Tag Archives: Acquisition Reform

OMB Wants Public Input To Improve Federal Acquisition And Supply Practices.

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Image courtesy blueoceanacademy.com

FCW

Ideas from supply and acquisition experts outside government can help the government modernize its $575 billion supply chain and acquisition functions.

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“Margaret Weichert, the deputy director of management at the Office of Management and Budget, teed up the effort in a document released Jan. 27 after the White House Summit on Federal Acquisition and Supply Chain Management.

“We want to hear from private sector organizations, researchers, academic institutions, good government groups, the public, and others on the vision and concept for a mechanism to facilitate curated conversations between the federal government and external supply chain and acquisition experts on a variety of issues and questions that support the government’s acquisition modernization effort,” said Weichert in a statement following the summit.”

https://fcw.com/articles/2020/01/28/omb-input-acquisition-rockwell.aspx?oly_enc_id=

Government Seeking To Redefine Procurement “Lead Time”

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Image: FCW

FCW

The Office of Federal Procurement Policy (OFPP) wants to nail down language on exactly when federal procurements begin and end to help eliminate delays.

OFPP proposed a rule change and is seeking comments on redefining the term “Procurement Administrative Lead Time” (PALT) and on a plan for measuring and publicly reporting governmentwide data on PALT for contracts and orders above the simplified acquisition threshold.

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“The agency wants to adopt the definition from section 878 of the 2019 National Defense Authorization Act. That language defines PALT as “the time between the date on which an initial solicitation for a contract or order is issued by a federal department or agency and the date of the award of the contract or order.”

Establishing a common PALT definition, said OFPP, as well as a plan to measure and report it can help the government pin down delays in the procurement process. Equipped with a common definition, it said, agencies can then use common data to make improvements.

Alan Chvotkin, executive vice president and counsel of the Professional Services Council, said he was “pleased” with OFPP’s proposed use of the NDAA definition.

“Time is money” for both federal agencies and contractors involved in an acquisition, he told FCW, adding that a revised PALT definition would help measure both.

Others want to tweak it a bit.

“I propose that PALT be defined as the cycle time between the solicitation response and the date award,” said Dave Zvenyach, former executive director of GSA’s 18F and former deputy commissioner for the agency’s Technology Transformation Service.

“PALT is the sort of topic that drives procurement nerds to drink,” said Zvenyach in a blog post on the issue. Defining it has been traditionally hard to do, since pinning down the “initial moment of requirement identification is notoriously difficult.”

Comments on the PALT language are due in 30 days.”

https://fcw.com/articles/2020/01/21/ofpp-lead-time-rule.aspx

Attempting The Biggest Defense Reform In A Generation

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DEFENSE ONE

Cut or retire various weapons and gear and shift money to efforts deemed of more utility in great power competition.

Congress can expect the 2021 budget proposal, slated for delivery on Feb. 10, to make a clear break with the past to invest in research and development of the future.

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“In two recent memos, the SecDef reveals his intention to change how the Pentagon uses its money, people, and time.

Since New Year’s Day, Defense Secretary Mark Esper has issued not one but two memos to the force. Both push for “ruthless prioritization” by the bureaucracy in support of his top priority: great power competition with China and Russia. 

He’s a man on a mission, and in a hurry. The goal? To achieve “full, irreversible implementation” of the defense strategy. Pentagon officials want to take the military so far down the road that their work cannot easily be unwound by the next cadre of leaders, whenever they might arrive.

In his Jan. 2 memo, Sec. Esper says “aggressive reforms” are getting underway at the Pentagon. He is seeking headroom under the flat budgets to come, but he’s not just looking for loose change in the proverbial couch cushions. He wants the entire defense enterprise to shift its time and people to better implement the National Defense Strategy. The focus on time and tasks is new, and important. The tyranny of the here-and-now (see: Iran) means that for many at the Pentagon, their days do not match the strategy. 

His Jan. 6 memo provided more insights into the reforms. In it, Esper highlighted $5 billion already designated to be squeezed from the 28 non-service defense agencies dubbed the Fourth Estate. He also identified an additional $2 billion in activities that will be shifted to the military services. And he announced upcoming reviews of the combatant commands.

This broad and well-telegraphed push for targeted cuts — including, no doubt, to some congressionally cherished programs — may succeed where previous efforts have failed. Congressional leaders have signaled that they want a list of clear winners and losers. If no one is wailing to Capitol Hill, politicians don’t believe leaders are seriously implementing the strategy. And if the recent past is any guide, Congress will get behind most of the Esper cuts even if they are politically unpopular. 

When he was Army Secretary, Esper led a similar zero-based budgeting review. A whopping 186 Army programs were targeted for elimination, cuts, or delays over five years. Casualties included a container-handling program, lightweight laser designator, mine clearing vehicle, Joint Light Tactical Vehicle, Armored Multi-Purpose Vehicle and an armored bulldozer.  Confronted with this “flood-the-zone” approach, Congress wound up approving almost all of the proposed changes. Esper & Co. now hope the same tactic will work with the Fourth Estate reforms and, shortly thereafter, the Navy and Air Force.  

The memos reveal Esper as an ambitious reformer, with goals broader than predecessors Robert Gates, who closed Joint Forces Command; and Chuck Hagel, who slimmed various headquarters staffs. His upcoming reviews of the regional and functional combatant commands presage an assault on a problem that many have long perceived but none have tackled: an imbalance in the requirements-generation process and Pentagon resourcing decisions that insulate and favor combatant commanders over service chiefs. This imbalance has led to some of the problems the defense strategy tries to redress, such as making the Middle East an “economy of force” region where missions are done more efficiently—or not at all.  

Finally, the review is about more than creating tradespace under flat budgets. Between the lines, Secretary Esper is also showing due diligence that could be used when making future arguments to boost defense toplines to fully resource the defense strategy. 

In his Jan. 2 memo, Esper highlights the past three years of steady spending increases and their benefits. He calls out the improved readiness across the force and notes the Defense Department is “beginning to modernize” capabilities across domains with these additional funds.

He echoes this line in the Jan. 6 memo, saying that savings found to date are “only a down payment” on what’s truly needed. He goes on to say that competition and the preparation for high-intensity conflict against a high-end competitor “is expensive.” The implication is that even the most valiant efforts he is overseeing to move money around under the topline will likely be insufficient. 

Members of Congress have been asking for two years whether the Pentagon was buying its own strategy. Most agreed the answer was no. This is one reason defense hawks are disappointed in last year’s budget deal, which dealt the Pentagon an inflation-adjusted decline in its 2021 budget . Policymakers will be quick to latch onto the defense secretary’s nuanced arguments that the three-year Trump bump for defense will not complete the job.”

https://www.defenseone.com/ideas/2020/01/esper-attempting-biggest-defense-reforms-generation/162457/

Department Of Defense Updates Mid-Tier And Urgent Acquisition Policies

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Image: Roper Center, Cornell University

FCW

The Defense Department issued updates to mid-tier and urgent acquisition policies that allow the military to quickly develop prototypes and field systems. The policies took effect in the last days of 2019.

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“Reworking the DOD 5000 series instructions that govern acquisition practices has been a top priority for DOD acquisition chief Ellen Lord, who told reporters Dec. 10 the changes “the most transformational change to acquisition policy in decades.”

The Pentagon has said it expects to publish the adaptive acquisition framework in January, which will include acquisition pathways specific to “the unique characteristics of the capability being acquired,” Lord said.

The mid-tier acquisition instructions address rapid prototyping and fielding and are meant to serve as a path to “accelerate capability maturation before transitioning to another acquisition pathway or may be used to minimally develop a capability before rapidly fielding.”

Lord said the new mid-tier instructions under an 18-month pilot facilitated a dramatic increase in the number of programs.

“Since our pilot started 18 months ago, we have gone from zero middle-tier programs in November 2018 to over 50 middle-tier programs today delivering military utility to warfighters years faster than the traditional acquisition system,” Lord said in the media briefing.

The urgent instructions focus on capabilities needed during conflict that can be fielded in less than two years but cost less than $525 million in research and development funds or $3 billion for fiscal 2020 procurements.

Lord said the department’s changes to the acquisition would make it easier for professionals to match programs with acquisition pathways as well as reduce lead time for pathfinder projects.

The rewrites for major capability, software, defense business systems and services acquisition are pending release.”

https://fcw.com/articles/2020/01/06/dod-5000-update-williams.aspx?oly_enc_id=

Government Agencies Need To Stop Wasting Money On Software They Don’t Use

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Federal agency budgets for purchasing new IT are already limited, without the added cost of purchasing software that will just sit on the shelf. (akindo)

FEDERAL TIMES

Overall the federal government allocates 80 percent of its IT spending just to maintain legacy systems.

Every day, precious money and resources — roughly 80 cents of every dollar — goes toward supporting yesterday’s technologies when it could be put to much better use implementing cutting-edge innovations”

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“That unfortunate reality makes every remaining dollar all the more precious. It’s money that agencies can’t afford to waste. Yet spending on “shelfware” — the software in an agency that no one uses — amounts to $18 billion in the government sector alone.

Thankfully, there are strategies that agencies can use to maximize investments in new technology (and limit waste), ensuring they stretch budgets as far as possible. But it can require a new way of thinking; after all, acquisition strategies previously designed to buy paper and toners are no longer applicable for purchasing licenses in an elastic computing ecosystem. Rather than shaping your acquisition strategy to align with vendor Terms and Conditions, consider the following recommendations to get the most out of your IT investment.

The first step is ditching static one-size-fits-all models that ignore mission-driven realities or agency-specific needs. These flat-rate offerings force agencies to compromise, buying into unnecessary plans and paying for services they don’t want. Agencies must instead insist on a targeted, dynamic pricing plan designed to measurably drive agency goals — thus allowing pricing to become a forcing factor in adoption and an enemy to shelfware.

Similarly, agencies should avoid adopting legacy subscription models that require customers to pay in advance, such that risks to consumption and adoption remain on your books. The old-fashioned practice of sizing license purchases against potential expansion does nothing to account for contraction. Agencies today should consider making the most of their investment with custom billing models that offer the potential to decrease software costs over time, and ultimately increase the return on their investment. Some vendors even offer usage or performance-based pricing, meaning that agencies will only pay for the licenses or features they use (further combating shelfware).

While each agency has its own goals, they still need to comply with regulations. Whether it’s FISMA, FedRAMP, FITARA, MGT or the Megabyte Act, the unfortunate reality is that most agencies spend valuable time and resources complying with these complex and labor-intensive requirements. A better approach is to look for ways to kill two birds with one stone, saving money while maintaining compliance by shifting portions of the compliance burden to vendor-partners.

And agencies would be wise to view these vendors as strategic partners, not just as software providers. The vendors can provide in-depth knowledge and insights on government regulatory requirements to help ensure you’re maintaining compliance. Ideally, they can offer insights from similar government deployments that might inform yours. And by all means make sure to fully utilize the ongoing support these vendors offer to get the most out of the systems, not just troubleshoot.

In addition, here are a few more tips to keep in mind:

  • Don’t buy things you “might” use. Identify your specific needs — and buy exactly that. Should your needs change down the line, vendors will gladly sell you additional solutions.
  • Implement what you buy. Otherwise, you’ll be back at square one paying for tools you don’t even use.
  • Take advantage of all the technological capabilities on offer. If you can’t, perhaps you’re again paying for systems that are too much for your current needs.
  • Conversely, manage your budget by only paying for what you use (pay-go). Add-ons, additional licenses and new capabilities will always be available should you need them.

Don’t let a dated legacy approach to software procurement leave you behind. Not only will this hold your agency back from pursuing innovative technology projects, it will also burn a big hole in your budget. The guidelines outlined above are a better fit for today’s landscape and can put you on the right track to a legacy-free future.”

https://www.federaltimes.com/opinions/2019/09/13/government-agencies-need-to-stop-wasting-money-on-software-they-dont-use/

The Road to Acquisition Reform ‘Nirvana’

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Image: James Norton “Linked In

NATIONAL DEFENSE MAGAZINE” Editor’s Notes By  Stew Magnuson

The Government Accountability Office in June produced three separate reports related to defense acquisition. Add them to the Section 809 Panel’s final recommendations on acquisition reform and there is a lot to chew on.

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“Ninety-nine years of magazines sit in a bookcase located in the association’s office. What began as Army Ordnance in July 1920 would eventually morph into National Defense.

It’s interesting to flip through the back issues, especially those published prior to 1970, which we will be doing more of as we prepare for the big centennial issue coming out in November.

There is one constant theme in back issue pages: no one has ever been happy with the Defense Department’s acquisition system. Complaints from association members found in the 1930s and 1940s sound similar to ones heard today: the services aren’t clear on their requirements; the system moves too slowly; payments come too late, and so on, and so on. The litany is well known.

The takeaway from this is that the road to “acquisition nirvana,” where everyone is happy with the system, will probably never be reached. But that won’t stop the defense community from trying with blue-ribbon panels, National Defense Authorization Acts and think tank reports — nor should it. Acquisition reform is a never-ending story.

With that in mind, the Government Accountability Office in June produced three separate reports related to defense acquisition. Add them to the Section 809 Panel’s final recommendations on acquisition reform and there is a lot to chew on.

The first report out of the gate: “DoD Acquisition Reform: Leadership Attention Needed to Effectively Implement Changes to Acquisition Oversight” mostly examines the recent initiative to move oversight of major defense acquisition programs from the office of the secretary of defense back to the services. GAO’s conclusion: It’s going fairly well. Of course, keep in mind that once upon a time, someone thought that the answer to the department’s woes was to move oversight of major acquisition programs from the services to the OSD. It will be interesting to see if the pendulum someday swings back in that direction.

The report also looked at the breakup of the OSD’s office of the undersecretary for acquisition, technology and logistics. One wonders if a decade or two from now, a reform-minded blue-ribbon panel or lawmaker will declare: “We need to combine the OSD’s office of the undersecretary for research and engineering with the office of the undersecretary for acquisition and sustainment so one person can have oversight of programs from beginning to end. That will fix things.”

This report’s other big reveal: The 2016 NDAA gave more freedom and cut some red tape for managers of middle-tier acquisition programs. The services’ response was to declare about everything a “middle-tier” program, which they could do because no one has clearly spelled out the definition of “middle tier.” Therefore, the Army categorized its multi-billion dollar effort to develop the next-generation combat vehicle a “middle-tier” program.

“We found that approximately half of the programs initiated to date would be categorized as major defense acquisition programs if they were not being pursued under a middle-tier pathway,” the report stated.

Perhaps the road to defense acquisition nirvana would be to declare everything “middle tier.” The Columbia-class submarine: middle tier! The F-35: middle tier! Protected communications satellites: middle tier, of course!

The next report: “KC-46 Tanker Modernization: Aircraft Delivery Has Begun, but Deficiencies Could Affect Operations and Will Take Time to Correct” drills down into one specific program, but as GAO said, it “identified a number of insights that could benefit other programs.” The Air Force and prime contractor Boeing entered into a firm fixed-price incentive contract to deliver the first four aircraft, which currently doesn’t seem to be benefitting anyone as the program is three years behind schedule and the aircraft have a number of deficiencies that will cost taxpayers $300 million. That loss will be temporarily made up as the Air Force withholds 20 percent payment on each aircraft.

However, lessons-learned about the benefits and pitfalls of firm fixed-price contracts are not in this report, and are not going to be shared by the Air Force until the program is complete in 2021. As GAO noted, that is of little help to those considering such contract vehicles now.

At the end of June, GAO published, “Contract Financing: DoD Should Comprehensively Assess How Its Policies Affect the Defense Industry.”

Great idea! Why hasn’t anyone thought of this before?

The report specifically is referring to performance-based versus fixed-price contracts and payment rates, another debate that could be found in decades-old yellowed pages of the magazine.

The last time the Defense Department comprehensively analyzed this topic was 1985, according to the GAO. Think of all the changes to the industry in the last five years, then all the way back 34 years.

“Until DoD conducts a comprehensive assessment and ensures they are done on a recurring basis, it will not be in a position to understand whether current or future contract financing policies are achieving their intended consequences,” the report said.

There is a lot more to these three reports. But they all prove that the pursuit of acquisition reform nirvana will fill the pages of National Defense for years to come. “

https://www.nationaldefensemagazine.org/articles/2019/8/6/editors-notes-the-road-to-acquisition-reform-nirvana

GSA Begins Transition To New Identifier Replacing DUNS

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FEDSCOOP

July marks the start of the 18-month shift to a new unique entity identifier (UEI) for doing business with the government.

In December 2020, the System for Award Management website, SAM.gov, will stop using the proprietary, nine-digit Data Universal Numbering System (DUNS) number supplied by Dun & Bradstreet.

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“The General Services Administration selected Ernst & Young to supply a non-proprietary UEI for identifying entities during the awards process for things like contracts, grants and cooperative agreements — in SAM.gov and other systems.

While GSA develops tools to generate new UEIs and begins assigning them, the DUNS number will remain the official UEI for registering with SAM.

GSA is also streamlining UEI request, registration and support processes by allowing entities to handle all three through SAM.gov. Previously Dun & Bradstreet assigned DUNS numbers before entities could register on SAM.gov and provided technical support.

In the future, SAM.gov will assign UEIs as 12-character alpha-numeric values — all letters being capitalized.

UEIs won’t use the letters O or I to avoid confusion, use 0 as the first character for ease of data imports, use nine-digit sequences like the DUNS number, have the first five characters conflict with Commercial and Government Entity codes, be case sensitive, or contain the entity’s Electronic Funds Transfer indicator. The final character will be a checksum of the first 11 to detect errors in data.

The entities required to register on SAM.gov haven’t changed, and all forms using the DUNS number will be updated.

UEIs will automatically be assigned to existing entities within SAM.gov and made available for viewing. Large businesses with multiple DUNS numbers will receive multiple, corresponding UEIs.

During the transition phase, entities assigned UEIs will still need to ensure that the agency they’re responding to has switched over to the new identifier or else continue using their old DUNS number.

GSA has provided and explainer video with more details.”

Congress Scolds Pentagon For Moving Too Slow on Acquisition Reform

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Image: “Economic Times”

“FEDERAL NEWS NETWORK”

“Over the past few years, Congress gave DoD a slew of acquisition tools to use to attract nontraditional companies, bring in small businesses and fire up innovation. 

The House Armed Services Committee’s Ranking Member Mac Thornberry (R-Texas)  says DoD is taking too long to implement those laws and it’s causing national security issues. “

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“The House Armed Services Committee’s top Republican doesn’t like the speed in which the Defense Department is implementing acquisition reforms and possible cuts to some defense agencies, and he’s ready to do something about it.

Committee Ranking Member Mac Thornberry (R-Texas) told reporters Tuesday he’s prepared to use legislative “sticks and carrots” to spur DoD on to abide by the law faster.

“There are some basic constitutional principles here,” Thornberry said. “If the law says you should do it; you should do it. We have tools, fencing money, and a whole variety of things that we can look at doing if a department is not implementing the law.”

Fencing money is when Congress doesn’t allow an agency to access a certain amount of funds unless the agency reaches certain benchmarks set out by Congress. Lawmakers fenced the Defense Innovation Unit’s money a couple years ago until it delivered a clear roadmap and strategy to them.

Over the past few years, Congress gave DoD a slew of acquisition tools to use to attract nontraditional companies, bring in small businesses and fire up innovation. Thornberry says DoD is taking too long to implement those laws and it’s causing national security issues.

“Part of the consequence of that is that it is still far harder and more difficult to do business with the Department of Defense than it should be and a fair number of innovative companies are saying it’s just not worth it,” Thornberry said. “Even if all of that were being implemented perfectly, there are still challenges for some small company that has technology X and says ‘I can go to the commercial market this fast and make this amount of return or I can go through DoD’s laborious process.’”

To DoD’s credit, it has a lot of provisions to implement and it takes time to change the culture of acquisition professionals so they will use the new tools.

The 2017 defense authorization act had more than 100 acquisition provisions for DoD, including expanded use of other transaction authorities and mid-tier acquisition.

Last March, the military secretaries told Congress to hold off on some reforms so they could focus on the ones they were already in charge of putting into place.

“There’s some fascinating and interesting tools that we’re using and we are going to use and look forward to using, so thank you for those,” Navy Secretary Richard Spencer said. “I would ask for a stabilization period so that we can digest what we have and have the ability to come back to you if we need more, but right now the knife drawer looks full.”

DoD is also wrestling with recommendations from the Section 809 Panel, which gave the department a whole swath of ways to reduce duplicity and waste in acquisition.

Fourth Estate

Thornberry is also frustrated with DoD over a provision to cut back on defense agencies not aligned with military services, like the Defense Information Systems Agency.

The DoD Chief Management Officer was supposed to submit a report on cutting the fourth estate by 25 percent under the 2019 defense authorization act. Thornberry says the report is still not submitted.

“The plan was supposed to be to us by Feb. 15,” Thornberry said. “Then they said ‘Oh, we are going to be late. It’s going to be, I don’t know, March 15. Well, we still haven’t gotten it. I’m having a meeting this week on this topic.”

One reason DoD may not have provided the report is it hasn’t had a CMO since last November. Lisa Hershman is currently serving in the acting capacity.

Other concerns

It’s not just Congress that’s noticing DoD dragging its feet, and there are other areas DoD is slow to implement the law.

“The process for updating and refining the acquisition regulation to keep pace with Congress has slowed to a glacial pace,” Scott Freling, a partner at Covington & Burling LLP told Federal News Network. “That causes quite a bit of consternation for contractors we work with where there’s changes that Congress has made to the procurement rules that aren’t yet reflected in the Federal Acquisition Regulation (FAR) or in the Defense FAR supplement. That uncertainty has been a source of concern by many clients where they are left in a state of wondering where they can avail themselves of the new rules or whether they have to wait until the FAR Council acts.”

It becomes even more of a concern when regulations are put on companies and they aren’t sure whether they need to comply now or after the rule is put into effect.

As an example, the Professional Services Council sent a letter in November to the assistant defense secretary for acquisition asking DoD to issue overdue regulations on the appropriate use of lowest-price technically acceptable criteria for DoD services contracts. The rules would implement a legislative provision Congress enacted three years ago, in the 2016 NDAA.

The Government Accountability Office also scolded DoD for its snail pace.

The House Armed Services Committee took note of the issue in its 2019 defense authorization committee report too.

These types of delays often do not allow “the acquisition and contracting communities within and outside the government” to “take full advantage of recent reforms and improvements to acquisition and contracting procedures,” the report stated.

There are several provisions from the 2016 NDAA that are still in the promulgation phase or have yet to break into the culture of DoD employees.

“It’s definitely taken a few years for the department to get its arms around these authorities,” Bill Greenwalt, senior fellow at the Atlantic Council told Federal News Network. “I’m optimistic now, seeing they are starting to use these authorities. There were so many that were put in place in 2015 and 2016 that we don’t even have regulations for it yet. We are going to have to see how the department gets its arms around that and starts executing.”

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DoD’s Acquisition And Contracting Sees Little Improvement On GAO High-Risk List

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Image: GAO

“FEDERAL NEWS NETWORK”

The two items on the high-risk list account for almost $2 trillion in taxpayer funds — about $1.66 trillion in investments of 86 major weapons systems and $300 billion in annual contracted services for the Pentagon. Both of the items have been on GAO’s high-risk list since the early 1990s. “

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“Despite sweeping legislative and department changes over the past five years, progress on the Defense Department’s systems acquisition and contracting management remain basically stagnant on the Government Accountability Office’s 2019 High-Risk List of areas that are most vulnerable to waste, fraud and abuse.

The list, released Wednesday, states efforts to shore up problems with DoD weapons systems acquisition remain “unchanged” since GAO’s last high-risk list in 2017. GAO made the same assessment of the Pentagon’s contract management issues, though with a few positive caveats.

At the same time, GAO points out that the government’s inability to address climate change is causing national security issues and will cost DoD more money.

Weapons acquisition

GAO’s report states DoD can get better returns on its weapons system investments by “following knowledge-based practices and developing an action plan for performance measures.”

Though Pentagon leadership undertook initiatives aimed at improving program outcomes, DoD demonstrated progress was lackluster in the past two years.

“DoD programs continue to not fully implement knowledge-based acquisition practices, which increases the risk of undesirable cost and schedule outcomes,” the report states.

The military still has not implemented leading practices and lessons to make greater use of existing financial awards for good performance and has only implemented four of 10 key practices to select, train, mentor and retain program managers.

Additionally, DoD has not identified a plan with specific goals or performance measures to implement across its acquisition portfolio to achieve better results.

The report comes as Congress and DoD have been implementing legislation from the past five years to overhaul and unburden the Pentagon’s acquisition process.

In past defense authorization acts, Congress pushed down milestone authority to the individual military service chiefs, made it easier to buy commercial-off-the-self products and completely rearranged the Pentagon’s procurement office.

Even with those changes and new authorities, DoD is still not up to par on acquisition. However, GAO does give DoD and Congress credit for implementing those reforms.

“DoD reported to Congress in August 2017 that the department was at risk of not being able to acquire and sustain major weapon systems at sufficient levels due to increasing cost,” the report states. “To counter this risk, DOD’s new position of undersecretary of defense for acquisition and sustainment is to focus on major defense acquisition program performance and on reducing costs to free up resources for further investment.”

The department also has not had much time to implement the measures. Last March, the military secretaries asked Congress to slow down its reforms so the military would have time to implement past ones.

“There’s some fascinating and interesting tools that we’re using and we are going to use and look forward to using, so thank you for those. I would ask for a stabilization period so that we can digest what we have and have the ability to come back to you if we need more, but right now the knife drawer looks full,” Navy Secretary Richard Spencer told Congress.

Contract management

DoD faces many of the same problems with contract management. Even with congressional changes and authorities, the Pentagon’s improvements are lacking.

Contract management once again has leadership behind it, but DoD still has not implemented ways to improve its acquisition workforce, service acquisitions or operational contract support.

“Over the years since we added this area to our high-risk list, we have made numerous recommendations related to these high-risk issues, 18 of which were made since the last high-risk update in February 2017,” the report states. “As of November 2018, 41 recommendations related to this high-risk area are open.”

While DoD increased its acquisition leadership and bettered training, there is still no framework for the acquisition workforce that identifies key times frames, metrics or projected budgetary requirements associated with key goals or strategic priorities.

DoD still has not developed plans to use an annual inventory of contracted services for workforce and budget decisions, which is statutorily required, and the department still needs to develop metrics to track progress associated with shaping the future of the acquisition workforce.

Climate change

One area gaining particular attention this year from Congress is the affect of climate change on the fiscal exposure of DoD.

Comptroller General Gene Dodaro said climate change is affecting DoD’s operations domestically and internationally.

“DoD needs to have a plan to look ahead as they are building their infrastructure and modernize their infrastructure to build in climate resistance policies and procedures,” Dodaro told members of the Senate Homeland Security and Governmental Affairs Committee Wednesday. “Congress required them to develop a plan and submit it to the Congress, which they did, but many members of the armed services committees weren’t satisfied with the plan. The Defense Department is now back preparing an additional plan.”

GAO will look at that plan when it’s ready and add recommendations.

Dodaro said DoD installations have coastal issues with rising sea levels, and previous storms like Hurricanes Michael and Florence have been very costly to the Pentagon.

He added that since 2005, the government has spent close to half a trillion dollars recovering from disasters.

“The cost of inaction is sort of incalculable, but it’s very high,” Dodaro told the House Oversight and Government Reform Committee. “For every dollar spent on hazard mitigation and resilience building, it will save $6 down the road.”

Dodaro went on to say that with disasters predicted to be more severe and more frequent, the government needs to invest in planning and mitigation.

Additionally, Dodaro said climate change is a national security issue internationally as droughts and disasters affect global migration patterns and socio-economic status of countries.”

https://federalnewsnetwork.com/defense-main/2019/03/dods-acquisition-and-contracting-sees-little-improvement-on-gao-high-risk-list/

5 ‘Bold’ Recommendations To Improve DoD Acquisition

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“FEDERAL NEWS NETWORK”

“Congress and the Defense Department are paying close attention to recommendations coming from the Section 809 panel to change the military’s acquisition process. “

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“The House and Senate Armed Service committees added every idea from the group’s May 2017 interim report as well as many of the recommendations from the panel’s January 2018 volume one report to recent Defense authorization bills, said David Drabkin, the panel’s chairman.

“During this process, we have met frequently with both the House Armed Services Committee, the Senate Armed Services Committee, and on occasion we have met with the House Appropriations Defense subcommittee and Senate Appropriations subcommittee on Defense, and have worked closely with the department as you can see on the panel, three of the department’s acquisition executives have been a part of the panel itself,” Drabkin said Tuesday during the roll out of the volume 3 recommendations in Washington, D.C. “We can’t assure Congress will accept our work, but we have an indication that they are very interested. As you look around the room, you can see members from the staff of the HASC and SASC sitting in the meeting today.”

So with the congressionally-mandated group of public-private sector experts issuing their third and final set of recommendations Tuesday detailing 58 new ones across 13 sections, the likelihood of many of these proposals advancing is good. In all, the panel made 93 recommendations, provide implementation plans and legislative language across more than 1,000 pages and three volumes of work since 2016.

“We’ve made recommendations which are bold and you are going to have to wait in the department for some of those for Congress to legislate in order to give you the authority to do those things,” Drabkin said. “But many, many of the things we recommended can be done by the department to a greater or lesser extent.”

David Drabkin, chairman of the Section 809 panel, said they made some bold recommendations in the final report.

Here are five of those bold recommendations in order of importance that you should pay close attention to over the next 12-18 months. This is not to say that all 53 new recommendations aren’t bold or worthwhile, these are just five that stood out.

No. 51: Mitigate the negative effect of CRs by allowing regular appropriations to remain available for a standardized duration from date of enactment.

The problem with continuing resolutions and getting agencies their funding late in the fiscal year, but for the military with 50 percent of the discretionary spending the problem is compounded. The 809 panel states, “The value of strategic planning is diluted when acquisition personnel are uncertain how much money will eventually be made available. Vendors have greater leverage over the government when they know that funds must be obligated on a more urgent timeframe. The workforce, which is already heavily worked at the end of a regular fiscal year, becomes even more overworked at that time. This situation causes indirect problems with morale and retention.”

The panel recommends that Congress modify the definition of “fiscal year.”

“Congress should allow for CR-triggered automatic flexibility in timing of expenditures. For instance, Congress could pass a law allowing for minimum 1-year validity of all funding appropriated under CRs or regular appropriations,” the report states. “This measure would, if a regular appropriations bill were enacted prior to the start of the fiscal year, have no effect. If Congress chose to fund the government under one or more CRs, however, the measure would eliminate the budget-compression effect that currently takes place when Congress fails to appropriate full-year funding until well into the fiscal year.”

Baseline needed

No. 41: Establish sustainment program baseline, implement key enablers of sustainment and elevate sustainment to equal standing with development and procurement, and improve the defense materiel enterprise focus on weapon systems readiness.

Joe Dyer, a retired vice admiral and former commander of the Naval Air Systems Command, said the recommendations under the portfolio management section focus on the execution level and around Defensewide capabilities.

For too long, he said, sustainment, or readiness, has been the step-child to development and procurement because of the oversight both receive so this recommendation aims to solve that systemic view.

“Sustainment costs constitute some 70 percent of the lifecycle cost of our Defense weapons systems. They are dramatically influenced by our early decisions that pre-ordain costs,” Dyer said. “That high-cost is much like a variable rate mortgage for a young family. It is cannibalizing our ability to recapitalize and invest in the future, and it carries with it an uncertainty that carries for years and years to come.”

Dyer said the baseline would be akin to the acquisition baseline.

“It’s a tripwire that will alert us to erosion of either requirements or funding or management attention, and to pout sustainment on the level and on par with procurement and with development and production,” he said. “This recommendation comes with a caution. It needs to come in company with real management reserve, that’s part of giving portfolio manager and program managers the kind of sea room they need. Without management reserve and without a tripwire, we will leave program managers with a problem they cannot resolve. The dirty little secret is logistics, readiness and sustainment is where many acquisition programs when they are faced with unexpected problems and cost overruns.”

No. 44: Exempt DoD from Clinger-Cohen Act provisions in Title 40

Many believe the 22-year-old law has become too arduous for DoD because it requires too much documentationand is too checklist oriented, and complying with it adds little value.

Elliott Branch is the deputy assistant secretary for acquisition and procurement in the Office of the Secretary of the Navy for Research, Development and Acquisition.

“CCA compliance is confirmed at major milestones, after full requirements have been developed. It does not guarantee systems are initially designed for interoperability, information assurance, or risk management framework compliance, contrary to evidence-based practice,” the report states. “Exempting DoD from the Clinger-Cohen Act is one step in streamlining IT acquisition, but not the final step. DoD must continue to shift toward more strategic, collaborative processes that restore accountability to the appropriate individuals. It is imperative that DoD continue to follow many of the best practices mandated by CCA and enforced by newer laws, including continuous assurance of cybersecurity, business process reengineering and the adoption of commercial technology and processes. Congress should not repeal CCA provisions altogether, because they may remain useful for civilian agencies.”

Elliott Branch, the deputy assistant secretary for acquisition and procurement in the Office of the Secretary of the Navy for Research, Development and Acquisition, said the authors of Clinger-Cohen did not necessarily focus on DoD, and other similar agencies like NASA and the Energy Department, to implement the law because they had more mature processes to manage complex IT projects.

“The question in the Navy and other services and departments that have a fairly robust requirements, resources and acquisition system, is what is the role of the CIO?” Branch said. “That role, in my observation at least in DoD, has been driven by personality as much as anything. It vacillates from trying to get control of the requirements, resources and acquisition process, which is a losing battle because it’s got its own statutory authority, and being a setter of standards, which is a job probably better done by the private sector, who for the most part are highly technical. Essentially, consistent with some of our other recommendations to eliminate paper that do not add value, you take the pieces of Clinger-Cohen that a decision-maker needs to have make a good decision about an acquisition strategy and fold them into a program plan and get rid of the rest.”

Budget, funding changes

No. 42: Reduce budget uncertainty, increase funding flexibility and enhance ability to effectively execute sustainment plans, and address emergent sustainment requirements.

The panel states that DoD struggles to estimate sustainment costs, which requires a combination of research, development, test and evaluation (RDT&E) procurement, and operation and maintenance (O&M) funding to successfully execute the full range of lifecycle sustainment actions.

“Stable funding is key to successful execution and having funding of the correct type in place at the right time requires program offices to forecast, program, and budget accurately for sustainment,” the report states.

The panel’s recommendation would let DoD move some of the sustainment activities to the investment accounts versus annual funding.

The panel said this would let program managers negotiate long-term supplier agreements to obtain savings on contractor supported systems, or performance-based logistics contracts.

“Although, for those activities still funded by O&M, the PM needs the increased flexibility to fund those requirements affected by continuing resolutions and O&M appropriations accounts should be allowed a 1-year, 5 percent carryover authority,” the report states.

Al Burman, the former administrator in the Office of Federal Procurement Policy and now president of Jefferson Consulting, said CRs are specifically painful for O&M programs where funding expires at the end of the fiscal year.

“Funding for 5 percent of the O&M account should be allowed to carry over into the next fiscal year. This would be one way to avoid making poor decisions at the end of the year based on the fear that if the money isn’t spent on something, whatever that might be, it will be taken away,” he said. “We’ve had a number of discussions with the folks in the DoD comptroller’s office of the various services and the technical issues were raised about how you are able to move the money into the next fiscal year and still preserve it so it can be used effectively as part of the prior year funding. There is no question this is going to be a technical challenge for people to do it. We know, for example, that the Defense Health Agency does have a very small carryover and the carryover lasts for a full year and it’s 1 percent. It’s to deal with the kinds of issues we’ve been addressing.”

Communication

No. 87: Establish a market intelligence capability throughout DoD to facilitate communication that enhances the government’s industry knowledge through open, two-way communication.

The panel clearly recognized through its research and interviews that the relationship between industry and contracting officers is constrained and risk aversion is the overarching approach to procurement.

The commissioners heard from industry and military services and agencies alike about how limited or highly-controlled market research has led to missed opportunities for DoD.

“We heard many common themes from those doing business with or considering doing business with the government. One complaint we heard repeatedly was in regard to the difficulty industry has in engaging in meaningful communication with government. The general consensus among industry and government is that communications are important, but for government personnel there seems to be a culture constraint that gets in the way,” said Larry Trovel, a retired colonel in the Air Force and a former policy representative on the Defense Acquisition Regulations Council. “There are strong urban legends arguing that communication between government and industry is dangerous, fraught with legal traps, only to be conducted under the close supervision of the contracting officer and frankly not worth the effort.”

Trovel said the current FAR language promoting industry and government communications are confusing and partly to blame for these challenge.

The market intelligence capability would be a continuous two-way communications between contractors and government based on specific program portfolios.

The panel is promoting language from OFPP’s mythbuster memos.

“The panel offers recommendations that would take a much more direct approach to improving communications between government and industry. Rather than encouraging, authorizing or allowing communications, as it says today, it would ask Congress and DoD to take a heavier hand in exploding the urban legends and making ongoing and meaningful communications a common practice,” Trovel said.”