The General Services Administration is moving forward with plans to stand up a cloud broker contract for acquiring and managing the performance of federal cloud services.
The Department of Homeland Security is one of two agencies that has committed to testing GSA’s cloud broker model in a pilot program expected to launch this fall, said GSA’s Mark Day. Speaking Monday at the annual Management of Change conference in Maryland, Day said GSA will award one contract to test the concept of a broker model and reevaluate the pilot by year’s end to determine how it could be expanded.
GSA has not yet defined all the services a cloud broker would provide, but the National Institute of Standards and Technology defines a cloud broker as “an entity that manages the use, performance and delivery of cloud services and negotiates relationships between cloud providers and cloud consumers.” Technology research firm Gartner defines cloud brokerage as a business model in which an entity adds value to one or more cloud services on behalf of one or more cloud users.
Some question whether the cloud broker model will add value or end up costing agencies more money. In a Feb. 14 letter to Rep. Doris Matsui, R-Calif., GSA’s Lisa Austin said the cloud broker model could be more effective in creating ongoing competition among cloud providers, rather than awarding single contracts for each cloud service.
“Part of the pilot is really understanding what’s the right role, [and] what’s the right process” for a cloud broker model, Day told Federal Times. ”We think we have an idea, but now we’ve got to test it.”
Day made clear what cloud brokers would not do inherently governmental functions, such as contracting. It isn’t clear to what extent brokers would negotiate services between agencies and cloud service providers, but the hope is that cloud brokers will increase vendor competition and reduce pricing and reduce the complexities of acquiring cloud services and integrating them with existing services.
Roughly 15 agencies are part of the cloud broker discussion, Day said. He would not name the second agency that has committed to testing the broker model because the agency has not announced it publicly.
The challenge for GSA has been attracting business to some of its existing federal contracts, rather than agencies launching their own contracts or using other agencies’ contracts. To garner greater use of its strategic sourcing contracts and future use of its cloud broker contract, GSA is meeting with agencies to determine their commitment to participate in market research and use the contracts, Day said. GSA can better leverage the federal government’s buying power, and vendors have an idea of what’s possible, in terms of business volume on a contract, he said.
More than half of the attendees at a big training meeting in 2011 for the General Services Administration’s acquisition arm hailed from the Washington area, but when it came time to figure out a location, officials headed to sunny Orlando instead.
As outlined in a memo released by the GSA’s Inspector General this week, a review found that Federal Acquisition Service officials settled on a contract proposal for conference planning and training that came to nearly a quarter million dollars, while the next highest vendor proposed just $79,784.
Despite the price, the IG found that officials essentially steered the conference to the Disney Institute by cutting and pasting from the request for quotation of a GSA leadership conference held months earlier by the FAS office in Atlanta. Three other vendors were rated poor and disqualified.
“This indicates that the competition may have been restricted since the requirements in the work statement could not be meet by other potential vendors,” James P. Hayes, deputy assistant IG, concluded in a May 15 memo to FAS Commissioner Thomas A. Sharpe, Jr., who was not in charge of FAS at the time.
Overall, the Florida conference conference cost $164,000, while 58-percent of the 155 attendees came from the Washington area, the IG found.
In am email, Dan Cruz, a spokesman for GSA, said the activity took place in 2011 and “would not be tolerated today.”
He said Acting GSA Administrator Dan Tangherlini, who also was not with GSA at the time, has enacted reforms leading to greater oversight of travel, conference spending and related procurement activities.
“Over the past year, GSA has cancelled more than 50 conferences,” Cruz said. “These internal reforms, including cuts in travel and conference spending, have led to $73 million in savings.”
Tangherlini was named head of GSA after the former chief, Martha Johnson, resigned amid embarrassing disclosures of lavish, taxpayer-funded conferences, including a now infamous gathering in Las Vegas that cost more than $800,000 and featured a red carpet party and a mind reader.
On Nov. 27, 2012, at 3:38 p.m., an employee at Insight Systems Corp., which was bidding on a health services contract, submitted a revised quote to two employees inside the U.S. Agency for International Development.
The deadline for doing so was 5 p.m.
The message reached the first of three agency-controlled servers at 3:41 p.m., but then it got stuck. And it wasn’t until 5:18 p.m. that the email reached the first USAID employee, while the second employee didn’t receive the message until 5:57 p.m.
Around the same time, an employee at another company, CenterScope, which was submitting its own revised quote, sent a submission to the same USAID employees at 4:39 p.m., but that email did not reach the intended recipients until 5:15 p.m. and 6:08 p.m., respectively.
Too late, right?
Not according to U.S. Court of Federal Claims Judge Francis Allegra.
In a 22-page opinion released Monday, Allegra rules in favor of both contractors in a recent complaint against USAID.
Aside from calling USAID’s decision to reject the quotes because they were late “arbitrary, capricious and contrary to law,” the ruling — in case you’re interested — provides a road map of a typical email message through a maze of internal servers.
In this case, the emails were received and accepted by the USAID’s internal server, but they got stuck there for a while and weren’t forwarded to the next server because of an internal error.
The delays lasted as long as more than two hours, but none of the messages made it to their final recipients by the 5 p.m. deadline.
Still, USAID sent both contractors letters days later saying their quotes wouldn’t be considered because, after all, late is late.
Allegra disagreed, sharply
He went so far as to say USAID approached the question of the timeliness of electronic submission “with the zeal of a pedantic school master awaiting a term paper.”
He also ruled that couldn’t see any reason why possession of the quotes couldn’t be effectuated through a government computer server any less than through a clerk in a mail room.
In the end, Allegra’s ruling bars USAID from making an award unless it accepts quotes from both contractors.
Or, he ruled, USAID could start all over with a new procurement.
The Interior Department has awarded 10 vendors a spot on its $1 billion cloud services contract.
Under the 10-year indefinite delivery, indefinite quantity contract, vendors will provide a variety of services, including cloud storage, secure file transfer, database hosting, Web hosting, development and testing, and virtual machine services. The latter will allow agencies to create virtual, rather than physical, versions of their servers and virtual desktop capabilities that allow employees to access work documents and applications from any device.
The Foundation Cloud Hosting Services contract was awarded May 1 and will be available to other agencies.
Most of the winning vendors are also on the General Services Administration’s cloud email and infrastructure services contracts, including Autonomic Resources, CGI, Lockheed Martin, Unysis, IBM, Smartronix, Verizon and AT&T. Global Technology Resources and Aquilent were the other winning vendors.
Interior’s contract has three base years and several option periods through 2023.
Raytheon CEO William H. Swanson received a slight salary bump in 2012 but his overall compensation grew by $1.4 million, the defense contractor disclosed in a Securities and Exchange Commission filing Friday.
Swanson received a base salary of $1.4 million for 2012, a small increase from 2011. But his overall compensation with incentive pay and stock holdings came to $16.4 million. That’s up from $15 million overall in 2011 and $14.8 million in 2010.
In explaining the compensation, the company noted in the SEC filing that Raytheon had “strong operational results” in 2012, including an increased backlog from $35.3 billion to $36.2 billion.
“Improved efficiencies and cost reduction initiatives were among the primary drivers of operating margin and earnings performance, while global demand for the Company’s innovative and cost-effective products and services resulted in strong bookings,” the company said.
Raytheon was the federal government’s third biggest contractor for 2012, behind only Boeing and Lockheed Martin. CEO’s for both companies during 2012 saw their compensation increase, too.
Kathleen McGrade was a contract specialist inside the State Department, but prosecutors say she didn’t live like one.
Steering tens of millions of dollars in work to a company controlled by her husband, McGrade bought a yacht, penthouse condo and lots of jewelry, according to charges unsealed Thursday in U.S. District Court in Virginia.
McGrade, 64, and her husband, Brian C. Collinsworth, 46, both of Fredericksburg, Va., face up to 20 years in prison on charges stemming from what authorities called a “secret scheme” by the couple to steer more than $60 million to a company they controlled.
Authorities said McGrade was a private contract employee assigned to work as a contract specialist inside the State Department. Though she kept the relationship with her husband a secret from colleagues, she signed off on payments to her husband’s company, authorities said.
In forfeiture papers filed in U.S. District Court in Alexandria on April 2, prosecutors also said McGrade was “involved in nearly every stage” of the contracting process. They say the scheme lasted from December to 2007 until August 2011.
Prosecutors are seeking three properties tied to the scheme along with a Steinway piano, a yacht, artwork and jewelry that includes a matching sapphire and diamond necklace and bracelet set that cost $136,500.
A phone number listed for McGrade in Virginia was disconnected, and attempts to reach her were unsuccessful.
The General Services Administration has launched a full review of its key online procurement system, after discovering a security vulnerability that may have exposed users’ sensitive data.
The security flaw was reported to GSA on March 8, and the agency has since issued a software patch on the system and is investigating potential impacts to vendors registered in GSA’s System for Award Management (SAM).
“When we got the word that this might be the case, we got right on it,” GSA Acting Administrator Dan Tangherlini told reporters Tuesday following a congressional hearing. “And there is nothing that we won’t do, there’s no step we’re not going to take to ensure the safety and the security of people’s data within that system.”
Tangherlini said GSA is testing changes to the system and will continue to keep users informed. “I am incredibly concerned about it, and the good news is that everyone in the organization is incredibly concerned,” he said of the system’s known security flaw.
The vulnerability could have compromised sensitive information, including Social Security numbers, of individuals registered in the system, according to GSA.gov. Contractors that use Social Security numbers instead of taxpayer identification numbers could be at greater risk, and those individuals will receive credit monitoring.
The vision for the SAM system is to serve as a single access point for nine procurement systems, but GSA has yet to accomplish that goal. To date, the SAM system includes four of the nine systems and provides access to contractors’ business information, their certifications required to receive federal contractors and grants and which contractors have been suspended and debarred.
In 2008, GSA began consolidating its systems in a effort to reduce costs, eliminate redundancies and improve efficiency.
A March 2012 Government Accountability Office report found that “while GSA has taken some steps to reduce costs, it has not reevaluated the business case for SAM or determined whether it is the most cost-effective alternative.”
The Federal Acquisition Service and Office of the Chief Information Officer are now providing program oversight, following an internal review of all GSA operations last year. Tangherlini has also called for the development, reporting and monitoring of key metrics for the SAM project.
For the first time in a long time, more federal contractors reported decreases in their government contracting revenue last fiscal year than those who saw increases, according to a Grant Thornton survey of about 100 contractors.
Thirty-eight percent of contractors suffered reductions in revenue over the past year, compared with 36 percent that saw revenue increases and 26 percent that experienced no significant change, according to the annual Government Contractor Survey released last week. Professional Services Council sponsored the survey.
“This year’s survey shows more revenue shrinkage than growth and a plunge in net profit, with the majority of contractors seeing a tiny profit or none at all,” the survey said. “This despite reducing headcount and overhead, holding wages at generally the same level as in the last two years, cutting [general and administrative expenses] and benefits, and doing just about all a company can do to sustain profits. Contractors are up against costs that can’t be slashed and must be absorbed: indirect, health care, overtime and, for many, out-of-scope work.”
Companies said that 84 percent of their revenue came from federal business, which is the lowest reported over the past six years. Last year, federal business made up 93 percent of companies’ revenue.
Defense Department contractors were the hardest hit. Revenue from DoD contracts dropped 16 percentage points to 47 percent. However, revenue from civilian agencies rose 7 percentage points to 37 percent. State and local revenue accounted for 7 percent and commercial revenue made up 9 percent of companies’ revenue.
The survey assumes that reduced defense spending, changing priorities for the administration and insourcing are to blame for contractors’ revenue decline.
Overall, the median turnover rate for companies was 8.5 percent. Most of the companies surveyed sell professional services to the government, which may explain the high turnover rates. It’s common for employees to accept jobs with the winning vendor if their company loses a follow-on contract, the survey said.
When asked how often their companies won non-sole-sourced contracts, the median rate was 30 percent. When the company was the incumbent, that number rose to 50 percent.
In some cases, however, bid protests are triggered when incumbent vendors receive far lower scores than their competitors, despite having a stellar performance record, the survey said. “It should be noted that with the increased use of lowest price, technically acceptable contracts, the incumbent’s advantage is virtually erased.”
Elliott Branch, the Navy’s deputy assistant secretary for acquisition and procurement, has been named Public Sector Partner of the Year as part of the 10th Annual Greater Washington Government Contractor Awards, the Fairfax County Chamber of Commerce, Professional Services Council and Washington Technology announced Friday.
The award honors “the leadership, innovation and commitment to excellence of the individuals and businesses in the region’s government contracting sector,” the group said in a news release. The awardees helped government contracting and acquisition officials execute a myriad of missions at home and abroad, PSC President Stan Soloway said during a gala honoring award recipients Thursday night.
“These partnerships will become all the more critical as we rise to meet the nation’s almost unprecedented budgetary and security challenges,” he said.
Contractors and company executives who received awards this year are:
Contractor of the Year (less than $25 million): Octo Consulting Group, Inc.
Contractor of the Year ($25-75 million): Blue Canopy Group, LLC
Contractor of the Year ($75-300 million): CALIBRE Systems, Inc.
Contractor of the Year (greater than $300 million): Sotera Defense Solutions, Inc.
Executive of the Year (less than $75 million): Greg Baroni, Chairman & CEO, Attain, LLC
Executive of the Year ($75-300 million): Tony Jimenez, Founder, President & CEO, MicroTech
Executive of the Year (greater than $300 million): Richard Montoni, President & CEO, MAXIMUS
Dr. J. Phillip London, chairman of the board of CACI International, was also inducted into the Greater Washington Government Contractor Awards Hall of Fame for career achievement and long term contributions to the industry.
The nominations period for the 11th annual awards will open in early 2013.
Three men were handed down prison sentences this week for participating in a scheme to defraud the government of more than $20 million through Army Corps of Engineers contracts, the Justice Department announced Thursday.
Harold Babb, the former director of contracts at Eyak Technology LLC, was sentenced to seven years and three months in prison on federal charges of bribery and unlawful kickbacks, according to a news release.
Babb admitted that he paid Army Corps of Engineers program manager Kerry Khan in return for Khan’s approval on contracts and subcontracts to EyakTek and Big Surf Construction Management, an EyakTek subcontractor, the release said.
James Miller, the owner of Big Surf Construction Management LLC, was sentenced to five years and 10 months in prison, the release said.
Khan also allegedly approved fictitious and fraudulently inflated invoices worth $850,000 submitted by Alpha Technology Group, company president Robert McKinney told the Justice Department. Alpha Technology kept about $246,000, and the rest allegedly was passed on to Khan directly and through a company controlled by one of Khan’s family members, the release said.
McKinney was sentenced to two years and nine months in prison.
Upon completion of their prison terms, Babb, McKinney and Miller will be under supervision for three years.
Twelve people, including Khan, have pled guilty to charges related to the fraudulent use of Army Corps of Engineers contracts, and the investigation is continuing, the release said. Army Corps of Engineers program director Michael Alexander, who also allegedly took bribes from contractors in exchange for access to government contracts, was sentenced in September 2012 to a six-year prison term. The other defendants are awaiting sentencing, the Justice Department said.