Tag Archives: Acquisition Reform

Adaptive Acquisition Framework — Ready, Set, Contract?

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Image: Defense Acquisition University

NATIONAL DEFENSE MAGAZINEBy Dr. William A. Schleckser

This new Adaptive Acquisition Framework displays a patent willingness to put substantial trust in program managers by moving decision-making authority as close to the program manager as possible.

For this new framework to prevail, there must be trust in contracting officers by moving authority for actions as close to the decision-maker — the contracting officer — as possible.

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“Undersecretary of Defense for Acquisition and Sustainment Ellen Lord has called the Adaptive Acquisition Framework “the most transformational change to acquisition policy in decades.” Her statement is difficult to argue given the revolutionary nature of the framework’s alterations to acquisition policy and the lack of truly transformational changes seen in acquisition policy and statute over the past 25 years. 

For decades, Defense Department leaders have lamented the laborious, bureaucratic acquisition process and its hindrance to innovative breakthroughs within weapon systems programs.

Many defense technologies, once fielded, lose a non-trivial portion of their relevance due to acquisition delays, a concept identified by former Defense Secretary James Mattis in the 2018 National Defense Strategy. The document pointed to processes’ non-responsiveness and a department over-optimized for exceptional performance, both of which come at the expense of providing timely capability delivery to the warfighter.

In response, Lord rapidly pushed out sweeping new guidance in the form of a six-pathway framework — the Adaptive Acquisition Framework — which is designed to put authority and agility back in the hands of program managers. With this newfound ability, executives will transition between pathways in order to speed delivery of capabilities to the warfighter.

Still, acquisition is not a solo sport. Program managers must rely on their team of acquisition professionals to embrace this new paradigm of speed, agility and risk management for this “transformation” to result in real change in capability delivery. But increasing speed, agility and risk sends a measure of anxiety through the vertebrae of the many contracting professionals who have focused on delivering contracts that are protest-proof and rigidly built to withstand the assaults of indistinct scope and performance.

Nonetheless, for the framework to deliver capabilities at the speed of relevance, contracting professionals at all levels must be willing to embrace this revolutionary change.

This change comes with a prerequisite to develop not only new and inventive processes, but an expanded tool box of soft skills necessary to bring about innovation, active management of risk, and corporate synergy to the contracting community that will result in high-speed, low-drag contracting.

The “Contracting Professional’s Career Roadmap” is a nine-step list published by the Federal Acquisition Institute. It provides contracting professionals a succinct overview of gates through which a contracting professional must successfully pass in order to be effective. Curiously, the first stop on this path, “become familiar with the federal acquisition process,” is not a contract-centric element. The federal acquisition process is not contracting, but contracting is a major subset. The process is the overarching method encompassing all relevant skills and functions by which the federal government acquires products and services.

Ironically, the second stop on the roadmap is “understand your role as a contracting professional” within this process. It was not by chance these items are numbers one and two on the path. That is because federal acquisition is a team sport, of which contracting is one player among many. As with any team sport, each player must understand his or her place and responsibilities within the team framework, otherwise the team will fail. The first thing a youth football coach should do is line up new players in formation — both offense and defense — so they can gain an understanding of where their position is in relation to all the other players. A single player lining up incorrectly could result in a penalty or failure for the team to properly execute the play.

Understanding where a manager fits in the overall formation is just as important in the acquisition team. Taking it to another level, each player also needs to understand how his play impacts his teammates. Commentators often praise a great player for their “knowledge of the game.” It isn’t just their knowledge of their specific responsibilities as a player, but the interrelation of how their play improves the play of those around them.

In federal acquisition, each team member must perform with that level of understanding in order for this new transformation to be successful. This may be even more imperative for contracting team members as the contracting processes tend to consume a significant portion of time while they deliberate source selection and performance risk.

Assistant Secretary of Defense for Acquisition Kevin Fahey identified a need to develop a culture of innovation and creative compliance, and enable critical thinking. In order to be innovative, creatively compliant and critical thinkers, department leadership wants acquisition teams to take calculated risks. As Gen. George S. Patton said, taking risks “is quite different from being rash.”

One tool that transforms rash behavior to measured performance is risk management. To take calculated risks, contracting professionals will need to learn how to actively manage risks. Program managers routinely manage risks and, as a programmatic community, have become comfortable mitigating, accepting, transferring or avoiding risks within their programs.

Contracting professionals must learn and implement these skills as they execute contractual actions. No longer will the acquisition community idly await the perfect contract. Perfection late is perfection lost. Too often contract award timeliness was sacrificed in an effort to gain contractual perfection through overly cumbersome approval chains and non-value-added reviews.

Timeliness has also been assaulted by excessive “documentation,” which has been a watchword for the contracting community and for good reason. However, as with any good thing, it tends to be overdone. In some ways the acquisition community may have become overly obsessive and unreasonably compulsive with its documentation, and some streamlining may be in order.

Procedural changes to contracting are only a first step. The real gains may be seen in a closer coupling of the acquisition team functional communities. In today’s continuously changing environment, requirements can no longer be developed in a vacuum only to be thrown over the fence to the next team. Requirement generators, program managers and contracting officers must integrate early and intimately in the requirements process to develop requirements, discuss possible options, perform market research, consider acquisition plans and jointly produce acquisition timelines. Contracting professionals often enter or are invited late into the acquisition process. Contracting organizations do it to themselves when they demand customers only turn over a requirement once it has been fully detailed with the finalized work statement, funding documents and cost estimates.

In today’s rapidly changing environment, contracting professionals better serve customers by entering as early in the requirements generation process as possible. The team must come together so closely and early that it would be difficult for an outsider to identify where program management stops and contracting starts.

If the first time a contracting professional sees a requirement is when it has been fully documented in a formal work statement, an opportunity to bring value to the process has been lost. Additionally, synergies that come from synchronized market research and critical thinking amid the program manager, contracting officer and other acquisition team members are missed; and with it early considerations for competition, innovative contracting and/or small business participation because the requirement has been fixed making change too difficult or time consuming.

Failing to capture the synergistic effects of close coordination, contracting will struggle to regain any status as an innovation enabler, and may continue to be relegated to chasing acquisition timelines and contract perfection.

The Adaptive Acquisition Framework is an opportunity to inject innovation, creativity and critical thinking into the federal acquisition process by placing authority and agility into the hands of program managers. However, this transformational change to acquisitions will not create true transformation unless the players are willing to embrace the change. Program and product managers can only deliver capability as fast as their team supports.

Although the framework is program management focused, it also presents a challenge to — and opportunity for — the contracting community. As a critical component to the delivery of products and services, the contracting community must get on board with the new vision being promoted by leadership. It is a vision overdue given the speed at which technological capabilities are progressing.

More specifically, contracting professionals must understand that timeliness can no longer be held hostage by contractual perfection, overly cumbersome approval chains and non-value-added reviews. Perfection late is perfection lost. As a result, contracting professionals must become intimately integrated early into the acquisition process starting at the notion of the requirement. Otherwise, they risk being a deterrent to the innovation and creativity crucial in today’s fast-moving environment.”

https://www.nationaldefensemagazine.org/articles/2020/5/29/adaptive-acquisition-framework-ready-set-contract

Dr. William A. Schleckser is a professor of contract management at the Defense Acquisition University. He is Defense Department Level III certified in contracting and program management.

A Pentagon Procurement Program That Seems Doomed to Fail

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Image: “Greycampus.com

REAL CLEAR DEFENSE

The Pentagon spends more money on federal contracts and relies more on private contractors to provide necessary support than all other U.S. government agencies combined.

With a potential ceiling of almost $8 billion dollars, the NGEN-R is one of the largest non-hardware contracts ever awarded. The problem with massive, long-duration IT contracts is that the pace of technological change often makes them out-of-date almost from the start.

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“The primary objective of the contract is to manage, modernize and eventually merge several massive Navy and Marine Corps networks that collectively encompass some 400,000 computers and 800,000 users at 2,500 locations. NGEN-R will provide secure data and information technology services such as data storage, email, cloud services, and video teleconferencing for Navy and Marine Corps ships and locations around the world.

As if this were not in itself a major undertaking, the Navy acquisition bureaucracy decided to make the effort even more challenging. First, it decided to split what had been for twenty years a single contract into two: a smaller hardware-centric section, and a larger one focused on services and support. Second, the Navy chose to assume the responsibility for overall management of the two contracts. Third, it awarded the services contract to Leidos, a company with no prior experience in providing support to major Navy/Marine Corps networks. Fourth, the new contract sets an extremely aggressive schedule for transferring responsibility for multiple networks from the existing contractors, who have some 30 years of experience in this field.

The NGEN-R award repeats an often-seen pattern in defense acquisitions, particularly those involving IT services and support contracts. The acquisition bureaucracy isn’t satisfied with incremental advancements; it wants to preside over “transformational change.” As a consequence, it dispenses with experienced contractors and tried-and-true approaches in favor of modernizing complex networks. This same bureaucracy buys into the new contractor’s promises that it can effortlessly take over for its predecessors, and then simultaneously integrate and modernize the Navy’s networks—all while lowering costs. We’ve seen this movie many times before and it never ends well.

When an IT network procurement goes wrong, a lot of bad things can happen. The most immediate impacts will be slow responses to individual needs and major events alike. In the former case, this results in increased dissatisfaction and frustration; in the latter case, missions are endangered when Sailors and Marines can’t get data or effectively communicate. Furthermore, it’s less than helpful when the “green” service desk team—the place where one goes for IT support—is struggling to understand how things work. Compounding this demand for IT help is the age of the technology, as refresh cycles for replacement laptops and PCs were likely put on hold until the new team was firmly in place. In the longer term, the Navy risks backsliding on everything it has accomplished over the last 20 years to consolidate its networks, standardize its technology and rein in IT spending. 

Were these normal times, the Navy and its new contractor might have the time and resources to weather the inevitable delays, service interruptions, and cost increases that will result from the acquisition bureaucracy’s desire to have the new contractors do it faster, better and cheaper. However, these are extraordinary times. We are in a crisis in which clear communications and a reliable network are much more important than they were when the contract was awarded. Like everyone else in the world, the Department of the Navy faced a massive challenge in getting several hundred thousand Sailors, Marines and civilians set up to telework and unlike a business, the important mission—protecting the United States—did not stop to wait for the IT to catch up with this radical change. The Navy’s networks have had to be reconfigured in real time while adding new nodes (such as two hospital ships deployed to support New York and Los Angeles’ health systems) and ensuring that both the Navy’s networks and connections to medical networks across the country are viable and secure.

There are already signs that the NGEN-R contract is heading for difficult times. The most notable was the early talk by the winning bidder about changing the solution that they proposed. In a recent interview, Gerry Fasano, head of Leidos’s Defense Group, acknowledged that the network “has continued to evolve, and so we’ll update ourselves from what we proposed and then worked through our transition plans.” Read this to mean: get ready for lots of change orders as the company attempts to make good on all its commitments.

In late April, the Department of the Navy’s Chief Information Officer, Aaron Weis, said in an interview that the Navy has been looking to “jumpstart” modernization—which is the right thinking—but expressed concern that the recently-awarded NGEN contract was the best path forward: “One of the first things we really talked about was do we stop NGEN-R and reset it given what we thought we needed to do. The reality is, given the acquisition timeframes, it probably would’ve set us back another year.” In hindsight, that would not have been a high price to pay.

The Navy’s plan to modernize its IT networks is likely to be dead in the water for an extended period while the NGEN contract transitions and networks struggle to deal with the new reality of communications in the era of COVID-19. While the acquisitions folks won’t feel a bit of pain, the Sailors and Marines and the state and local communities they are trying to help certainly will.

The NGEN-R award is currently in protest. But whatever the outcome, the Navy should take the opportunity to reconsider its rush towards an unpredictable future. The Navy needs a different approach, one that doesn’t put its networks and thus its pandemic response at risk, much less the security of the Nation and tens of thousands of Sailors and Marines. It would be wise for the Navy to suspend the NGEN-R contract and pursue a new competition.”

https://www.realcleardefense.com/articles/2020/05/16/a_pentagon_procurement_program_that_seems_doomed_to_fail_115296.html

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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