The FACT SHEET issued by the White House on November 8, 2023 professes the four underlying initiatives “will generate more than an additional 10 billion annually in savings and cost avoidance while improving the performance of Federal contracts.” Seeing as it also states, “[l]ast year alone, the Federal Government purchased $700 billion of goods and services,” – this 1.5% saving would be a good start. So, let’s take a look at these initiatives.
Leveraging Data Across Federal Agencies to Get Lower Prices and Better Terms
Good common sense – When making a significant purchase, most of us leverage the information available from other consumers, even if it is simply getting input from our family and friends.
To support this initiative, the administration is introducing a new tool. “[T]he Office of Management Budget [(OMB)] is launching a new centralized data management strategy, which will create a Hi-definition framework for sharing and analyzing acquisition data across the Federal enterprise.” “[T]he first iteration of a new tool that, when fully implemented, will provide contracting officers with unparalleled access to centralized product pricing data derived from federal sales and commercial benchmarks, along with information on vendors and contracts, so agencies can confidently identify a best value solution for common needs, such as laptops, servers, and office furniture and supplies.” A searchable database of Government purchases with pricing and other details – we assume.
Great idea, and if it gets contracting officers to do the market research, they are already required to do under FAR part 10, I am all for it. As I recall, the Contractor Performance Assessment Reporting System (CPARS) still struggles to get sufficient timely detail from many overworked contracting officers. So, will these databases fare any better?
Negotiating Common Enterprise-Wide Software Licenses
“GSA will lead the Government in negotiating a governmentwide IT software license agreement with a large software provider.”
Is this not already in place under the GSA Schedule? “The GSA Schedule, also known as Federal Supply Schedule, and Multiple Award Schedule (MAS), is a long-term governmentwide contract with commercial companies that provide access to millions of commercial products and services at fair and reasonable prices to the government.” One of the MAS categories is information technology, including Software Licenses (SIN 511210) and Software Maintenance Services (SIN 54151).
Well, back in 2014, DoD did issue guidance and a FAR deviation that questioned whether GSA prices were fair and reasonable, providing that contracting officers couldn’t just accept the prices without making a determination of fair and reasonable pricing using the proposal analysis techniques in FAR 15.404-1. Could we possibly see this go away?
Saving Money and Avoiding Waste by Getting Contract Requirements Right the First Time
This initiative is focused on the acquisition of professional services (yet again, an area already covered by the GSA Schedule) and includes the following:
- OMB will be issuing guidance to agencies on proven methodology to help pinpoint requirements.
- Agencies will facilitate workshops to help teams of program, acquisition, supply chain, IT, and other experts translate their needs to each other and build performance-based requirements to capture better, more cost-effective outcomes.
- GSA will sponsor workshops on requirements development and acquisition planning for services contracts.
- GSA, OMB, and the agencies will work together to develop additional training, expand workforce development opportunities, and consider a new professional workforce certification model.
There is no argument from me on this – many of my clients face professional service contracts with scopes of work that are not well defined. DoD has made great strides in developing and implementing an acquisition training and certification process through the Defense Acquisition University. Let’s hope this can be leveraged – but creating new wheels is a government thing.
Getting Better Value from Sole Source and Other High-Risk Contracts
Here, the initiative is looking to leverage the work already put in place by DoD through “peer reviews where independent procurement teams review terms to deliver a second opinion and leveraging special teams of cost and engineering experts like the Navy “Price Fighters,” to reduce the risk of inflated prices.” Additionally, the use of hybrid contracts is being recommended – this will mean that a large contract will have the scope of work broken down into parts to allow for the application of the best contract type (i.e., cost reimbursement, labor hour, and even firm fixed price) based on the underlying scope of work.
Based on my years with DoD, I cannot really argue with this initiative. However, in my current role as a consultant, I do believe this will add to the complexity of many Government acquisitions and lead to the need to train your business development, estimating, accounting, and compliance employees on the potential expectations and how they can be addressed.
Takeaway
As a taxpayer myself, I would hope that any administration would be concerned about the efficient and effective operation of the acquisition process within the Government – so, I applaud the effort. That said – I believe there are some other areas of the Government acquisition process that should be considered:
- The expectation is that the Government should get the best (or even better) pricing on commercial products and services. If you come to the commercial marketplace with requirements well beyond those of the average commercial customer (See the ever-expanding list of requirements in FAR 52.212-5), you are going to pay more.
- Being a slow (if ever) adopter of new product versions. The FAA will accept a part for a commercial aircraft, but the Army will not for its military cargo aircraft. If you want a manufacturer to produce an older version of a product, you are going to pay more.
- Demanding competition (FAR 52.244-5) but simultaneously expecting the contractor to manage its supply chain to meet cyber, counterfeit electronic parts, Buy American, training, and so on. These are two competing requirements (i.e., competition vs. supply chain management). Harmonization of these competing requirements could have a significant impact on Government acquisition costs.
Additionally, based on the history of most Government initiatives – no matter how internally focused they are, at some point, the initiatives end up adding to the burden of industry.
Redstone GCI assists contractors throughout the U.S. and internationally with understanding the Government’s requirements and supporting acquisition expectations. We would be happy to be part of your team.
John is a Director with Redstone Government Consulting, Inc. providing government contract consulting services to our clients primarily related to the DFARS business systems, CAS Disclosure Statements, and DCAA/DCMA compliance preparation, advisory, and defense. Prior to joining Redstone Government Consulting, John served in a number of capacities with DCAA/DCMA for more than 30 years. Upon his retirement, he was based in Texas as an SES-level Corporate Audit Director for DCAA, managing a staff of 300 auditors at one of the largest DOD programs. Professional Experience John began his career in the late 80s working in the Clearwater, FL audit office and over the next three decades he progressed through a number of positions within both DCAA and DCMA with career highlights as DCAA Program Manager at Ft. Belvoir, Chief of Technical Programs Division, Deputy Assistant Director-Policy, Director of the DCMA Cost and Pricing Center, the SES-level Lockheed Martin Corporate Audit Director, and Director of Integrity and Quality Assurance. John’s three decades of experience in performing and leading DCAA auditors and DCMA reviewers provides a wealth of expertise to our clients. John’s role, not only in the performance of audits, but also in the development of audit policy affords him unique insights into the defense of audit findings and the linkage of audit program steps to the underlying regulatory framework. He is an expert in FAR, DFARS, and other agency acquisition regulation, as well as a subject matter expert in the Cost Accounting Standards having reviewed and provided audit feedback on many of the largest and most complex cost accounting practices during his tenure with the DCAA. John’s tenure with DCAA and DCMA came at a critical time during each agency’s history where a number of changes were occurring such as the response to the ICS backlog, development of audit approaches to the DFARS Business Systems and implementation of new audit initiatives as a result of Congressional oversight through the NDAA process. John’s leadership at the DCMA Cost & Pricing center saw oversight of all major DOD pricing actions, leadership of should cost review teams, the Commercial Pricing group and many other areas of strategic value to our clients. His involvement in these and other Agency initiatives is of great value to our clients due to his in depth understanding of DCAA and DCMA’s internal policy directives. Education John holds a Master of Business Administration and a B.A. in Accounting from the University of South Florida. Certifications Certified Information Systems Auditor State of Alabama Certified Public Accountant