Category Archives: Technology

What is a Government Contract Stop Work Order?

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“SMALL TO FEDS” By Ken Larson

Stop work orders are serious matters and require special handling to comply with government direction and to manage risk.  

Continuing effort on a contract after receipt of a stop work is high risk. Astutely managing your options is a far better approach. 


During the Federal Government Shutdown of 2013 many enterprises received stop work orders on contracts.  This article will specify the purpose of a stop work order, actions that must be taken upon receipt of the order and the relationship of the order to resumption of effort, funding constraints, contract terminations and associated business risk.

PURPOSE

The purpose of a stop work order is to immediately bring to a halt the effort on a contract and any further performance and related cost against that contract.

It is usually necessary when unforeseen circumstances necessitate the action, such as the government shutdown or similar exigencies. An example of a clause that appears regularly in most government contracts, reserving the government’s rights to stop work, is as follows:

“Stop-Work Order (Aug 1989)

(a) The Contracting Officer may, at any time, by written order to the Contractor, require the Contractor to stop all, or any part, of the work called for by this contract for a period of 90 days after the order is delivered to the Contractor, and for any further period to which the parties may agree. The order shall be specifically identified as a stop-work order issued under this clause. Upon receipt of the order, the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage. Within a period of 90 days after a stop-work is delivered to the Contractor, or within any extension of that period to which the parties shall have agreed, the Contracting Officer shall either—

(1) Cancel the stop-work order; or

(2) Terminate the work covered by the order as provided in the Default, or the Termination for Convenience of the Government, clause of this contract.

(b) If a stop-work order issued under this clause is canceled or the period of the order or any extension thereof expires, the Contractor shall resume work. The Contracting Officer shall make an equitable adjustment in the delivery schedule or contract price, or both, and the contract shall be modified, in writing, accordingly, if—

(1) The stop-work order results in an increase in the time required for, or in the Contractor’s cost properly allocable to, the performance of any part of this contract; and

(2) The Contractor asserts its right to the adjustment within 30 days after the end of the period of work stoppage; provided, that, if the Contracting Officer decides the facts justify the action, the Contracting Officer may receive and act upon the claim submitted at any time before final payment under this contract.

(c) If a stop-work order is not canceled and the work covered by the order is terminated for the convenience of the Government, the Contracting Officer shall allow reasonable costs resulting from the stop-work order in arriving at the termination settlement.

(d) If a stop-work order is not canceled and the work covered by the order is terminated for default, the Contracting Officer shall allow, by equitable adjustment or otherwise, reasonable costs resulting from the stop-work order.

(End of clause) “

ACTIONS

A stop work order is to be taken literally.  Under a stop work order the government makes no guarantees it will take any further deliveries whatsoever, regardless of the contract type. A stop work order means just that.  Stop work and stop incurring cost.

Upon receipt of a stop work order you have no guarantee of payment for any transaction date-stamped in your accounting system after the date of the stop work order (or the commencement date of a stop work order specified in a Contracting Officer’s Letter).

I suggest clients receiving these orders close the charge numbers applicable until the stop work order is lifted with an order to resume effort and immediately notify any effected suppliers and subcontractors to do the same.

To the degree the government has made progress payments or has any other form of payment invested in the product to date it has ownership rights in the product. If that is the case treat the physical material work-in-process as government owned, store it as such without performing any more effort on it and await further disposition.

To the degree the government has not paid anything on the contract or delivery order they have no ownership rights to the product and you are free to complete it and sell it to another customer (commercial or government) that has not stopped work. If the government recommences the order, quote a new price and delivery from ground zero.

At the bottom line a stop work is blunt and to the point.  Treat it as if you will never hear from this customer again to manage the risk.

To the degree you do hear from the CO again and he or she has the funding to recommence work, be prepared to submit a proposal for what it will take to start the effort and a realistic delivery schedule to complete the it, but do not build any retroactive costs incurred during the stop work period into your logic and expect to bill them; they may not come to payment fruition.

CONTRACT TERMINATIONS AND FUNDING CONSTRAINTS

Note that in the above cited clause the government discusses resumption of work and contract terminations as options.

Hypothetically at some future date the government could terminate the  contract without taking delivery and the contractor will then submit a termination proposal for recovery of costs and disruption.

http://www.smalltofeds.com/2011/08/federal-government-contract.html

When a stop work order is lifted  the contract or the delivery order is open to negotiation on both price and delivery under the equitable adjustment and changes clauses in the FAR provisions of the contract.

At that time, you should inform the government that you are pleased to resume work, but under revised price and delivery conditions as specified in a proposal for equitable adjustment

You should not resume work until a contract or work order amendment is received granting the price and delivery relief to contract requirements commensurate with negotiation results under your proposal for equitable adjustment.

In short, time is money.

If your contract was adequately funded and remains so when work commences and assuming you negotiate acceptable terms and conditions you can proceed with low risk.  If the funding on the contract is low at the time of recommencement, it is recommended you request additional funding and handle that matter in accordance with the article linked below.

http://www.smalltofeds.com/2007/09/limitatoin-of-funds-and-funding.html

ABOUT THE AUTHOR: https://www.alignable.com/hastings-mn/small-to-feds

Micro Mentor Volunteer Counselor Ken Larson assists many small businesses with their planning and operations processes. He spent over 30 years in federal government program and contract management and 10 years in small business consulting. Ken receives many inquiries from small companies wishing to enter or enhance their position in federal government contracting. Volunteer time, books, articles, and resources are 100% free through Small to Feds maintained exclusively for small business.

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5 Steps to Stand Out From The Government Contracting Crowd In 2018

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Small Business Standing Out in a Crowd

“WASHINGTON TECHNOLOGY” By Mark Amtower

“How can they stand out from the crowd to get some of those precious government contract dollars?

Several things come to mind but these five are usually at the top of my list. I have included a reference for each to a previous WT article.”


“Networking

We all understand that this market is driven by relationships: who you know, who knows you, what they think of you and you of them, and what you might be able to do together or for one another.

In the summer of 2012 I wrote an article on networking, which is a big part of the relationship puzzle. Where you choose to spend your time is critical. You have limited time and there are always many venues where you can network. Picking the venues which yield the best return on investment, where you can meet prospects, customers, partners, media and others, is a key component to help you stand out where it matters. You must be seen. Here is my column.

Strategy

I have been in numerous meetings where an executive will have goals, sometimes nebulous, sometimes well-defined, but they lack a strategy for reaching the goals. Knowing your goals is important, but without a game plan you will likely go nowhere and you will certainly not stand out. Read more here.

Differentiate

Clearly enunciate what you bring to the table. This can be a combination of things that make you and your company unique, or it can one really strong area of competence.

Combinations can include technical expertise, deep relationships with an agency, SMEs, owning a spot on preferred contracts, set-aside status and more.

The more you can differentiate in terms that appeal to government buyers the more you stand out. Read more.

Agency (account) based marketing (ABM)

I wrote about this back in November, but it is worth repeating.

Since the mid-1990s I have been advising companies to maximize their presence in agencies where they are known before they try to migrate to “greener pastures,” which are often pastures where they are not know. If you are selling in a cabinet level department to one or two divisions, why not expand to other divisions within that department? This is often a saner approach than migrating to another cabinet department or independent agency.

It is much easier to stand out when you are doing more business with your best customer(s).

Social selling

This is another recent column topic. Social selling is an adjunct to traditional selling, leveraging social networking platforms to start and manage relationships with customers, prospects, partners and others.

Social selling is the process of finding buyers and influencers on a social networking platform (I prefer LinkedIn), getting on their radar and sharing information that will make you and your company stand out from the competition. There are many social selling tactics that you can use, depending on who you are trying to influence.

LinkedIn is pervasive in the government contracting community and by adding valuable insights on social media you will most definitely stand out.

You can’t stand out by being part of the herd.”

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. 

https://washingtontechnology.com/articles/2018/01/17/insights-amtower-2018-strategy.aspx

 

 

 

 

Forecasting Disease From Space

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Geospacial Disease Forecasting

Photo Credit: World Health Organization (WHO)

“TRAJECTORY”

“Disease forecasting remains an imperfect science, but as it is refined to a point of repeated, reliable accuracy, it will play a more significant role in containing and responding to dangerous disease outbreaks.”


“In May 2017, hydrologist Antarpreet Jutla and a team of civil scientists used predictive algorithms to forecast an outbreak of cholera in Yemen. Cholera, a waterborne bacterial disease, primarily blooms during hot and dry seasons in coastal, developing countries lacking sophisticated sanitation and water infrastructure. To identify areas where these conditions are prevalent, Jutla’s team used satellite imagery to monitor temperature patterns, water storage, population migration, regional topography, and precipitation throughout Yemen. That data was fed into a processing algorithm that predicted areas most likely to experience an outbreak in the near future—particularly cities in West Yemen along the Red Sea.

Less than a month later, the model’s predictions rang true. Because the algorithms were built and tested using data from other regions, such as the Bengal Delta in South Asia, the team did not anticipate such accurate results in Yemen and chose not to preemptively warn local officials of the model’s predictions. In June, highly populated cities along the country’s West coast (including Al Hudaydah, Hajjah, and Taiz) saw tens of thousands of inhabitants suffer moderate to severe cholera symptoms.

The epidemic confirmed the model’s effectiveness beyond the team’s expectations. The refinement of such a system to a near-certain level of accuracy would offer huge advantages to hospitals and medical professionals, such as the ability to prepare treatment facilities and appropriately allocate supplies and vaccinations.

A similar disease forecasting effort in fall 2017 predicted malaria outbreaks in the Peruvian Amazon. NASA has partnered with university researchers who leverage NASA’s satellite fleet to identify areas where popular breeding grounds for the anopheles darlingi mosquito (the species most responsible for spreading malaria) overlap with concentrated human populations, leading to high infection rates. Using the Land Data Assimilation System (LDAS), NASA can pinpoint warm temperatures and calm waters like ponds or groundwater flooding—ideal conditions for darlingi to lay eggs. Regional models analyze this data and jump forward 12 weeks to predict where malaria is most likely to erupt. Health ministries are then encouraged to administer preventative treatment, bed nets, and other resources to specific health posts throughout Peru.”

http://trajectorymagazine.com/forecasting-disease-space/

 

Government Audit Finds Pentagon Squandered Millions On Economic Development Projects in Afghanistan

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Afghanistan Task Force Failures

Cashmere Goat Farm in Afghanistan Abandoned as of April 2017. (Photo: SIGAR)

“THE PROJECT ON GOVERNMENT OVERSIGHT”

“Mixed results, waste, and unsustained projects” that cost U.S. taxpayers more than $675 million.

The Task Force awarded more than $200 million in sole-source contracts, which pose a higher risk of poor performance and corruption. Even worse, $35 million of these contracts went to companies employing former Task Force officials.”


“The Special Inspector General for Afghanistan Reconstruction (SIGAR) rendered what could be the final verdict on the Pentagon’s controversial Task Force for Business and Stability Operations (Task Force). On Tuesday, the watchdog released the results of a comprehensive performance audit of Task Force programs and activities in Afghanistan. It found “mixed results, waste, and unsustained projects” that cost U.S. taxpayers more than $675 million.

Readers of our blog are probably familiar with the Task Force, a Department of Defense (DoD) office that carried out economic development projects in Afghanistan from 2010 to 2014. The office achieved notoriety in 2015 for allegedly spending $43 million to build a gas station that should have cost less than $500,000. (The actual cost of the gas station remains a matter of dispute between SIGAR and DoD. The dispute took a bizarre turntwo years ago when a DoD official testifying at a Senate hearing quoted a cost figure, the source of which remains a mystery.) For the last two years, Special Inspector General John Sopko has been publicly bashing the Task Force for “ill-conceived,” “poorly planned,” and “unfinished” projects.

The audit, conducted at the request of Senator Chuck Grassley (R-IA) and former Senator Kelly Ayotte (R-NH), found several systemic flaws that doomed the Task Force: poor record-keeping, absence of a clear statement of objectives and strategy, inconsistent coordination with other U.S. agencies, and poor contract planning and oversight.

Because the Task Force did a particularly bad job collecting data and retaining records, SIGAR was “unable to determine whether it achieved its goal of reducing violence, enhancing stability, and supporting economic normalcy in Afghanistan through strategic business and economic activities.” As a result, taxpayers may never know exactly what the Task Force did or did not accomplish. The records SIGAR could get its hands on tell a story of massive waste and unfulfilled promises.

The Task Force obligated more than $675 million in contracts, $316 million of which funded contracts directly supporting economic recovery projects. The remaining $360 million went toward various indirect and overhead costs, including the infamous luxury private villas the Task Force used to house staff, guests, and contractors, instead of using less expensive U.S. government accommodations.

SIGAR determined that only 22 percent of the $316 million in contracts fully met their objectives. But even this rather modest metric must be taken with a grain of salt, since completed projects often were abandoned or fell into disuse or disrepair because the Afghans were unable to independently sustain them.

The report quotes an unnamed Task Force employee who recounted some troubling initial impressions:

The first thing I noticed was that the organization was involved in far too many activities. The list of projects was extremely long and unfocused and seemed to be a hodge-podge of projects without a strategy. The organization was trying to do too many things, including work that overlapped with that of other organizations working in Afghanistan.

Task Force contracting personnel, according to the report, were “generally inexperienced and unfamiliar with government contracting regulations and timelines, and their plans tended not to account for routine delays in the U.S. contracting process.” Furthermore, ill-defined contract requirements often left contracting officials unable to hold poor performers accountable.

The Task Force awarded more than $200 million in sole-source contracts, which pose a higher risk of poor performance and corruption. Even worse, $35 million of these contracts went to companies employing former Task Force officials. In the two examples described in the report, the results were disastrous. Hickory Ground Solutions, a consulting firm whose chief executive was a former Task Force employee, won a $3.9 million sole-source consulting contract. Hickory allegedly ran afoul of small business contracting rules and misled the contracting officer about its capability to fulfill the contract’s requirements. Transformation Advisors Group, another small consulting firm that employed a former Task Force official “in a senior capacity,” received full payment on a mining training program contract despite allegedly unsatisfactory performance.

Despite recounting numerous examples of waste, cronyism, and outright fraud, the report makes no mention of any criminal or other enforcement actions arising out of the Task Force’s operations. This is somewhat surprising, given Special Inspector General John Sopko’s assertion in January 2016 that “several criminal investigations” connected with the Task Force were underway.

To its credit, DoD took a conciliatory tone toward the audit. “We appreciate SIGAR’s efforts,” Deputy Assistant Secretary of Defense Colin Jackson wrote in a response letter reprinted in the report’s appendix. He conceded that SIGAR’s findings are “consistent with other independent assessments that concluded that [the Task Force] had mixed results” and that the report “documents unacceptable weaknesses and shortcomings.”

“We can—and must—do better,” Jackson stated.

Credit must also go to John Sopko and his dogged team of auditors and investigators for keeping the heat on DoD. We hope the government has learned its lesson and takes to heart the several “observations” SIGAR makes in the report to guide the White House and Congress if they ever decide to authorize another entity like the Task Force.”

http://www.pogo.org/blog/2018/01/audit-finds-dod-task-force-squandered-millions-had-few-successes.html

 

 

 

Pentagon Leaders Skirting Major Defense Acquisition Program (MDAP) Controls Required by Law

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Dodging the Formal Acquisition Process

The Abrams M1A2 SEPv3 Battle Tank. (Photo: U.S. Army)

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

“The 2018 National Defense Authorization Act provides $650 million to upgrade 29 M1A2s to the new configuration. That means we will be spending $22 million to upgrade a $6 million vehicle.

What makes this particularly curious is that at the same time the Army is dodging the MDAP process with the tank upgrade program, the Hercules tank recovery vehicle upgrade program is going through the MDAP process. That means the wrecker will receive greater scrutiny than the weapon it is meant to recover.”


“When Army leaders decided they needed an upgraded version of the Abrams tank, they wanted to get it without enduring what they consider to be a cumbersome formal acquisition process. Any program of this scale would ordinarily be classified as a Major Defense Acquisition Program (MDAP) and be subject to the oversight reviews and regulations that status entails. To avoid this, Army leaders claimed a major modernization effort to a weapon central to their very identity was a mere design tweak, and managed the project through the far less rigorous Engineering Change Proposal process. This is a problem. The MDAP process may be cumbersome, but its intended purpose is to ensure the Pentagon properly evaluates its needs and then enters into programs that will properly meet them. It is also meant to exert the kind of pressure necessary to keep costs under control. While the system is indisputably flawed (the F-35 is an MDAP), the services should not be permitted to simply ignore the laws. Doing so will almost certainly result in weapons of dubious combat value and more cost overruns.

In performing such a maneuver to avoid the toughest of the acquisitions process, the Army is hardly alone. All of the services are increasingly resorting to similar schemes for other high-profile programs. The danger to the taxpayers, to say nothing of the men and women who will have to take these systems into combat one day, is that these complex and expensive weapons systems aren’t subjected the kind of outside scrutiny necessary to ensure the services are purchasing suitable and effective equipment.

Acquisition Reform

Hardly a year goes by without some effort to modernize the Pentagon’s weapons buying process. Senator John McCain (R-AZ) succeeded in pushing into law a provision to split the Pentagon’s office of Acquisition, Technology & Logistics into at least two offices. The long-time chairman of the Senate Armed Services Committee believes this will allow the separate undersecretaries to focus more on their particular offices. The new office of Research and Engineering will focus on innovation while the Acquisition and Sustainment office deals with basic business functions associated with buying and maintaining new weapons. House Armed Services Committee chairman, Representative Mac Thornberry (R-TX), has introduced legislation meant to streamline the process for the past three years. The latest version would allow the services to purchase more items through commercial marketplaces. Previous similar efforts, such as when the Pentagon attempted to change the definition of commercial items to avoid the competitive bidding process, proved problematic. Earlier efforts were geared towards improving program business models and reducing the process’s reports and paperwork. Congress also effectively outsourced acquisition reform to the defense industry when it created the “Section 809 Panel” as part of the FY 2016 National Defense Authorization Act to make recommendations to streamline the way the Pentagon buys weapons. This panel is comprised of several members with deep ties to the defense industry and is the subject of a concerted lobbying effort by the contracting community.

The effectiveness of such efforts is not yet clear, but that might not matter. The usual result of most such efforts is an even more sluggish process—it is a rare problem that can’t be made worse with the addition of more bureaucracy.

Why the Military-Industrial-Congressional Complex Wants to Avoid the MDAP Process

From the perspective of the Pentagon, the defense contractors, and their allies on Capitol Hill, there are advantages in procuring weapon systems through means other than the formal acquisition process. The acquisition process is so complicated and involved that the Department of Defense created the Defense Acquisition University in 1991 to educate personnel on navigating various aspects of the process. A full explanation of the process would fill volumes, but even the basics provide a glimpse into the complexity of the process.

A Major Defense Acquisition Program goes through three separate phases. At the end of each phase, a program goes through a review process to determine whether it has met the criteria to move onto the next phase. These transitions are called “milestones.”

A project begins when the services identify a new military need, or what is known as a capability. This is done through the Joint Capabilities Integration and Development System. This process figures out whether a new weapon system is actually needed to fill the perceived capability gap or if a change in tactics or some other non-material solution can get the job done. This work is reviewed by the Joint Requirements Oversight Council. If they determine a new weapon system is needed, then it goes through the Material Solution Analysis Phase.

A program has to achieve 40 milestone requirements just to pass Milestone A into the second major phase of a program, the Technology Maturation & Risk Reduction Phase. These 40 requirements includes conducting an Analysis of Alternatives, which is a comparison of other weapons that could potentially fill the same need; an Independent Cost Estimate, which helps decision-makers decide if the weapon is something they can afford to pursue (or what tradeoffs should be made if it’s not); and developing a Test and Evaluation Master Plan, which is essential to establish clear testing benchmarks to evaluate how the new weapon system performs in combat. While plenty of redundancy exists within the process, it is meant to protect the interests of both the warfighters and taxpayers. The Government Accountability Office has noted the importance of following through with these steps as part of a knowledge-based process. If the services don’t do so, they create situations where programs “carry technology, design, and production risks into subsequent phases of the acquisition process that could result in cost growth or schedule delays.”

Ideally, multiple contractors will build prototypes that will then be tested as part of a competition to see which design performs the intended mission better. The most successful programs begin this way, with the Lightweight Fighter Program (F-16) and the A-X Program (A-10) being the most notable examples.

The awarding of a contract for the winning design marks Milestone B, and the program passes into the Engineering & Manufacturing Development Phase. The prime and sub-contractors then finalize the development of the system and begin manufacturing enough production-representative goods to complete the Initial Operational Test & Evaluation process.

The successful completion of the realistic combat and live-fire testing phase marks Milestone C, and the program proceeds to full-scale production and deployment to the troops.

Throughout this process, there are numerous review and decision points. This includes a review by the Defense Acquisition Board, which is made up of the Vice Chairman of the Joint Chiefs of Staff, Secretaries of the Military Departments, four undersecretaries of defense, the Director of Operational Test & Evaluation, and others.

Case Study: The Army’s New Tank

The Army commissioned General Dynamics to design an upgraded version of the M1A2 Abrams tank in 2015. The first of what is expected to be 1,500 upgraded versions of the Army’s Abrams tanks rolled off the assembly line at the Lima, Ohio, factory on October 4, 2017. The choice of contractors for the project was hardly a surprise as the Abrams tank is a General Dynamics product. That is not to suggest that another contractor could not perform the work. Other contractors like BAE Systems also build armored vehicles and their component systems. By designating the project as an Engineering Change Proposal, however, the Army had little need to open it to a competitive bidding process as “most ECPs occur in a sole source environment.”

To the casual observer, the Army’s newest tank looks very much like the existing tanks. The M1A2 SEPv3 is still essentially an Abrams tank on the outside. However, the vehicle is quite different on the inside. It sports a new suite of communications gear called the Joint Tactical Radio System, which is supposed to fully integrate the vehicle into the Army’s command and control network. To provide the necessary electricity to power all of the new electronics and conserve fuel in situations where the crew does not need to run the gas-turbine engine, an improved generator has been added inside the hull.

The tank uses the same M256 smooth-bore cannon as the existing M1A1 tanks, but the breach in this variant has been modified to use the Ammunition DataLink to be compatible with the advanced multi-purpose round. This allows the tank’s gunner to send a signal to the round right before it is fired, setting its detonation mode to one of three different settings. It can detonate on impact, detonate on a delay for obstacle reduction, or airburst. This single round replaces four existing rounds, reducing the logistical burden of the armored forces, which is always a great concern.

In response to the threat posed by IEDs, the new tank includes a Counter Remote Controlled Improvised Explosive Device electronic warfare package. Should all of that fail, or when enemy fighters use simpler low-tech command-wired IEDs (which they will), the tank also boasts additional armor protection.

These are not insignificant changes. They add significantly to an already extremely heavy tank. As someone who spent ten years operating in tanks, I can tell you this is a significant problem. The Abrams tank is already too heavy for most of the world’s bridges. This restricts the number of avenues a unit can take to reach an objective, making it much easier for the enemy to predict the unit’s movements. It also increases the logistics burden because a heavier tank requires more fuel.

Sources within the Army say the new variant is too heavy for the Army’s fleet of Heavy Equipment Transport vehicles. The Army relies on these vehicles to transport the tanks across long distances to conserve fuel and to reduce wear and tear on the tanks.

They also do not come cheaply. The 2018 National Defense Authorization Act provides $650 million to upgrade 29 M1A2s to the new configuration. That means we will be spending $22 million to upgrade a $6 million vehicle.

What makes this particularly curious is that at the same time the Army is dodging the MDAP process with the tank upgrade program, the Hercules tank recovery vehicle upgrade program is going through the MDAP process. That means the wrecker will receive greater scrutiny than the weapon it is meant to recover.

Case Study: F-35 Follow On Modernization

F-35A's touch down at RAF Fairford

An Airman with the Air Combat Command F-35A Heritage Flight team marshals an F-35A Lightning II to its parking spot on the flightline at Royal Air Force Fairford, England, June 30, 2016. The team flew to England for the Royal International Air Tattoo. (Photo: U.S. Air Force / Tech. Sgt. Jarad A. Denton)

The F-35 program is being managed through the regular MDAP process, but officials are now working furiously behind the scenes to prevent the next phase of it from following the same path. No one is quite sure what the latest incarnation of the F-35 will be able to do when the program completes the development and testing process, but that isn’t stopping officials from seeking funds for upgrades to the aircraft. They are continuing to develop a list of needed capabilities for the newer version, called Block 4.

The Pentagon estimates the cost just for the initial phase of the modernization program—the research, development, test and evaluation (RDT&E) phase—to be more than $3.9 billion through 2022. The Government Accountability Office correctly points out that this “would exceed the statutory and regulatory thresholds for what constitutes a major defense acquisitions program (MDAP), and would make it more expensive than many of the other MDAPs already in DOD’s portfolio.”

The F-35 Joint Program Office has strenuously resisted efforts to create a separate MDAP for the Block 4 modernization citing time and money concerns. The Joint Program Office wants to run the modernization program as part of the original contract from 2001. By dodging the MDAP process for this effort, the program would avoid many of the processes meant to ensure proper Congressional oversight. The program would not, for example, have to go through a Milestone B review, which would establish an acquisition program cost baseline and require regular reports to Congress about the program’s cost and performance progress.

Such a move also means the program would not be subject to the provisions of the Nunn-McCurdy amendment which establishes unit cost growth thresholds. This would require the Pentagon to notify Congress if the program’s unit cost grows by 25 percent and calls for the program’s cancellation if the cost grows by more than 50 percent. This, unfortunately, does not happen very often because the law includes a waiver provision that allows the Secretary of Defense to certify that the program is critical to national security and should be continued. Only one program, the Armed Reconnaissance Helicopter, has been cancelled as a direct result of a Nunn-McCurdy breach.

Case Study: The B-21 Raider

B-21

(Photo: US Air Force)

The biggest ticket item currently attempting to dodge public scrutiny is the Air Force’s newest bomber, the B-21 Raider. This program is being managed by the Air Force’s Rapid Capabilities Office, a secretive group that is conveniently not subject to many of the regulations Congress imposes upon most acquisition programs.

According the Air Force’s Rapid Capabilities Office website, this outfit has a key advantage the regular acquisition office does not:

“waivers to and deviations from any encumbering practices, procedures, policies, directives or regulations may be granted in order to ensure the timely accomplishment of the mission within applicable statutory guidance.”

The Air Force has been extremely cagey about releasing cost information about the new bomber. During the bid process, service leaders announced a $550 million per aircraft target cost. So far, Air Force leaders have refused to publicly releasethe value of the B-21’s development contract with Northrop Grumman. The stated reason for the secrecy about cost is that a potential adversary could derive information about the size, weight, and range. Apparently no one will be able to determine any of that information from the artist’s rendering of the new bomber, or from the list of subcontractors Air Force officials publicly announced.

Conclusion

The MDAP process is complex and does often fail to produce weapons that do what they are expected to do or come anywhere close to meeting the original cost expectations. The process is long over-due for a comprehensive streamlining effort. But even though the process is deeply flawed, the protections it includes were put there to protect the interests of the troops and the taxpayers. Just because the services find the process inconvenient, doesn’t justify their efforts to dodge the oversight mechanisms provided by federal law.

Unless Congress arrests this disturbing trend, the services are likely to continue to use these schemes to bypass the rules and regulations put in place to protect both the troops and the taxpayers. The people’s interests are served only when everyone involved in the process of buying new weapons have the correct information at the beginning. As Tom Christie, former Director, Operational Test and Evaluation wrote:

“Upfront realistic cost estimates and technical risk assessments, developed by independent organizations outside the chain of command for major programs, should inform Defense Acquisition Executives.  The requirement for those assessments to be independent, not performed by organizations already controlled by the existing self-interests sections of the bureaucracy is essential.”

It is understandable that the services want to speed up the process of fielding new weapon systems. While there are many flaws in the current acquisition system, it is not the root of the problem. Service leaders and their partners (and far too often future colleagues) in the defense industry keep pursuing unrealistic programs and Congress keeps voting for them. Dodging the current acquisition regulations will not fix that problem, but it will make it easier for all involved to hide the bad results from the people paying for them, but presumably not from those who would suffer the consequences if a weapon were to fail in combat.”

http://www.pogo.org/straus/issues/weapons/2018/dodging-the-formal-acquisition-process.html

 

 

 

Former Navy Official Sean Stackley Joins L3 Technologies

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Navy to L3 Revolving Door

THE PENTAGON REVOLVING DOOR REVOLVES ONCE MORE

“DEFENSE  NEWS”

“Sean Stackley, who also served as the acting secretary of the Navy from Jan. 20 to Aug. 3, 2017, kicked off his tenure as corporate vice president at L3 Technologies on Jan. 8, leading the company’s strategic advanced capabilities and technologies.

It’s a whole new world,” Stackley said of his new role during an exclusive interview with Defense News on Jan. 3, the day after he officially wrapped up his tenure in government.”

L-3 Communications Contractor Misconduct


“As one would figure for a high-level official from the Defense Department, Stackley did have options — he said he was approached by a number of market leaders. (He wouldn’t name which specifically.) He wasn’t ready to engage and settle with a single defense company, nor was L3 even on his radar as a possibility until he got the call from the company’s new chief executive. Chris Kubasik, who stepped into the CEO role at the start of the year after serving as chief operating officer since 2015, has worked with Stackley on government projects on and off for about a decade.

“Our strategy and vision has gained traction and is appealing to a lot of leaders,” Kubasik told Defense News. “Sean and I are completely aligned as to how L3 can help our customers with their important missions, and he was one of the most respected leaders in the Pentagon. We are excited to have him on board.”

For Stackley, the fact that L3 is a company built upon acquisitions, thus far maintaining some of the speed and agility that can come more easily for smaller companies, is an advantage.

“The government and our closest defense firms tend to grow up together; organizationally and structurally, they tend to become mirror images,” Stackley said. “For all the goodness — and I have four decades of public service and nothing but love and respect for what we do — the government is not credited with being really quick. L3, unlike its larger defense companies, did not take on that mirror image of the government. It’s kept its roots that came from the smaller companies that formed it. That’s a strength.”

That said, among the priorities for both Stackley and Kubasik is to further unify a corporation that remains relatively segmented — “to integrate all these parts of the companies to make something bigger,” in the words of the former Navy official.

In terms of his Navy tenure, Stackley remained rather mum about the recent challenges faced by the service, voicing strong support for the current leadership’s ability to address challenges and saying only that the June 2017 collision involving the destroyer Fitzgerald while he was serving as acting secretary “shook us.”

He did, however, speak to his optimism about the current administration’s approach to defense.

“More so than some of the past administrations that I’ve worked closely in or with, there’s been a heavy focus on the industry side with this administration,” Stackley said. “That brings with it a greater understanding of some of the challenges that industry faces, coupled with an understanding of the opportunities that the government has in terms of dealing with industry — from acquisition strategies to contract negotiations.”

“We’re at year one of the administration,” he continued. “But the team in place has a good respect for and understanding of industry, which lends itself to smart policies that protect the health and welfare of industry, but at the same time puts the department in a strong position to be a demanding customer.”

https://www.defensenews.com/breaking-news/2018/01/08/former-navy-official-sean-stackley-joins-l3-technologies/

 

Why Artificial Intelligence (AI) Is Not Like Your Brain Yet

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AI Not LIke Your Brain Yet

Image: ZOHAR LAZAR

“WIRED”

“AI resembles the gray matter in your head about as much as a pull-string doll resembles a rocket scientist.

These systems have only a few million “neurons,” which are really just nodes with some input/output connections. That’s puny compared to the 100 billion genuine neurons in your cranium.”


“Here’s a fun drinking game: Every time someone compares AI to the human brain, take a shot. It’ll dull the pain of such mindless metaphorizing—and serve as a reminder that you, an at-least-semiconscious being, have an actual brain that can make real decisions like “Drink!” in the first place. Contra the hype of marketers (as regurgitated by credulous journalists—for shame!), AI resembles the gray matter in your head about as much as a pull-string doll resembles a rocket scientist. There’s a similarity in shape, ish: So-called neural networks are software programs inspired by neuroscience. But these systems have only a few million “neurons,” which are really just nodes with some input/output connections.

That’s puny compared to the 100 billion genuine neurons in your cranium. Read it and weep, Alexa! We’re talking 100 trillion synapses. Or 200 trillion. (Of course, cognition is still pretty incognita itself—which means we’re “modeling” AIs on something we barely even comprehend.) The truth is, tricks like beating people at Go or diagnosing melanomas owe more to brute-force computing power than to any higher sentience. It’s just basic pattern matching under the hood. Yes, a “deep learning” system running on 16,000 processors taught itself to identify cats—with 75 percent accuracy—after analyzing 10 million images. A toddler can nail that on a walk to the playground. So all this Muskian/Hawkingian/Singularitarian talk of “summoning the demon” and “existential threats” to our “survival”? Eh, let’s just worry about that tomorrow. For now, we’re human, and we’re here to drink.”

https://www.wired.com/story/why-artificial-intelligence-is-not-like-your-brainyet/

 

 

 

Booze Allen Contractor to Plead Guilty in 23-Year-Long Largest Ever Theft of Classified Data

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Booze Allen - Here we go again

“WASHINGTON TECHNOLOGY”

“The saga of a government contractor who allegedly stole more classified data than anyone else in history might be coming to a close.

Harold Martin III, who is accused of stealing terabytes of information, has told the U.S. District Court in Baltimore that he will plead guilty to a single charge of willful retention of national defense information on Jan. 22.”


“A plea agreement has not been filed yet, so it is not clear what punishment is being proposed or what will happen to the other 19 counts that were filed against him.

Court filings state that Martin will not be sentenced until all the other counts are resolved.

That single charge carries a maximum of 10 years in prison and three years of probation. He also could be fined up to $250,000.

Over a 23-year period, Martin worked for a series of contractors serving customers in the intelligence field. His security clearances gave him access to a broad range of information.

During that period, Martin took copies of documents and software programs home. This includes data from the National Security Agency, U.S. Cyber Command, the National Reconnaissance Office and the CIA.

When the FBI searched his home in August 2016, the bureau said they found the biggest stash of classified documents ever uncovered. Computers and storage devices were found in his home, his car and a shed in his yard. There were boxes and boxes of paper documents as well.

Still not clear is what Martin did with the data he allegedly stole. There is no allegation that he sold the information or distributed it.

At the time of his August arrest, Martin worked for Booz Allen Hamilton. But he worked for at least seven companies over the 23 years he had taken government secrets, according to the indictment.”

https://washingtontechnology.com/blogs/editors-notebook/2018/01/harold-martin-guilty-plea.aspx

 

 

 

Key Processes for Winning Proposals

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Writing Winning Proposals

“WASHINGTON TECHNOLOGY” By Matthew McKelvey

“Don’t be fooled, winning proposals are created, and do not simply materialize from some magical force. It’s not magic, but a disciplined process.

By adhering to key principles and steps, such as: careful planning, time management, attention to detail, and assembling a team of experts, your organization can create your own recipe for success.”


“The often lengthy and detailed process involved with developing winning proposals for new government opportunities can sometimes seem almost mythical.

You decode a requirements document that is hundreds of pages long and identify a combination of recommendations from limited or conflicting information, past performance experience which doesn’t necessarily match the current opportunity exactly, and somehow propose a price you will have to live with for five years or more.

The bottom-line is that, while writing cost proposals requires following a basic formula, it is critical to develop a multi-level, detailed plan to include all data points and requests to ensure a timely turnaround and delivery. Following a process ensures your proposal is compliant (meets all of the government requirements) and accurate (no mathematical, grammatical, or presentation errors). Failure to be either compliant or accurate is a sure way to lose — regardless of how great your solution is.

Here are some ‘pro tips’ from our experts to take the guesswork out of your cost proposal development process:

Arm Yourself with Tools for Success- Key Processes for a Winning Approach

From the get-go, it is essential to begin a proposal response approach that will result in a consistent, repeatable new business approach that wins time and again.

In a RFP review, for example:

  • Always be sure you read the full document up-front and ensure you have all of the relevant information required to respond accurately and comprehensively.
  • Document key questions right away, as well as identify areas where you’ll need more detail. Also, remember that the best time to meet the client, gather information, develop your team, and plan the proposal response is before the RFP is ever released.
  • Assemble your team and develop your production schedule that highlights key milestones and backs into known due dates. At this stage of the game, it is critical to involve your pricing team right out of the gate and before the RFP drops (at the capture process). This is a critical step because of the potential impacts your teammates and sub-contractors can exert on your cost decisions.
  • Always create a Compliance Matrix. The best proposal is often eliminated from consideration all because of a minor compliance error. To avoid this happening to you, put together a matrix to organize all steps, responsibilities, activities, deliverables, and team members so you can keep your eyes on the prize (that finished response!) and track progress at-a-glance while keeping communication lines open. The matrix should list everything the RFP requires so nothing is missed, and it also makes it easy for reviewers to check off the boxes to ensure you hit all necessary points.
  • Determine the Cost Schedule right away. This includes an assessment of indirect rates, using a model to calculate inputs and additional costs beyond RFP requirements, calculate your wrap rate, and analyze basis and pools, as well as ceiling impacts.

Tricks of the Trade – The Secret Sauce

  • Get Started Early. Particularly with cost decisions, time is a critical factor to be sure your data is accurate. Building in the over-communication and transparency among your team members is important to finishing the response in a timely manner, but also to allow for early intervention and mitigation of any roadblocks that may arise.
  • Develop a production framework and strategy early, and use it often. Implement a phased, targeted structure to your cost meetings during a response development process. Doing so early on makes it much easier to adjust for changes in requirements or information as they come up as you already have your framework established.
  • Master Excel. Consolidate data entry onto single tabs for easy management and recall, use color coded values as opposed to formulas where possible, check formatting, data validation, and perform independent quality checks on your model as you go to ensure everything is on track.
  • Manage your Sub-Contractors Effectively. Create templates for key deliverables and document responses to distribute to subcontractors, helping to ensure a consistent work product – and less editing, formatting, and merging later on – while establishing a structure of regular communication and status updates throughout each project stage.
  • Own the Narrative. Refer back to your compliance matrix regularly, create an outline based on the RFP, and create your narrative early in the process so it can grow and evolve as the process unfolds. The narrative is where you sell your price and clarify all bases of estimates.
  • Determine Labor Rates and Support Your Proposed Cost Elements. Typically, the distributor of the RFP will tell you what they are looking for. You’ll need to know early on what exactly you’ll be proposing to address this need. To do this, you’ll need to gather as much data as you can up-front and map requirements from the RFP against company, prime, and labor categories.

Remember- especially in the government sector, you are not just making a case about what is needed to address an identified objective, you are also selling what the associated costs will be.

Having a strong and competitive cost strategy for each of your cost estimates (staffing, direct labor, subcontractors, other direct costs, indirect rates, and fee/profit) is key to increasing win likelihood.

Doing this right, with compelling support, will ensure you are able to successfully defend your case in your response and demonstrate that your proposed solution – and the associated costs – are realistic and reasonable.

How To Develop a Tight Production Machine

At the top of the list is to always plan ahead! The enemy of timely production and accurate completion of tasks is rushing to the finish. It’s a good idea to dedicate at least three days for review – whether in soft copy or printed.

It is also a good idea to conduct your pricing reviews ahead of the last minute to allow for time to correct quality control issues, formatting (which is a compliance issue), and others. Allow five days here in your production schedule, ideally.

Other tips? Color code everything on your spreadsheet documents- this allows you to keep things organized, but also to know on the cost side which sheets are to be printed and submitted, and which stay with you.

Leverage all of the power of your team here as well; they are often your best proofers!

The Bottom-Line

Overall, the secret to a winning proposal process and cost structure is not a mystery. Proposals take time and effort – maximize both by ensuring you plan early, assemble a strong team, develop a compliance matrix, create a tight production schedule, use your narrative to sell your approach, and make sure you provide a compelling cost story. Remember – compliance and accuracy are key.

Adhering to these principles will ensure your cost proposal isn’t just a mix of ingredients. Instead, it is a well-formed recipe which produces a very tempting choice for the government.”

About the Author

Matthew McKelvey is the president of the McKelvey Group, a financial consulting firm in Gaithersburg, Md.

https://washingtontechnology.com/articles/2017/12/21/insights-mckelvey-no-magic-proposals.aspx

 

 

 

 

Government Law and Regulation Compliance Fatigue Syndrome is Real

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Compliance Fatigue Synderome

“NATIONAL DEFENSE MAGAZINE” By Brian D. Miller

“A values-based compliance program seeks to encourage leaders and employees to follow a set of core values that should result in more effective compliance.

The culture of the organization is so internalized that employees are automatically asking: “What is the right thing to do in this situation?” This is better than relying on a memorized rule.”


“Forget chronic fatigue syndrome. A more serious ailment may be compliance fatigue syndrome. Which is more ruinous? Hint: One may result in time spent in a federal correctional institution.

In modern slang, is compliance fatigue syndrome even a thing? Unfortunately, it is a thing, but arguably it is a confused thing. Worse yet, if there is talk of it in an organization, it’s a red flag — a big red flag. It means that the state of affairs is far worse than you believed.

What is compliance fatigue syndrome?

Urban Dictionary defines it as “a state of chronic fatigue induced by having to constantly maintain compliance with the ever-increasing variety of rules, regulations and processes created by middle management bureaucrats in both public and private organizations.”

This frustration does not arise from an issue of whether to comply with legislation and regulations that have been lawfully passed and promulgated. This kind of frustration is with lawmakers and regulators who may be guilty of overregulation, which is ultimately a political issue.

Compliance fatigue syndrome is a misnomer in this situation. It is one thing to be frustrated at the increasing regulatory burdens placed on contractors and therefore “fatigued,” but it is quite a different thing to be frustrated with compliance itself. The bottom line is this should not be called “compliance” fatigue but rather overregulation fatigue.

However, there may be resentment of time and money spent on compliance. In effect, this translates into the belief that compliance is a money pit with no benefit to the organization — a revenue drain rather than a revenue maker.

Budgets are tight in today’s organizations, and money spent on compliance means that money won’t be spent on revenue-producing programs. A manager might want to maximize spending on an important programmatic budget than on what may be considered “overhead.” Unfortunately, that perspective betrays a culture that puts very little confidence in compliance.

Instead of viewing compliance programs as strengthening the organization, this attitude views them as just an obligation with little or no benefits. The proper attitude is to see how compliance is an outworking of the corporate culture that places great value on doing things right and making ethical corporate decisions. In the long run, an ethical company will gain a competitive advantage and will avoid devastating investigations and their consequences.

Resentment of the authority of compliance professionals is another symptom of compliance fatigue syndrome. Managers, workers, lawyers and auditors may resent having to take time out of their regular projects to deal with compliance officers who need information quickly. Additionally, managers may resent workers saying things in confidence or beyond their control.

Sometimes functions previously handled by other offices may now be controlled by the compliance office. For example, human resources may have dealt with all employee complaints and interviewed all employees, but certain complaints must now be handled by the compliance office. To be sure, how compliance professionals work with others will either contribute to this kind of fatigue or prevent it. However, in all cases, this type of internal power struggle fails to recognize the bigger picture and how the organization will benefit from effective programs.

Another indicator of compliance fatigue is resentment of stale and repetitive programs. Just as a lecture on nutrition doesn’t cause overweight people to lose weight, ethics training alone won’t prevent employees from making ethical mistakes. Dietary lectures may be helpful, and even necessary, but they are not sufficient for effective weight loss. Likewise, compliance and ethics lectures alone, however brilliant, will deter very few ethical lapses. This is especially true if the same lecture is repeated year after year. Compliance professionals need to work hard at making training fresh and relevant.

How can compliance fatigue syndrome be prevented?

A compliance program that encourages compliance with the law and regulations is a good start. The most effective programs, however, change the culture of the organization and the people in them.

They have a set of core values that are clearly communicated and modeled by organizational leaders.

This sort of ingrained attitude results from modeling leaders and managers within the organization who know that compliance will lead to more business success.

A values-based compliance program meets and exceeds what is required by federal authorities. The Federal Acquisition Regulation and other rules require a contractor to “promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.” This is how to effectively prevent talk of compliance fatigue syndrome.

In conclusion, to the extent that compliance fatigue is viewed as legitimate and is voiced, trouble will follow. It may be a veiled threat to effective compliance. It could be a way to undercut effective transformation of the corporate culture; undermine the authority and effectiveness of compliance officials; or gain an advantage in an internal corporate power struggle.

In contrast, employees in healthy corporate cultures are asking how to do the right thing in all circumstances and are grateful for help in doing so.”

http://www.nationaldefensemagazine.org/articles/2017/11/28/compliance-fatigue-syndrome-is-real

ABOUT THE AUTHOR:

Brian D. Miller is a shareholder with Rogers Joseph O’Donnell, PC, http://www.rjo.com, specializing in government investigations, government contracts and suspension/debarment. He also serves as corporate monitor. He was formerly inspector general for the General Services Administration. He can be contacted at bmiller@rjo.com.