Complaints are coming from contractors on the General Services Administration’s multiple-award schedule. They say contracting officers are trying to re-negotiate finished contracts and making unreasonable demands for information. For more, the Federal Drive with Tom Temin talked with federal sales and marketing consultant Larry Allen.

Interview transcript 

Tom Temin  And you have found that this is mainly happening in the information technology part of the Unified Schedules program.

Larry Allen That’s right. And at the outset, you know, I’ve worked on the GSA Schedules program for well over 30 years. And we certainly have seen things ebb and flow over that time. But recently, the level of industry discussion on problems, particularly with the IT schedule, has been pointing up close to an all-time high. And it’s time to get these issues out in front of people… get a little disinfecting sunshine on them, if you will, so that we have a program that works better not just for contractors, but for government customers.

Tom Temin Well, what is happening? What are contracting officers actually doing, that the contractors are complaining about?

Larry Allen  They’re doing several things. I think one of the most notable things, Tom, is that there seems to be no end to the amount of data that contracting officers feel that they are entitled to. Papering the record, just one more set of transactional data, and you know, all of that data…everything a contractor submits, it has to be accurate, current and complete. And the more you’re asked to submit, the more, you’ve got to keep track of everything and make sure you’re meeting that standard. And if you’re not, then you are setting yourself up for some future potential audit problems, not to mention the paperwork that you’re having to provide in an endless stream of requests that come. One of the other things that’s happening is — and you alluded to it in the setup — and that is (for) contracts that are already in place, GSA has already negotiated it, the contracting officer has found that to be a fair and reasonable price. Six months (or) a year later, a company comes in and asks for a contract modification. And the contracting officer now uses that as an occasion to reopen negotiations on everything and say, ‘Well, wait a minute, that maybe wasn’t a fair and reasonable price.’ And the contractor is left saying, ‘Well, wait a minute, this is how I’ve been selling. I’ve been doing this for the last year, people enjoy doing business with me this way.’ You know, there’s only so much blood in the turnip that you can give. And that’s an issue too. I think one of the things that every contractor ought to be concerned about as well, Tom is contracting officers asking companies who have their contract set up through GSA’s Transactional Data Reporting pilot, for contractor-based sales information. That’s not supposed to happen at all. And it’s a real danger for me, I think, look, when TDR was set up, I put a blackbox warning out on it on exactly this issue. And since then, things have you know, mitigated a little bit where TDR has proven to be a viable pathway for companies who can’t use the traditional method to get on scheduled. But if we’re getting into a situation where there’s no standard for what constitutes enough data, or how much data because there’s not supposed to be any data in the first place, that is a moment that every TDR contractor should wake up and say, ‘Stop. What’s going on here?’

Tom Temin We’re speaking with Larry Allen, president of Allen Federal Business Partners. I mean, there are legal restrictions on what the government can ask for — correct? — in what are basically totally commercial products. This is not cost plus contracts or development contracts, but simply commercial items available widely.

Larry Allen Right. And I think this is one of the disconnects, Tom. First of all, the Paperwork Reduction Act is a rule that even the schedules program has to adhere to, where the government is only supposed to make reasonable data requests. And in fact, GSA has to go out every so often, and renew its authority to collect data from contractors. Usually, that type of request is rubber stamped at the FAR Council. But right now, I don’t think it should be. It seems like if it just sales through the rulemaking process, then the idea is that whatever we’re asking for is fine, and we’re not asking for anything more than we should be. And that’s manifestly not the case. Ironically, we’re talking about this at a time when GSA is trying to be pro-environment, but there are a lot of trees that are losing their lives to provide the paperwork, the contracting officers want. Are you aware that GSA management is aware of this? And maybe we’ll do something to mitigate it… get some word out to their CEOs? Tom, I think they weren’t aware of it before this, but they’re aware of it now. I know that the schedules program management office is aware of these issues. They’ve already indicated that they want to have discussions with the contracting officer management team at the IT part of GSA. I think that’s a good idea. But I do think it’s going to take some senior level intervention here to say, ‘Hey, look, this program worked best when it’s a partnership. When contractors and GSA work together to serve our common federal customer. This is not a program that works well of contractors have a target on their back.’  And just because you’re doing $20 billions a year today through this program, from the IT schedule doesn’t mean that thus now and forevermore, it shall be. One need look no further, Tom, than the Oasis Plus Program and the fact that Oasis overtook the GSA professional services schedule in terms of sales a couple of years ago. So you can actually kill the goose that lays the golden egg.

Tom Temin All right, well, we’ll keep an eye on that one and see what develops. Especially as you say, there’s a lot of G wax around that people can use alternatively to the to the schedules. Also your reporting that whistleblower lawsuits are reaching companies in greater frequency, especially to help enforce the cybersecurity regime.

Larry Allen That’s right, Tom, we’d forecast when all the cybersecurity rules started coming down, that the primary way that they would be enforced would be through whistleblower cases. And we’re just starting now to get some evidence that that’s actually what’s playing out. We had a whistleblower, this time, blowing the whistle against SAIC alleging that on one of their government contracts, they didn’t fulfill all the cybersecurity duties they were supposed to adhere to. We don’t know whether that’s true or not. But what we can say is that once the allegations were made, the contractor in this case acted in a way that is probably not a best practice. You don’t solely isolate the employee, you don’t take away their rights, you don’t fire them for blowing the whistle. There are FAR rules on that type of stuff. And you can actually make the situation worse for yourself. Because now instead of just having to defend against the cybersecurity allegations, you’ve got a retaliation suit that you’re gonna have to settle as well. So it’s just really full employment for your legal staff.

Tom Temin Yeah. So, what’s your best advice for companies then, besides making sure the cyber procedures are in place that are required to start with?

Larry Allen Well, I think at a basic level, if you have whistle — every company has, on paper anyway, whistleblower protections. Those whistleblower protections actually have to be operational. It’s nice to have them on a piece of paper, it’s nice to have them in a policy document, but they actually have to be lived. And don’t fear the people who blow the whistle. Look if, at a minimum, if you’d listened to the whistleblower in this case, you would have an opportunity to know whether or not the allegations were valid or not. Now you’ve got lawyers involved and the Department of Justice, it’s going to cost you a lot of money, it’s probably going to cost at least one person, their job in the company. And you didn’t need to do it. So, my advice is to relax, work through it, follow the rules that you’re supposed to follow. They’re there for a reason. And they can actually save you some time and aggravation.

Tom Temin I guess that’s our theme today. Stay within your guidelines and your lanes of travel, whether you’re government or industry.

Larry Allen I think that’s a good takeaway. These things exist for a reason and they help make sure that we have a good government market. And that’s really what the outline is. We want to be able to have the business of government run smoothly.

The post GSA contracting officers are driving schedule holders crazy first appeared on Federal News Network.

The Government Accountability Office (GAO) recently reiterated something it has been pointing out for years: The government wastes billions and billions of dollars on duplicative and overlapping activities. The Federal Drive with Tom Temin‘s guest says the GAO overlooked a crucial way to stop the waste, namely shared services. Steve Goodrich is the Chairman of the Shared Services Leadership Coalition.

Interview Transcript: 

Tom Temin  The Government Accountability Office recently reiterated something it’s been pointing out for years. The government wastes billions and billions on duplicative and overlapping activities. My next guest says the GAO overlooked a crucial way to stop the waste, namely, shared services. The chairman of the Shared Services Leadership Coalition, Steve Goodrich, joins me in studio now. Steve, good to have you in.

Steve Goodrich  Thanks, Tom. And thanks for having me.

Tom Temin  And just briefly, tell us about the coalition. You’ve been around for more than last week?

Steve Goodrich  I certainly have. I’ve been around government working on these kinds of reforms for over 40 years. The Shared Services Leadership Coalition was formed to specifically focus on shared services and improving the efficiency and effectiveness of government founded by John Marshall.

Tom Temin  And John is still around.

Steve Goodrich  He’s our president and CEO.

Tom Temin  And the idea of shared services goes back. Well, I mean, there’s the National Finance Center and places like that, that go back generations, really of government, but it was called lines of service, I think.  Lines of business. That’s correct. In the George W. Bush administration as a way when electronic government started really becoming something of a thing, and government was going online. Why do you think there has been not so much progress in expanding shared services?

Steve Goodrich  Lines of business.

Tom Temin  And I would think in some ways, shared services would be more efficient now than in the past. If you take something like the National Finance Center, and its counterparts, these are big buildings with capital expenditure and data centers that have to be updated. It’s expensive to operate. Whereas it could all be in the cloud now, where the government pays for it, it still could be a shared service, but without all the capital infrastructure needed.

Steve Goodrich  There needs to be a real focus on building the infrastructure required to get there. There’s nobody in charge. There’s nothing statutory about shared services. And it needs to be brought together. I mean, it really started with a push in the Reagan administration. But every administration has had it, it’s been part of the President’s management agenda in the past, but it hasn’t quite gotten legs yet. Because it is an investment and a transition that has to take place. Well, not only in the cloud, but you have a real opportunity to reduce the number of platforms around government. And with the advent of generational AI, bots, the advanced technologies that are out there, there’s tremendous opportunity for cost savings, efficiency and effectiveness with shared services.

Tom Temin  Now, some agencies do share services, and you’ve got some examples of where it’s working and the savings have been documented.

Steve Goodrich  Oh, sure, absolutely. So if you look at NASA, for example, they’ve saved over $200 million in putting together a shared service. They actually borrowed about $40 million to put it together and paid that back within just several years. You know, almost 90% of large corporations in the private sector are doing shared services now. You know, Johnson and Johnson has saved, with only 150,000 employees, has saved almost $2 billion now.

Tom Temin  That’s a lot of shampoo.

Steve Goodrich  That’s an awful lot of shampoo. You’re absolutely right. So there’s great opportunity for government to do this right.

Tom Temin  And if you look at NASA, what services do they share, and with whom? Or is it among the centers of NASA that had been duplicating the same thing?

Steve Goodrich  Well, NASA is primarily within the walls of NASA. So they’re doing HR and IT and finance and and those kinds of things. You also have, you mentioned NFC, which is external, if you will, in the Interior Business Center, supporting other agencies, PSC at HHS, Arc at Treasury. You have a number of them. They haven’t all yet been required to measure their performance, and that’s absolutely a critical element. You know, Commerce has enterprise services, you know, DoD has defense. So we’ve made, for example, with payroll, you know, back in the early 2000s, when it was reduced from 26 payroll centers to four, over $1.6 billion was saved in doing that. And it’s not just about the money, it’s real opportunity to consolidate and reduce the number of technology platforms we have.

Tom Temin  We’re speaking with Steve Goodrich. He is chairman of the Shared Services Leadership Coalition. And it’s not like this is totally unfamiliar to government in the larger sense. I’m thinking of the Bureau of the Fiscal Service. Otherwise, you’d have every agency with a checking account. But no matter who you have been paid for in the government, your check says Treasury.

Steve Goodrich  Your check all comes through Treasury. Payroll comes through four centers. So whether you’re talking HR procurement, IT services, financial services, imagine consolidating and reducing the number of platforms the number of resources required and getting better service. As we all know, this government is overspending and constantly. Now, I get it. No Congressman has ever gotten elected saying, I’m for shared services. That just doesn’t get votes. It’s not the sexy stuff. But the opportunity to increase government performance, serve the mission of agencies and save a heck of a lot of money is there.

Tom Temin  Well, that’s right, too, and even though it’s not a subject of interest in the parades and the speeches back home, Congress nevertheless deals with thousands of such items as it is. Nobody back home on the congressional trail of reelection would be excited by 99% of what’s in the defense authorization bill, for example. All those 800-series provisions on procurement, yet Congress does those. So it seems like they could take on shared services, even though it’s not exciting, because of their track record with a thousand other things that aren’t exciting.

Steve Goodrich  They could, and you know, Congress is very good at looking at individual agency budgets. They’re not very good at looking cross-government. And that’s where we need to focus them. That’s where we need some statutory requirements to get there. And that’s where we need a person, an individual with the accountability and responsibility and authority to make this happen across government. Those are the things that are missing.

Tom Temin  And what would a statute cause to happen, do you think?

Steve Goodrich  Well, one, it’ll make it mandatory, because as I said, it’s not a mandatory factor now. Two, it’ll provide the resources necessary to make the transition from here to there. And, like anything else, an investment is required. But we need to do the analysis. We need to put the business model together. And we need to identify what the ROI is, and demonstrate to the government that is possible.

Tom Temin  Because mandatory is easy to say, but what exactly would be mandatory? Payroll? Or, I mean, we’d have to specify what services need to be shared, and among whom, wouldn’t it?

Steve Goodrich  We do, and I don’t think we boil the ocean. You know, I think we establish shared service for a clear definition of what it is, making it mandatory. And then let’s start with one, develop the business model, make the adjustments that are necessary, and then start migrating that model from line of business to line of business.

Tom Temin  And is there one particular service that you think is particularly ripe for being the guinea pig?

Steve Goodrich  Well, I think there’s a number of them that are ripe, you know. Procurement would work, you can do something small, like travel management. HR is the one a lot of people go to, but it’s very complex. I think we should be working on that. And there are folks like at OPM who are working on building the foundations out for the marketplace, the standards, things like that are getting there, as well as for, you know, grants is another possibility, to really push on grants. Again, you don’t want to boil the ocean, because you want to get this right. And make sure, you know, in Washington, you know, our memory fades after a number of years. We need to keep it in the limelight. And our policy recommendation is to establish a role in GSA at the commissioner level, to have the authority to pull this off and make it happen.

Tom Temin  Because they used to have GSA consolidating all of the information technology procurement. And if you wanted to do it as an agency, you had to get that delegation.

Steve Goodrich  Correct.

Tom Temin  So that went away, I think, when the Brooks Act was repealed.

Steve Goodrich  Yeah, you know, it happens in different ways, because agencies still have the focus and the authority to do what they want, when they want to do it. And so, you know, GSA can come out with a new, great, really efficient procurement vehicle, and agencies can choose to use it or not. Okay. And that’s part of the mandatory part. But there has to be a migration, and this is a 10 to 15 year migration to make it work.

Tom Temin  Are there any members that are sympathetic that you kind of leverage into the rest of Congress?

Steve Goodrich  Well, I think the oversight committees in both Houses are interested in this, as well as, you know, appropriations and budget. They want to figure out how to use shared services to create the efficiencies. And, you know, the TMF, the Technology Modernization Fund, allows for shared services, in fact, specifically states that will support shared services. It hasn’t to date, but there’s real opportunity, because the investment for this isn’t just Congress appropriating funds, and absolutely getting a return. You do have TMF. You do have the savings by not investing in all the many systems that the agencies are asking for right now. Give them the band-aids and paperclips right now, but pull money from existing opportunities in the budget. You know, the TMF and other areas, even customers can help support this and it won’t cost a whole heck of a lot and there is a return.

Tom Temin  Steve Goodrich is chairman of the Shared Services Leadership Coalition. Thanks so much for joining me.

Steve Goodrich  You’re welcome.

Tom Temin  We’ll post this interview along with a link to more information at federalnewsnetwork.com/federaldrive. Subscribe to the federal drive wherever you get your podcasts.

The post Why the government should use more shared services to reduce costs first appeared on Federal News Network.

The committee today voted to approve a bill from Rep. Carlos Gimenez (R-Fl.), “Decoupling from Foreign Adversarial Battery Dependence Act.” The bill would block DHS from procuring batteries from six Chinese companies over concerns about human rights abuses, as well as supply chain and cybersecurity concerns.

Under the legislation, the ban would begin on Oct. 1, 2027.

During today’s markup, Gimenez said he had engaged with DHS in developing the legislation over the past two months. “The committee incorporated nearly all of DHS’s inputs,” he said.

Gimenez also said he was expecting a report from DHS within the coming months describing the potential impacts of the proposed ban.

Under the bill, DHS would be able to waive the prohibition if it determines the battery purchases don’t pose a national security risk. DHS would also be able to issue a waiver if there are no viable alternatives.

The latest push targeting major Chinese battery manufacturers comes after the fiscal 2024 defense authorization act included a corresponding ban on the Defense Department buying batteries from the same six companies. The DoD ban will also go into effect on Oct. 1, 2027.

That law, however, gives the Pentagon the ability to waive the limitation for any reason.

TSA commuting legislation

The homeland security committee today also unanimously passed legislation that would explore better compensating Transportation Security Committee employees for the time they spend commuting to the job.

The “TSA Commuting Fairness Act,” introduced by Rep. Tim Kennedy (D-N.Y.), would require TSA to conduct a feasibility study on allowing employees to clock in for work when they arrive at airport parking lots or bus and transit stops. The study would evaluate whether such a program could rely on location data from employees’ phones.

“Doing so would reduce commuting costs and improve quality of life for employees while allowing TSA leadership to manage the workforce appropriately and maintain order and discipline,” Kennedy said during today’s mark-up.

Kennedy referenced how TSA employees typically have to navigate a lengthy secondary commute between airport parking lots and their assigned airport checkpoints. Many have to wait for bus or light rail connections, or they have to walk to the from the lot to the airport. “And if these hardworking Americans are just a few minutes late to clock in, they can face discipline and punishment,” he added.

“This study will help both TSA and Congress gain insight into ways to address these challenges and the potential costs and benefits of pursuing an innovative program along these lines,” Kennedy said.

Digital identity report

The committee also unanimously approved a bill introduced by Rep. Clay Higgins that would require TSA to submit a report on the current state of “digital identity” ecosystems, as well as the value of digital IDs in the transportation sector.

Higgins said he supports TSA’s digital ID initiatives. “It’s also important that we understand the full extent of the risks and benefits of utilizing this technology to advance the agency’s homeland security mission,” he added.

“Using a digital ID is not only more convenient, but also better for ensuring privacy protection as opposed to using conventional physical IDs,” Higgins said. “Digital IDs do not need to be handled by a [transportation security officer].”

TSA has started accepting digital IDs, such as mobile drivers licenses that are stored in a mobile phone’s electronic wallet, at some airport checkpoints. The agency this week announced it would begin accepting New York state-issued mobile drivers licenses at select airports. The announcement brings TSA’s digital ID initiative to nine states and 28 airports so far.

TSA’s work has represented a primary pathfinder in the federal government’s acceptance of digital IDs. Meanwhile, the National Institute of Standards and Technology is considering including mobile drivers licenses and other digital credentials in its revised digital identity guidelines.

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The Grants Quality Service Management Office over the last year helped several micro agencies buy award management services.

This pilot was part of how the QSMO is crawling before it tries to walk or run with larger agencies.

Andrea Sampanis, the acting director of the Grants Quality Service Management Office in the Department of Health and Human Services, said the procurement pilots with AmeriCorps, the Inter-American Foundation and the Northern Border Regional Commission opened the door to bigger possibilities to modernize federal grant services.

“We worked with them to explore the vendors on our Catalog of Market Research, making sure they were ready to meet their needs and helping to support them through the procurement process,” Sampanis said on Ask the CIO. “IAF and NBRC are live, on target and on budget, which is not an easy thing to do. AmeriCorps is expected to go live this fall. Huge kudos to these three agencies, as they were prepared to be good customers, willing to accept the system as-is and supported by great leaders in their chief information officer and chief procurement offices.  Their grants teams came together to support a great vendor product from our Catalog of Market Research.”

While the AmeriCorps, the Inter-American Foundation and the Northern Border Regional Commission are considered micro agencies, the amount of money each of them awards through grants is anything but small. Sampanis said the AmeriCorps is more like a medium-sized agency when looking at the amount of money it awards through grants. In fiscal 2024, for example, the agency expects to award $577 million in grants.

The Inter-American Foundation and NBRC are much smaller with IAF, awarding about $145 million and about $50 million in grants, respectively.

Grants QSMO aims to speed acquisition

While these three agencies don’t reach the billions HHS or the Education Department or the NASA hand out, Sampanis said demonstrating how the procurement assistance pilot works opens the door to improve and expand the QSMO’s efforts.

The QSMO marketplace current has approved seven grants management system providers and is in the middle of conducting market research to expand its services.

“We have one quote that says having access to Grants QSMO market research puts you 1,000 steps ahead in your procurement. It’s our goal to speed up the acquisition process and give agencies more buying confidence as they are pursuing a vendor on our catalog.  The vendors on our catalog are selected to support meeting grants standards and align to 2CFR 200 requirements,” Sampanis said. “It just lets them really focus their attention on a fewer number of providers to really say, ‘Hey, this solution is purpose built for grants. It’s an award management solution that is software-as-a-service and very configurable.’ It should feel easy. They don’t have to go and renegotiate a contract.”

The QSMO also works with the agency’s CIO and security leadership, helps develop performance work statements and serves as advisors during the entire acquisition phase.

“I always encourage agencies to meet with all the vendors on our Catalog of Market Research to understand what’s out there and share their specific needs. I think they learn a lot about themselves by talking to the vendors,” Sampanis said. “I helped them all the way through the pilot because I’m learning a lot. Every time I hear a contracting officer ask a new question, I think, ‘hey, that’s something I need in my catalog because that’s true.’ I always say our goal is to speed up an agency’s acquisition and give them buying confidence.”

HHS has led the Grants QSMO since January 2021 and has been building its services over the last few years.

With the Office of Management and Budget finalizing the update to the governmentwide grants guidance under 2 CFR earlier this year, standardizing certain key areas like notices of funding opportunities and overall trying to expand access to more than $1.2 trillion in grants and cooperative assistance agencies pay out each year, Sampanis said the QSMO is ready to expand its services and offerings.

Two common drivers of grants modernization

Having that baseline understanding and confidence in the marketplace is a key factor in success, said Wagish Bhartiya, the chief growth officer for REI Systems, which helps agencies modernize their grant systems.

Bhartiya said there are two basic drivers of grant modernization. The first is budget and second is technology.

“There has been a greater focus on budget and how much of our budget goes towards grant funding and how that funding is being deployed? How much of that is serving management processes, some of the overhead aspects of grant management, which will exist inherently, versus how much should be deployed into the community? That analysis, I think, is getting more acute,” he said. “The technology itself has evolved and shipped in a way that, I think, is much more possible now to be thoughtful about performance and mission. The technology is enabling some of this some of these questions to be asked because we now have the potential and the power to look at it for the first time.”

These two big trends are part of how grants providers are shifting their mindsets away from being so compliance focused to spending more time and money on measuring and ensuring outcomes.

“There’s all these dollars flowing through our grant programs so we need to start to think just as much about the downside, protecting from a compliance and a risk mitigation perspective, as the upside into the mission impact in terms of what are the tangible and successful outcomes,” Bhartiya said. “The other big theme is customer experience and user experience, and now the grantee experience.”

He said this updated point of view is part of why many grant providers are more willing to change today than ever before. He said this means the singularity of the way grants management worked over the last few decades is going away.

“Every grant program thinks they’re a snowflake and they think they’re special or unique and actually bespoke. But when you zoom out, you see that actually 85% of what a grant making agency does is essentially the same in the core lifecycle design,” he said. “Convincing them that they don’t need to make everything bespoke and tailored to the Nth degree because they can leverage best practices, use what’s worked for other agencies because there’s a chance to reduce the burden on their staff and on the recipient community is part of the challenge.”

Bhartiya added that the benefits of an end-to-end system, that’s in the cloud are becoming more clear to agencies.

The post Grants procurement pilots demonstrate speed to modernization first appeared on Federal News Network.

• 62-year-old Robert Burke, a retired four-star admiral, is facing up to 30 years in prison for an alleged scheme to steer a government contract to a company in exchange for future employment. Burke, who served as the vice chief of naval operations from 2019 to 2020, has been arrested and charged with four felony counts, including bribery and conspiracy to commit bribery. He is also charged with performing acts affecting a personal financial interest and concealing material facts from the United States. Burke made his initial court appearance on Friday in Miami.
  (Former vice chief of naval operations accused of bribery - DoJ)
• The Nuclear Regulatory Commission (NRC) did not have to look far to find its new CIO, as it tapped Scott Flanders, the acting chief information officer since January, to take on the permanent job. His first day is today. Flanders, who has been the deputy CIO for the previous several years, will replace Dave Nelson, who retired at the end of January after eight years. Flanders has been with the NRC since 1991. Before joining the CIO's office, Flanders led the Division of Site Safety and Environmental Analysis in the then Office of New Reactors. The NRC's IT budget for 2024 is $170 million and the agency requested $190 million for 2025.
  (NRC hires acting CIO Flanders into permanent role - NRC News)
• The intelligence community has updated its technology plans, with a new information technology roadmap released last week, which indicates that the IC will embrace multiple cloud computing environments. But the document acknowledges that the IC’s efforts to tailor different cloud capabilities are still complex and nascent. The roadmap also commits to adopting DevSecOps software practices, enterprise data architectures, and artificial intelligence at scale. Intelligence officials said spy agencies need to quickly adopt emerging IT capabilities to stay ahead of U.S. adversaries.
  (ODNI releases IC information technology roadmap - ODNI)
• The Department of Health and Human Services is getting a head start on pooled hiring. HHS’s “hire now” platform, lets hiring managers view both internal agency applicants and governmentwide ones at the same time. Through that portal, HHS has hired about 900 candidates. Another 800 or so hires are currently making their way through the process. “It’s helping to bring in that acquisition workforce, that IT workforce of the future — it’s to ensure that we’re creating opportunities and really helping to attract that talent to public service writ large in addition to our own specific mission,” said Bob Leavitt, the chief human capital officer at HHS. About 11% of all HHS hires come from shared certificates.
  (Interview with HHS on recruitment and retention - Federal News Network)
• The Pentagon’s Chief Digital and Artificial Intelligence Office plans to bring in more vendors to further the department’s Combined Joint All Domain Command and Control (CJADC2) effort. The Defense Department is opening its doors to more companies as part of a new initiative called the Open Data and Applications Government-owned Interoperable Repositories. The initiative will allow the department to integrate industry solutions in a way where the DoD retains ownership of its data while letting companies develop applications using that data. The Pentagon will initially use this ecosystem to scale its data infrastructure, interoperability, artificial intelligence and analytics capabilities in support of the CJADC2 initiative.
  (CDAO will integrate more vendors through Open DAGIR initiative - Federal News Network)
• Agency program managers have some new best practices to protect their programs from fraud and abuse. A new report from the Pandemic Responsibility and Accountability Committee (PRAC), said agencies that took three broad steps, such as preparing for an emergency by maintaining a crisis-ready staff, were better prepared to limit improper payments during the COVID-19 emergency. The PRAC said developing strong internal controls, that include validating self-certifying criteria and implementing a risk-based monitoring approach, were among the other traits of successful programs. The PRAC report details resources, reports, and other documents agencies can refer to as they further develop their funding programs.
  (Pandemic lessons agencies can use to protect programs from fraud - Pandemic Response Accountability Committee)
• The Federal Housing Administration is the latest agency to issue cybersecurity reporting rules. FHA is requiring lenders of mortgages to report cyber incidents to the Department of Housing and Urban Development within 12 hours of detection. FHA’s rule joins a growing set of federal cyber incident reporting regulations, including new rules from the Cybersecurity and Infrastructure Security Agency that will require reporting across all 16 critical infrastructure sectors.
  (FHA: New cybersecurity incident reporting requirements effective immediately - FHA)
• Participants in the Thrift Savings Plan will now see a speedier withdrawal process in the TSP’s “My Account” online platform. After requesting a withdrawal from their TSP account, users no longer have to wait 30 days to request a second withdrawal. The Federal Retirement Thrift Investment Board said removing the 30-day waiting period should give participants more flexibility in how they manage their accounts.
  (No 30-day waiting period between withdrawal requests - Thrift Savings Plan)

The post Retired four-star admiral faces 30 years in prison on bribery charges first appeared on Federal News Network.

The Navy isn’t the only military service that struggles with big shipbuilding programs. Two of the Coast Guard’s biggest programs — the Offshore Patrol Cutter and the Polar Security Cutter — are years behind schedule and billions of dollars over budget. The Government Accountability Office (GAO) says those cost and schedule increases are signs of broader management and oversight problems. For more on the Federal Drive with Tom Temin, Federal News Networks Host of On DoD, Jared Serbu talked with Shelby Oakley, GAO’s Director for Contracting and National Security Issues.

Interview Transcript: 

Jared Serbu I think it’s fair to say the Coast Guard has really had major struggles over the years with these major acquisition programs. I know your recent testimony was focused really on just a couple of those, the offshore patrol cutter and the polar security cutter. So what did those programs sort of tell us about the state of play in major shipbuilding programs across the Coast Guard, and how much things have improved or not over the years?

Shelby Oakley Yeah, unfortunately, I think with OPC (Offshore Patrol Cutter) and PSC (Polar Security Cutter), they are kind of indicative of the things that we’ve seen as struggles for Coast Guard shipbuilding, but also Navy shipbuilding over the years. Just major challenges with achieving stable designs to support actually beginning construction, and what that often results in is rework and delays and that kind of thing. And I think, OPC and PSC are delayed four and five years respectively, are now 11 billion and at least $2 billion over budget. So these outcomes are just a bit of a challenge, especially for an organization like Coast Guard with such a small budget for acquisitions.

Jared Serbu Yeah. And you talk about concurrency in the testimony, is that really the main issue here, moving ahead into later phases of the program before you really have a clear picture of what you’re doing?

Shelby Oakley It’s a huge issue. We’ve done a lot of work over the years on commercial shipbuilding. And the outcomes that commercial shipbuilders achieve are nothing like we see in the Coast Guard and the Navy. They are on time and on budget. And it’s not kind of a question. And the common things that we see them do, or what we call leading practices for shipbuilding and ship design, and one of the main parameters is they just don’t move forward until they’re, key elements of their design are matured. This is like structural layouts, where the equipment’s going to go. All sorts of things like that need to be figured out before you move forward and start cutting steel or bending metal, as they say, because any changes at that point really result in reverberating bad effects. And we saw that on PSC. They had designed the height of the deck, for one of the lower decks of the ship incorrectly. And that had reverberating design change impacts throughout the ship. Had they have begun constructing that ship, at this point, we would have been in big trouble. But at least they’re just focused on redesigning those aspects at this point.

Jared Serbu You mentioned the agency size issue earlier, and that’s kind of where my head goes sometimes when I think about the Coast Guard challenges relatively small agency doing incredibly complex engineering and acquisition work. But then I remind myself, well, the Navy has an entire command that’s, I think, bigger than the whole Coast Guard that does this stuff. And they face many of the same issues. So is there just something inherent to naval shipbuilding or is this really all process improvement stuff?

Shelby Oakley Yeah. I think one of the key differences that we see, between like government shipbuilding and commercial shipbuilding is this issue of lack of discipline. And this is sometimes driven by, the industrial base. So with commercial shipbuilding they have a ship lined up right after one another. So they have to keep those ships moving through the shipyards, otherwise there’s severe financial ramifications for those companies. That’s just not what we see in government shipbuilding. And government shipbuilding, they’re allowed to proceed with design, with construction too early. Any challenges that we run into, we end up just throwing more money at these programs. There’s been a lack of incentive in the industrial base because of kind of fits and starts of demand signal from the Navy and the Coast Guard. And so there’s a lack of incentive to do and key investments, in technology or processes that could improve their performance in design and construction. And so there is something about government shipbuilding that’s a little bit different. But if you look at the practices that we outline, there really just kind of common sense, they’re not shocking to anybody. They’re like logical and disciplined approaches that anybody would apply to their own life if you were buying a house or designing a pool.

Jared Serbu One of the things in in your testimony that was striking to me, as you talk about these very long periods between milestone events, which are, I guess, the triggers that are designed to get senior leaders to really review a program in depth and make course corrections if they need to. They’re like 4 or 5 years apart on these programs, like how big a role does that play in letting these things kind of spin out of control?

Shelby Oakley Well, it’s the early warning signal. If you don’t have a milestone for several years, you’re not tracking anything. You’re not tracking delays to that. So it doesn’t trigger this oversight review from Coast Guard officials or even DHS officials to be able to say, hey, wait, we’re heading in the wrong direction or things aren’t going so great, maybe we need to figure it out. And so we’ve made a number of recommendations over the years for the Coast Guard to add milestones to their acquisition baselines, so that there can be closer tracking of that progress to give a sense of how well the program is doing.

Jared Serbu These two programs that we were talking about, specifically the OPC and the PSC. They’re pretty far down the line at this point. On those programs specifically, to what extent is the diet kind of cast by past decisions that have been made? And how much can they specifically do to improve on these two?

Shelby Oakley Yeah. So I think there’s two separate answers there. So OPC as you know, has two stages. OPC stage one with just the first four ships are already underway and construction. OPC stage two is planning to start construction in September. And so we would suggest that the Coast Guard has an opportunity to make sure that the design of OPC stage two is matured sufficiently to be able to justify moving forward with that construction decision. And so if they do that, that could put them on a better path for OPC stage two. After those first 15 ships, the Coast Guard’s intending to buy 25 ships total. We think for that next ten, there’s an opportunity to really rethink how we’re going about building these ships and driving more of these commercial practices into their approaches for that. So we think that there will be an opportunity in the long run for this program to make some changes. With regard to PSC, they plan to start construction by the end of the year. And we made a recommendation that they ensure that their design is mature and they understand how everything’s working before they move forward with that. They concurred. But we have yet to have, confidence that they will actually ensure that the design is mature before they move forward. If they don’t, it’s going to lead to a lot of risky decisions and a lot of risky, risky outcomes that hopefully the Coast Guard at that point would more closely manage and ensure that we’re executing that program to the best extent possible, given the risk that we’ve accepted by moving forward.

Jared Serbu As you mentioned, these leading practices have been down on paper since 2009. Still not much evidence of them showing up in programs. Is this something Congress should consider getting involved in?

Shelby Oakley Yeah. So, we did our first tranche of work in 2009. And Congress has taken some action, specifically with regard to Navy programs, in requiring certain aspects of those leading practices. We have some matters for congressional consideration out there for Coast Guard programs that we’re hoping that the Congress takes a good look at, especially in light of our most recent report that we updated those practices, this spring. There are a lot of similarities, but some new nuances given ten years, ten plus years of advancements in technology that these commercial shipbuilders all around the world are really employing to a great extent and to great success.

Jared Serbu I did want to ask you one more question about the comparison between commercial and military. It seems like it wouldn’t be that easy for government work to just get plugged into one of these commercial shipyards that doesn’t already do much government work. That’s one of the issues here, you sort of do need people with government experience?

Shelby Oakley Yeah. I think we’ve seen on the, OPC and PSC that the shipbuilders have a lack of experience in government contracting. And that has led to some of the problems. They don’t have the systems or capacities available that a lot of these major shipbuilders have that are consistently in this kind of government space. And so with the commercial practices, we’re not necessarily saying go to commercial yards and have those ships built there. What we’re saying is these builders that work for the government, that’s their primary business, need to begin thinking about those practices that commercial builders use and how they could apply them in the government space to achieve better outcomes. And the DoD and the Coast Guard play a role in incentivizing them to do that, and requiring them to do that.

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Sometimes federal procurements don’t go according to the rules. Sometimes its worse, when bribes and kickbacks come into play. That’s what the Justice Department’s Procurement Collusion Strike Force tries to discover and prosecute. Now the strike force is expanding, with four new members. For details, the Federal Drive with Tom Temin spoke with the Dan Glad, the director of the Strike Force.

Interview Transcript: 

Tom Temin And just briefly review the task, the strike force, what it does and what its scope is and where it fits in the hierarchy of oversight here in the government.

Dan Glad Sure. The term collusion strike force, which is a mouthful. So, I’ll call it the PCSF or the strike force. That is the Department of Justice’s coordinated national and inter-agency response to anti-trust crimes and other related fraud schemes that impact government procurement, grant, and program funding at all levels of government, federal, state, and local. And we’ve been around since late 2019. And our mission is really two pronged. One is to enhance deterrence, trying to stop these schemes before they happen. And we do that through education, outreach, and training to both federal agents who investigate these crimes and procurement officers at all levels who are in the position to spot them. And then when deterrence fails and deterrence fails, men are no angels. We look to amplify the detection, investigation, and prosecution of these schemes. I think you asked, Tom, sort of sort of like what we actually do. I’ll tell you what I call our lane. And it’s really we use all the tools in the statutory toolbox, all the parts of the Criminal Code to go after any criminal conduct that distorts, perverts, subverts the competitive procurement process. When the government is going out into the market to buy stuff.

Tom Temin And how do you find out about the fallen angels? Is it mostly whistleblowers?

Dan Glad Whistleblowers are certainly part of the mix. It’s really a combination. We certainly will have whistleblowers who come in and who spot something. The Antitrust Division, which is the part of the Department of Justice I come from, has a long-standing policy of its leniency policy, which is essentially become a cooperator. Tell us about the crimes that you did. And if you do fully cooperate, you’ll get a benefit. The public, we rely on the public to send us tips and leads, and we have a public facing website where members of the public can submit information. Our federal agents and investigators are well positioned to using either confidential sources or just the things they see to refer these matters to us. And then finally, I think I would be remiss if I didn’t mention the people who are really there the procurement officers, the contracting officers, the people in government whose day-to-day job is buying stuff. They are able to spot the indicators, the red flags of these collusive schemes and report them. They often know something’s wrong, even if they can’t put a term on it. And so that’s part of our outreach mission. And since we were founded, we’ve reached more than 31,000 government employees as part of this outreach. That’s 31,000 sets of eyes.

Tom Temin And since 2019, how busy has the strike force been? How many cases have you actually come together and gone after?

Dan Glad We’ve been busy. Since 2019, we’ve opened more than 100 criminal investigations. We have prosecuted to conviction. So, either at trial or through a guilty plea, more than 50 individuals and companies and of our public matter, some cases that are filed. This touches on more than $500 million of government spending. And I will say, I think it’s just the tip of the iceberg.

Tom Temin Well, that was my question. And by the way, we’re speaking with Dan Glad he is director of the Procurement Collusion Strike Force at the Justice Department and the Antitrust Division. I mean, the federal procurement system in the United States is in many ways the gold standard for the world. And most people that participate believe that it’s fundamentally honest. It’s not like India or Russia where bribery and corruption is the norm. Are we still in that place? And these are still exceptions because you say it occurs a lot. Collusion and so forth.

Dan Glad They are exceptions. Federal government procurement is fundamentally sound. The majority of federal government procurement is not a set and attacked by bid rigging, price fixing and fraud schemes. But I think about it in the way it’s the law of large numbers. There’s so much federal procurement that even a fractional loss is substantial. Tom, there’s one study I’m aware of from an international NGO called the organization for Economic Co-operation and Development, or the OECD. And what the OECD tried to do is assess how much money is lost from bid rigging, price fixing and other collusive schemes at the outset from government spending. They looked at all governments around the world, and their assessment is that it’s 20%, that there was a 20% collusion tax imposed by criminal conspiracies on government spending around the world, and the US is probably right there in the middle of that 20% number as a whole. I would say there are parts of the United States that may be higher. Tom, I mentioned before we started talking today that my hometown of Chicago and I worked as the assistant inspector general for the city of Chicago before coming to the Department of Justice. And I can say based on my experience, I think my hometown, though I love it, is likely overperforming that 20% number. There’s another way to think about it. There’s this great quote from a recent 11th Circuit case where the judge opened the opinion by saying, and this is a quote like bears to honey. White collar criminals are drawn to billion-dollar government programs. And that’s true. And I’ll tell you the last way I think about, and I’ve mentioned this because it’s very recent, the GAO, the Government Accountability Office just put out a report where they were trying to estimate they were trying to answer this question. Tom, what is the cost of fraud across the government? And they came up with a numerical figure that’s quite broad, 233 billion to 521 billion every year. And what really stuck with me was the way they contextualized it. They said that if fraud were a government agency, it would be the sixth largest government agency in the United States if there were a U.S. Department of Fraud.

Tom Temin All right. Well, we could probably discuss that philosophically for hours. Let’s get to the operation of the task force. You’ve added new members. Who are they? And what does it mean when a new members added what’s incumbent upon them?

Dan Glad Maybe I took a step back, Tom, and explain sort of our structure. Our strike force includes federal prosecutors. So that’s folks from the Antitrust Division, and we’re now up to 25 US attorney’s offices. So those are the federal prosecutors who sit in cities and districts around the country. We have 12 national law enforcement partners. So, it’s 11 offices of inspector general at the federal level and the FBI. And so, we work together on that two-prong mission set. I’m really happy that we recently welcomed another office of inspector general, the US Department of Commerce, that is now one of our national partners, as well as three new US attorney’s offices to our collective effort. And that’s the District of New Jersey, the District of Alaska, and the Eastern District of Louisiana, which is headquartered in New Orleans. And they will be joining our existing collective effort and also doing environmental scans and being on the lookout and thinking strategically about what’s happening in the commerce world and also in those geographies and on commerce. The U.S. Department of Commerce is embarking on some pretty significant spending. Its second largest spending program in the history of the department is the Bipartisan Infrastructure Law, its number one spot program of all time since its existence is the Chips act. And those are two very recent spending bills.

Tom Temin And by the way, do you also look at state and local level corruption when that happens? Because sometimes the states and the cities don’t have the resources the federal government has.

Dan Glad Absolutely. Some of the core antitrust offenses bid rigging, price fixing, market allocation, criminal monopolization, those are federal offenses wherever they occur at any point in the market, private and public and within the public, which is really where I focus my efforts and my thinking local, state and federal. And we do rely on and work with our partners at that local and state level to uncover, investigate and prosecute crimes that are going after their funding. Relatedly, so much of the funding that comes in to the local and state governments is in whole or in part coming from the federal government. So, the federal government has a very vested interest in making sure that the programs have integrity.

Tom Temin Sure. And just any recent cases that come to mind that kind of stand out for you?

Dan Glad Yeah. Tom, very recently in the month of May, we had a guilty plea in our Idaho fire investigation. There. We indicted two executives with fraud and rigging bids that were submitted to the US Forest service for contracts to provide critical supplies used to fight forest fires. And this was after an investigation that involved court authorized wiretaps. And earlier this month, one of those executives pleaded guilty. Now, what happened here, Thomas? For at least eight years, two executives who were supposed to be competing were not. They conspired to rig bids. They conspired to allocate territories. And this is offering a crucial service that helps U.S. government fight fires in the Rocky Mountain region. And over time, the conspiracy evolved. And they inspired these competitors or anything but competitors. These executives conspired to monopolize the market and they conspired to push other people out. And I’ll say Tom, the evidence here was just really compelling. The executives would text each other talking about how they were going to, quote, squeeze, drown, punch, or lowball their competitors. The wiretap evidence where our federal agents were able to listen in real time due to a court order to the conspirators talking. We were able to hear the executives, and this is all, as alleged in the indictment, conspire about their upcoming bids, about what they would tell the FBI agent. So, the FBI came knocking and how they would hide their conduct. And this really gets to sort of why we do what we do. The U.S. Forest Service relies on a fair bidding process to secure the best deal at the best price for taxpayers. And when people like these executives as allegedly indictment, collude rather than compete, they wronged the public. And more than that time, they are wrong honest competitors who play by the rules. And are doing things fair and square.

Tom Temin Finally, you mentioned that contracting officers, COs 1102s, and people in that function in the federal government are kind of eyes and ears on this. What would you say are the top three signals that a CO should be watching for? That might indicate something bad going on with a contract or an acquisition.

Dan Glad I think the first is any indicators in the contract, in the bid documents, in the contract and documents, any tells that competitors are anything but that two or more bidders are working together. And sometimes that can be the sloppiness that can result. Where you can see a classic example is the same typo. That is, it’s not proof positive, but it’s a lawyer would say it’s probative of a collusive conspiracy. The other thing I always tell contracting officers, and it sort of goes back to my thought that humans are pattern recognition machines. We can recognize patterns even if we can’t articulate it. If a contracting officer has this sense that they know who’s going to win before they, in the old days, open the envelopes with the bid. But today sort of go into the procurement platform to open the bids. I would ask a contracting officer sort of pause. And as they said in Star Wars, search your feelings, figure out what’s going on, why you have this inclination that someone’s going to win. Again, not proof positive, but these schemes are iterative. They are pattern. They happen over time. There’s no such thing Tom as a bid rigging Crime of passion. You have. Over time, when you are procurement professional, you’re invested, and you will have been able to spot that pattern. And the third thing is sort of look in the pricing, look at the information you have. If pricing is all going up lockstep that’s a red flag not proof positive but it’s a red flag. There may be an innocent explanation for it. If pricing is very, very close or it’s off by round numbers or round percentages, that can be an indicator of a collusive scheme bid rigging, price fixing, or some other kind of fraud.

The post Justice Department expands its procurement fraud strike force first appeared on Federal News Network.

When it comes to software development, the Army is going to stop worrying about the color of money.

That’s because as part of its new approach to software modernization, the Army is rethinking what sustainment means.

Margaret Boatner is the deputy assistant secretary of the Army for strategy and acquisition reform, said one of the main tenets of the policy signed by Army Secretary Christine Wormuth in March is to reform several legacy processes that is keeping the service from adopting modern software development approaches.

“We are targeting a couple of really key processes like our test and evaluation processes, and importantly, our cybersecurity processes. We really are trying to modernize and streamline those as well as changing the way we think about sustainment because software is really never done. We really have to retrain ourselves to think about and to acknowledge the fact that software really needs to stay in development all the time,” Boatner said in an exclusive interview with Federal News Network. “Right now, our systems and our acquisition programs, once they’re done being developed, they go through a process that we call transition to sustainment, meaning they’ve been fully developed and are now going to live in our inventory for 10, 20, 30 years. We’re going to sustain them for a long period of time. When a system makes that transition, the financial management regulations dictate that they use a certain color of money, operations and maintenance dollars. With that color of money, we can really only do minor patches, fixes and bug updates. So that’s an example of a legacy process that, when you’re talking about a software system, really tied our arms behind our back. It really prevented us from doing true development over the long term with the software solutions.”

Boatner said under the new policy, software will no longer make the transition to sustainment. Instead, the program office will keep operating under research, development, test and evaluation (RDT&E) funding.

“It’s recognizing that a continuous integration/continuous delivery (CI/CD) model software is never done. That way, our program managers can plan to use the appropriate color of money, which in many cases might be RDT&E, which is the color money you need to do true development,” she said. “So, that will give our program managers a lot more flexibility to determine the appropriate color money based on what they want to do, such that our software systems can really continue to be developed over time.”

The Army has been on this path to software modernization path for several years, with it culminating with the March memo.

With the lessons from the 11 software pathways to testing out a new approach to a continuous authority to operate to the broad adoption of the Adaptive Acquisition Framework, Boatner and Leo Garciga, the Army’s chief information officer, are clearing obstacles, modernizing policies and attempting to change the culture of how the Army buys, builds and manages software.

Army updating ATO policy

Garciga said by keeping programs under the RDT&E bucket, the Army is recognizing the other changes it needs to complete to make these efforts more successful.

“We need to relook at processes like interoperability. Historically, that was not a parallel process, but definitely a series process. How do we change the way we look at that to bring it into this model where we’re developing at speed and scale all the time?” he said. “I think we’re starting to see the beginnings of the second- and third-order effects of some of these decisions. The software directive really encapsulated some big rocks that need to move. We’re finding things in our processes that we’re going to have to quickly change to get to the end state we’re looking for.”

Since taking over the CIO role in July, Garciga has been on a mission to modernize IT policies that are standing in the way. The latest one is around a continuous ATO (C-ATO).

He said the new policy could be out later this summer.

“We’ve told folks to do DevSecOps and to bring agile into how they deliver software, so how do we accredit that? How do we certify that? What does that model look like? We’re hyper-focused on building out a framework that we can push out to the entire Army,” Garciga said. “Whether you’re at a program of record, or you’re sitting at an Army command, who has an enterprise capability, we will give some guidelines on how we do that, or at least an initial operational framework that says these are the basic steps you need to be certified to do DevSecOps, which really gets to the end state that we’re shooting for.”

He added the current approach to obtaining an ATO is too compliance focused and not risk based.

Pilot demonstrated what is possible

Garciga highlighted a recent example of the barriers to getting C-ATO.

“We started looking at some initial programs with a smart team and we found some interesting things. There was some things that were holding us back like a program that was ready to do CI/CD and actually could do releases every day, but because of interoperability testing and the nature of how we were implementing that in the Army, it was causing them to only release two times a year, which is insane,” he said. “We very quickly got together and rewickered the entire approach for how we were going to do interoperability testing inside the Army. We’re hoping that leads to the department also taking a look at that as we look at the joint force and joint interoperability and maybe they follow our lead, so we can break down some of those barriers.”

Additionally, the Army undertook a pilot to test out this new C-ATO approach.

Garciga said the test case proved a program could receive at least an initial C-ATO in less than 90 days by bringing in red and purple teams to review the code.

“I’d say about three months ago, we actually slimmed down the administrative portion and focused on what were the things that would allow us to protect our data, protect access to a system and make a system survivable. We really condensed down the entire risk management framework (RMF) process to six critical controls,” he said. “On top of that, we added a red team and a purple team to actually do penetration testing in real time against that system as it was deployed in production. What that did is it took our entire time from no ATO to having at least an ATO with conditions down to about less than 90 days. That was really our first pilot to see if we can we actually do this, and what are our challenges in doing that.”

Garciga said one of the big challenges that emerged was the need to train employees to take a more threat-based approach to ATOs. Another challenge that emerged was the Army applied its on-premise ATO approach to the cloud, which Garciga said didn’t make a lot of sense.

“We put some new policy out to really focus on what it means to accredit cloud services and to make that process a lot easier. One of our pilots, as we looked at how do we speed up the process and get someone to a viable CI/CD pipeline, we found things that were really in the way like interoperability testing and how do we get that out of the way and streamline that process,” he said. “In our pilots, the one part that we did find very interesting was this transition of our security control assessors from folks that have historically looked at some very specific paperwork to actually now getting on a system and looking at code, looking at triggers that have happened inside some of our CI/CD tools and making very difficult threshold decisions based on risk and risk that an authorizing official would take to make those decisions. We’re still very much working on what our training plan would be around that piece. That’ll be a big portion of how we’re going to certify CI/CD work and DevSecOps pipelines in the Army moving forward.”

The post Army changing the color of money used to modernize software first appeared on Federal News Network.

It’s been four years since the Defense Department created six new acquisition pathways — including one specifically intended to speed up software acquisition. But as often happens with policy reforms, implementation is off to a slow start, so officials are building a cadre of software experts at the Pentagon to help speed up adoption.

DoD created the software acquisition pathway as part of a broader overhaul to make its acquisition system more “adaptive” to the particular products or services the department buys. The software pathway in particular came out of a recognition that most of DoD’s traditional approaches were geared toward large weapons systems. It’s designed to encourage rapid development and close coordination with users, and also eliminates some steps of the traditional acquisition process that don’t make sense for software.

Cara Abercrombie, the assistant secretary of Defense for acquisition, said she has heard positive feedback from program managers throughout the military services, but they don’t always feel empowered to use the new pathway.

“They love it. They want to use it more expansively,” she said Thursday at the Naval Postgraduate School’s annual acquisition research symposium in Monterey, California. “But my sense is there’s a little bit of risk aversion in the system, a little bit of worry, because it moves fast, it doesn’t have to check all the same boxes as the other acquisition pathways. And I do think there can often be reluctance to use it.”

Only about 50 programs using software acquisition pathway so far

According to the Government Accountability Office, there are only about 50 programs across DoD using the software pathway. In a report last summer, GAO also found that software-intensive programs that aren’t using the software pathway don’t tend to use modern, agile development methodologies.

But Abercrombie said DoD is looking to drive wider adoption, and is establishing a specialized cadre of software experts within her office.

“It will be a team of experts who know how to use the software pathway, who know how to do agile acquisition strategies,” she said. “We’re going to make sure they are more or less a SWAT team, if you will, that can parachute into program offices to provide deskside support, to help walk program office teams through how to get the software pathway going effectively. We also need to do some forensics as to understanding why there hasn’t been wider adoption, but I suspect some of it is that it’s so different from what we’ve done before.”

Congress mandated the standup of that new software cadre in the 2022 Defense authorization bill. Lawmakers also ordered DoD to create a dedicated software specialist career path to help develop that group of experts, and to develop military members with technical skills into software experts.

Military services also pursuing changes

Meanwhile, the military services are doing work of their own to get more out of the software pathway. In March, the Army, for example, issued policies that told the acquisition workforce to “maximize” their use of the software pathway and move to industry best practices for software development.

In an April interview with Federal News Network, Margaret Boatner, the deputy assistant secretary of the Army for strategy and acquisition reform, said the service has only used the pathway for 11 programs so far, but officials have seen clear benefits.

“There’s a lot less documentation and review requirements to start a program on the software pathway. But even more importantly, it actually requires us to use modern software practices. It’s not an option; we have to use agile, lean DevSecOps, continuous integration and continuous delivery, those types of things,” she said. “Traditionally when you look at our software systems, we released capability drops every three to four years. We have programs now that are operating on the software pathway that are delivering every 12 months, every nine months, and striving to deliver capability every six months. Sure, that’s not quite as quickly as industry, but it’s absolutely progress.”

A separate challenge: funding software

But even if the pathway helps solve some of DoD’s acquisition process problems, it doesn’t do much to fix the way Congress and the department fund software development.

As of now, program managers have to run through complex legal hurdles to determine whether specific aspects of their programs need to be funded from procurement, R&D or operations and maintenance accounts. Congress has authorized a pilot program that lets officials fund software with just a single color of money — and program managers love that approach too — but lawmakers have only authorized six programs for the pilot so far.

In its final report in March, the congressional commission on Planning, Programming, Budgeting and Execution Reform said Congress needs to expand the single color of money idea to all DoD software programs.

“I’ve had to be on reprogramming actions where you’re changing money between appropriations just because of the way [an aspect of a software program] has been defined,” Elizabeth Bieri, the commission’s director of research and a former DoD financial management official, told the NPS symposium Thursday. “Well, it’s really not that different. I think back to the years when you had to use procurement to buy all your IT equipment, and now it’s just regular O&M money. This would be just kind of the continuation of how people work things today, and the continuation of the evolution of software. If I’m changing code because of a bug fix, how is that any different than incorporating something for new interoperability features? I think if you combine all of these things, you’ll have the ability to make the changes that are required when needed without an arbitrary seam.”

The post DoD stands up ‘SWAT team’ to help speed software acquisition first appeared on Federal News Network.

Now that it have been 10 years since issuing them, the White House has updated what is known as Uniform Guidance on grants and federal assistance. One reason for the update: reducing regulatory burden on both agencies and grantees. For some highlights, the Federal Drive with Tom Temin spoke with Haynes Boone procurement attorney Dan Ramish.

Interview Transcript: 

Tom Temin Dan, the uniform guidance is a little bit outside of FAR and contracting concerns. But yet, something you felt is important to highlight here.

Dan Ramish Yes, Tom. So the federal government spends more than $1 trillion a year in grants and other federal financial assistance. So it’s a really important tool, and it’s important to taxpayers. And government contractors will sometimes participate in the federal grant space, either as contractors or as recipients or sub recipients. So there’s a lot of money. And increasingly, the federal grant in assistance space is becoming subject to more requirements that start to look like government contracts. But this latest change in the uniform guidance is really intended to make things easier on awarding agencies and recipients and sub recipients.

Tom Temin So what are some of the big changes people can expect? I mean, this has been like a rulemaking, even though it’s not a rule per se, but there has been commentary and drafts and final versions. Fair to say?

Dan Ramish Yes. So the uniform guidance forms the basis for agency grant and federal financial assistance regulations. So even though it’s not a regulation itself, different agencies adopt it with a little bit of their own flavor. So the big things in this rulemaking, it was mostly changes in the margins. And there are some changes that are intended to improve access and the ability of recipients and some recipients to participate. So one of those changes is there’s a new template for the standard solicitation and notice of funding opportunity. And that’s in Appendix One of the Uniform Guidance. And there are some new guidelines contained in that appendix that tell federal awarding agencies to pull out their Strunk and White. They’re supposed to reduce word count and use plain language, leave out provisions that aren’t strictly necessary, and even include an executive summary 500 words that tells applicants the goals and objectives of the program, the target audience, and eligibility requirements.

Tom Temin Sure, and there are also some updated thresholds for what gets audited, what gets investigated by the government, and also for some of the provisions for equipment and ancillary costs associated with a grant. What are some of the top ones there? Let’s talk about maybe the threshold for what gets audited.

Dan Ramish Yes. So the Single Audit Act requires audits for state and local governments and nonprofit organizations under federal grants and assistance. And that threshold hasn’t been increased in many years. And now the updated guidance will raise that from $750,000 to $1 million in total expenditures of federal funds for a single fiscal year. So that’s directly intended to make it easier for recipients that aren’t receiving that higher volume of awards to not have to be subject to an audit.

Tom Temin So for an agency that’s giving awards, then if it gives a lot of them that are under a million, then its own burden is relieved if it doesn’t have to audit every one of them.

Dan Ramish That’s right. The auditing agency may be different from the awarding agency, but it’s certainly the burden on the auditors could also be reduced. And focusing on where the risk is,  and certainly the order of magnitude is part of that risk analysis.

Tom Temin Sure. Another big one is the de minimis rate adjustment. Tell us about that.

Dan Ramish Sure. So the de minimis rate is a default indirect cost rate that the uniform guidance allows for recipients to use instead of negotiating at an indirect cost rate. And the benefit to recipients there is that there’s no documentation requirement to justify the rate. And that rate also hasn’t been adjusted for many years, and it’s a pretty low indirect rate of 10%. And the updated guidance will increase that rate to 15%. And it also makes a related increase. So there’s a limit on the amount of sub award funds that count as part of the modified total direct cost. So the de minimis rate is applied against a base that is the modified total direct cost of the award. And one of the adjustments is sub awards over a certain value are excluded. And the result there is, of course, the recipients aren’t receiving as much of their indirect cost recovery as they otherwise would. And so that rate is also increasing from $25,000 to $50,000. So it will help recipients that use the de minimis rate to recover more of their actual indirect costs.

Tom Temin We’re speaking with Haynes Boone procurement attorney Dan Ramish. So that’s the equivalent, well, the analog of when you look at a charity and what percent of the money actually goes to the charities and what percent is overhead. That’s kind of what the de minimis is all about.

Dan Ramish Yeah, it’s covering administrative and general expenses that aren’t directly tied to the award. But those are real costs that the recipients have to bear, and it’s fair for them to get compensated for them. And particularly for newer recipients or sub recipients, it’s more burdensome to have to go through the indirect rate negotiations with an agency. So this is a good option for many of them.

Tom Temin A couple of the provisions I wanted to make sure we covered. There are new whistleblower protections and new requirements for reasonable cybersecurity internal controls that seems to be like maple syrup covering everything the government is eating these days. But let’s talk about whistleblower protections in the context of grants.

Dan Ramish Well, so whistleblower protections have been a focus across the government, including, of course, in government contracts. And this is directly related to concerns about controls over waste, fraud and abuse, and ensuring that there are mechanisms to prevent that and to promote enforcement. And so there’s now a specific whistleblower protection that prevents recipients or sub recipients from reprisals against whistleblowers that report waste, fraud and abuse, and also requires them to notify employees of the whistleblower rights and protections.

Tom Temin All right. And that’s kind of making it a little bit more uniform with how whistleblowers are, in theory, protected elsewhere in other types of activities.

Dan Ramish Yes, I would say that’s one of the ways in which they’re aligning things with government contracts.

Tom Temin And then new requirements for reasonable cyber security, internal controls also kind of in alignment with what they’re asking contractors for in various ways across the government.

Dan Ramish That’s right. Clearly cybersecurity has been a big priority for the administration. And I would say, though, that this requirement is pretty generic. They opted against imposing some of the more detailed rules that the Department of Defense has applied to government contracts. But it’s a movement in that direction and reflects kind of the priority for the government in this area.

Tom Temin And one more I wanted to ask you about, and that is the equipment threshold, because sometimes grants might be for laboratory work or for developing some kind of a new technology test and so forth. So there’s a hardware, if you will piece to the grant and not just brainpower.

Dan Ramish Yes. So there’s a threshold for what constitutes equipment under the uniform guidance as well. And that is another threshold that is increasing to reduce the burden from 5,000 to $10,000. And the reason that’s important is that there are special requirements for managing equipment. And so if an item that is purchased under an award doesn’t constitute equipment that reduces the burden.

Tom Temin All right. Anything else we need to know. And so agencies need to, I guess get this into their grant making apparatus and inculcate these guidance.

Dan Ramish Yes. So there will be relief in a number of ways, as we said, with the thresholds, with efforts to make notices of funding opportunity, more plain language and easily understood by prospective recipients. So the effectiveness date is established as Oct. 1, 2024. Agencies also have the discretion to implement the new guidance earlier, but it has to be no earlier than June 21, 2024, and so agencies will be coming up with their own plans in the coming weeks to roll out their implementation of the final guidance. So recipients and sub recipients should be tracking that. May 15 is the date for the new guidance, so we’ll see how this plays out.

 

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Agencies, once again, set new records almost across the board for contracting with small businesses in fiscal 2023. New data from the Small Business Administration shows agencies awarded an all-time high of 28.4% of all eligible federal contract dollars to small businesses.

At the same time, SBA’s new small business scorecard data shows agencies met or surpassed governmentwide goals in three of five socio-economic category, including service disabled veteran-owned small businesses.

In all, agencies awarded $178.6 billion to small businesses last year, which is an increase of $15.7 billion from 2022.  The governmentwide small business contracting goal is 23%.  House Small Business Committee lawmakers recently passed a bill to increase that goal to 25%.

FY23 Prime Contracting by Dollars and Percentages for All Categories*:

• In accordance with federal law, SBA provided double credit for prime contract awards in disaster areas that were awarded as a local area set aside. SBA also included in the calculation of government-wide achievements Department of Energy first-tier subcontracts required to be included by section 318 of the Consolidated Appropriations Act of 2014 (“CAA”), Public Law 113-76.

Overall, SBA says 10 agencies received “A+” grades and two others received “A” grades on the scorecard, including the SBA, the departments of Agriculture Housing and Urban Development, Interior, Homeland Security and Commerce as well as the National Science Foundation, the General Services Administration, the Nuclear Regulatory Commission and the Office of Personnel Management.

The White House and SBA recognized the small business contracting accomplishments during a roundtable today as well as during National Small Business Week, which kicked off yesterday.

As part of the 2023 scorecard, SBA also released contract data broken down by business owner race and ethnicity, which shows that businesses owned by historically underrepresented groups earned more through federal contracts across every category. Agencies awarded $76.2 billion to small disadvantaged businesses, the most ever, surpassing the Biden administration’s goal of 12%. The White House set a 15% goal for 2025.

“This represents the third consecutive year of record-breaking awards to SDBs under President Biden, and puts the administration on track to reach the President’s goal of increasing federal contracting dollars to SDBs by 50% by 2025,” the White House said in a fact sheet released today.

For example, African-American owned businesses received $10.2 billion in federal contracts in 2023, $800 million more than in 2022. Meanwhile, Hispanic-owned businesses saw their overall contract dollars increase by $943 million to $10.9 billion last year.

FY23 Federal Contracting Dollars to Minority-Owned Small Businesses:

In addition to beating the SDB goal, the SBA says agencies also exceeded the service-disabled veteran-owned small business goal of 3%. Agencies awarded $31.9 billion, or 5.07% of all contracts to these firms.

This also is first time agencies came close to meeting the goal for women-owned small business awards in several years, missing out by less than 1%, while still awarding $30.9 billion to these companies.

Along with prime contracts, agencies exceeded their goals in making sure small businesses received subcontracts. SBA says 33.34% of all subcontract dollars went to small companies, more than 2% above the goal for a total of $86.4 billion.

Unlike with prime contracts, agencies missed all socioeconomic goals under subcontracting except for women-owned small businesses. The women-owned small business goal was 5% and agencies achieved 5.65%, while missing out on the SDB, HUBZone and service-disabled veteran-owned small business goals.

This latest scorecard comes when House and Senate lawmakers are pushing SBA to hold agencies more accountable for small business contracting. Sen. Joni Ernst (R-Iowa), ranking member of the Small Business and Entrepreneurship Committee, introduced the Accountability and Clarity in Contracts to Engage Small Suppliers and Small Businesses (ACCESS) Act last September to revamp the goaling structure.

House Small Business Committee lawmakers also passed several bills earlier this month to address long-standing concerns like making sure agencies use plain language when writing contracts and bring more transparency to decisions when agencies cancel small business contracts.

The post Agencies set records for small business contracting in 2023 first appeared on Federal News Network.

That new White House guidance on agency use of artificial intelligence: It embodies guardrails, but also a few opt-out scenarios that give agencies plenty of discretion. One analyst thinks it gives them too much discretion. For more on the Federal Drive with Tom Temin, Federal News Network’s Eric White spoke to the senior counsel at the Brennan Center for Justice, Amos Toh.

Interview Transcript: 

Amos Toh I think that the OMB memo does provide one of the most robust frameworks for regulating how governments, how federal agencies should regulate their use of AI. But the problem is that this robust framework has major loopholes that government agencies may invoke to avoid the very strong and sensible safeguards that the OMB has outlined. So let’s start with the good, for AI that impacts rights and safety. The OMB memo requires agencies to conduct an impact assessment before they deploy the system. During the impact assessment phase they have to consider whether the expected benefits of the system will actually outweigh the costs, including its risks to civil liberties and rights. They also have to assess whether an AI system is better suited to accomplishing the tasks that the agency wishes to accomplish compared to a non AI strategies. So all of these criteria and mechanisms are really in place to compel agencies to think very carefully about deploying AI and whether it’s suitable for that function and that task. There’s also ongoing risk monitoring that the federal agency must do once they’ve deployed the system. There are requirements for human training and oversight and transparency and providing notice to people the fact that, by the system, as well as requiring agencies to provide options to opt out of an AI system, and providing AI alternatives to people directly affected by these systems. So there’s a lot of good in there. But, there are ways that agencies can exempt themselves from these safeguards. And there are two main ways. One is obtaining a waiver when they determine that the system that complying with these safeguards will somehow impact. So safety or would be an impediment to critical agency operations. And they can also define their AI systems in such a way where they are exempt from the guidance.

Eric White So yeah, those are the two critical loopholes that you think. Is your beef with them that they give agency leaders almost a little too much leeway? Because, yeah, I’ve read that same part of the rules. And yeah, I got a little bit of sense of the implied powers clause from the Constitution there. Just saying kind of describing how leaders can make the decision if they feel the need to almost.

Amos Toh Right. So the OMB memo, grants, chief artificial intelligence officers at agencies, which are essentially the agency appointed leads on overseeing the AI systems for that particular agency. It essentially grants CAIO’s discretion to apply waivers to the systems, and also to define whether an AI system is a principle or basis for a given agency, decision or action. If it is, then it would be covered by the OMB memo, and the minimum practices would apply if it does not qualify as a principal basis according to the CIO and according to the agency, then it would be exempt from these practices. So that’s really kind of the two ways, in which agencies can exempt themselves from the minimum practices. And I think the criteria is highly subjective and potentially also overbroad. Particularly in the law enforcement context, we have great concern that agencies will seek to waive minimum practices in the name of critical law enforcement imperatives. When we’ve seen time and time again, when agencies don’t follow safeguards, that leads to significant impact on civil rights and civil liberties.

Eric White So this is all new territory for everybody. I think I get a sense that you’re not saying that the waivers aren’t unnecessary. There does need to be some sort of escape clause for agencies if they feel the need. But what you’re saying is that should those waivers should be under more scrutiny.

Amos Toh Well, I do think that there are certain minimum practices. And in the OMB memo, that should never be waived. I do think, for example, that the duty to conduct an impact assessment is before you deploy an AI system is something that should be applied regardless of whether there are emergency circumstances or not. AI can be a very powerful tool that can have a lot of harm in rolling it out without even an assessment of its potential impact on people and rights and safety can really need to mask violations of people’s rights and may actually be damaging to safety at scale. So you can imagine an agency, if they need to roll something out quickly, because it’s a critical agency operation. And that’s happening, and in a limited time frame. They could opt to do a shorter impact assessment and do a more deliberate one later on when there is less time pressure. But to waive that requirement entirely is something that actually can lead to the opposite of what the agency intends, which is that it might not, it may be even counterproductive to the operation that the agency is trying to undertake. So I do think that there are certain requirements that shouldn’t be waived. For requirements that arguably waivable, such as certain transparency requirements and kind of public disclosure requirements. I do think that needs to be really combined to instances where the AI system, for example, aspects of the AI system may actually be sensitive, law enforcement or national security information that can be genuinely classified as such. So we’ve seen a glut of over classification of information in the government. And so there’s not a lot of confidence that agencies, will apply classification markings that actually adhere to both the letter and the spirit of classification directives. And I think to OMB’s credit, you’ve said in some of their guidelines that even if some aspects of an AI system may not be disclosed to the public, the agency should make kind of best efforts to disclose the rest of the system that can be and should be disclosed to the public.

The post Is the AI leash on federal agencies too long? first appeared on Federal News Network.

The General Services Administration is putting the final touches on its solicitation for the Alliant 3 IT services contract.

But one of the sections that GSA is already finished with is a new approach to attracting small businesses with new or emerging technology capabilities.

Large businesses can get started today on meeting the requirements of GSA’s small business emerging technology solutions engagement requirements under Alliant 3 contract.

Paul Bowen, the director of the center for GWAC programs at GSA, said this evaluation factor is among the first of its kind.

“There’s an opportunity for an ‘other than small business’ offeror to engage with small businesses that have eligible emerging technology solutions in any of these 11 areas. So if I’m an other than small business company, I have the opportunity to go out and interact with up to five small businesses that have emerging technology solutions, meet with them, have them sign a form that shows that we met, we had an engagement and that we spoke,” Bowen said at an event sponsored by ACT-IAC on Friday. “The small business has to provide the proof that they have the eligible product, and then when the other than small business submits it to GSA. The other than small business would receive 200 points for each of the five engagements up to a total maximum of 1,000 points.”

As part of the draft solicitation for Alliant 3 issued last December, GSA detailed this new approach to hold large businesses accountable for learning about small businesses in specific emerging technology areas. The 11 areas included such as big data, cloud, cyber, AI, zero trust and quantum computing.

GSA highlights 11 emerging tech areas

What the small business emerging technology solutions engagement requires is for large businesses to meet with at least five small businesses who work in one of these 11 areas. The 11 emerging tech areas came from work GSA’s IT Category office has been and continues to do.

Bowen said GSA isn’t being prescriptive about how the engagements work or what may or may not come from them.

“GSA does not dictate how these meetings are set up, how long they last, the terms of them. It’s entirely for you to all figure out how you want to do it and to come to terms with each other, whether it’s a phone call, whether it’s a meeting, whether it’s a demonstration, however you work it out, you work it out,” he said. “There’s no expectation that you will have done business in the past. Nor is does it create an obligation in GSA’s eyes that you’ll do business together in the future. It’s a way to match make.”

GSA, however, put some parameters on the size of the emerging small businesses. The firm has to have done at least $100,000 worth of business or being a part of the Small Business Innovation Research or Small Business Technology Transfer (SBIR/STTR) programs.

Under the terms of the program, the large business may only get credit for meeting with a different small business for all five engagements and can’t meet with small businesses in any of the 11 categories like cyber or AI more than twice. Bowen said that means if large company X meets with two different AI companies, then they have to pick three other emerging technology areas like cloud or health IT for their other meetings.

Matchmaking made easier

Small firms bidding on Alliant 3 do not have to participate in this part of the evaluation. GSA says they would receive the 1,000 points automatically.

Bowen said GSA’s decision to take this approach made sense for several reasons.

First, it just made sense to make small business matchmaking part of the evaluation factor just made sense.

“We know that small businesses have really been leaders in emerging technology, which is such a focus for everyone, including the government. For us to have an evaluated factor where other than small business offers on Alliant 3 have a scored element where they can go out and meet with small businesses with emerging technology solutions is a win-win for everyone,” Bowen said. “It’s a win-win for the small businesses with the emerging technology because they have the ability to go meet with these companies where previously may have been difficult to get in the door. It’s a win for the other than small business offers because they get to learn about these technologies. They demonstrate to the government that they have the ability to go out and find small businesses with emerging technology because so much of the emerging technology is being done to almost the garage level and above at this point.”

Bowen said this approach also gives the small businesses some leverage with the large firms in terms of getting meetings and explaining their technologies and value.

In addition to this 1,000 point evaluation factor, Bowen said GSA also will hold vendors accountable for meeting their subcontracting goals as part of the contract.

GSA expects to issue the final solicitation for Alliant 3 toward the end of May or early June.

One big change to the Alliant 3 is the number of awards GSA is expecting to make. Bowen said GSA is targeting about 76 awards, which is up from the 60 awards it made under Alliant 2 back in 2018.

One reason GSA is looking to make a larger number of awards is the number of contractors who ended up leaving Alliant 2. GSA started with 60 awards and has lost 22 over the last six years. Of those 22, 11 were lost to mergers and acquisitions and another 11 to the companies “volunteered” to leave the contract as they were not meeting specific bidding and winning requirements.

There now are 38 vendors under Alliant 2 and GSA expects the larger number of awardees to provide better and more competition.

Alliant 2 remains a popular contract among agencies, adding a lot of focus and excitement on Alliant 3.

GSA data shows agencies obligated more than $8.6 billion across 117 task orders in 2022. Since GSA awarded Alliant 2 in 2018, agencies have obligated more than $26 billion.

The popularity of Alliant 2 caused GSA in August 2022 to increase the ceiling of Alliant 2 to $75 billion from $50 billion because it saw the increasing spending trends.

Over the last four or so years, Alliant 2 has been a go-to contract for many of the major and high dollar programs agencies have pursued. The average task order under Alliant 2 is around $120 million.

Industry and GSA expects Alliant 3 will be just as popular with spending continuing to increase.

The post GSA’s new approach to small business matchmaking first appeared on Federal News Network.

The Federal Acquisition Regulation (FAR) includes a host of contract clauses that must be flowed down to subcontractors. Moreover, given the procurement system’s focus on regulatory and performance compliance, prime contractors are incentivized to flow down as many clauses as possible beyond those mandatory flow-downs. Some of these additional flow-downs can be central to contract performance, like the Trade Agreement Act (TAA). The government expects, in the normal course of business, that prime contractors and subcontractors effectively address flow-down requirements to ensure contract compliance.

Similarly, procurement policies and procedures flow down to the acquisition workforce through the FAR, General Services Acquisition Regulation (GSAR), acquisition letters, and other management guidance. These regulations and associated guidance address a host of contracting officer responsibilities, including but not limited to, proposal evaluation, negotiations, price and/or cost analysis, data rights, and foreign acquisition (e.g., TAA).

For this reason, procurement policy flow-downs cannot be one-sided. The government rightly expects compliance from its industry partners regarding contract clause flow-down requirements. Likewise, industry partners and the public have a right to expect sound, effective flow down of acquisition policies to the federal acquisition workforce. Unfortunately, the record is this regard is mixed, at best, and the General Service Administration’s (GSA’s) Multiple Award Schedule (MAS) program serves as a case in point.

MAS contractors continue to experience challenges regarding the negotiation and administration of MAS contracts. These challenges often reflect unsound, ineffective flow-down of key policy guidance to the workforce. Many MAS contract negotiations are premised on positions and analysis that are inconsistent with the GSAR and FAR. As a result, contractors and offerors are being asked to make untenable business decisions in order to receive a MAS contract or have an option exercised. This result is especially problematic for small business concerns and, ironically, occurs at a time when the Administration and Administrator Carnahan are focused on supporting small business concerns entering the federal market.

Investments in training, in-person and virtual, can help address the gap in knowledge (contractors report some contracting officers are unfamiliar with the MAS pricing policies.) This training should include a focus on commercial business practices and incorporate reverse industry days. Additionally, sound procurement management, consistent with the Senior Procurement Executive’s memorandum on the appropriate role of management in the GSA acquisition process (See SPE Memo SPE-2022-03), is vital to consistent, balanced application of the rules. The memo should be included in any GSA-specific acquisition training.  Finally, FAS Policy and Procedure Memorandum 2021-05 (the PAP) should be rescinded, so as to allow contracting officers to rely on the guidance contained in the GSAR and the FAR when conducting MAS contract negotiations.

The PAP and a new request for information

The PAP includes guidance that is inconsistent with the underlying GSAR pricing policies and the FAR. Some of this inconsistent guidance is punitive in nature (e.g., “all commercial customers” as the Basis of Award (BOA) tracking customer), especially negatively impacting small businesses. It also imposes, for all intents and purposes, new data collection requirements on contractors and offerors that are not in the GSAR. The (hopefully) unintended consequence of the PAP is to establish a new and different negotiation regulatory framework for contracting officers and contractors without the benefit of public notice and the opportunity to comment.

In September 2023, the Coalition provided comments on the PAP to the Federal Acquisition Service (FAS). Subsequently, the Coalition has had the opportunity to engage with FAS regarding the PAP. FAS’s willingness to discuss the PAP is greatly appreciated and consistent with need for transparency in policy making. Unfortunately, little has changed over the last eight months to address the significant policy questions raised by the PAP. In this regard, just this week FAS released a Request for Information (RFI) seeking feedback on “GSA FAS – MAS Pricing Practices – Market Research.”

While GSA’s industry partners appreciate the opportunity to provide feedback and GSA’s apparent willingness to consider such feedback, the RFI is disappointing. It asks for information from industry without the appropriate context, specifically reference to the PAP. Without the context of the PAP, the public will not be able to provide effective feedback and/or useful information to FAS. The PAP text should be included as part of the RFI with specific questions tailored to those parts of the PAP where FAS is seeking feedback/information. This step towards greater transparency is in the public interest.

The RFI questions/data requests, in some cases, make troubling assumptions regarding the validity of certain “policy positions” taken in the PAP. One regards what seems to be a standard policy view that invoices and other documentation are required as a part of an offer. The GSAR does not reflect this view. A second, significant view is the RFI’s endorsement of the use “all commercial customers” as the BOA customer for contractors with limited commercial sales. This position is fundamentally inconsistent with the GSAR.  In the RFI, FAS even goes so far as to say that use of “all commercial customers” as the BOA “provides the government with the best price protection.” It does not.

Competition at the task and delivery order level provides the best price protection for the government because it the point at which requirements are definitized, and thus vendors are incented to offer their best solutions. Further, the use of “all commercial customers” is a profoundly anti-competitive measure, as it restricts the ability of contractors to compete in the commercial marketplace independently and effectively. This measure is especially punitive to small businesses seeking to grow their federal and commercial business. It is shocking that FAS continues to impose this anti-small business policy on firms, as it is fundamentally at odds with the Administration’s efforts to reduce barriers and increase opportunities for small businesses.

Based on the foregoing, the RFI should be rescinded, revised, and republished with the PAP. Alternatively, if the PAP is itself rescinded, the RFI could reference the GSAR, as appropriate. These actions would provide the public with a fully transparent opportunity to provide useful feedback to FAS. To this end, the Coalition stands ready to work with all stakeholders on training for the acquisition workforce, including participation in reverse industry days.

The post Procurement flow-downs can’t be one-sided first appeared on Federal News Network.

• A defense contractor is facing heavy fines and probation for admitting to a bribery scheme with a former Naval Information Warfare Center employee. The Justice Department said Cambridge International Systems, Inc., headquartered in Arlington, Virginia, pleaded guilty to giving everything from a ticket to the 2018 Major League Baseball all-star game in Washington, D.C. to funneling $2,000 a month to James Soriano, a contracting officer with the Naval Information Warfare Center. In return, Soriano helped steer contracts of more than $132 million to Cambridge International. The company will be sentenced on July 3 and faces up to five years corporate probation and $500,000 in fines.
  (Defense contractor pleads guilty to bribing Navy contracting officer - Justice Department)
• The tug of war is intensifying over what to do with the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), as bipartisan lawmakers are doubling down on efforts to get their Social Security Fairness Act passed. The bill aims to give public sector workers a full Social Security amount by repealing both WEP and GPO. The two provisions reduce Social Security payments for certain federal annuitants. In a letter to the House Ways and Means Committee, Reps. Abigail Spanberger (D-Va.) and Garret Graves (R-La.) pointed to the bill’s 316 co-sponsors, making it one of the most broadly supported bills in the House. But lawmakers appear undecided on whether they will move forward with that full repeal, or instead keep the provisions and simply alter the benefit calculations.
  (Repeal or reform? House lawmakers weigh responses to WEP, GPO - Federal News Network)
• A bipartisan bill will put the Postal Service’s network modernization plans on hold, if the bill makes it through Congress. The Protect Postal Performance Act would bar USPS from shaking up its delivery network in areas where the agency is not meeting standards for on-time mail delivery. That means ensuring at least 90% of first-class three-to-five-day mail arrives on time. If it does not meet that standard, the legislation would prohibit USPS from opening Regional Processing and Distribution Centers. These large facilities serve as hubs for long-distance transportation where employees sort mail and packages going to other regions. Reps. Nikki Budzinski (D-Ill.) and Jack Bergman (R-Mich.) introduced the bill. USPS is seeing a major drop in on-time delivery in areas where it has already opened these large facilities.
  (Budzinski Introduces Bipartisan Bill to Halt USPS Processing Facility Consolidations - Rep. Nikki Budzinski (D-III.))
• The Army is on track to meet its 2024 recruitment goals. The service wants to bring in 55,000 recruits by the end of the fiscal year, a number it has a shot at hitting, said Army Secretary Christine Wormuth, who credits the success of its Future Soldier prep course. It should be noted that the service lowered its recruitment goal this year. In 2023, the Army wanted to bring in 65,000 new soldiers, but this year the service decided to shrink its authorized troop levels as it transitions from counterinsurgency missions to large-scale combat operations. The service has missed its annual recruitment targets for nearly a decade.
  (Army on track to meet its recruitment goals - Federal News Network)
• Are prices under the multiple-award schedule contracts fair and reasonable? The General Services Administration is asking industry 15 questions about how to better align schedule pricing with commercial practices. The questions in GSA's request for information included whether using the same labor-category names and descriptions — across schedule special item numbers as a standard practice — would reduce administrative costs and burdens. GSA is using the RFI as part of its review of agency practices to streamline how it determines “fair and reasonable” prices on schedule contracts. Responses to the RFI are due by May 8.
  (GSA seeking feedback on "price reasonableness" on the schedule contract - GSA)
• The State Department’s Diplomatic Security Service is setting a goal to have women make up at least 30% of its incoming recruits by 2030. Diplomatic Security is making that commitment as part of the 30x30 Initiative that 240 other law enforcement agencies have already signed onto. Operating in over 170 countries, Diplomatic Security is also looking to ensure its policies and culture allow it to recruit and retain women as law enforcement officers.
  (Diplomatic Security Service commits to 30×30 initiative - State Department)
• Investing in federal retirement services is top of mind for NARFE, the National Active and Retired Federal Employees Association. The organization is calling on Congress to give more resources to the Office of Personnel Management in fiscal 2025. OPM is the long-time overseer of retirement processing for federal employees. The agency has been starting to chip away at modernizing the largely paper-based system, but without proper investments and oversight, NARFE said it is concerned that widespread delays on retirement claims and processing will continue.
  (Letter on fiscal 2025 Financial Services and General Government appropriations - NARFE)
• The Army will begin conducting cognitive assessments of all soldiers before they attend basic training. The goal of the test is to establish a baseline before soldiers are exposed to repeated blasts in training and combat. The Army also wants to use wearable devices to continuously track and monitor blast exposures. The service has yet to find the ideal gauges to track exposure to blasts for soldiers, but plans to assess various wearable devices, which the Special Operations Command will eventually purchase.
  (Army will conduct cognitive assessment during training to prevent traumatic brain injury - Senate Armed Service Committee)

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