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The One Year Budget Cycle Must Go


Budget White Elephant kickstarter dot com

                                                   Image: Coveredglasses                 


“With the threat of yet another government shutdown, the U.S. has one of the biggest White Elephants ever in front of us (a National Debt approaching $21 Trillion).

A huge reason for much of the largess in this entire area is the one year budget cycle in which the US Government is entrenched.   It has become a ludicrous exercise we can no longer afford and our government is choking on it.”

“Having  dealt with the funding process in the government contracting industry  (both large and small business) for over 40 years through many administrations and much frustration, I can discuss with  some  credibility a major weakness in the huge machine we call the US  Federal  Government — the one year budget cycle.

Its tail end is whipping everybody this month with the threat of another sanctimonious “Shutdown” and the promise of more to come.

About mid-summer every agency begins to get paranoid about whether or not they have spent all their money, worried about having to return some and be cut back the next year. They flood the market with sources sought notifications and open solicitations to get the money committed. Many of these projects are meaningless.

Then during the last fiscal month (September) proposals are stacked up all over the place and everything is bottle-necked. If you are a small business trying to get the paperwork processed and be under contract before the new fiscal year starts you are facing a major challenge.

Government must lay out a formal baseline over multiple years (I suggest at least 2 fiscal years – ideally 4 – tied to a presidential election)  – then fund in accordance with it and hold some principals in the agencies funded accountable by controlling their spending incrementally – not once a year in a panic mode. 

Naturally exigencies can occur. A management reserve can be set aside if events mandate scope changes in the baseline due to unforeseen circumstances. Congress could approve such baseline changes as they arise.

There is a management technique for the above that DOD, NASA and the major agencies require by regulation in large government contracts.    It is called “Earned Value Management” and it came about as a result of some of the biggest White Elephant overruns in Defense Department History.…

We need to get this mess under control, manage our finances and our debt or it will manage us into default.”


How the Vietnam Tet Offensive Undermined American Faith in Government

TET Offensive

President Lyndon B. Johnson and Gen. William Westmoreland in Vietnam on December 25, 1967, a month before the Tet Offensive.


I had a recent conversation with an old acquaintance from the Tet Offensive 50 years ago.  We met on the 1968 Vietnam battlefield as enemies and later became friends by accident in civilian life when we met again at a U.S. airport in 1998.

 What’s It Like To Meet Someone You Fought Against In War 

We agree the following article in “The Atlantic” is an excellent footnote to history on how the Tet Offensive, that enormously effected the two of us, also dramatically impacted the faith of Americans in the U.S. government regarding truth in foreign interventions.  –Ken Larson


“Tet shaped the world within which we live today: In an era when Americans still don’t fully trust government officials to tell them the truth about situations overseas, and don’t have confidence that leaders, for all their bluster, will do the right thing.

Tet is an important reminder that for liberals and conservatives sometimes a little distrust is a good thing. Particularly at a time when we have a president who traffics heavily in falsehoods, Tet showed that blind confidence in leaders can easily lead down dangerous paths.”

“When Americans wince upon hearing presidents make proclamations about foreign policy, the legacy of the 1968 Tet Offensive looms large.

On January 30, at the start of the sacred Vietnamese holiday of Tet, which celebrated the start of the new lunar year, the North Vietnamese and the Vietcong launched a massive military offensive that proved the battle raging in Southeast Asia was far from over, and that President Lyndon B. Johnson’s administration had grossly oversold American progress to the public. Although U.S. troops ultimately ended the offensive successfully, and the North Vietnamese and the Vietcong suffered brutal loses, these bloody weeks triggered a series of events that continue to undermine Americans’ confidence in their government.

The Tet offensive came after several months of the North Vietnamese modifying their strategy. Rather than a battle of attrition, the leadership planned to launch a massive assault that aimed to undermine the morale of the South Vietnamese as well as the American public. Since December, the North Vietnamese had been conducting a series of attacks meant to send U.S. forces in the wrong direction. Johnson and his military advisors fell for the trick. The president and General William Westmoreland had focused on potential attacks against a U.S. Marine base in Khe Sanh. Johnson kept asking military leaders if they were prepared to defend the base and he kept promising congressional Democrats and Republicans that he had received their assurances everything would be fine.

Meanwhile, Johnson had conducted a massive public relations blitz in the end of 1967 to convince the public that the war was nearing a conclusion and that the United States was winning. The Progress Campaign, as it was sometimes called, deployed large volumes of data to convince the media that the communists were losing on the battlefield and that their numbers were diminishing.

Westmoreland told Meet the Press on November 19, 1967 that the U.S could win the war within two years and then proclaimed at the National Press Club on November 21 that “the end begins to come into view.” In November 1967, according to the Harris poll, confidence in the president’s Vietnam policies rose by 11 points (from 23 to 34 percent). In his State of the Union Address on January 17, Johnson sounded downright optimistic, even though he acknowledged that the U.S. faced major challenges overseas and that victory in Vietnam would take some time. As he asked Congress to pass a tax surcharge to help pay for the escalating costs of the war, while continuing to fund the Great Society, the president declared that the enemy was testing the “will” of the nation to “meet the trials that these times impose.”

In resolute fashion, Johnson went on to promise that “America will persevere. Our patience and our perseverance will match our power. Aggression will never prevail.” Max Frankel of The New York Times reported, “Whereas a year ago he promised ‘more cost, more loss and more agony’ in the war, this year he emphasized the positive, what he called the ‘marks of progress,’ and dwelt less on the whole issue of the war than in the previous two speeches.”

Then the situation took a bad turn a few weeks later. The crisis of Tet began in the early morning of January 30, the start of the year of the Monkey. In Saigon, NLF fighters attacked the American embassy. A 20-year-old soldier, Chuck Searcy, recalled waking up after an evening of drinking and movies, that when the sirens went off he assumed it was a drill and they would be able to go back to sleep. “But then a captain came around the perimeter in a jeep with a loudspeaker announcing that this was not a practice alert … It was the moment when the war became a reality for us, because up to then, Saigon had been considered a very safe area and quite secure and basically an area that would never be attacked.” The fighting continued until 9:15 the next morning. Nineteen enemy soldiers would lose their lives in the battle for the embassy; five Americans were killed. This was just one of many onslaughts that took place as the communists conducted their offensive in five major cities, 36 provincial capitals and smaller hamlets across the country.

Desperate to stop the public fallout, on January 31, Johnson ordered Westmoreland to hold daily press briefings to “convey to the American public your confidence in our capability to blunt these enemy moves, and to reassure the public here that you have the situation under control.” Johnson warned legislators that the anti-war protests in the U.S. were being triggered by allies of the communists. Secretary of Defense Robert McNamara privately told Johnson, “I think it shows two things, Mr. President. First, that they have more power than some credit them with … My guess is that we will inflict very heavy losses on them, both in terms of personnel and materiel and this will set them back some, but after they absorb the losses, they will remain a substantial force.”

After the initial shock and awe, U.S. troops mounted a fierce and effective counter-attack, one of the most successful military operations of the war. When it was all over in late February, the communists suffered over 40,000 deaths, including some of their most skilled troops. The fighting ended when the U.S. and South Vietnamese recaptured the city of Hue.

Yet the military victory turned into a political disaster for the administration. Johnson tried to stop the political bleeding from the realization that the Vietnam War was not ending any time soon.

The Tet Offensive showed that Johnson and Westmoreland were lying about having “reached an important point where the end begins to come into view,” as Westmoreland famously had said.

The media coverage of Tet provided reporters with unprecedented access to the images of the conflict as the battles moved into the cities, and they delivered. One of the most famous images from the period was that of a South Vietnamese brigadier general Nguyen Ngoc Loan, the chief of the national police, putting a bullet in the head of Nguyen Van Lem, a captain in the Vietcong. The photograph, taken by Associated Press photographer Eddie Adams on February 1, confirmed the brutality of this conflict to many Americans. Life magazine’s cover on February 16 featured a photograph of two North Vietnamese soldiers with Chinese AK-47 automatic rifles, guarding Hue, with an article by Catherine Leroy called, “The Enemy Lets Me Take His Picture.”

The images on television were just as bad. The coverage shifted from smoke and helicopters to soldiers fighting to recapture ground in a brutal war. “There, on color screens,” one observer noted, “dead bodies lay amidst the rubble and the rattle of automatic gunfire as dazed American soldiers and civilians ran back and forth trying to flush out the assailants.” Walter Cronkite famously signed off his broadcast challenging the president and joining journalists who had increasingly been saying that the government was not telling the full truth. “Who won and lost in the great Tet Offensive against the cities? I’m not sure. The Vietcong did not win by a knockout but neither did we … For it seems now more certain than ever, that the bloody experience in Vietnam is to end in a stalemate. To say that we are closer to victory today is to believe in the face of the evidence, the optimists who have been wrong in the past.” ABC anchor Frank McGee followed up a few days later telling viewers “The war is being lost” while his colleague Frank Reynolds said it put the president’s credibility “under fire.”

Inside the White House, the historian Robert Dallek found that Johnson’s advisors were shaken. Following one meeting of foreign policy advisors, Joseph Califano reported that they were “beyond pessimistic.” The new secretary of defense, Clark Clifford, recalled that “It is hard to imagine or recreate the atmosphere in the sixty days after Tet. The pressure grew so intense that at times I felt the government might come apart at its seams. Leadership was fraying at its very center—something very rare in a nation with so stable a government structure.” Clifford said that in early March he made his “overwhelming priority” as Secretary “to extricate our nation from an endless war.”

“The element of hope has been taken away by the Tet Offensive,” noted Secretary of State Dean Rusk, “People don’t think there is likely to be an end.” Newsweek ran a cover story on February 19, with Westmoreland on the cover, entitled “Man on the Spot.”

By the time that Tet ended, Johnson was left with a massive credibility gap that overshadowed everything he had done on domestic policy. By March, when anti-war Democrat Senator Eugene McCarthy performed unexpectedly well in the New Hampshire primary, the polls had really turned on the president and the war. An initial spike in public support from Tet in February, with a notable increase in hawkish sentiment about Vietnam, turned hard against the administration in March. 49 percent of Americans thought the war was a mistake; only 41 percent thought it was the right decision. Only 35 percent believed that it would end within the next two years. His overall approval ratings for handling the war fell to a meager 26 percent. On the last day of the month, with his support plummeting, Johnson shocked the nation by going on television to announce that he would not run for reelection.

When rumors circulated that Westmoreland had asked for 206,000 more troops in response to Tet, Americans were outraged and the apparent blindness of the people in power. The Democratic Convention in 1968 was a disaster, as liberal Democrats and the anti-war movement opened up a civil war. Ironically, the person to reap the most benefits from the war was Richard Nixon, the next president of the United States, who lied and deceived the public about Vietnam in ways that even Johnson could not have imagined.

Besides the damage that Tet imposed on Johnson, the surprise attack and the revelation that the administration had vastly oversold the prospects for success were a severe blow to public confidence in American government leaders to tell the truth and to do the right thing.

The right also took its own lessons from Tet and other parts of the increasingly critical wartime coverage, namely that the media could not be trusted. As reporters focused on Tet as evidence of failure, hawkish Democrats and Republicans were quick to note, rightly so, that the U.S. counter-offensive had been successful. Johnson felt this way and tried to hammer away on the point that the media was misrepresenting what happened. For decades, coverage of Tet would remain to conservatives a symbol of why the “liberal establishment” could not be trusted to give the public a realistic assessment of national security issues.

For much of the nation, however, the specifics of Tet were beside the point. The real story was the context of the disastrous policies in Vietnam that cost thousands of American lives every month, undermined the nation’s moral authority in the Cold War, and didn’t seem to be working. As the historian Fred Logevall has argued, Tet is not the sole culprit behind the shattered faith from Vietnam, as opposition to the war and the realization of government falsehood had been growing for several years. But Tet still packed an extraordinarily powerful punch on a nation primed to be disillusioned. Based on what they were seeing in the winter of 1968, the communists in North Vietnam remained strong and determined, and promises that the war was ending were simply not true.”

Consumer Electronics Industry Shows Up Defense Department

Consumer Electronics and the Defense Department

Photo: Defense Dept., Ford


“In 2005, the F-22 went through initial operating capability and the Ford GT sports car was launched. Both required 2 million lines of software to operate.

The F-35 requires 8 million lines of software to operate. The 2018 F-150 pickup truck requires 150 million lines of software to operate. And the F-150 comes with a rebate, a warranty and free software upgrades. “

“A book published in 1984 references two tongue-in-cheek “laws” to be avoided within the Defense Department, Congress and the defense industrial base.

The most famous of these laws is: “In the year 2054, the entire defense budget will purchase just one aircraft. This aircraft will have to be shared by the Air Force and Navy three and half days each per week, except for leap year when it will be made available to the Marines for the extra day.”

This book, Augustine’s Laws by former secretary of the Army and industry executive Norm Augustine is a collection of anecdotal market trend observations that highlighted the Defense Department’s growing dependence on electronic systems in the mid-1970s. Another famous law is: “After the year 2015, there will be no airplane crashes. There will be no takeoffs either, because electronics will occupy 100 percent of every airplane’s weight.”

Now in its sixth edition and published in six languages, the book’s lessons ring true today, as it appears the department and the defense industrial base have adopted many of the laws as goals.

However, it might come as a shock to both entities to learn that Augustine’s Laws have been broken by commercial aviation, commercial electronics and the auto industry.

For decades the Defense Department was the driving force behind the development of microelectronics. The Army funded the micromodule project, precursor of the integrated circuit. The Defense Advanced Research Projects Agency funded the very-large-scale integration project, which created today’s electronic design architecture companies and resulted in the development of multi-chip wafer fabrication technology. Today’s microelectronics technology would not exist if not for a few brave and visionary defense project officers.

Most of the critical technologies developed under Defense Department science and technology programs have successfully transitioned to the commercial market. “Free market” competitive forces incentivize the commercial industry to invest considerable internal resources to advance and mature these technologies, resulting in affordably priced — and profitable — cutting edge technology products that have “broken” Augustine’s Laws.

Microelectronics technology is the most visible and significant example of the commercial market not only transitioning, but significantly advancing defense developed technology. This article is being written on a device that wouldn’t exist without this technology. It is also the enabling technology that will allow the Defense Department and defense industrial base to break Augustine’s Laws.

Consider the following when assessing the technological state of consumer electronics product development.When was the last time a commercial company released a “beta” version of their product to the public? When was the last time a major electronics company slipped a product launch date? When was the last time a consumer electronics product wasn’t profitable?

When was the last time a consumer electronics product had to be recalled?

Success of today’s consumer electronics companies is due in large part to the “first-pass success” enabled by electronic design automation tools and processes. These tools and processes, developed by companies that invest up to 40 percent of their annual sales in internal research and development are a result of the intense competition within the unforgiving consumer electronics market, which thrives on getting new products out for next year’s big holiday season.

These “first-pass success, future-proofed design” tools and processes are the basis of on-schedule, on-cost product development.

If it is generously assumed that the Defense Department and defense industrial base electronics development process and the commercial electronics development process both achieve “first-pass success,” the commercial process timeline is at most 30 percent that of the defense industry process. However, past program performance has proven that the Defense Department process does not achieve that.

Not having to develop hardware design test articles and eliminating the need for application-specific integrated circuit/system on chip re-work has a factorial impact on the reduction of commercial product development costs.

So, why aren’t these processes being adopted whole-heartedly by the defense sector?

The sad fact is that while science and technology programs have consistently focused on developing and demonstrating technologies that would break Augustine’s Laws, these laws are on track to become a self-fulfilling prophecy because of a phenomenon that is unique to the defense industry the so called “Valley of Death,” where good ideas in the lab don’t make it to the intended end user.

The uninformed say this Valley of Death is a result of unfocused DoD science and technology projects. Yet, as recently as two years ago, an extensive investigation of the S&T program again affirmed that it is focusing on the right advanced technologies to allow the right warfighting capabilities.

The truth is that this Valley of Death was created and is maintained by the Guardians of the Status Quo. These guardians, represented by a variety of support companies and internal DoD organizations, all have a common trait — they don’t like change.

These guardians have the greatest weapon on their side — fear. Followers of the adage, “If it ain’t broke, don’t fix it” create false fears to sow seeds of doubt in the minds of the decision makers concerning the operational payoffs from advancements and achievements made by the community.

The “seeds of fear” statements that the Guardians of the Status Quo plant are:

• DoD systems are much more sophisticated than commercial systems, so these tools won’t work.

• DoD systems operate in very harsh environments, so these tools can’t meet reliability.

• Commercial electronics design tools aren’t “trusted” and we need the security of older, proven tools.

To quote the late, great Paul Harvey, here’s the “rest of the story.”

In 2005, the F-22 went through initial operating capability and the Ford GT sports car was launched. Both required 2 million lines of software to operate. The F-35 requires 8 million lines of software to operate. The 2018 F-150 pickup truck requires 150 million lines of software to operate. And the F-150 comes with a rebate, a warranty and free software upgrades. Not to mention cut-rate financing, but that might be unfair.

At last year’s Los Angeles Auto Show, the keynote speaker on industry day was Intel CEO Brian Krzanich, who delivered the address, “Data is the New Oil in the Future of Automated Driving.” And data is the new oil in just about every military electronics application. Yes, data is going to transform the world, and there will be a huge demand to process that data efficiently using artificial intelligence, convolutional neural networks and many yet-to-be-discovered technologies. It is worth reading his remarks, which are found on the Intel website.

After reading his remarks, think of the reliability and timeliness demanded from smartphones. By the way, cutting-edge implantable medical devices such as pacemakers and insulin pumps are also designed and fabricated with state-of-the-art electronic design tools.

No one who banks using a smartphone app, or uses Google Home or Amazon Echo devices wants hackable systems. The reality of today’s electronics development is that security is an utmost concern. The commercial electronic products industry already demands “trusted” designs. The system-on-chip design will perform only what the operating software will ask it to perform and when every circuit within the design has a defined purpose. The realities of today’s electronics development and fabrication require a new definition of “trust,” which Congress has mandated the Defense Department develop.

Congress seems to appreciate that transitioning commercial electronics best practices to the Defense Department is the basis for the much-desired firm, fixed-price acquisition. They seem to have seen through the false narrative by the Guardians of the Status Quo concerning the adaptation of commercial electronics best practices. The fiscal year 2017 National Defense Authorization Act has an entire section on transitioning commercial electronics best practices to the Defense Department. Its program offices, tired of paying for expensive electronic mistakes, are seeking a better way.

Brave individuals within the defense industrial base are sensing their customer frustration and seek to understand the better, proven way to design electronics that will reduce the design schedules by at least 70 percent, producing “first-pass success, future proofed” system-on-chip designs. And they see that maintaining the country’s technological superiority depends on taking advantage of these newer, much more capable technologies.

These courageous individuals in Congress, the Defense Department and its industrial base need much more support to generate the momentum to rapidly adopt commercial best practices. And as the number of key individuals within both the executive and legislative branches of our government learn, understand, appreciate and require the benefits from the adaptation of these best practices, even the most ardent guardian of the status quo will have to stay out of the way, allowing the defense industry to fully adapt and benefit from the use of these tools.

This soon-to-be-irreversible trend should provide a path for other Defense Department developed technologies that have been significantly improved by the commercial free market to be adopted by the military.

And when this happens, I look forward to telling my friend Norm, “We broke your laws.”No doubt, he will answer, “It’s about time.”


James Chew

James S.B. Chew is chair of NDIA’s Science and  Engineering Technology Division and group director of Cadence Design Systems.



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

Afghanistan Task Force Failures

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


“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.”




IRS Privatized Tax Collection Loses Money And Hurts the Poor

Private Tax Collection

(Photo: Shutterstock; Illustration by POGO)


“Collection contractors cost the agency $20 million in fiscal year 2017—nearly three times more than the $6.7 million they recovered. Contractors sometimes received commissions for work they hadn’t actually performed.

Taxpayers complained of abusive and underhanded collection tactics. In addition, several Democratic Senators raised the possibility that the collection companies pressure taxpayers into “extraordinarily dangerous” debt payment options.”

“Last year, the Project On Government Oversight expressed concern shortly after the Internal Revenue Service (IRS) rolled out its third attempt at outsourcing federal tax debt collection that past problems would repeat themselves. The two previous attempts at using private collection companies to help the IRS recover nearly a half trillion dollars in unpaid taxes were failures because costs exceeded the revenue collected, and taxpayers complained of abusive and underhanded collection tactics. In addition, several Democratic Senators raised the possibility that the collection companies pressure taxpayers into “extraordinarily dangerous” debt payment options.

It looks like some of those concerns have been validated by the latest annual report of the Taxpayer Advocate Service, an independent office within the IRS that helps taxpayers and reports to Congress on systemic problems at the agency.

The IRS watchdog office considers the IRS’s private debt collection program to be one of the agency’s “most serious problems.” It found the collection contractors cost the agency $20 million in fiscal year 2017—nearly three times more than the $6.7 million they recovered. In addition, it found the contractors sometimes received commissions for work they hadn’t actually performed, such as when debts were paid after the IRS notified the taxpayer their case was being assigned to a collection company but before the company contacted the taxpayer. (The companies are entitled to a commission of up to 25 percent of the amount they collect.) Incredibly, the report states that the IRS “has no plans to change its procedures” in order to stop these erroneous commissions.

The watchdog also found that almost half of the taxpayers assigned to private debt collectors have incomes that “indicate they are at risk of economic hardship.” According to the report, “the most vulnerable taxpayers are making payments and entering into installment agreements they cannot afford,” and they are doing so “with unacceptable frequency.”

The report makes no mention of abusive or unscrupulous collection tactics, although this might be due to the IRS refusing to let the investigators listen to phone calls between collection agents and taxpayers. A footnote in the report makes a vague reference to the watchdog office receiving 30 cases during FY 2017 in which “the taxpayer asked for assistance in stopping contact from” private collection agencies.

As we have long been pointing out, tax collection seems to be a function best left to the government. In fact, the report found that “a simple letter from the IRS” reminding taxpayers about their debts achieved better results than a private collector.

Three strikes and you’re out. Congress should direct the IRS to end this program and give up on privatized tax debt collection.”

2018’s Most Disruptive Technologies Government Contracting Opportunities and Concerns


2018 disruptive Technologies


“The following four disruptive trends will be at the forefront of discussions.

Each is already getting a lot of attention in technology circles, and in 2018 they will start to shape the thinking of decision makers in every area of government and business.”

The Internet of Things

“The Opportunity: The Internet of Things is all about using sensors to collect data in the field and then making real-time and near real-time decisions based on analyzing that data. IoT is already being used to power smart homes — e.g. intelligent refrigerators, ovens, thermostats and security systems — as well as smart factories that can monitor building conditions and the status of production.

IoT will certainly be a key topic of federal and state initiatives related to building and grounds maintenance, security, and logistics. It will also play a vital role in the military, as well as in domestic crime prevention and combating terrorism.

One of the most exciting developments is the rise of smart cities, where a variety of sensor types will be used in coordination to lower operational costs, improve transportation, and deliver services more efficiently.

The Concern: Wherever there is massive data collection, no matter how altruistic the intent, privacy concerns arise. For example, who owns the data that a smart city collects? Who can have access to it? Can it be sold? This will be an increasingly important topic for legislators in 2018 as more IoT-powered systems come online.


The Opportunity: The recent meteoric rise of bitcoin and other cryptocurrencies has many people finally talking about the power of blockchain, the open ledger technology that can be used for far more powerful solutions than just tracking these cryptocurrencies.

For example, in the same way blockchain eliminates the need for a bank or credit card company to serve as a middleman for a currency transaction, the technology can be used to implement smart contracts and mortgages that simplify and accelerate legal relationships — while increasing security and transparency — even when a cryptocurrency is not involved.

While practical applications of blockchain may still be some time off, federal and state governments should imagine how this technology can increase efficiency, drive down costs and reduce risks.

The Concern: As an open, distributed technology, blockchain lacks the central control that governments tend to prefer. How this technology can be abused and how it comes to be regulated remains to be seen.

Virtual Reality/Augmented Reality

The Opportunity: Virtual reality (creating a submersive world for a user to enter) and augmented reality (enhancing a user’s view of the real world) offer unlimited opportunities to improve education, increase safety and reduce costs. For example, military and police trainees can practice in highly dangerous or sensitive situations without facing or creating any real danger. Using goggles, technicians can send drones or robots into dangerous environments — a collapsed building or a flood zone for example — and search for survivors or effect repairs from a safe distance. Or an expert can make repairs to a disabled jet or tank anywhere in the world without the time or cost of traveling to the site.

In the same way that virtual conferencing has lowered costs by reducing the need for travel, we need to constantly think of ways that new virtual and augmented reality technologies can be used to save time and increase efficiency.

The Concern: Remember the Pokemon Go craze? Remember seeing people wandering the streets looking down at their phones? Augmented reality goggles may well have a place in public settings. For example, tourists could see information about buildings and events as they walk around a new city. But the potential danger caused by distraction is a very real issue cities will need to start considering this year.

Artificial Intelligence/ Machine Learning

The Opportunity: Artificial intelligence (AI) systems are programmed to do intelligent things, such as control driverless cars. Machine learning (ML) systems, such as product recommendation engines, incorporate usage to become more precise or accurate.

Logistics companies are already using AI and ML to identify optimal routes, and it is easy to envision a time when public sector buses, trains and metro lines will rely on these technologies to adjust routes and schedules on the fly for far greater efficiency. Along with driverless cars, driverless buses are on the way, and drone package delivery, which is already being tested, may have public sector applications as well.

AI also presents an opportunity to address long-tail needs around education and advocacy. For example, the many associations headquartered in the DC area enable people who work in the same field to gather, learn from one another, and collaborate on industry-wide agendas. AI and ML can help make these advocacy and educational efforts much more precise and effective through reaching out to and connecting members (“micro-targeting”) based on jobs, interests and connections.

The Concern: Automation will inevitably replace some jobs, and the public sector will need to study the impact of this. As a society, we have to ensure we understand how decision making evolves in an AI setting. For example, AI decisions are based on algorithms and optimizations of inputs, and we need to have confidence the outputs won’t have surprising or negative consequences. And micro-targeting has the potential to keep people inside their filter bubble, which could lead to further polarization of society.

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Conor Sibley, Higher Logic CIO


Conor Sibley is the chief technology officer at Higher Logic. He has been designing and implementing business enabling technology since the late 1990’s. Sibley has in-depth knowledge from his work as a software executive, advisor to successful technology businesses, contracting with the military and intelligence community and investing in startups. He graduated with a bachelor’s degree from the University of Virginia in computer engineering and he received his master’s from the University of Virginia’s Darden Graduate School of Business.



Continuing Resolutions – The Short Term Budget Fix That Is Bad For Government

CR and the Can

Dark clouds pass over the Capitol in Washington.(AP Photo/Susan Walsh, File)

“FEDERAL TIMES” By Chris Cummiskey

“The latest continuing resolution was passed just before Christmas and is set to expire Jan. 19. What does it say about our country that the Congress can’t execute the most basic responsibility of providing funds for a full fiscal year?

Threatening a federal government shutdown is considered the nuclear option by both parties in Congress. However, the reality is that government by continuing resolution is bad for just about everyone.”

“Once again, the airwaves and media outlets are filled with the threat of another federal government shutdown in just 10 days.

Congress and the president have been at odds over the annual spending bill to fund the government for months, with agencies function under a series of short-term spending measures to keep the lights on. The latest continuing resolution was passed just before Christmas and is set to expire Jan. 19.

Unfortunately, this has been a common approach to government funding in recent years that I know all too well. In 2013, as the deputy under secretary for management at the Department of Homeland Security, I was tasked with overseeing DHS’s shutdown efforts.

Now, it is no secret there are legitimate policy issues to resolve this year including a host of immigration related items. The problem is that government by continuing resolution is bad for our citizens, bad for the government and bad for Federal workers that are trying to deliver much needed services.

Bad for citizens

Regardless of where you fall on the political spectrum, it is likely that you or someone close to you relies on some sort of government service. This can take many forms – ranging from receiving a monthly social security check to taking your family to a national park. What does it say about our country that the Congress can’t execute the most basic responsibility of providing funds for a full fiscal year? Confidence is already low in the federal government’s ability to perform. This doesn’t help. Say what you will about state governments, but as a state senator, we had no choice but to get the budget done at the start of each fiscal year. Most states have a balanced budget requirement that forces lawmakers to get in a room and not come out until a funding bill is sent to the governor. Congress should try that approach.

Bad for government operations

Under the rules of a CR period, the funding level is an apportioned amount based on prior year funding. Think of it as a mini fiscal year. Under a CR, no new starts of programs are permitted and changes to existing programs are severely limited. It essentially freezes all the current activity for departments and agencies so that most strategic planning is placed on hold. This means that even needed changes to improve service delivery and performance are shelved until a full year spending bill is approved by Congress.

Bad for federal workers

The constant threat of a shutdown is also bad for government workers who are left to do the best they can with a cloud of constant uncertainty. CRs also make it very difficult to fill mission essential positions. Federal managers and supervisors who are often shorthanded due to attrition, retirement and lack of retention incentives, struggle to meet critical staffing needs. When coupled with the slow rate of political appointments in many agencies, it makes it almost impossible to get the job done. These artificial mini fiscal years are particularly hard on the CFO and budget offices in agencies. At any given time, they are already working issues in several fiscal years. As an example, amid the current meltdown, CFOs and their staff must continue planning for the public release of the president’s fiscal 2019 budget set for next month. This kicks off congressional attention for the next round of budgeting even though they have not finished the 2018 spending bill.

As a recovering politician, I get it. You must play the cards you are dealt to leverage your best position in a budget negotiation. There are always a lot of moving parts and competing spending interests. Threatening a federal government shutdown is considered the nuclear option by both parties in Congress. However, the reality is that government by continuing resolution is bad for just about everyone.”


Chris Cummiskey is a former acting under secretary/deputy under secretary for management and chief acquisition officer at the U.S. Department Homeland Security. He also serves as a senior fellow with the Center for Cyber and Homeland Security at George Washington University.



Illinois Governor Takes Up Residence In Veterans Home


Ill Gov at Vets Home


“Illinois Gov. Bruce Rauner, a multimillionaire who owns nine homes — including a condo overlooking Central Park in New York — is taking up residence this week under decidedly less luxurious conditions.

The first-term Republican governor checked himself into a central Illinois, state-run veterans’ home where 13 veterans died over three years from a deadly Legionnaires’ outbreak.”

“The move, denounced as a “publicity stunt” by opponents, is a sign of the urgency of the moment as Rauner struggles to contain an onslaught of criticism about his administration’s handling of an outbreak that has persisted at the facility. Of the numerous controversies Rauner has faced since his 2014 election, veterans dying on his watch is arguably the most explosive.

Democratic Sen. Dick Durbin has called for the facility to be shuttered if the state can’t guarantee its safety for residents. And legislative hearings scheduled for next week are expected to create a fresh blast of publicity on the issue.

“[The governor] plans to spend several days there with the residents and staff,” said Rauner spokeswoman Rachel Bold. “He wants to gain a more thorough understanding of the clinical, water-treatment, and residential operations of the home.”

Last month, WBEZ, Chicago’s public radio affiliate, published an investigationraising questions about how Rauner handled a 2015 outbreak of the Legionella bacteria, which revealed the administration delayed publicizing what appeared to be the beginning of an epidemic. In all, 13 people died and at least 53 staff and residents were sickened by the bacteria found at the facility. Now, 11 families are suing the state for negligence.

The Legionella bacteria, found in some water supplies, can cause a severe form of pneumonia. In December, in an effort to assuage concerns, Rauner told reporters he would drink the water at the facility.

But the governor’s attempts to tamp down the controversy have failed so far. On Wednesday, Rauner was excoriated by opponents after telling a local newspaper that Legionella outbreaks are not uncommon — “it happens,” he said. Rauner has defended his administration’s actions, saying he brought in every expert available including the Center for Disease Control.

Even before veterans’ home revelations, Rauner was widely viewed as the most endangered governor in 2018. He has suffered through staffing turmoil — including having three chiefs of staff in a three-month period — and presided over a more than two-year budget impasse that ended with Republicans banding against him in a veto override.

After being designated the “Worst Republican Governor in America” by the conservative National Review, Rauner stumbled again when he told reporters “I’m not in charge.”

All of it has created a daunting reelection road for a governor who now faces a primary challenge on the right — from state Rep. Jeanne Ives, a veteran herself. On the Democratic side, billionaire J.B. Pritzker leads the field, raising the prospect of what could be the most expensive governor’s race in the nation’s history.

“This is a cynical and transparent publicity stunt,” said Ives. “The conditions in the Illinois Veterans Home, as well as the delayed response from the Rauner administration, are betrayals of our veterans and the benefits they earned protecting our freedoms. This is what happens when the governor isn’t in charge, as he said. The state fails to abide its responsibilities and people die.”



Failures in Guarding Private Sector Information


Cyber Security“THE CIPHER BRIEF” By Debora Lee James

“Here’s the bottom line: we need a holistic approach to cyber security going forward, including network and endpoint security. Focusing on one but not the other could result in crippling losses in today’s machine-to-machine marketplace.

The government and the private sector need to keep working to lock the front door, and start doing a better job of bolting the windows.”

“Not a day goes by that Americans don’t wake to the news of a new cyber intrusion affecting private sector or government networks, whether major cyber hacks at Target or Equifax, sloppy data breaches like those Verizon experienced, or nation-state-sponsored efforts like the WannaCry virus. Companies and institutions are pouring more time, attention and resources into computer network security, because the networks are so critical. But why lock the front door when you leave the windows wide open? Bad actors can launch attacks and gain access to critical information through other routes too.

As seen with the widely reported interference in democratic elections, attacks can be launched cheaply and relatively easily by criminals, nation-states, terrorists, disgruntled employees, or even good people with sloppy habits who accidentally expose critical data. As a former Secretary of the Air Force, I can tell you that Air Force networks are attacked—and these attacks are repelled—thousands of times per week.

This is why, in addition to network security, the Air Force is focusing more resources on operational security. The private sector should follow suit.

Operational security means protecting assets that depend on lines of code in software to conduct missions, whatever those missions might be. This could involve anything from protecting advanced fighter aircraft to the HVAC systems on a base where critical operations take place. It could include the MRI machine in a hospital entrusted with sensitive patient data. Our critical infrastructure—the electrical grid and transportation systems, for example—can be equally vulnerable from an operational perspective, if network security is the sole focus.

The solution is to broaden the national cybersecurity approach to include “endpoint security” for vital operational systems. Stated another way, we need to wrap firewalls around certain vital machines to ensure that an intrusion in one area will not allow for a more extensive penetration to the broader network.

Consider a fictional scenario in which a U.S. nuclear facility is breached. A terrorist group launches a “cyber-physical attack” by unleashing a virus that penetrates sensors that monitor cooling. The malware is introduced when an infected flash drive is inserted into a network laptop during maintenance to adjust, for example, process sequences. The laptop is presumed to be safe because it’s not connected to the internet—it is “air gapped.” The virus targets specific endpoints that manage fail-safe functions such as temperature maximums. The virus tells temperature sensors to stop working. At the same time, it tells other mini computers to escalate heat-generating functions. The result could be catastrophic overheating and, ultimately, a meltdown.

Such an attack, and many others we haven’t thought of yet, are preventable when control systems are more deeply protected. Each device and sensor comprising the network can and should be shielded from malware that gets through the figurative front door. ”


Secretary James has over 30 years of senior level homeland and national security experience in the federal government and private sector. During her time as Secretary, her responsibilities included the affairs of the Department of the Air Force, including the organizing, training, equipping and providing for the welfare of its nearly 660,000 active-duty, Guard, Reserve and civilian Airmen and their families. Secretary James also oversaw the Air Force’s annual budget of more than $139 billion. Today, James serves on boards of directors and advisory Boards of companies and not for profits focused on security including Ultra 3 eti, Textron, Unisys, MKA Cyber and Noblis.




$3.4 Billion of $3.7 Billion in Federal Fraud Recoveries in FY 2017 Came From Whistle Blowers


Federal Fraud Recovery 2017


“Since 1986, the government has awarded nearly $6.6 billion of its recoveries (12 percent of the total) to the whistleblowers who filed the lawsuits—often at great risk to their careers.

Because those who defraud the government often hide their misconduct from public view, whistleblowers are often essential to uncovering the truth.”

“On the Thursday before Christmas, the Department of Justice (DOJ) released its annual fraud recovery numbers. The DOJ announced it had recouped $3.7 billion through settlements and judgments in False Claims Act cases in fiscal year 2017.

This amount is nearly 23 percent lower than the previous fiscal year, but roughly in line with FY 2015’s total. This seems to be a trend: a historical analysis of DOJ’s fraud recoveries since 1986 (the year Congress substantially strengthened the False Claims Act) shows that, in recent years, a substantial drop-off occurs in non-election years.

According to the DOJ, of the $3.7 billion in fraud recoveries in FY 2017, $3.4 billion came from whistleblower lawsuits filed under the qui tam provisions of the False Claims Act. Since 1986, the government has awarded nearly $6.6 billion of its recoveries (12 percent of the total) to the whistleblowers who filed the lawsuits—often at great risk to their careers.

Overall, since 1986, the False Claims Act has helped taxpayers claw back more than $56 billion—an average of $1.8 billion per year.

As in past years, the largest share of the recoveries—about two-thirds—involved health care fraud. But a substantial sum also came from some of Uncle Sam’s largest contractors [See Inset].

Since 1986, the government has awarded nearly $6.6 billion of its recoveries (12 percent of the total) to the whistleblowers who filed the lawsuits—often at great risk to their careers.

“Because those who defraud the government often hide their misconduct from public view, whistleblowers are often essential to uncovering the truth,” Acting Assistant Attorney General Chad Readler proclaimed in the DOJ announcement.

Senate Judiciary Committee Chairman Chuck Grassley (R-IA), a longtime champion of the False Claims Act who helped strengthen the law over the years, trumpeted the DOJ’s latest numbers.

“To those who doubt the value of whistleblowers and the False Claims Act, I’d just say: $56 billion and counting,” Grassley stated in a press release.

We’ll see if the federal fraud recovery trend continues and next year’s total shows an election-year increase. The DOJ recently indicated it will more aggressively seek to dismiss qui tam lawsuits when it concludes the case lacks merit, instead of allowing the whistleblower to proceed. A government motion for dismissal doesn’t automatically doom the lawsuit, although judges are more likely to side with the government and throw out the case. Depending on how strict the DOJ is when assessing a case’s merit, this policy change could substantially lower how much the government recovers from companies accused of defrauding or endangering the health and safety of U.S. taxpayers.”