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GAO: Agency use of cost contracts is down?

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Agency use of risky cost-based contracts has dropped over the last six-years, but the number of contracts coded as “combination contracts” is on the rise, the Government Accountability Office found in a report released today.

Between 2003 and 2008, the value of cost-reimbursement contracts, which pay vendors for their actual costs to perform the work, grew from $120 billion to $136 billion. But as a percentage of overall dollars spent through the procurement process, use declined. In 2003, the $120 billion represented 34 percent of the $298 billion spent. In 2008, the $136 billion was just 26 percent of the $528 billion spent, GAO found.

The report comes in the same week as the Office of Management and Budget told how agencies they should reduce the use of these contracts by another 10 percent by Oct. 1, 2010.

“However, this overall downward trend is misleading,” GAO said in the report. “A significant increase has been reported for obligations using the ‘combination’ contract type, a category that based on GAO’s analysis of 2008 data, includes many contracts with cost-reimbursement obligations that are not recorded as such.”

In fiscal 2004, agencies spent less than 1 percent — or $1.3 billion — of government obligations on “combination” contracts. In 2008, use swelled to 8 percent or $39 billion of total contract spending. Defense was the largest user of the contracts in 2008, spending $34 billion of the $39 billion in “combination” contracts, GAO found. In addition, billions in contracts had no contract type designated for fiscal 2008, the report said.

Regardless of how much agencies spent through cost-reimbursement methods, as opposed to less risky fixed-price contracts, agencies were not monitoring the contracts carefully, GAO said.

Of 92 cost-based contacts GAO reviewed for the report, only half of the contractors had accounting systems government auditors found were accurate in tracking costs, GAO found. Twenty had no evidence that systems were adequate and 20 more had outdated determinations of accuracy, GAO said. Outdated accuracy determinations and inadequate systems put government at risk for making improper payments, the report said.

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2009 intelligence budget: Almost $50 billion

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How much does the (civilian) government spend on intelligence? $49.8 billion last year, according to Dennis Blair, the director of national intelligence, who released the 2009 spending figure earlier this morning.

That figure includes only the non-military intelligence budget. Blair said in a conference call earlier this year that the entire intelligence community budget is $75 billion — suggesting that the military intelligence budget, still technically classified, is about $25.2 billion.


Update: Martha Johnson's nomination…still on hold

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Sen. Christopher “Kit” Bond, R-Mo., rose to speak on the Senate floor yesterday to inform everyone he’s not lifting the hold on Martha Johnson’s nomination to lead the General Services Administration until the GSA explains…again…why it decided to build a federally owned building to house 1,200 feds in downtown Kansas City, rather than taking the more costly lease-construction route. (A lease-construction project is when a contractor builds a space to government specs then leases it to the government.)

In the Oct. 29 floor statement, Bond expressed frustration that GSA decided to “pull the plug” on the lease-construction project that he and local leaders had worked with the Bush administration to get.

Bond claimed he was waiting for GSA’s response as to the future of the project, even though GSA did so in an Oct. 9 letter to Bond and other Missouri congressional delegates. GSA Public Building Service Commissioner Robert Peck wrote that the agency would take the less costly route of constructing a building GSA would own outright.

Bond said he hoped to lift the hold soon, possibly in “a matter of a couple of days.”

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Deadline looms to submit green ideas

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Heads up, federal procrastinators: You’ve got until midnight Saturday to submit your suggestions for making the government more environmentally friendly and to vote on those ideas already submitted by your more industrious colleagues. 

As we reported earlier, the most popular ideas submitted during the GreenGov Challenge will be presented to agencies, which are right now figuring out how to meet the ambitious environmental goals laid out earlier this month by President Barack Obama.

With a portfolio of more than 500,000 buildings and 600,000 vehicles, the government is a prime target for testing ideas to conserve energy, reduce carbon emissions and promote environmental sustainability, Vice President Joe Biden said.

Any idea, big or small, about how to make this government more efficient can make a significant impact on our energy consumption and our energy future.

As an added incentive,  Biden recorded a special message encouraging federal employees and military service members to participate. Check it out below, and then submit your own ideas.

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Senate confirms surgeon general

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Senators unanimously confirmed Dr. Regina Benjamin Thursday as the next U.S. surgeon general.

Benjamin is the founder of the Bayou Le Batre Rural Health Clinic in Bayou La Batre, Ala., a fishing village, and has served as its chief executive officer since its founding in 1990.

Benjamin has rebuilt the clinic several times, including after Hurricane Georges in 1998 and Hurricane Katrina in 2005.

Atlanta neurosurgeon and CNN correspondent Dr. Sanjay Gupta was rumored earlier this year to be Obama’s first choice for surgeon general, but Gupta pulled his name from consideration, citing his desire to spend more time on his current work.

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President signs end to NSPS

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President Barack Obama signed the Defense authorization bill into law Wednesday afternoon, marking the eventual end to the controversial National Security Personnel System.

HR 2647 phases out the NSPS pay-for-performance system by Jan 1, 2012, and the Pentagon has six months from Wednesday to start transferring employees over to their original pay system. For many employees, that means a return to the General Schedule.

The bill also contains a number of provisions long anticipated by federal employees:

  • Federal Employment Retirement System (FERS) employees will be able to count unused sick leave toward their years of service, just as Civil Service Retirement System (CSRS) employees can. This may end the epidemic of “FERS flu,” where soon-to-retire employees burn off sick leave because they couldn’t receive credit for it.
  • FERS employees returning to work for the federal government would be able to redeposit their annuities.
  • CSRS employees who work part time at the end of their careers would be able to have their annuities recalculated to be based only on their full-time salaries.
  • Retirees returning to work for the federal government would be able to collect their full salaries while drawing their annuities. Agencies used to be able to pay rehired annuitants a full salary only if they obtained a waiver from the Office of Personnel Management.
  • Federal employees in Alaska, Hawaii and U.S. territories will now receive locality pay instead of cost of living. Employees in the continental U.S. receive locality pay.

Feel free to celebrate in the comments section below, feds!

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OMB procurement guidance now available

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UPDATE: OMB says the definition of inherently governmental functions is still being worked on. Expect to hear something by the end of the year.

The Office of Management and Budget just released two long-awaited procurement reform memos. The first is about increasing competition while reducing risk in contracting. The second is about strategic planning for the civilian agency acquisition workforce.

So far no word on a A third piece of expected guidance meant to clarify the definition of inherently governmental functions was not released today as expected [see update above]. That memo will help agencies carry out earlier guidance to insource certain contractor-performed work.

A full story on the new guidance will be posted on FederalTimes.com later today.

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Updated: Sound off on going green

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Update: Nearly 2,800 ideas for greening the federal government have been submitted so far through the White  House’s GreenGov Challenge.  Those ideas have been voted on more than 93,000 times since voting began Oct. 19.

Federal employees and military service members have until Saturday to make their suggestions and cast their votes.


Original post: Think you have a great idea for how the government can reduce its environmental footprint? The Obama administration wants to know it.

The White House is challenging federal civilian employees and military service members to come up with ways in which the government can get to green in six key areas: reducing carbon emissions, conserving energy, conserving water, eliminating waste, building sustainable facilities and purchasing sustainable products.

From now until Oct. 31, employees can log onto the new GreenGov website and post their ideas. They can also vote on ideas submitted by other employees.

The most popular ideas in each area will be presented next month to a committee of senior officials from each agency who are charged with meeting the goals laid out earlier this month in President Barack Obama’s executive order on greening the government’s operations.

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Breaking: April Stephenson out as DCAA Director

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UPDATE: Full story now on FederalTimes.com. Click here.

Embattled Defense Contract Audit Agency director April Stephenson was removed from her post earlier today, the Defense Department has announced.

Stephenson, who was spent her entire career at DCAA, was reassigned to the staff of DoD Comptroller Robert Hale. Hale, who oversees DCAA, replaced her with Army Auditor General Patrick Fitzgerald, said Navy Cmdr. Darryn James, a Pentagon spokesman. Fitzgerald takes over Nov. 9.

The move was announced during an internal teleconference at 2 p.m. today. Following the teleconference DCAA staff was notified via email, James said.

Fitzgerald was chosen to take over the reformation of DCAA because he has “a fresh perspective and new ideas,” James said.

Stephenson’s leadership of DCAA has been dominated by the fallout from two Government Accountability Office reports that found auditors there cut corners, changed audit findings to be favorable to contractors without good cause, and rushed audits to completion to meet cost and management pressures.

At a hearing earlier this year, lawmakers on the Senate Homeland Security and Governmental Affairs committee expressed concern over whether someone with a long history inside DCAA could effectively reform it.

More to come soon on FederalTimes.com.

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Did anyone take the USPS buyouts?

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Are you one of the 18,000 people who accepted the Postal Service’s $15,000 buyout offer? Want to talk about why you took the deal? E-mail me. (Alternatively, if you didn’t accept the deal, I want to hear why not!)

I’m working on a story about the buyouts, and I’d love to include your stories. Glad to keep you anonymous, of course.

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