New guidance from the White House seeks to get agencies to break ”bloated, multi-year” projects for information technology acquisitions into more manageable chunks that can be delivered quickly and for less money.
Lengthy acquisition and IT development efforts to deliver massive new systems over years lead to projects that wasted billions of dollars and arrived years behind schedule, Joe Jordan, the Office of Federal Procurement Policy administrator, and Steven VanRoekel, the federal chief information officer, said in a June 14 blog post. By the time some projects launched, technology was obsolete, the officials wrote.
The guidance is meant to show IT, acquisition, finance and program officials how to work together to break investments into pieces and seek solutions that can be delivered shortly after contract award, the blog post said.
“By requiring frequent deliverables, agencies will also be better able to hold contractors accountable for keeping projects on track and delivering solutions that truly meet agency needs,” Jordan and VanRoekel said in the post. “And by breaking investments into smaller chunks, agencies may be able to drive more competition – including small businesses that might not have been equipped to compete for the massive, multi-year projects of the past.”
The document outlines the factors that contracting officers, in support of IT managers, will need to consider when planning modular developments, such as how to ensure that there is competition in the process, how broad or specific the statements of work should be, and when to use fixed-price contracts or rely on contract types or agreements.
Agencies that refuse to put senior leadership in charge of their small business contracting activities, as required by law, will be asked to explain their noncompliance to a House small business subcommittee.
The Small Business Act requires each agency to have an Office of Small and Disadvantaged Business Utilization (OSDBU) that ensures contracts are written with small business participation in mind. By law, the director of these offices should report directly to an agency’s secretary or deputy secretary.
The Government Accountability Office reported in June that the Agriculture, Commerce, Interior, Justice, State and Treasury departments are not complying with the requirements. Some agencies name top level officials as OSDBU directors but have less senior administrators do day-to-day activities. Others have the OSDBU director report to officials other than the secretary or deputy secretary.
“The reporting relationship is not an issue of form over function,” Rep. Mick Mulvaney, chairman of the House Small Business Subcommittee on Contracting and Workforce, said in a Politico op-ed Friday. “These small-business advocates are intended to be a peer of the chief acquisition officer and senior procurement executive. They are meant to serve as an authoritative figure — not an afterthought — so they can serve as a constant advocate for small businesses and an aggressive check against abuse.”
Mulvaney sent letters to noncompliant agencies that asked them to change their OSDBU leadership. The Treasury, State, Justice and Agriculture departments have told Mulvaney they believe they are in compliance with the law and will not change.
Mulvaney said the article that he plans to hold hearings on the topic.
Companies seeking preferential treatment as veteran-owned or small businesses will first have to verify their status with the Veterans Affairs Department.
Under the 2010 Veterans Benefits Act, VA has greater responsibilities to ensure that businesses competing for set-aside contracts are eligible.
This applies to companies currently listed in VA’s Vendor Information Pages database. Since mid-December, the agency has contacted more than 13,000 businesses by e-mail and mail to notify them of the new deadline.
Companies have 90 days to submit documentation to VA upon notification, or they will not be listed in the database, VA announced Monday. The verification process requires businesses to provide a list of all owners, the percentage of ownership for each person and other relevant information.
“Although the verification process may initially be a challenge to some small business owners and to VA, it’s a necessary step to eliminate misrepresentation by firms trying to receive contracts that should go to service-disabled and other Veteran-owned vendors,” said VA Secretary Eric Shinseki in a news release.
Similar requirements will extend to businesses not listed in VA’s database once those in the database are notified.
The announcement follows the temporary suspension last year of three Washington-area firms for alleged abuse of small-business set-aside rules.
Information technology vendor GTSI has since resumed new federal business, but suspensions for EG Solutions and MultimaxArray FirstSource have not been lifted.
The U.S. Postal Service’s Office of Inspector General today released its report on former marketing executive Robert Bernstock in response to a Federal Times Freedom of Information Act request. Our story on his alleged staffing and contracting abuses just went online here, but you can download the entire report by clicking here.
Our original stories that broke the news on four sole-source contracts he steered to associates he called “friends” can be found here and here. Bernstock announced his resignation May 12 and he officially left the agency June 4.
Government contractors and subcontractors are now required to post signs that “inform their employees of their rights as employees under federal labor laws.” Acquisition workers will have to write the provision into every contract they write from now on.
The rule went into effect yesterday, about a month after the Labor Department published it in the Federal Register. It’s based on a Jan. 30, 2009 executive order from President Obama. The president wrote at the time that his order was “designed to promote economy and efficiency in government procurement. When the Federal Government contracts for goods or services, it has a proprietary interest in ensuring that those contracts will be performed by contractors whose work will not be interrupted by labor unrest.”
Essentially, the order and the rule are designed to ensure that employees are aware of their right to join a union. The move is part of a package of labor-related executive orders issued in early 2009. One, related to collective bargaining agreements on large construction projects, already resulted in a change to federal procurement rules. Two others are still working their way through the pipeline.
Rebecca Pearson of the Washington law firm Venable said the information contained in the notices required to be posted under the new rule is fairly benign, but that the move is part of the Obama administration’s larger “pro-union agenda.” She also worried that the rule allows for contractors to be suspended or disbarred if they don’t comply.
Federal employees worried that their jobs will be outsourced to the private sector can rest easy for another year. The 2011 budget proposal continues a governmentwide moratorium on public-private competitions for federal work.
But contractors may face further insourcing under the proposal. While blocking agencies from competing federal work, the budget’s “general provisions” section requires agencies to take a head count of all contractor employees performing services for the government. The so-called “service contract inventory” must also include the name of the vendor, the type of service provided and the cost of that service.
Businesses may also see fewer federal contracts on the street in fiscal 2011 as the White House renewed its call for agencies to meet the $40 billion contract savings target by the end of that year. To meet this savings goal, the White House encouraged agencies to buy in bulk.
Here’s an update on Monday’s story on U.S. Postal Service executive Robert Bernstock and the three sole-source contracts he awarded to people he worked with in the private sector: Agency spokesman Gerry McKiernan said yesterday that the Postal Service’s general counsel, Mary Anne Gibbons has finished reviewing the contracts and “determined that the procurement process was followed in securing these contracts.”
Gibbons began reviewing the contracts last week in response to Federal Times inquiries.
The House passed the 2010 National Defense Authorization Act in a 389-22 vote today.
The House version of the bill would suspend the use of public-private competitions for federal jobs for three years, end the department’s pay-for-performance system and direct new contracting reforms.
My colleague Gregg Carlstrom already highlighted the budget cuts that the White House said will lead to $17 billion in savings in 2010. But I wanted to highlight a few items tucked into that figure that represent savings that came not from cuts, but from better contract management.
Among the items dubbed “other savings” in the White House’s “Terminations, Reductions and Savings” report released today:
- The Environmental Protection Agency’s consolidation of 22 information technology contracts for desktop support saved the agency $2 million. The new, single contract centralized help desk support, provided more energy efficient equipment and improved security.
- The Education Department achieved $8 million in savings last year by reducing the numbers of computers and printers it leases. Computers were reduced to 1,400, or about one per user from an average of 1.5 per user. More significantly, Education implemented a new network printer strategy that reduces the number of printers from 5,000 to 1,300, serving 10 people per printer and saving ink and paper. Going forward these efforts will save Education 7 percent to 10 percent annually on its contractor-owned and operated computer network.Â
- The Homeland Security Department will save up to $59 million annually over the next five years through consolidated purchasing of office supplies and computer software, which leverages the departments buying power to obtain bulk purchasing discounts.
- The State Department will also save 7 percent to 10 percent on office supplies, furniture, medical supplies, cell phones, personal digital assistants and other commodities by consolidating purchases under one vendor to take advantage of volume discounts. The White House report did not an exact dollar amount for the department’s savings.
Relatively speaking, these savings are small. But as Benjamin Franklin once said, “A penny saved is a penny earned.”
Update,10:40 a.m.: The President has made the big contracting reform announcement.
He called the government’s contracting system “broken” and said it was “plagued by massive cost overruns and outright fraud.”
We need more competition for contracts and more oversight when they’re carried out.
Ending the “unnecessary” use of sole-source and cost-based contracts, ensuring that government work isn’t improperly outsourced and opening more contracts to small businesses will save the government $40 billion of the $500 billion spent on contracts annually by increasing competition and reducing waste, he said.
These estimated cost savings are part of the $2 trillion in cuts in announced in last week’s budget.
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