the coffers of their future employers in the defense industry.

The losers in this arrangement are obviously the taxpayers, who continually pay more and more while receiving a smaller and less capable military force for their money, and the people who have to take these systems into battle. The impact on the men and women actually doing the fighting is of great importance.

Many dismiss the diminishing number of weapons as not mattering since technology makes up the difference. The character of warfare has certainly changed in the years since World War II. Then, massive military forces were needed to confront other state-controlled military forces. With the advent of nuclear weapons, conflicts of a similar scale are unlikely to occur again. But this does not mean that numbers no longer matter in warfare. The United States needs to have a force large enough to meet its national security priorities and commitments. Having a smaller force puts a greater strain on the people and machines that remain. The Navy inadvertently staged a demonstration of this phenomenon in 2017 with a series of deadly incidents in the Pacific. Seven sailors died when the destroyer USS Fitzgerald collided with a container ship off the coast of Japan in June. Ten sailors died two months later when the USS John S. McCain collided with an oil tanker in the Straits of Malacca. These incidents occurred in part because the 7th Fleet, with its current complement of personnel and ships, had difficulty meeting all of its assigned missions, according to a Navy review.

The authors of the Air Force’s Air Superiority 2030 report also acknowledged this problem and at least verbalized the need to pursue low-cost systems in order to be able to field larger forces. Only time will tell if any defense officials, civilian or military, actually act on this.

The Simplicity Virtue Versus the Complexity Vortex

C-17 controls

U.S. Air Force Staff Sgt. Bryan Segrist, 452nd Maintenance Squadron, checks post flight controls on a C-17 Globemaster III. (Photo: U.S. Air Force / Staff Sgt. Caroline Hayworth)

 

As a general rule, weapons should be of the simplest possible design while meeting the needs of their intended use. This serves several functions. First, it has a quantitative effect: it keeps the costs under control, which means they can be purchased in numbers large enough to be useful on the battlefield. The more complex a weapon system is, the longer it takes to educate and train troops to operate the weapon. Unit training suffers as well because the force spends an inordinate amount of time on basic maintenance rather than going out and training to use the weapon in the field. And the effects of complexity are cumulative: every extra component added to a weapon system is one more potential failure point. This increases the maintenance burden and increases the chances that the weapon will not be available when it is needed most.

Murphy’s Law looms large in all military operations. The author experienced this numerous times while serving in the Marine Corps. As fearsome as main battle tanks are, they are notorious for breaking down. Every time a tank breaks down in the field, operations are disrupted. Depending on the circumstances and the logistics plan, the effects of these breakdowns can be overcome, but the tempo of the mission will be disrupted and battlefield opportunities, which are always fleeting, can be missed. With this elemental knowledge in place, Service leaders signing off on a new weapon system should opt for the simplest possible designs to minimize potential maintenance problems to greatest extent possible. Doing so will provide Murphy with far fewer opportunities to wreak havoc.

The F-35 provides another excellent example of excess complexity creating debilitating maintenance burdens. Due in large part to the overall complexity of the system, the F-35 had an abysmal 26 percent average fully mission-capable rate in 2017. That means that at any given time, only a quarter of the fleet could be expected to perform all the tasks the F-35 has been designed to perform. There haven’t been many signs of improvement. The availability rates of the F-35 have remained relatively unchanged for the past four years. This complexity vortex actually magnifies the effects of unilateral disarmament. As the complexity of weapon systems increases, costs skyrocket and we can afford to buy fewer and fewer of them. At the same time, the increased complexity makes them more difficult to maintain, so the available fleet shrinks even more. The MICC has trapped itself in a vicious circle of the highest order.

Complexity Vortex Case Studies

Colonel Riccioni’s work in 2001 focused exclusively on aircraft and aerial weapons. But the problem of spiraling costs causing a shrinking force is not confined to military aviation. This is a systemic problem across the elements and Services. Here is a sampling of new weapons programs with a cost comparison to the system they are intended to replace. The dollar amounts have been adjusted to 2018 figures for comparison’s sake.

The USS Gerald R. Ford Aircraft Carrier

USS Ford repairman

A fire controlman aboard the pre-commissioning Unit Gerald R. Ford (CVN 78) installs a pump in the Dual Band Radar cooling system during routine maintenance. (Photo: U.S. Navy / Electronics Technician 3rd Class Elisa Grauberger)

The USS Ford is the first of the Navy’s newest class of super carriers to replace the older Nimitz-class ships. Its function remains exactly the same as the current ships, but Navy and Pentagon leaders decided to add more than a dozen new technologies, including an Electromagnetic Aircraft Launch System (EMALS) and Advanced Arresting Gear to perform the basic function of an aircraft carrier: launch and recover aircraft. Navy leaders promised the new design would reduce acquisition and life-cycle costs. So far, the Ford has cost at least $12.9 billion, $2.4 billion over the originally estimated price tag. The last of the Nimitz-class ships, the USS George H. W. Bush, would cost $7.33 billion today. That is a 76 percent increase for the exact same-sized fleet that does exactly the same thing.

While new ship designs are expected to have some teething problems, the USS Ford has already developed a reputation for being more delicate than its predecessor. The ship’s new electrical aircraft catapult, EMALS, is an example of this. Previous aircraft carriers used steam-powered catapult systems. These needed a larger crew to operate and required miles of piping to move the steam generated by the ship’s reactors, but they have also been proven reliable and robust through the years. The previous system also has a great advantage over the EMALS: crews can repair them without disrupting flight operations for the entire ship. The EMALS requires a massive electrical charge to operate, enough to power 12,000 homes. If one of the Ford’s four catapults breaks down, crews can’t perform maintenance on one catapult without shutting down the rest because the ship’s designers did not include a way to electrically isolate them individually.

This might not seem like a serious flaw, but it is, because the individual catapults have so far demonstrated poor reliability. As of 2017, EMALS has a demonstrated reliability rate nearly 10 times worse than the contracted specifications. Testing officials have reported that because of this, the USS Fordhas only a 9 percent chance of completing a four-day surge, which would be expected at the beginning of a war, without a major disruption.

CH-53 Heavy-Lift Helicopters

CH-53

Marines perform maintenance on a CH-53E Super Stallion helicopter aboard the amphibious assault ship USS Makin Island. (Photo: U.S. Navy / Mass Communication Specialist 2nd Class Alan Gragg)

The Marine Corps is currently upgrading its fleet of CH-53 heavy-lift helicopters. The CH-53 has gone through several versions since it first entered service in the 1960s. The Marine Corps currently operates the CH-53E “Super Stallion.” These helicopters would each cost approximately $41 million today. The Marine Corps plans to replace CH-53Es, of which 172 were originally purchased, with 200 CH-53K “King Stallions,” according to the latest plans. This new version is capable of lifting nearly three times the weight its predecessor can. But as should be expected, this capability comes at three times the cost. Each CH-53K costs $131 million. If the Marine Corps actually purchases all 200 CH-53Ks, the fleet will increase by 16 percent, but it will cost 219 percent more to do so.

The sheer expense of each helicopter creates an efficacy problem for the entire program. Since the Korean War, helicopters have been used by the military to insert troops close to their objectives, deliver supplies, evacuate casualties, and attack targets. Military commanders carefully consider how and when they employ all forces, but they become even more cautious as the price tag of the weapon systems involved increases. The author witnessed this firsthand in Afghanistan when commanders were considering the use of $41 million CH-53Es. Lucrative targets for raids were dismissed in favor of less-valuable targets because commanders were unwilling to take the chance that some of the helicopters used to insert forces would be hit by ground fire. It is not hard to imagine how much less willing they might be to accept responsibility for placing a $131 million CH-53K in a situation where it might be shot down. If a system is too expensive to lose, then it becomes too expensive to use. In that case, the reasonable person would be correct in questioning why the Pentagon bothered with the program in the first place.

Zumwalt-Class Destroyers

Zumwalt crew

Pre-commissioning crew of the future USS Zumwalt (DDG 1000) train to use the common display system console and engineering control system screen navigation (Photo: U.S. Navy / Joseph Battista)

The Navy’s Zumwalt-class guided-missile destroyer program suffered massive cost overruns, which resulted in its curtailment. The original plans called for the construction of 32 ships, but, in another example of the shrinking force, only 3 will actually be produced. The Zumwalts were meant to replace the Arleigh Burke-class ships, of which 65 are still active, with another 9 yet to be added to the fleet, for a total of 77. An Arleigh Burke-class ship costs approximately $1.76 billion. Each Zumwalt-class ship costs approximately $7.5 billion. That is a 326 percent increase in cost per ship, for 96 percent fewer destroyers.

Little information exists about the potential fragility of the Zumwalt design because the ship can’t actually do anything at this point. The ship’s designers originally intended to use it to strike targets onshore with a futuristic advanced gun system. Officials shelved this idea shortly after it emerged that the Long Range Land-Attack Projectiles cost $800,000 apiece.

Conclusion

Colonel Riccioni provided lists of the causes of and solutions to the unilateral disarmament problem. Most are just as valid today as they were 17 years ago. Chief among them are that Department of Defense leadership misrepresents facts to a credulous Congress, and that the contractors that are best able to overstate what they can deliver and understate the expected costs get rewarded when their bid wins. And this entire process is enabled by what Colonel Riccioni called the “Iron Triangle”—the Military-Industrial-Congressional Complex. These three actors are intended to be checks and balances on one another, but instead collude for their own benefit, with the American taxpayers and troops suffering the consequences.

The problem is not rooted in a lack of understanding by those in power. At the 2010 Acquisition Community Symposium, Frank Kendall, then-Undersecretary of Defense for Acquisition, Technology, and Logistics, delivered a briefing in which he echoed many of the concerns Colonel Riccioni raised nine years earlier. Most telling, he included a list of behaviors that contribute to inefficiency in the acquisitions process. These include setting unrealistic goals for programs, creating “optimistic” delivery schedules, and “rewarding high risk bidding practices.” He told the gathering of officials that these behaviors could be changed.

The question remains whether anyone will actually take the necessary steps to correct any of these bad practices.”

http://www.pogo.org/straus/issues/weapons/2018/the-complexity-vortex.html

 

Veterans Administration Looking at Blockchain to Help Track Contract Closeouts

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Block Chain and the VA

“FEDSCOOP”

“The agency issued a request for information seeking industry input on how blockchain solutions can be used in “routine government contract procedures, and in particular, contract closeouts.”

Blockchain has been a hot topic in federal circles of late with a litany of agencies examining how to leverage the distributed ledger technology to verify their operations.”


“The Department of Veterans Affairs is taking a look at how blockchain can bring more efficiency to its acquisition process — particularly how it finalizes completed contracts.

The VA’s RFI seeks industry solutions that can help integrate the various sources of information needed to verify a contract has been completed and is free of outstanding claims and disputes.

“Because considerable resources are invested into this repetitive process, blockchain technology has been identified as a possible means to alleviate almost all the labor involved in government contract close-out procedures,” the RFI’s performance work statement said.

Contractors should be able to provide a proof of concept that can show whether blockchain can handle current closeout procedures, including possibly retroactively applying them to all pending contract closeouts.

VA officials envision a future contract with a six-month base period to demonstrate the effectiveness of the blockchain technology, with a potential follow-on contract if the contractor can present a viable solution.”

Interested stakeholders have until July 31 to respond to the RFI.”

https://www.fedscoop.com/va-looking-blockchain-can-help-contract-closeouts/

 

 

 

The FCC’s Net Neutrality Rules Are Dead But the Fight Is Not Over

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net neutrality Broadbandnow

Image:  “Broadband Now”

“WIRED”

“Federal net neutrality protections are officially dead. The most immediate battle to save net neutrality is legislation that would effectively force the FCC to bring back the rules the FCC approved in 2015. 

Several states, including New York and Washington, have passed regulations that ban or discourage internet providers from favoring certain content based on payments from content providers. “


“Today the Federal Communications Commission’s rules barring internet providers from blocking or slowing content, or giving special treatment to certain content, were wiped off the books, following an FCC vote last December. But don’t expect to see huge changes right away.

First, there are still some rules constraining broadband providers.

Comcast, the nation’s largest broadband provider, is temporarily forbidden from violating net neutrality under the terms of the government’s approval of its 2011 acquisition of NBC Universal; that restriction expires in September. Charter, the second-largest home broadband provider, is required to uphold net neutrality until 2023 under the terms of its acquisition of Time Warner Cable in 2016.

Meanwhile, most major internet providers have promisednot to block, throttle, or discriminate against legal content. But net neutrality activists don’t want to take the companies at their word. They’re fighting to block the FCC’s December decision in both Congress and the courts while also working to pass new state laws.

Congress Considers Restoring Rules

The most immediate battle to save net neutrality is legislation that would effectively force the FCC to bring back the rules the FCC approved in 2015. Under the Congressional Review Act, or CRA, Congress, with the approval of the president, can not only reject regulations issued by a federal agency but effectively bar that agency from taking similar action again.

Legislation overturning the FCC’s December decision passed the Senate in May with three Republicans and all Democrats and independents voting in favor. The next step would be a vote in the House, where it needs more than 20 Republicans to support it before the end of the year.

US Representative Mike Doyle (D-Pennsylvania), who introduced the legislation in the House, filed a petition last month that would force a vote if a majority of House members sign it. That’s a tall order; to date, 170 members have signed. But it might be doable, given the bipartisan support for net neutrality. A recent Morning Consult pollfound that 60 percent of registered voters, including 63 percent of Republicans, support the idea of net neutrality. An earlier poll by the Program for Public Consultation at the University of Maryland, which attempted to explain both sides of the issue to respondents, found that 83 percent favored keeping the FCC’s net neutrality rules, including 75 percent of Republicans.

Former FCC lawyer Gigi Sohn points out that last year when Republicans used the CRA to kill Obama-era internet privacy rules, 15 House Republicans crossed the aisle to vote with Democrats to save the protections. Sohn argues that more Republicans could have been persuaded to vote against the legislation if there had been more time. And activists have won against long odds before. For example, in 2012 public pressure persuaded Congress to kill an intellectual property bill known as SOPA/PIPA.

Even if the measure passes the House, it will need to be signed by the president, who hasn’t been supportive of net neutrality in the past. But Free Press policy director Matt Wood points out that the administration is unpredictable and has embraced more populist policies at times, such as its opposition to AT&T’s proposed acquisition of Time Warner.

The CRA isn’t the only attempt in Congress to address net neutrality. Last year, Representative Marsha Blackburn (R-Tennessee), a long-time critic of net neutrality, proposed a bill that would ban internet service providers from blocking content, while allowing “fast lanes.” It would also ban states from passing their own net neutrality laws and limit the FCC’s authority over broadband. Last month, during the Senate’s debate over the CRA, Senator John Thune (R-South Dakota) said he would reintroduce a similar bill he first introduced in 2015 that bans paid prioritization, but likewise limits the FCC’s role in overseeing broadband. Neither bill covers broadband providers’ use of data caps or the obscure but important behind-the-scenes deals they make with each other. Net neutrality advocates have generally seen both bills as inadequate or even harmful. “At the end of the day this bill is a cynical attempt to distract GOP lawmakers who are considering voting for the CRA to restore MUCH stronger, REAL #NetNeutrality protections,” the group Fight for the Future tweeted last month about Thune’s proposal.

States Take Action

Some state governments, meanwhile, aren’t waiting for Congress. Washington became the first state to pass net neutrality protections in March. Last month, the California state senate passed a net neutrality bill that would actually offer stronger protections than the Obama-era FCC rules. The bill is now awaiting a vote by the California Assembly before moving on to Governor Jerry Brown. New York state lawmakers are considering a similar bill. If both bills pass, that would give 17 percent of the country stricter protections than they enjoyed under the Obama-era rules.

New York is also among the several states that have taken a more indirect approach to ensuring net neutrality. In January, Governor Andrew Cuomo signed an executive order that banned state agencies from doing business with internet providers that don’t agree to uphold net neutrality. The governors of Montana, New Jersey, Hawaii, and Vermont have signed similar orders, and Oregon passed a similar state law.

Broadband providers claim that these state-level rules would burden them with a “patchwork” of rules. The telecommunications industry group US Telecom has vowed to challenge state rules in court. That could come to a head soon, because the FCC order taking effect to revoke the Obama-era rules also bans states from passing their own laws. Legal experts are unsure whether that ban will hold up in court. Marc Martin, a former FCC staffer who is chair of law firm Perkins Coie’s communications practice, told WIRED earlier this year that while it’s not clear if state level protections such as those in Washington will withstand legal challenge, the executive orders are on more solid footing because states have broad authority to choose how they spend their budgets. “I wonder if anyone will even fight it,” Martin says.

Court Battles

Perhaps the biggest cloud of uncertainty is whether the FCC could legally repeal the Obama-era rules. A law called the Administrative Procedure Act bans federal agencies from making “arbitrary or capricious” decisions. Net neutrality advocates have sued the FCC in federal court, arguing that voting to revoke them less than three years after they were passed in early 2015 is capricious.

The lawsuit was initially filed by several state attorneys general, and was joined by advocacy groups, industry groups, and by companies including Etsy and Kickstarter. But a timeline for the case has yet to be approved, says Wood of Free Press, one of the organizations involved in the suit. It will take months for the two sides to file briefs and responses. It’s possible that a court will reach a decision by early 2019, but it could easily be at least a year from now before a decision is reached, Wood says.

While Congress can block the FCC from trying to revoke net neutrality laws again, the outcome of the court case will be less final. If the FCC loses the case, the agency would be free to try again to dismantle net neutrality. And if the FCC wins, it could actually make it easier for Democrats to restore net neutrality rules the next time the party controls the White House.

That means regardless of what happens in court, the fight is far from over.”

https://www.wired.com/story/the-fccs-net-neutrality-rules-are-dead-but-the-fight-isnt/

 

 

Tech Giants Play the DC Influence Game to Win Pentagon Cloud Deal

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Pentagon Cloud Deal

Illustration by POGO.

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

In a few months, the Department of Defense (DoD) will pick a company to build a cloud computing system for the U.S. military.

The prize is a two-year contract that could end up being extended for a full decade and be worth billions of dollars. The winner could also obtain a virtual monopoly over the federal cloud-computing market for the foreseeable future.”


“The odds-on favorite to win the Joint Enterprise Defense Infrastructure (JEDI) contract is Amazon Web Services, which currently manages a $600 million cloud system for the intelligence agencies and, through its network of “partners,” already has a stake in other federal cloud projects. Amazon’s dominant market position and past experience hosting sensitive government data give it a solid advantage over its primary competitors—Leidos, General Dynamics, Oracle, Microsoft, IBM, and Google. Despite pleas from these companies, who fear Amazon may have the inside track, DoD will not waiver from its plan to award JEDI as a winner-take-all, single-vendor contract.

Amazon is no longer an upstart online bookseller from Seattle. The company has taken its place among the federal government’s contracting heavyweights, employing the traditional methods of Washington influence in its quest to land the JEDI contract.

Amazon’s political action committee has given over $1 million in campaign donations to federal candidates in the past two election cycles, doling out the money to both parties in nearly equal shares. The company has spent over $37 million on lobbying since 2015, getting face time with Members of Congress and officials in the executive departments on matters involving cloud computing and myriad other issues. Those efforts appear to have paid off last year with the passage of the so-called “Amazon amendment,” a provision tucked into the defense authorization bill that will establish a program facilitating government purchasing through e-commerce portals like Amazon.com.

Amazon has also been taking advantage of the revolving door, hiring its share of former government officials. According to the watchdog group Center for Responsive Politics, 59 of Amazon’s 90 lobbyists (not all of whom worked, or are working, on cloud or IT issues) are “revolvers” who had previously worked for the federal government. Scott Renda, who oversaw an Office of Management and Budget (OMB) cloud computing initiative during his tenure in the Obama Administration, joined Amazon Web Services in 2014. Former Obama White House press secretary Jay Carney became Amazon’s senior vice president for global corporate affairs in 2015. Former U.S. Chief Acquisition Officer Anne Rung left the White House in 2016 to lead the government affairs division of Amazon Business. Rung spent two years as the leader of OMB’s Office of Federal Procurement Policy, which plays a central role in shaping how the government purchases goods and services.

From the other end of Pennsylvania Avenue, the company enlisted the lobbying services of former Senators John Breaux (D-LA) and Trent Lott (R-MS) and former Congressional staffer Rich Beutel. Beutel, the former lead staff member of the House Oversight and Government Reform Committee, was once described as “a player at the forefront of cyber [and] contracting.” Between 2015 and March 2018, Beutel represented Amazon Web Services before Congress and the White House on a range of issues, including cloud acquisition and deployment. Amazon Web Services was also a clientof Sally Donnelly, a well-connected political consultant who recently served as a senior adviser to Secretary of Defense James Mattis and was a consultant on the Defense Business Board, a DoD advisory panel of private-sector executives.

Pentagon Metro Amazon AWS Ad

Amazon placed targeted advertisements for its cloud service in Washington, DC’s Pentagon metro station ahead of the Department of Defense awarding the JEDI contract. (Photo: POGO)

For added measure, Amazon is making its presence known on local magazine coversand on the walls and floors of the Washington Metro. This public relations blitz may actually be targeting two audiences: the DoD officials who will choose the winner of the JEDI contract, and local politicians in DC and the neighboring suburbs in Maryland and Virginia hoping to be chosen as the site of the company’s second corporate headquarters.

Pentagon Metro Amazon AWS Ads

Amazon placed targeted advertisements for its cloud service in Washington, DC’s Pentagon metro station ahead of the Department of Defense awarding the JEDI contract. (Photo: POGO)

However, victory for Amazon is not a foregone conclusion. The competing tech and defense heavyweights also know how to play the influence game. Most of the companies—particularly General Dynamics and Google—are keeping pace with Amazon’s level of spending on elections and lobbyists. The revolving door spins just as rapidly at Amazon’s competitors: more than three-quarters of Microsoft’s 90 lobbyists previously worked in the federal government, while the board of directors of Leidos currently boasts former senior Pentagon officials Gregory Dahlberg and Frank Kendall. The revolving door took a big turn in the other direction last year at General Dynamics when James Mattis left the company’s board to become Secretary of Defense.

Meanwhile, former Google CEO Eric Schmidt, Google vice president Milo Medin, and Microsoft board member Reid Hoffman serve on the Defense Innovation Board, where they advise DoD on technology and acquisition matters. Oracle CEO Safra Catz was a member of the Trump transition team. She recently got a chance to discuss the JEDI competition at a private dinner with President Trump, who has made no secret of his animosity toward Amazon. Perhaps Catz or someone else at the dinner mentioned that she and four other Oracle executives made a total of nearly $35,000 in campaign donations to one of the President’s staunchest supporters in Congress: House Intelligence Committee Chairman Devin Nunes (R-CA). Oracle is reportedly leading a campaign with other tech companies to “unseat Amazon as the front-runner” for the JEDI contract.

DoD will award the JEDI contract in late September. For the next few months, Amazon and its competitors will flood the Washington area with lobbyists, campaign donations, attractive job offers, and eye-catching advertisements. The millions they spend now could pay off in the billions later.

In the meantime, we need to ask two important questions. First, is it a good idea to award the contract to a single vendor? The DoD reasons that scattering data across multiple cloud systems would inhibit the ability to access and analyze critical data, and that it has “multiple mechanisms” in place to prevent a monopoly. However, tech and federal procurement experts dispute the government’s justifications for making JEDI a single-award contract.

Second, should the government do more to develop an in-house capability to run a cloud system? The DoD will likely pay significantly more for a contractor to operate and manage the system, over which the contractor will retain exclusive ownership rights. Ten years is an uncomfortably long period of time to entrust such a vital function to one private company.”

http://www.pogo.org/blog/2018/06/tech-giants-play-the-dc-influence-game-to-win-pentagon-cloud-deal.html

Important June Update Notices From GSA on Registering and Maintaining Government Contracting Registrations

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SAM_logo

“SMALL TO FEDS”

“Notarized Letter changes and New Login Process Coming June 29th 2010”

“GSA. GOV SAM Update

GSA has taken action to address fraudulent activity in the System for Award Management (SAM). The measures GSA already put in place to help prevent improper activity in SAM include masking specific data elements in the entity registration even for authorized entity users; requiring “parent” approval of new registrations for their “child” entities; and requiring the formal appointment of the Entity Administrator by original, signed notarized letter.
Additional enhanced controls will be deployed at the end of June. These controls include implementing multi-factor authentication using Login.gov and notifying Entity Administrators when there is a change in the entity’s bank account information. As a result of these and other measures, GSA is modifying the current notarized letter review process in two phases.

NOTARIZED LETTER PROCESS CHANGES

How is the notarized letter review process changing on June 11, 2018?

  • Effective June 11, 2018, entities who create or update their registration in SAM.gov to apply only for federal assistance opportunities such as grants, loans, and other financial assistance programs no longer need to have an approved Entity Administrator notarized letter on file before their registration is activated.
    • Hint: This applies to you if your SAM.gov Purpose of Registration is Federal Assistance only. Check SAM.gov to find your Purpose of Registration.
  • Federal Assistance entities still must mail the original, signed copy of the notarized letter to the Federal Service Desk. Failure to do so within 30 days of activation may result in the registration no longer being active.

How is the notarized letter review process changing on June 29, 2018?

  • Effective June 29, 2018, all non-Federal entities who create or update their registration in SAM.gov will no longerneed to have an approved Entity Administrator notarized letter on file before their registration is activated.
    • Hint: This applies to you if your SAM.gov Purpose of Registration is either Federal Assistance or All Awards. Check SAM.gov to find your Purpose of Registration.
  • All non-Federal entities still must mail the original, signed copy of the notarized letter to the Federal Service Desk. Failure to do so within 30 days of activation may result in the registration no longer being active.

Where can I find the notarized letter templates?

Does the notarized letter requirement apply to U.S. Federal Government entities registering in SAM?

  • No.

NEW LOGIN PROCESS FOR SAM.GOV COMING JUNE 29, 2018!

What is the new login process for SAM.gov?

  • Effective June 29, 2018, when you go to SAM.gov and log in, you will be asked to create a Login.gov user account. Your current SAM.gov username and password will no longer work.

What is the most important thing I need to do before June 29th?

  • Make sure you know the email address associated with your current SAM.gov user account.

Why do I need my current SAM.gov user account email address?

  • Using the same email address allows SAM.gov to automatically migrate your roles. If a different email address is provided, your roles will need to be reassigned. This could cause delays updating your existing registrations.

How do I find the email address for my SAM.gov user account?

  • If you don’t know which email is associated with your SAM.gov user account, take action now. Go to www.SAM.gov → My SAM → My Account Settings → Edit User Information. As of June 29, 2018, your current username and password won’t work, so take steps now to confirm your email!

What do I need to create my Login.gov user account?

  • You will need to:
    1. know the email address associated with your SAM.gov username and password
    2. have access to that email to receive a confirmation email from Login.gov, and
    3. have a working phone (cell phone or landline) to receive a security code from Login.gov.

Why is SAM.gov making these user account changes on June 29, 2018?

  • To further increase security and deter fraud, SAM.gov is partnering with Login.gov to implement multi-factor authentication for registered SAM.gov users.

Will this change impact public users who do not log in to SAM.gov?

  • No. There is no change for users who search and view public data on SAM.gov without logging in to the system.

Will I be able to get help for this new login process?

BACKGROUND

GSA’s System for Award Management (SAM) continues to support an active investigation by the GSA Office of Inspector General (OIG) into alleged, third-party fraudulent activity in SAM. Only a limited number of entities registered in SAM were suspected of being impacted by this alleged fraudulent activity. In March 2018, GSA took steps to address this issue and notified affected entities. GSA continues to work with the OIG and law enforcement agencies to take additional action, as appropriate.

What has GSA been doing to address the problem?

GSA took a number of proactive steps to address this issue, including system modifications, to prevent improper activity going forward. In addition, GSA expired, then deactivated any entity registrations that appeared to have been affected. These entities were advised to validate their registration information in SAM, particularly their financial information and points of contact, before reactivating the entity registrations. Further, GSA has begun implementing additional reviews during the registration process to prevent future issues.

What interim changes were made to the SAM registration process?

These proactive steps include requiring submission of an original, signed notarized letter identifying the authorized Entity Administrator for the entity associated with the Data Universal Numbering System (DUNS) number. GSA posted instructions for domestic entities and instructions for international entities for easy reference. This requirement went into effect on March 22, 2018, for new entities registering in SAM and went into effect on April 27, 2018, for existing registrations being updated or renewed in SAM. Changes are coming to this process on June 11, 2018, for Federal Assistance only entities and on June 29, 2018, for all entities.

Who was impacted?

Entities with registrations that appeared to be impacted were notified. Instructions were provided explaining how to validate registration information and how to reactivate the registration. In addition, entities whose bank account information for Electronic Fund Transfer (EFT) changed within the 12 months prior to March 2018 were notified. Although not associated with suspicious activity, these entities are required to validate their registration information, particularly their EFT information.

What is an entity?

In SAM, you, your company, business, or organization is referred to as an “entity.” Individuals register themselves or their entity to do business with the U.S. Federal Government by completing the registration process in SAM.

What should entities registered in SAM do to protect themselves and confirm that their bank account information has not been changed?

Entities registered in SAM are advised to log into SAM and review their registration information, particularly their bank account information for Electronic Funds Transfer (EFT) on the financial information page. Contact the supporting Federal Service Desk at www.fsd.gov, or by telephone at 866-606-8220 (toll free) or 334-206-7828 (internationally) Monday through Friday from 8 a.m. to 8 p.m. (ET), for FREE assistance. Entities are responsible for ensuring that their information is current and correct in SAM in accordance with paragraph (b) of Federal Acquisition Regulation (FAR) clause 52.232-33 or Title 2 of the Code of Federal Regulations Part 25 (2 CFR § 25.310 and Appendix A), as applicable, and should routinely review such information for accuracy.

Who should entities contact if they find that payments due them from Federal agencies have been paid to a bank account that other than their own?

If an entity suspects a payment due them from a Federal agency was paid to a bank account other than their own, they should contact the Federal Service Desk at www.fsd.gov, or by telephone at 866-606-8220 (toll free) or 334-206-7828(internationally), Monday through Friday from 8 a.m. to 8 p.m. (ET), for FREE assistance.

Where can an international entity find information about the notarized letter process?

Entities not located in the U.S. or its outlying areas should read the international entity instructions posted at the Federal Service Desk that outline procedures and provide links to letter templates. If they have additional questions, international entities should contact the Federal Service Desk at www.fsd.gov, or by telephone at 866-606-8220 (toll free) or 334-206-7828 (internationally), Monday through Friday from 8 a.m. to 8 p.m. (ET), for FREE assistance.
GSA’s Office of the Inspector General (OIG) is actively investigating alleged, third party fraudulent activity in the System for Award Management (SAM).  At this time, only a limited number of entities registered in SAM are suspected of being impacted by this fraudulent activity. GSA is in the process of notifying these affected entities.
IMPORTANT NOTE:  In a proactive step to address this issue, GSA is now requiring an original, signed notarized letter identifying the authorized Entity Administrator for the entity (company) associated with the DUNS number before a new SAM.gov entity registration will be activated. GSA has very specific requirements for this notarized letter—click here for Federal Service Desk (FSD) guidelines.  A template has been developed by Procurement Technical Assistance Center (PTAC) experts that can serve as the starting point for this document.  It must be completed with the specified information, printed on company letterhead, notarized, and mailed to the Federal Service Desk at the address indicated. Download Template here.
Who is impacted? Entities who may have been impacted are those whose financial information has changed within the last year. GSA began notifying affected entities on March 22, 2018.
All entities registered in SAM are advised to log into SAM and review their registration information, particularly their financial (bank account) information. GSA reminds everyone that entities are responsible for ensuring that their information is current and correct in SAM.
Any entity finding that a payment due to them from a federal agency has been paid to a bank account other than their own should contact their Federal agency awarding official.
How is GSA addressing this situation?  In addition to the above, GSA has expired – then deactivated – any entity registrations that appeared to have been affected. These entities are being advised to validate their registration information in SAM, particularly their financial information and points of contact. Further, GSA has begun implementing additional reviews during the registration process to prevent more issues.

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FURTHER GUIDANCE FROM SMALL TO FEDS:

You have worked hard establishing your small business in the commercial market; or you have succeeded in your profession working for large enterprises. You have established yourself and you are recognized as a success by your superiors, your peers and your subordinates. Someone or something one day attracts your attention with the suggestion that the federal government may be in the market for your skills, products or services. This article will address the path to expanding your existing business or initially undertaking a business involving federal government contracts.

GETTING STARTED

The best way to explore federal government contracting possibilities is to expand your business plan to include a sector for that type of business or develop your start up plan including a federal government business sector. Doing business with the Federal Government is not “Rocket Science” but it is different. It embodies a set of regulations entitled, “The Federal Acquisition Regulation” or FAR, which contain the rules by which the government and industry abide in contracting for supplies and services. The FAR had its genesis during World War II and has evolved since that time to control and regulate the ever-expanding amounts of goods and services which the federal government buys.

The following are the most important “Mechanical Steps” necessary in positioning your business to begin selling to the federal government. They are listed in the necessary sequence for becoming a supplier entity in the government system. A link to appropriate web sites is provided at each step.

A. Dunn &Bradstreet (D&B) Number Go to Small Business Tab At:

http://www.dnb.com/us/

If you do not have one a D and B Number is necessary before you can complete a Registration (CCR) which is required for all companies who aspire to sell to the federal government. A D and B Number is also required for your Small Disadvantaged Business (SDB) application if you intend to pursue minority- owned business certification. If you are not already incorporated you may wish to incorporate before you set up your D and B number. Incorporation is fairly inexpensive these days and can be done via the WEB for either a non-profit or a for-profit business. Try search mechanisms, such as “Incorporate.com”, or “Incorporate Now”. It is best to do a check with the Better Business Bureau before using the results. Establishing your D and B is free.

B. For Central Contractor Registration:

C. For application in the SBA Small, Disadvantaged Business (SDB) Program:

http://sba8a.symplicity.com/applicants/guide

If you qualify as a minority, follow the directions closely. Note there is a preview section which will acquaint you with the application and the types of information that will be necessary when you start the process.

D. For Historically Under-Utilized Business (HUB) Zone Information:

Note that Hub Zone qualification is based on where the business is located and where the personnel in the business reside as well.

E. For Searches on Federal Buys:

http://www.fedbizopps.gov/

FEDBIZOPS is the gateway for all federal business. The search tool there is a very powerful engine with many filters that are useful. It is well worth the time to learn the filters. Every federal agency is required by regulation to advertise there and you will be amazed at the products and services the federal government buys.

F. For an example of a small business capability statement check the following web site:

A capability statement is always a good idea for marketing. The link above as an example. It was found on the web in the public domain Note that the site is a SDB. Later you will get into proposal preparation and the regulations governing the types of grants and contracts, as well as billing the government for your work and other factors.

G. Questions for you:

Are you planning to produce a deliverable, distinct, end product such as software, hardware, a commodity, a report, a conference, a survey or a study, sell it to meet the government’s statement of work and bill for the end product when delivered?

OR

Are you planning to price your services at an hourly rate, sell them by labor categories with professional job descriptions to perform the government’s statement of work and bill by the hour for labor and at cost for material and travel?

Answers to the above questions are key factors in how you set up your business and price your work in proposals to federal agencies. The answer to the above questions is “Yes” in both cases for some businesses. Some small businesses sell their product commercially, but contract for product implementation and support on a service contract basis.
The next topic in this series of articles will deal with avenues for marketing a small small business in the federal government environment.”


 

Major Defense Corporations Have Appetites For Startup Investments

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Aerospace Companies Startups

“DEFENSE NEWS”

“Major defense primes including Lockheed, Boeing and Airbus have recently started venture funds with the hope of deepening ties with fledgling commercial tech businesses.

Google may be backing away from future Pentagon contracts, but defense companies are finding a receptive audience in Silicon Valley startups, the head of Lockheed Martin’s venture fund said Wednesday.”

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“Chris Moran had spent about 30 years of his career in Silicon Valley before taking over Lockheed’s venture fund in June 2016. So naturally he felt “a little trepidation” about moving into the defense sector, he told a group of reporters at June 6 roundtable.

“Almost from the outset, I was pleasantly surprised by the embracement from the folks that I met both inside the company and in the startup space, finding those technologies, talking about the problems that we have to work on, and finding that they were very excited about working on those technologies and working with Lockheed Martin,” he said.

Google announced on June 1 that it plans to no longer bid for future contracts on the Pentagon’s Project Maven, which used the company’s machine learning technologies to analyze drone imagery.

When Google’s involvement in the program was disclosed earlier this year, it was met with internal criticism, including a petition signed by 4,000 employees imploring Google to vow never to work with the Defense Department, Wired magazine reported in May.

But despite the controversy, Moran said he hasn’t seen startup companies try to move away from working with defense companies — or accepting their seed money.

“I know there’s kind of an independent streak in the Valley, so maybe they want to keep some distance there,” he said. “But I haven’t seen it. When I go talk to companies — and again I’m working at the engineering level a lot of times — they are absolutely enthralled by the types of things that we work on and love the challenge.”

Lockheed Martin's venture capital investments include a company called Terran Orbital, which is a partner to Lockheed on the LM50 nanosatellite shown here. (Lockheed Martin)
Lockheed Martin’s venture capital investments include a company called Terran Orbital, which is a partner to Lockheed on the LM50 nanosatellite shown here. (Lockheed Martin)

Major defense primes including Lockheed, Boeing and Airbus have recently started venture funds with the hope of deepening ties with fledgling commercial tech businesses, and Moran said the companies’ engagements in Silicon Valley have made defense firms more credible as a partner.

Now, Lockheed is doubling down on its investments. Moran announced during the roundtable that Lockheed will take $100 million of the money saved from recent tax reform legislation and funnel it into the its venture capital fund — increasing that pool of money two times over.

Since 2016, the company has invested $40 million in eight companies, some of which have not be publicly disclosed. While Lockheed’s venture capital arm gets about 500 leads on new technology a year, Moran wants to be able to double that.

“We’d love to go from — generically — about four investments per year, we’d love to get to six or even eight,” he said. “The $200 million will help us to work with more companies, and our goal is to try to get those relationships teed up earlier than later.”

With its new infusion of funds, it might also look to emerging technologies like quantum computing and quantum sensors, where there has been a lot of recent activity.

“Many companies have been formed in the last two years in that, so we’re looking in those areas as well,” Moran said.

So what has Lockheed been getting out of its venture capital investments?

Unlike other investors, Lockheed isn’t funding companies in the hopes of getting a massive financial return. Instead, it wants to invest in startups with big commercial potential, which are developing technologies that could give Lockheed a strategic edge in areas like cyber, space, artificial intelligence, autonomy, 3-D printing and data analytics.

“The perfect investments for us are those that are scaling and growing through commercial activity but at the same time are maturing, hardening, becoming more reliable as a result of the volume and scale that the commercial space can bring,” Moran said.

For instance, Lockheed has made investments in commercial radar and lidar companies closely aligned with the automobile industry.

If those products end up being successful and are integrated into hundreds of thousands of cars, that drastically decreases down the price for customers like Lockheed who could use the system for defense applications and creates a bigger pool of money for the startup to reinvest in its own infrastructure.

While a lot of venture funds are used by companies to pave the way for a future acquisition, that isn’t the case for Lockheed, which would rather keep those firms as potential suppliers based in the commercial sector.

“A home run would look like an entire portfolio of companies we’re working with like Terran Orbital,” the nanosatellite company that Lockheed has partnered with on Defense Department and NASA contracts, said Moran.

Through Terran Orbital, “we found a really capable technology that had immediate or near term application to things that we’re running with our government customers,” he said. “We could both grow them, grow our ability to enter new markets or hone our abilities in existing markets.”

https://www.defensenews.com/industry/2018/06/06/lockheed-martin-sees-an-appetite-for-startup-investments/

How Reach the Washington Technology Top 100 Government Contractors

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How to Hit Top 100

 

“WASHINGTON TECHNOLOGY “By Mark Amtower

“Every year the Washington Technology publishes the Top 100.  Here are a few thoughts for upward migration.”

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“AUTHOR’s NOTE: Ten years ago I wrote my first column for Washington Technology on how to break into the Washington Technology Top 100 – now it’s time to revisit

So, you want to be in the Washington Technology Top 100. But how do you migrate up the food chain?

I get calls and emails asking how some companies, especially the new ones, broke into the Top 100.

There are only two sure ways to get into the WashTech Top 100: buy one of them, or sell to one of them.

Other than that, you’ll need to work your way up the ladder.

Here are a few thoughts for upward migration.

Market Commitment

GovCon is not a part time gig, and those approaching it as an adjunct to their B2B business really need to understand the differences.

This is exacerbated if you are a public company and your Board and shareholders have expectations beyond what is attainable. Public companies do succeed in this market but only when the Board, investors and Wall Street understand that B2G is not a business based on quarterly reports.

The commitment involves bringing in the right talent, dedicating the right resources, and adequately funding each.

The commitment must be company-wide and the acceptance of the glacial nature of GovCon must be a given.

Focus

Focus can take many forms here: the focus on a particular technology or agency, focus on a special problem facing those in certain jobs, a regional focus, and more. Or possibly a combination of two or more of these. Fraud, waste and abuse (FWA), for example, is a pervasive and persistent problem, but it does not seem to be on the front burner…unless it is your job in your agency.

Focus on what you do best, then become among the best at what you do. This is not lost on the community where you work.

Focus on a beachhead in an agency and grow that business before thinking about migrating to other agencies. Develop a significant presence and understand that you earn this position on a daily basis, not simply when you win the contract.

Time

Government time can seem like geologic ages. Things don’t usually happen quickly.

Those seeking rapid migration to the top tiers contracting, to be on par with GDIT, Northrop and others, are in the wrong business unless they have really deep pockets and buy their way in.

Time and a seriously thought out long-term plan are required. I have several anecdotes of those who were beginning to succeed, then made an alteration to their plan which short-circuited their growth. I have other anecdotes for the flip side: companies that made alterations that were well thought out and led to winning more business.

Relationships

Those who read my articles and other posts know that I believe relationships are the key to success. These relationships include the client relationship, partner (prime/sub) relationship, management to employee, company to the channel, press relations and more.

Each must be handled properly and professionally. Snafus in any of these will impact your brand in the market as word of said snafu will invariably get out somehow (think White House leaks).

Education

This market continues to evolve, and the evolution requires perpetual education for each discipline in your company, including sales, marketing, BD, proposals, accounting, and legal.

There are many venues for education, including associations, conferences, seminars, webinars, briefings, in-house training, continuing professional education, advanced degrees (I am an adjunct professor in the GWU graduate school for Government Contracting where I learn as much from my students as they do from me), and more.

There is education by osmosis, hanging out with market experts (in and outside of your company), education by continual scanning of market information (trade publications, blogs and other sources of market intel).

But the education has to be constant. Take a break for a few months and you are behind the curve.

Rinse and repeat (re-commit)

Your commitment to the market must be renewed regularly, formally or informally. This is a requirement for those seeking to move up in the pecking order, from third tier to second, from second tier to first.

There are no guarantees that you will migrate to the top even if you do all these things. But I can guarantee that you will fail if you don’t do them.

“Do or do not, there is no try.”

https://washingtontechnology.com/articles/2018/06/03/amtower-top-100-advice.aspx

About the Author

Mark Amtower advises government contractors on all facets of business-to-government (B2G) marketing and leveraging LinkedIn. Find Mark on LinkedIn at http://www.linkedin.com/in/markamtower. 

 

 

 

Government Legislation Taking Aim at Waste and Fraud

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Congress and Waste and Fraud

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

“The “Payment Integrity Information Act of 2018” would update and strengthen the current laws that require federal agencies to estimate, detect, prevent, and recover payments made in error, or in the wrong amount.

An estimate from fiscal year 2016 showed $144 billion in misspending that year—an all-time high. These improper payments result from insufficient financial accountability, and divert dollars from where they are needed.”

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“A major portion of wasteful government spending is a broad category known as “improper payments,” which are payments made in the wrong amount (including both overpayments and underpayments), to the wrong people, or for the wrong reason.

These improper payments result from insufficient financial accountability, and divert dollars from where they are needed. While significant progress by Congress and some federal agencies has been made in curbing improper payments during the past decade, more needs to be done to stop this wasteful and ineffective practice.

Agencies and programs throughout the federal government are the sources of improper payments. For example, the Department of Agriculture noted $218 million in federal crop insurance overpayments in 2016. Also, the Pentagon admitted that, in fiscal year 2016, it made more than $100 million in overpayments to commercial vendors, and more than $400 million in overpayments when reimbursing individuals for travel costs.

Three leading members of the Senate Homeland Security and Governmental Affairs Committee, Ranking Member Claire McCaskill (D-MO), Chairman Ron Johnson (R-WI), and Permanent Subcommittee on Investigations Ranking Member Tom Carper (D-DE) introduced the legislation. The bill language was well-vetted by many experts in the inspector general community, the Government Accountability Office, and the Office of Management and Budget. Staff from the Project On Government Oversight also reviewed the language. A House companion bill is under consideration.

Among the key provisions of the Act, the legislation would:

  • Establish more complete understanding of when and why improper payments are made. Agencies should conduct stronger and more consistent reviews of when a program’s spending is at risk for improper payments. For example, payments to federal contractors are rarely given a thorough examination in this light, despite findings from auditors, inspectors general, and the Government Accountability Office that there are major problems. The Act includes language that requires the federal government to find new methods for estimating and detecting improper payments to contractors.
  • Focus more agency action toward preventing improper payments. The legislation requires agencies to devise and implement a plan, following a clear timeline in order to eliminate known vulnerabilities, rather than simply trying to recover improper payments after detection. This would shift agencies away from what is called “pay and chase.”
  • Provide new nation-wide tools to curb payment errors and fraud. A current federal-wide mechanism to screen federal payments called the “Do Not Pay” program is showing signs of success. However, the system is still missing many improper payments. The bill would give agencies new abilities to catch additional payment errors. For example, state agencies that managed federal benefits programs, such as Unemployment Insurance and Medicaid, would have improved access to the Do Not Pay program.
  • Improve use of data analysis tools to ferret out improper payments. The legislation requires federal agencies to coordinate with each other in developing and using cutting-edge data analysis procedures. Some agencies have seen success with these tools, such as the Center for Medicare and Medicaid Services, which continues to develop and refine a robust software system to fight Medicare waste and fraud. However, most agencies have not made effective use of data analysis systems.

Congress is already looking at other useful legislative ideas. Earlier this year, a bipartisan coalition of Congressional sponsors introduced legislation tackling the odd-sounding but very real problem of improper payments involving dead people. The Government Accountability Office has chronicled this substantial improper payment problem. The “Stopping Improper Payments to Deceased People Act” (S. 2374/H.R. 4929) would provide all relevant agencies with access to the full death list maintained by the Social Security Administration, while still maintaining strong privacy and security protections for the data. The legislation would also require steps to improve accuracy and completeness of the Social Security Administration’s database of deceased individuals, and improve the way it is used.

The Project On Government Oversight is working with Congress on the problem of improper payments, and in finding solutions that would result in real progress. We will also continue to work with the Administration and Congress on other measures to improve the accuracy and accountability of government spending.”

http://www.pogo.org/blog/2018/06/congress-taking-aim-at-waste-and-fraud.html

The Pentagon Is Taking Over Security Clearance Checks

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Pentagon security-clearnance1 WTKR dot com

Image:  WTKR.com

“MILITARY TIMES”

“Pentagon officials said that over the next three years, the Defense Department will take responsibility for all background investigations involving its military and civilian employees and contractors. 

Plans to transfer responsibility from the Office of Personnel Management to the Pentagon for all of the roughly 3.6 million Pentagon employees, directed by defense legislation for fiscal 2017, are already in the works.”

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“The Defense Department is poised to take over background investigations for the federal government, using increased automation and high-tech analysis to tighten controls and tackle an enormous backlog of workers waiting for security clearances, according to U.S. officials.

The change aims to fix a system whose weaknesses were exposed by the case of a Navy contractor who gunned down a dozen people at Washington’s Navy Yard in 2013. He was able to maintain a security clearance despite concerns about his mental health and an arrest that investigators never reviewed.

Problems had earlier surfaced with former National Security Agency contractor Edward Snowden, who now lives in Russia to avoid charges for disclosing classified material, and Army Pvt. Chelsea Manning, who went to prison for leaking classified documents, triggering calls to update the antiquated system to include more frequent criminal and financial checks of workers who have security clearances.

Another problem has been delays: a backlog of about 700,000 people, including high-ranking federal officials waiting as much as a year to get clearances. President Donald Trump’s son-in-law and senior adviser, Jared Kushner, for example, received his permanent clearance just a few weeks ago, more than 16 months after Trump took office. The delay, his lawyer said, was caused by the backlog in the new administration and Kushner’s extensive financial wealth, which required lengthy review.

According to a U.S. official, the White House is expected to soon give the department Authority to conduct security reviews for nearly all other government agencies as well. The official spoke on condition of anonymity to discuss the decision before it was publicly announced.

The new program will involve a system of continuous checks that will automatically pull and analyze workers’ criminal, financial, substance abuse and eventually social media data on a more regular basis, rather than only every five or 10 years as it is done now.

Garry Reid, director for defense intelligence, said the shift of responsibility to the Pentagon will allow OPM officials to begin eating away at the current backlog of about 700,000, of which roughly 500,000 are Defense Department workers. The Pentagon won’t take over any of the backlogged cases because they are already underway in OPM.

While the Office of the Director of National Intelligence is the executive agent for the program, and sets the guidelines for the security requirements based on federal investigative guidelines. OPM and the Pentagon carry out the vetting process, working with the DNI.

Bill Evanina, director of the National Counterintelligence and Security Center, said at his confirmation hearing last month that by mid-June the national intelligence director would issue guidance to departments and agencies to update 2012 federal investigative standards used to vet for security clearances. He said the government also was working on ways to allow contractors and federal workers to move more seamlessly between the private sector and government without having to get new clearances.

Evanina said changes could result in a 20 percent reduction in the backlog within six months.

In the first year, the Pentagon will take over investigations for those seeking a renewal of their secret clearance, then over the next two years will take on those seeking their initial secret clearance and then move to employees seeking top secret renewals and initial clearances, said Reid, in a recent interview with The Associated Press.

According to Reid, about 20 people are already on board setting up the program and 350 more will be hired in the coming months.

It will cost an additional $40 million for fiscal year 2019. But over time, he said, the department expects to spend “significantly less” than the current $1.3 billion price tag for the program because of the increased automation and other savings.

A key problem contributing to the backlog is that field investigations into workers seeking security clearances can take up to 500 days, as investigators scour records and conduct interviews with neighbors and other acquaintances of the employee.

An analysis of the process, said Reid, found that 50 percent of the investigators’ workloads involves tasks such as driving around the country, finding sources and looking for people to talk to about the employees.

Using more automated and continuous checks, he said, “can find out that same information that’s taking hundreds of days and frankly a billion dollars a year to do, and collect similar information.”

As an example, he said an automated check could reveal information in the national criminal database about an incident that wasn’t otherwise reported or communicated between a local law enforcement agency and the military.

Carrie L. Wibben, the Pentagon’s director of counterintelligence and security, said that as a result, the department is discovering problems years before investigators would have turned them up in regularly scheduled five or 10-year checks.

Workers with secret clearance are re-evaluated every 10 years, and those with top secret clearances are checked every five years.

She also said that through advanced technology, the department will be able to determine specific risk factors for workers based on their histories, and then set up automatic checks and analyses to watch for problems. For example, an employee who had some minor financial problems might get their credit checked more frequently.

Already the department has started the continuous evaluation process for about 1.1 million employees, and since January, 58 workers have had their security clearances revoked.

While social media can provide a massive amount of information about people, it also presents a challenge.

Wibben said the department has done pilot programs to assess the value, but so far she said the Pentagon is not scouring workers’ social media accounts for information.

“The challenge of social media in general is the fidelity of it — you can’t believe everything you read on the internet,” said Reid, adding that researching everyone’s internet postings would be wasteful and erroneous. “So we have the authority, frankly, to do more, but to make it effective is something we’re still really researching.”

https://www.militarytimes.com/news/pentagon-congress/2018/06/03/pentagon-to-take-over-security-clearance-checks/