Service Contractor Magazine - December 2013 by Professional Services Council

December 2013 / The Voice of the Government Services Industry

Unleashing

Big Data ALso inside:

big dataa revolution ready for today

navigating the murky waters of sca compliance

Big Data and Privacy: What Do We Do Now?

annual conference highlights

December 2013 Service Contractor is a publication of the Professional Services Council 4401 Wilson Blvd., Suite 1110 Arlington, VA 22203 Phone: 703-875-8059 Fax: 703-875-8922 Web: www.pscouncil.org All Rights Reserved PSC Staff Stan Z. Soloway President & CEO soloway@pscouncil.org Alan Chvotkin Executive Vice President & Counsel chvotkin@pscouncil.org Bryan Bowman Manager, Marketing bowman@pscouncil.org Matt Busby Manager, Member Services busby@pscouncil.org Joe Carden Vice President, Marketing & Membership carden@pscouncil.org Elise Castelli Manager, Media Relations castelli@pscouncil.org Charlene Dowdy Membership Associate dowdy@pscouncil.org Paul Foldi Director, International Development Affairs foldi@pscouncil.org Karen L. Holmes Office Manager/Receptionist holmes@pscouncil.org Roger Jordan Vice President, Government Relations jordan@pscouncil.org Jeremy W. Madson Manager, Federal Affairs madson@pscouncil.org Kate Petersen Manager, Legislative Affairs petersen@pscouncil.org Melissa R. Phillips Director of Meetings & Events phillips@pscouncil.org Robert Piening Director of Finance piening@pscouncil.org Jean Tarascio Manager, Events Services tarascio@pscouncil.org Matthew Taylor Policy Associate taylor@pscouncil.org Kristine Thomas Executive Assistant thomas@pscouncil.org For advertising or to submit articles or items for the Member News section, contact: Bryan Bowman

The Voice of the Government Services Industry

Big 10 Data

A Revolution Ready for Today

Sounding board: the business of big data

The ACA & the employee value Proposition

navigating big data & murky PRivacy: what waters of SCA do we do now? compliance

4 Presidentâ&#x20AC;&#x2122;s Corner / 24 Annual Conference / 26 Big Gaps, Changing Needs 28 2013 Government Contractor Awards / 31 Bill Tracker / 41 Policy Spotlight 43 Committee Corner / 44 Member News / 46 PSC Scene & Heard Cover montage: Ana Eastep / Studio25.

Professional Services Council

Service Contractor / December 2013 / 3

PRESIDENT ’S CORNER

o say the federal fiscal year is off to an “interesting” start would be an understatement. While nobody seems optimistic that a “grand bargain” is in the offing, we continue to advocate for at least a “mini-bargain” that will provide agencies some degree of assurance about their funding going forward.

Meanwhile, the policy wheels continue to In addition, Baker Tilly’s Jennifer Flickturn on everything from security clearances inger and Aaron Raddock and James Kelly We need your feedback to employee compensation, to cybersecurity Morgan, Lewis and Bockius discuss preto improve Service Contractor. ofaward policy, information technology reform, and concerns with Service Contract Act Visit this link to give us your compliance in Multiple Award Schedule more. Budget agreement or not, “fixes” to real or imagined problems, continue to be contracting in the first of a two-part series. thoughts in a short survey: contemplated, proposed or even voted on. This issue also includes our usual bit.ly/PSCmag The same is true for the overall marlegislation “tracker,” a spotlight on PSC’s ket for government services. Attention Health and Human Services Task Force, continues to be focused on core requireand much more. Further, to ensure ments that virtually everyone agrees are top priorities, regardless our features and content provide value to you, we need your of the final budget decisions. Key among those areas, of course, feedback to improve Service Contractor. Visit this link to give us is “big data.” Thus, in this issue of Service Contractor we opted your thoughts in a short survey: bit.ly/PSCmag. to focus a portion of our attention on this large, sometimes Finally, one closing thought. At the PSC Annual Conferill-defined market. What is it? Where is the government most ence in October, there was a palpable and understandable sense likely to invest resources in big data and analytics? This issue of unease throughout the audience. But over the course of the features a thoughtful overview of the topic by Marv Langston, following weeks, I had the opportunity to attend the Service to the former deputy CIO at the Defense Department and a America Medals gala, which recognizes outstanding civil servants leading thinker on government technology. In our Soundfor extraordinary achievement; the Greater Washington Governing Board feature, Jim Regan of DRC and Wes Anderson of ment Contractor Awards, which we co-present with the Fairfax Microsoft offer their perspectives on how big data will drive Chamber of Commerce; and the Government Computer News the professional services market. And Jeffrey Smith and David Awards at which a dozen federal IT programs were recognized Metzger of Arnold and Porter explore the associated legal issues for their performance. Putting it all together reminded me once that have emerged in the “post-Snowden” era. Continuing on again of the remarkable work being done, every day, by our govthe Snowden theme, our own Executive Vice President and ernment colleagues and their partners in industry. The times are Counsel Alan Chvotkin revisits security clearance issues in the certainly difficult and challenging, but as these awardees illustrate wake of congressional hearings and new legislation addressing so well, great and important work continues to get done. And recent events. that’s a real tribute to everyone involved. We are also pleased to include in this issue a look at some of Thanks, as always, for your support of PSC, and for the the internal communications challenges companies are facing work you do. with the advent of the Affordable Care Act. Will the ACA affect you? How well prepared are you for the employee communications challenges it generates? Our thanks to Holly Fisher of PSC member company Hill & Knowlton Strategies for her Stan Soloway thoughts on the issue. President & CEO 4 / Service Contractor / December 2013

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Professional Services Council

SOUNDING BOARD:

In each issue, PSC asks members of our board of directors to offer their perspectives on key challenges facing the government services industry.

The Business of

Big Data

In your primary area, where do you see big data driving the professional services market?

Wes Anderson

Vice President, U.S. Public Sector Services, Microsoft

ver the last decade the amount of data that organizations can access, collect and analyze has grown exponentially. More than 90 percent of all of the data currently available to us was generated in the last two years.1 According to a recent Tech Republic report, the volume of data in the “Digital Universe” is expected to double every two years to reach 40,000 exabytes (one exabyte being a billion gigabytes) by 2020. 2 Virtually any data that can be collected—from full text, to images, to sensor data, to social, to video—fits under the label of “big data.” This explosion in data has been driven by the low cost of information storage, increases in IT processing power, the proliferation of sensors and advances in software innovation to handle huge volumes of data and provide expedient data analysis. Government agencies can now begin to mine these data to gain access to critical information and derive incredible insights applicable across the broadest imaginable range of solutions, including citizen services, logistics, planning, security, defense and more. The potential payoff for government is enormous, which is why President Obama launched the “Big Data and Research and Development Initiative”3 in March, 2012, which invested over $200 million for data research across agencies to funding a wide array of big data services initiatives. continued on page 8

Jim Regan

Photo: McCarony/shutterstock.com

Chairman, DRC

t DRC, we have several customers currently involved with “big data,” including the National Oceanic and Atmospheric Administration, the Food and Drug Administration and the Defense Department. Other DRC customers are also looking at the benefits and challenges of “big data.” One example of DRC’s big data work is with the scientists at NOAA’s Geophysical Fluid Dynamics Lab (GFDL) who use large amounts of data and large data sets to produce predictive modeling of global climate for the Intergovernmental Panel on Climate Change. These data sets are run on supercomputers that perform computationally intensive algorithms to help predict global climate change. Another example is FDA where DRC assisted in the implementation of four EMC Isilon SAN Storage Systems to provide 1.05 petabytes (1015 bytes) of scientific data. Thirdly, DRC just completed a Medicaid predictive modeling solution in Massachusetts for fraud and abuse prevention. The final example is at the Army where DRC led architecture and development of the tactical cloud within Distributed Common Ground System-Army (a GCN Award Winner – see GCN Magazine Oct-2013). Big data still has an elusive definition across the information technology community. As we reviewed customer engagements and had discussions on big data, we saw a need to do things differently. As such, nearly two years ago we took Gartner’s “Three V’s of Big Data” and expanded those to include three additional V’s which we believe are important for advising our government customers. DRC’s six V’s are: volume, velocity, variety, veracity, visibility and variability. These provide our framework to review, assess, develop and advise on big data solutions. continued on page 21

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Service Contractor / December 2013 / 7

Wes Anderson

continued from pg. 7

Due to decreased budgets as a result of the economic downturn, many state and local governments have already taken advantage of robust big data analytics to more effectively manage budgets, improve services and drive operational efficiency. In its report on “How Big Data Is Revolutionizing City Government,” NextGov points out that “mayors and city officials are using [big data] tools to make data-driven decisions about where police patrol and how they hand out permits for restaurants and other businesses.”4 We anticipate ever-growing demand for big data and analytics in federal government at all levels. Having better access to more data and the ability to analyze it instantly translates to increased organizational agility and more informed decisions. Many agencies have already seen significant increases in performance and efficiency attributable to big data and analytics in applications such as weather, climate, energy, agriculture, transportation, law enforcement, security and healthcare. Analysts and technology customers ranked big data as their No. 6 priority in a January 2012 survey, whereas it did not even make the list in 2010. What’s more, many of those priorities higher on the list, including business intelligence and analytics, social media, cloud computing and mobility, all benefit from the ready availability of big data. Big data management tools make it possible to bring structured data, often from existing databases, together with non-structured data and opens the ability to derive new insights from these complex and large data sets. For example, Microsoft’s HDInsight is a service that makes big data management available as a service in Microsoft’s Azure cloud. This allows organizations to quickly deploy Hadoop clusters, bringing the power of big data management and analytics together with the deployment, enterprise class security and elasticity efficiencies of the cloud. Services such as SQL Server StreamInsight can be used to handle streaming data and can add an additional dimension of real time analytics when combined with historical data. Once data sources are identified and managed (often dynamically), the data can be enriched such that other tools can provide discovery and recommendation, data transformation and governance. The promise of big data is only made real through the application of business analytics that tease out and make

clear the insights organizations need. By applying business analytics tools along with intuitive and relevant user interfaces, big data can be studied, patterns recognized and relationships between data visualized. Data scientists typically help provide that insight, many of those analytics can be performed using familiar and ubiquitous tools like Excel and web-based user interfaces for analysis and data visualization, making big data more accessible to a broader range of consumers. This is a game-changer because it puts the power of big data in the hands of many, helping government more rapidly and frequently realize greater return on investment and mission impact for their big data investment. The government web site data.gov even extends that capability to the individual citizen by increasing “the ability of the public to easily find, download, and use datasets that are generated and held by the federal government.” 5 A crucial component to successful big data implementation in government will be to continue to increase partnerships and data sharing across agencies and stakeholders. Government agencies will need to cooperate with one another as well as with academia and industry to maximize the opportunities offered by synthesizing multiple big data sources to form insights. In the healthcare field, for example, caregivers and patients can more easily share data providing both individual benefit the ability for the healthcare community at large to gain better insight. In the transportation industry we bring together cameras, sensors from multiple sources and individual feedback to show real-time traffic. Many of the same capabilities are also being leveraged across agencies to track criminals and to take proactive security measures. From a federal services industry perspective the advent of big data provides significant opportunities to provide innovative and transformational capabilities to customers. The key to success is that a discussion around big data must be a business discussion first, before it becomes an IT capabilities discussion. Doing so helps insure that the organization can leverage big data to become predictive, effective and agile. Harnessing its power allows us to not only access the right information, but ultimately make better decisions and optimize government services, security, and operations. 3

Reference: 1 Dragland, Ase “Big Data, for better or worse” SINTEF.NO (2013, May 22). 2 Gantz, John and Reinsel, David “The Digital Universe in 2020” EMC.COM (2012, December) 3 http://www.whitehouse.gov/sites/default/files/microsites/ostp/big_data_press_release_final_2.pdf 4 Marks, Joseph (2-13, July 1) Q and A: How Big Data Is Revolutionizing City Government. NextGov.com 5 http://DATA.GOV

8 / Service Contractor / December 2013

Professional Services Council

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tions (to include their contractors), and indeed the way most of us conduct our daily lives.

Why is big data such a hyped term today?

In 1976 the worldâ&#x20AC;&#x2122;s fastest Cray-1 supercomputer sold for $8 million and filled a large building. Today the computing power of the Cray-1 is contained in every smart phone sold. More importantly, our smart phones are backed up with massive networks of wireless and wired communications paths tied into multi-acre computer sites that have given rise to todayâ&#x20AC;&#x2122;s cloud computing age. It is these always on, fault tolerant networks and cloud computing sites that have enabled big data and the big data analytics that are transforming our planet. Through these technologies big

Professional Services Council

Word Cloud: Rafal Olechowski/shutterstock.com

by Dr. Marv Langston, Former DoD Deputy CIO and IT Consultant

ig data is the reason a Google search on any word or subject will return a hundred thousand responses in a tenth of a second. Big data is why Facebook instantly connects us to the shared lives of family and friends. Big data is the reason detailed maps of our globe are quickly accessible on any electronic user device. And if we ask, big data will tell us the traffic conditions and alternate routes through heavy traffic. The technology of big data is not new. It has been the bread and butter of large institutions such as National Security Agency, National Weather Service, and National Science Foundation for decades. More recently, big data is transforming successful commercial businesses, many federal, state, and local government func-

Ready for Today data has become accessible to any individual or organization with an interest and a desire to work smarter.

What is big data?

The National Institute of Standards and Technology defines big data as data that “exceed(s) the capacity of current or conventional methods and systems.” This is a non-technical way to say that access to big data analytics requires more than a desktop computer and a local area network to process. Wikipedia defines big data1 as the processing of large data sets “allowing correlations to be found to spot business trends, determine quality of research, prevent diseases, link legal citations, combat crime, and determine real-time roadway traffic conditions.” 1

http://en.wikipedia.org/wiki/Big_data

Professional Services Council

In the past, processing big data was the province of large institutions that could purchase and operate the massive computing resources required to work with large data sets. The growth of inexpensive network access, coupled to faster, cheaper and smaller computers, has forever removed most big data processing constraints. Thanks to large information technology companies, ondemand access to big data computing resources are available through Amazon, Google, Microsoft, Oracle, Rackspace, Terremark, and a growing list of other companies. Using the available services from any of these companies, it is easy to process big data tasks at reasonable costs, on demand.

With the computing power constraint removed, the real big data challenge is the data; how to find it, how to know what to ask of it, and how to understand when significant results are being provided. In the recent book Big Data: A Revolution That Will Transform How We Live, Work, and Think, authors Viktor Mayer-Schonberger and Kenneth Cukier, state: “Just as the telescope enabled us to comprehend the universe and the microscope allowed us to understand germs, the new techniques for collecting and analyzing huge bodies of data will help us make sense of our world in ways we are just starting to appreciate. … the real revolution is not in the machines that calculate data but in data itself and how we use it.” continued on page 12 Service Contractor / December 2013 / 11

Because most of our institutions are not well versed in the value of big data, it is difficult to know how to start mining the big data that could transform your organization. An example worth emulating is Virtual Alabama. Following Hurricane Katrina, the governor of Alabama mandated that all state data be visibly available on-line (https://virtual.alabama. gov/). At the time he was not sure how visualizing the State’s data would help with future natural disasters but his Chief Information Officer was confident it would make a difference. Innovative people took it from there. Having access to all of the state’s data sources has revolutionized how the state provides services, responds to natural disasters, organizes police actions, and more. And new ideas continue to grow for Alabama.

Is big data here to stay?

Big data means different things to different organizations. CNET news writer, John Webster2 asserts that big data analytics is here to stay because the growing availability of big data processing technologies has made it easy for information technology departments to provide access to big data analytics. More importantly Webster states: “The analytics systems now being built to extract meaning from once unimaginable amounts of data— sometimes delivering new insights in real time—are moving toward imitating the way the human mind functions. They can sense. They can process multiple inputs simultaneously. They can focus on only the data that’s relevant to a given situation.” These new analytic systems are also giving rise to new skill sets. Data scientist is one such skill that is in short supply in both government and industry. Recognizing this shortfall, universities are building new curricula to fill this need. A data scientist is a person skilled in:

• understanding the potential of large data sets within an organization; • finding ways to obtain or generate such data sets; and, • creating visualizations that provide new insights for services, products, and process change.

As analytic systems continue to improve and data related skill sets are filled, big data is at the beginning of a long evolutionary path. As Mayer-Schonberger and Cukier articulate well in their big data book, the future of big data is going to fundamentally change how we live: “In the future—and sooner than we may think—many aspects of our world will be augmented or replaced by computer systems that today are the sole purview of human judgment. Not just driving or matchmaking, but even more complex tasks. After all, Amazon can recommend the ideal book, Google can rank the most relevant website, Facebook knows our likes, and LinkedIn divines whom we know. The same technologies will be applied to diagnosing illnesses, recommending treatment, perhaps even identifying ‘criminals’ before one actually commits a crime. Just as the Internet radically changed the world by adding communications to computers, so too will big data change fundamental aspects of life by giving it a quantitative dimension it never had before.”

How will government use big data?

In the Department of Defense there is significant research and development activity working to process the new large data sets being created by manned and unmanned sensors, and to find new ways to analyze large intelligence data sets. By combining new intelligence analytics with real-time sensor data, it will become possible to more effectively anticipate adversary activity and apply military resources even as the size of military forces continues to be reduced by budget constraints. In the

non-security related federal agencies, big data will enable efficient services better tailored to the citizens being served. Within the health sector this will translate into more effective medicines, shorter hospital stays, and more effective medical procedures. Similarly, big data will continue to improve weather forecasts and disaster prevention and response, it will increase the efficiency of welfare systems, and it will enable improved the policy decisions across all government organizations.

Big data issues and challenges

Like all new technology paradigm shifts, some organizations will be early adopters and many will be late adopters. Commercial industry has been both leader and technology developer of big data solutions. Because of the easy access to low cost big data analytics, the largest challenge for most government organizations will be the creative drive to change business as usual. After embarking on a big data path the next challenge is finding employees or contractors that have adequate big data skills coupled with subject matter expertise. Underlying these challenges is access to the data itself. Most data producing organizations within an agency or department have a difficult time making the data easily available for others to apply to new data analytic solutions. Just as it took concentrated senior leadership to create Virtual Alabama, similar leadership will be required to achieve a high percentage of data sharing across a government agency or department. These issues and challenges will not deter the big data transformative path that continues to change our world. As more organizations learn of the value available through big data analytics, more data scientist will be trained, more data will become available, and more contracts will be focused toward new big data enabled solutions. 3

http://news.cnet.com/8301-21546_3-57420987-10253464/why-big-data-is-here-to-stay/

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Professional Services Council

Service Contractor / December 2013 / 13

G BRIDGIN The

1 2

and the employee value proposition

by Kathie Boettrich, Hill + Knowlton Strategies

to evaluate how it will impact them and their family, a share that has been fairly steady since 2010. Furthermore, 44 percent remain confused about the law’s status: 8 percent believe it was repealed, 5 percent believe it has been overturned by the Supreme Court, and the remaining 31 percent are unsure of whether or not it remains the law.1 Finally, three-quarters of workers say that health care reform is too complicated to understand, and that they are not very or not at all knowledgeable about federal and state health care exchanges. Many workers are also not aware of consumer-driven options such as health reimbursement, health savings accounts and high deductible plans.2 Most important for companies is the fact that 75 percent of the workforce think their employer will educate them

“Kaiser Health Tracking Poll,” Kaiser Family Foundation, August 28, 2013; http://kff.org/health-reform/poll-finding/kaiser-health-tracking-poll-august-2013/ 2013 Aflac WorkForces Report, a study conducted by Research Now on behalf of Aflac, January 7 – 24, 2013

14 / Service Contractor / December 2013

Professional Services Council

Photo: Ed Samuel/shutterstock.com

ignificant provisions of the Patient Protection and Affordable Care Act (ACA), or Obamacare, take effect on January 1, 2014. In spite of the fact that the ACA may be the single most talked-about piece of legislation in decades, the object of intense political posturing, and the pretense for a government shutdown, the actual reforms it implements and what these mean for employees and their families still remain unclear. What should employers discuss? What do employees want to know? Data shows that many employees are confused about the impact of the ACA on their coverage and are concerned about how it might impact the costs of their health insurance. A little over half of the population (51 percent) continues to say that they don’t have enough information about the ACA

Affordable Care Act

5 Steps to Bridge the Gap 1.

Equip leaders and managers to have benefits conversations

Assure that health and wellness benefits are accessible and easy to understand

Include spouses and significant others in the conversation about changes to their health care coverage. Yet, only 13 percent of employers say educating their employees about health care reform is important to their organization.3 This is a significant gap: employees believe they should be hearing about it from their companies while employers feel it is not their role. The facts are that for the average American worker who already has health coverage, the ACA does not change much. Lack of clarity has left the impression that the ACA affects everyone and everyone needs to procure coverage through the exchanges. This gap is a potential communications challenge for companies, as overfocus and lack of clarity around the actual health benefits a company provides may lead to employees losing sight of or devaluing the entire benefits package they receive. Conversely, it also creates an opportunity for proactive companies to start conversations with their employees that inform them about health care benefits and shift the focus to everything they receive as an employee: the entire Employee Value Proposition (EVP). To bridge the gap and change the dialogue to what a company offers and 3

Don’t take ownership of the ACA discussion – use sources that are available

Expand the conversation to talk about the entire employee value proposition

want to talk about, there are five proven steps to take: First, prepare and equip the leaders and managers in your company to answer questions or direct employees to sources of information about the company’s health benefits. This can be accomplished with talking points and other materials. Second, confirm and clarify details about your health plan and any changes in your health benefit offerings in easyto-understand language. Third, include spouses and significant others in this information and provide opportunities for families to plan their health coverage together. The easiest way to do this is to send information to your employees’ home and to

allow the spouses and significant others access to your healthcare portal(s). Fourth, don’t assume responsibility for explaining the ACA. Instead, provide links to accurate sources of information (Kaiser Family Foundation, healthcare.gov). Fifth, and most importantly, seize this opportunity to expand the conversation from health care coverage to the company’s entire employee value proposition. In addition to the health benefits, this includes the entire compensation offering, training opportunities, paid time off (PTO), and the ability to experience interesting work and support critical U.S. government programs, to name just a few. If employers grasp the opportunity that confusion around the Affordable Care Act creates to start a serious and positive conversation about your company’s employee value proposition, you can not only bridge the gap between your employees’ expectations and your company’s responsibilities but actually turn the current situation into a competitive advantage. Kathie Boettrich is a senior vice president at Hill + Knowlton Strategies and head of the Washington, DC change and internal communications practice.

2013 Aflac WorkForces Report, a study conducted by Research Now on behalf of Aflac, January 7 – 24, 2013.

Professional Services Council

Service Contractor / December 2013 / 15

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Navigating the Murky Waters of Service Contract Act Compliance in Multiple Award Schedule Contracting by Jennifer Flickinger and Aaron Raddock, Baker Tilly and James J. Kelley, Morgan, Lewis and Bockius

Illustration: Ana Eastep/Studio25

ultiple Award Schedule (MAS) contracts, by the General Services Administration’s (GSA) own definition, are for the acquisition of commercial products and services1— and intended to mirror commercial buying practices. The Service Contract Act (SCA or the act), an inherently governmental requirement, does not apply in a commercial environment. Yet GSA, backed by Labor Department (DoL) enforcement, continues to include SCA in MAS contracts for the acquisition of commercial services.2 Despite this fundamental conflict, contractors have little choice but to comply with SCA requirements. The conflict between SCA and MAS contracts has intensified since 2010 as GSA expands SCA’s inclusion into additional schedules, particularly those principally for professional or quasi-professional services (e.g., MOBIS). The definition of “service” employee under the act excludes employees deemed to qualify for the professional or other “white collar” exemptions under the Fair Labor Standards Act (FLSA).3 As a result of this change, employees that were considered exempt from SCA may now be covered (e.g.,

technical writers or computer professionals).4 Some professional services providers may still claim an exemption from SCA coverage where the use of service employees is not “significant,” but DOL considers the use of service employees “significant” when they comprise more than 10-20 percent of employees or hours worked.5 It’s no surprise that applying SCA to commercial acquisitions vexes even the savviest contractors. In this first part of a two-part series, we discuss the pre-

award issues contractors may encounter when MAS contracts incorporate SCA. The limited options for price increases after contract award, coupled with the Price Reductions Clause (PRC), increases the importance of addressing SCA compliance challenges during preaward negotiations.

Pricing Approach

Under MAS services contracts, an offeror must first disclose commercial sales practices (CSP) in the GSA Form continued on page 18

Professional Services Council

Service Contractor / December 2013 / 17

from page 17

Figure 1.

SCA Matrix

SCA Eligible Contract Labor Category

SCA Equivalent Code - Title WD Number

Administrative Assistant

01011 - Accounting Clerk I

05-2059

Secretary

01311 - Secretary I

05-2059

CSP-1 format, and identify its most favored customer (MFC) for each labor category. GSA often views the MFC as the customer receiving the lowest rate for that labor category, regardless of the terms and conditions. Pre-award disclosures—including standard discounts, volume discounts, and concessions— provide the contracting officer (CO) with data to evaluate proposed prices and form negotiation positions. Traditionally, the CO formulates a price reasonableness determination based on comparative commercial sales; however, SCA minimum wages and benefits are often significantly higher than those in the commercial market. To persuade the CO of a price premium for SCA labor categories, the contractor might compare SCA wages to wages paid under the competitive commercial conditions associated with the MFC. Another option for contractors using the cost-build approach to pricing is to incorporate SCA minimums and a reasonable profit into schedule prices. However, the cost-build approach may be challenged because many COs are unfamiliar with it or don’t understand its benefits.

PRC and BOA Customer Options

MAS pricing is generally based on commercial price lists or marketbased prices, as opposed to a cost build up. The PRC (GSAR 552.238-75), intended to preserve price reasonableness throughout the contract term, is better suited for the commercial price list/market-based pricing model. The PRC establishes a proportional price or discount relationship between schedule prices and the negotiated basis of award (BOA) customer(s) prices. Any reduc-

tion to BOA customer pricing during the contract term causes a commensurate decrease to schedule pricing. GSA’s common starting point for BOA negotiations is “all commercial customers,” meaning if not effectively negotiated upfront, SCA labor prices could be further discounted to prices offered to any commercial customer regardless of the contractor’s obligation to pay SCA wages and benefits. To prevent inappropriate price adjustments under the PRC for SCA labor categories, contractors should narrow the BOA to customers with wages and benefits comparable to those paid under the SCA—or try to eliminate the BOA altogether. When using a cost-build approach, where comparable commercial pricing can vary by resource, the PRC and BOA should be deleted from the contract. A PRC tied to commercial transactions is particularly dangerous in an environment where labor category prices may drop while governmentmandated “prevailing” wages and benefits remain inflated by law. Where the PRC is non-negotiable, be creative. For example, request a different price trigger for SCA labor categories vs. non-covered labor categories or request a price floor equal to SCA minimums plus burdens and a reasonable profit.

Labor mapping

Many MAS solicitations include the SCA clause (FAR 52.222-41), an index of wage determinations (WDs) covering locations across the country, 6 and an SCA matrix (Figure 1). During negotiations, contractors must identify SCA covered labor categories proposed, the corresponding SCA labor

18 / Service Contractor / December 2013

category identified in the DoL Directory of Occupations, and the wage determination used as the basis for proposed labor pricing. Solicitations also contain the following problematic language: “The Service Contract Act (SCA) is applicable to this contract and it includes SCA applicable labor categories. The prices for the indicated SCA labor categories are based on the U.S. Department of Labor Wage Determination Number(s) identified in the matrix. The prices offered are based on the preponderance of where work is performed and should the contractor perform in an area with lower SCA rates, resulting in lower wages being paid, the task order prices will be discounted accordingly.” 7 This language creates many potential issues and requires contractors to address aspects of SCA compliance without advance knowledge of task order (TO)-specific requirements. GSA CO approval of the labor mappings will not protect a contractor from a DoL finding of non-compliance. Additionally, because WDs vary by locality, determining which WDs to include in the matrix forces contractors to take calculated risks. WDs should be based on the location where the “preponderance of work will be performed,” which may be unknown or difficult to anticipate. For contractors who operate nationwide, proposed prices may not make sense in unanticipated performance locations. Consequently, contractors often choose the WD with the highest wages and benefits where work might take place—and discount pricing when appropriate during TO negotiations. For contractors desiring added

Professional Services Council

Figure 2. Adjustment Method Requirement Pros Cons Fixed Escalation Prices increase due to fixed Eliminates need for escalation or changes to an preparation and negotiation identified market index of requests for adjustment Easy for MAS COs to understand and implement

When granted, fixed escalation generally does not exceed 3%; H&W rates have increased in excess of 5% per year Contractor must pay increased SCA wages and benefits even if in excess of the fixed escalation

Commercial Price Refresh Prices change when contractor’s Easy for MAS COs to update their commercial price list understand and implement

Contractors must maintain a commercial price list

SCA Adjustment Clause Contractors have 30 days to request adjustment to pricing

Contractors must request and negociate equitable adjustments upon each WD refresh

Less understood by MAS COs and more burdensome to manage

transparency or for whom the solicitation language does not apply, altering that language is also an option.

available: price adjustment under FAR 52.222-43.8 (Figure 2.)

Selection of Price Adjustment Methodology

A contractual obligation to pay non-commercial prevailing wages and benefits in a contract for commercial services creates challenges to both profitability and compliance. For many issues presented here, there is no easy answer. Current or prospective MAS contractors should communicate with appropriate resources, including the CO, DoL and knowledgeable con-

During negotiations, the MAS contractor must select the prospective price adjustment method for its SCA labor categories. Traditionally, MAS contractors select between two price adjustment methodologies: fixed escalation and a commercial price list refresh. SCA contractors have a third approach

“GSA establishes long-term governmentwide contracts…to provide access to millions of commercial products and services at volume discount pricing.” GSA Schedule Overview; retrieved November 8, 2013 from; http:// www.gsa.gov 2 At the administrative level, DoL has promulgated only limited exceptions in a handful of narrow categories of commercial services. See 29 C.F.R. 4.123(e) and 4.133(b); see also, FAR § 22.1003-4(d). 1

Professional Services Council

Summary

See 29 C.F.R. § 4.156. The FLSA “white collar” exemptions are found in 29 C.F.R. § 541.0 et seq. 4 See 29 C.F. R. § 541.300 and § 541.400. 5 48 F.R. 49736, 49743 6 The index is not included in all solicitations (e.g., IT Schedule 70). Without an index, the funding agency’s CO must incorporate the applicable WD for each TO. 7 MOBIS Solicitation TFTP-MC-000874-B posted June 7, 2013 3

Commercial pricing must support SCA wages and benefits

sultants and attorneys to weigh each alternative based on the contractor’s particular situation and risk tolerance. Part two, which will address postaward issues, will be published in the next issue. Jennifer Flickinger is a director in Baker Tilly’s Government Contractor Advisory Services practice. Aaron Raddock is a manager in Baker Tilly’s Government Contractor Advisory Services practice. James J. Kelley is a partner in Morgan, Lewis & Bockius, where he is Co-Chair of the Firm’s Wage & Hour Practice.

The contract price or hourly labor rates will be adjusted to reflect the contractor’s actual increase or decrease in applicable wages and fringe benefits as a result of: the Labor Department wage determination applicable on the anniversary date of the multiple year contract, or at the beginning of the renewal option period. The contractor shall notify the CO of any increase within 30 days after receiving a new wage determination.

Service Contractor / December 2013 / 19

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Jim Regan

continued from pg. 7

Based on parameters measured against the six V’s, we suggest that big data is a special case of the overall (large) data market requiring special consideration of additional challenges. Therefore, we surmise that big data represents a small percentage of the overall federal data market. We further believe that the overall federal data solutions market is growing in-step with data itself. Worldwide data is now being produced at a rate of 2.5 billion gigabytes per day. At this rate, data storage will double every 40 months (according to IBM) and therefore the demand to meet data challenges and develop new mission capabilities will continue to grow. This market focus is also validated by the announcement of the President’s Big Data R&D Initiative in March 2012 and more recent activities following that announcement. Data is being produced faster in “unstructured data,” which generally means items not in databases such as email, social media, and pictures. We believe that the government will drive an acceleration in data analytics and predictive modeling for the usual core missions of fraud and abuse detection, regulatory compliance, healthcare, science, defense, intelligence, law enforcement and homeland security solutions, among others. These will be enabled by new technology and solutions in data visualization, pattern recognition, predictive modeling, and unstructured data analytics. Technologies in the lead for unstructured data are NoSQL and Hadoop. Massively parallel processing techniques using graphical processing units (GPUs) rather than CPUs is also promising. A key area already moving quickly is in the research and application of big data technology for cybersecurity such as computer network defense (CND). This is an important area since sorting through the massive amounts of network, firewall, user, intrusion detection systems and other sensor data to find patterns and eliminate false positives is a key element of success. As a whole, federal cybersecurity is estimated to have a market value in fiscal year 2014 of about $13 billion. One probable result, as the “.gov” domain adopts common strategies under contracts like the $6 billion DHS Continuous Diagnostics and Monitoring (CDM), is that more effort will be deployed to garner that data, analyze it more effectively, and to move toward predictive CND. Anecdotally, a second area we look at is in health and regulatory missions. Our FDA customer’s mission has grown rapidly over the past decade. Interestingly, in 2011, for every dollar Americans spent, $0.25 went to FDA regulated products? With gene sequencing and other bioinformatics, global food safety tracking, drug trials and drug interactions, there is no shortage of data and possibilities for data analytics at FDA. Other regulatory and health agencies face similar challenges. In scientific missions, such as earth sciences, there is a growing need to better understand and predict natural processes which affect us globally as the world’s population approaches 10 billion people. Weather forecasting accuracy directly relates to the number and accuracy of measurements (initial conditions), Professional Services Council

the size of the observational grid, and the amount of time in the future for the forecast. The tighter the grid the more difficult the problem is to solve, since you have to run many more solutions simultaneously. The same goes for climatological and oceanographic modeling. Therefore, increases in prediction accuracy adds to the complexity and intensity of computation. Finally, full motion video and digital imaging are truly pushing today’s data explosion. As more unmanned aerial systems (UASs) find their way into global and U.S. airspace, coupled with a world where every smart phone is a sensor (geo-located camera and social media device), there will be increasing demand to use that data in more ways for analytical purposes. At DRC, we believe that while the market environment is difficult from a funding perspective in the near-term, we will see the big data-related areas of data analytics, data management, data processing, data aggregation, and data provenance continue to grow. We also believe that big data is directly tied to cloud computing that provides a means to an end and allows federal employees to focus on mission analysis rather than on operations. Lastly, DRC suggests that high performance computing or supercomputing is a technology that will “return to the spotlight” as we seek to solve large data challenges to provide better mission value. 3

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Service Contractor / December 2013 / 21

Big Data & Privacy: What Do We Do Now? by Jeffrey Smith and David Metzger, Arnold & Porter LLP

cial remained. So, too, did some of the technology that had been developed to “exploit” big data. “Big data” can be thought of as the increasingly larger data sets that a technological society generates. As we e-mail, tweet, make cell phone calls, apply for and use credit cards, travel, enter contests using personal information, buy and register cars and homes, and interact with satellites, cell towers, Internet service providers and large retailers, we generate more and more data about ourselves. The government was not alone in recognizing the value of this big data.

22 / Service Contractor / December 2013

Long before 9/11, private industry began collecting and analyzing this data for marketing and other commercial purposes. Extremely sophisticated professional services companies were developing increasingly higher level capabilities to mine this big data. European governments, with recent memory of the totalitarian practices of the last century, adopted tight data privacy restrictions on industry. But in this country, there is less concern about industrial use of big data than about government use of big data. The leaks by former NSA employee Edward Snowden have triggered a major debate Professional Services Council

Photo: kentoh/shutterstock.com

he attacks of September 11, 2001 revealed major weaknesses in the ability of the United States to defend itself against innovative terrorist attacks. The 9/11 Commission recommended a number of major changes, including the establishment of the Director of National Intelligence and knocking down the “wall” that had grown up between our law enforcement and intelligence agencies. The Commission concluded that, had the agencies been less “stovepiped” and able to “connect the dots,” there was a real possibility the attacks might have been prevented. The Commission and the government realized there was a vast amount of data available (in both government and private hands) that, if properly analyzed, could provide extraordinarily valuable information. In the Patriot Act of 2001, Congress enacted nearly all of the recommendations of the 9/11 Commission, but some of the provisions raised privacy concerns. Those concerns were exacerbated when the media reported on a DARPA program, “Total Information Awareness,” that was designed to sweep up and analyze vast quantities of information from government and private sources to identify terrorist threats. It created an uproar and Congress killed it. But the knowledge that “big data” had great potential for intelligence and commer-

here and abroad about the massive collection and use of data for national security purposes. Many are troubled by the potential intrusion on our liberties and skeptical of the value of this collection, despite assurances by General Keith Alexander, the director of NSA, and others that the collection of “big data” is both lawful and essential to our national security. Congress is considering a number of bills with different approaches to manage the collection of big data for national security purposes. These range from modest changes to dramatic overhaul of the government’s power to collect, analyze and distribute intelligence based on big data. At this writing, no one knows how that legislation will come out except that it will contain changes. No one can say with confidence whether these changes will make us safer or more vulnerable,

whether our liberties will be infringed, or whether NSA will be able to recover from the damage caused by Snowden’s leaks and work within new constraints to keep us safe. But we do know that big data is here to stay, and so are threats to our country. The threats are not just to traditional national security agencies and assets but to a broad array of private companies, universities and other American institutions. Industry faces particular challenges, not only in protecting their own data, but also answering a host of questions, such as what R&D strategy to follow. How do companies know which technologies can be developed for commercial or government use that are “legal”? Technical advances, by the good guys and the bad guys, are racing ahead. The laws and policies governing use of big data, however, are hopelessly behind.

Industry confronts a bewildering array of antiquated and complex laws, here and in Europe. The absence of clear policies and laws means that companies must make decisions by trying to “reason forward” based on current law and fundamental principles of privacy protection. But those are often inadequate to make decisions with confidence. Congress and the government can benefit by working closely with industry, particularly those industries who have the sophisticated knowledge of big data. Industry frequently has a more informed view of what big data is, what uses can be made of it and what privacy safeguards make sense from a commercial and national security perspective. As in so many other aspects of our national life today, all of us—government, Congress, industry, academia and the public—have to work together to get this right. Our security depends on it. 3

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3/8/13 2013 11:55 /AM Service Contractor / December 23

Andy McCann of HP Enterprise Services (left) moderates a panel on adjacent markets, divestments and other strategies to navigate todayâ&#x20AC;&#x2122;s market. The panel featured (from left) Tom Romeo of MAXIMUS Federal Services, David Langstaff of TASC, Steve Goldsmith of the Harvard Kennedy School of Government, and Nancy Blethen of Tech Systems.

PSC President and CEO Stan Soloway sets the stage for the 2013 Annual Conference with his famous high-level market and policy briefing.

Former Sen. Kent Conrad, former chairman of the Senate Budget Committee, provides his view on the fiscal stalemate in Congress that led to a government shutdown and outlined the key elements of possible solutions. Conrad was our luncheon keynote speaker.

Background photo: PSC Executive Vice President and Counsel Alan Chvotkin (on stage) and PSC President and CEO Stan Soloway hold an open forum on the impacts of the government shutdown on the government services industry. 24 / Service Contractor / December 2013

David Zolet of CSC (far left) moderates a discussion of cyber policy with (from left to right) Bob Butler

Kevin Hassett, senior fellow and director of economic policy studies at the American Enterprise Institute, provided the closing keynote address that focused on the broad economic outlook for the country and the existing and future pressures on the U.S. economy. Professional Services Council

of IO, Jake Olcott of Good Harbor, and Jim Winner of Northrop Grumman Information Systems.

General Michael Hayden, former NSA and CIA director and principal at the Chertoff Group, discusses the role of contractors within the intelligence community during his opening keynote speech.

Robin Lineberger of Deloitte (far left) moderates a discussion of whether traditional business and pricing models are keeping up with the demands of the new era in government acquisition. The panel featured (from left to right) Anne Altman of IBM, Babs Doherty of Eagle Ray, Inc., Wayne Lucernoni of Harris, and Bill Parker of Salient.

Former USAID COO Alonzo Fulgham of CH2M Hill discusses the Quadrennial Diplomacy and Development Review (QDDR) during a panel discussion about the QDDR, the Quadrennial Defense Review (QDR) and the Quadrennial Homeland Security Review (QHSR).

Professional Services Council

Nancy Blethen, owner, president and CEO of Tech Systems, discusses strategies for navigating todayâ&#x20AC;&#x2122;s market during a panel discussion.

Service Contractor / December 2013 / 25

Big Gaps, Changing Needs? How Science and Technology Requirements are Evolving by Randy Fuerst, President and COO, Oceus Networks and Jay Cohen, Principal, The Chertoff Group

26 / Service Contractor / December 2013

Professional Services Council

Jay Cohen’s “Threat Roadmap” slide highlights the risk and likelihood of threats in order to inform decisions.

Professional Services Council

• Recognizing the power of an “enterprise view” (such as enterprise IT platforms, enterprise architecture and enterprise licensing); • Retiring old solutions that are not helping to achieve mission outcomes of the future; • Fostering speed, agility and innovation across government and industry to be responsive and stay ahead; • Implementing information security solutions that recognize and support the need to share information with unanticipated users; • Creating a cost culture at government organizations that can identify return on investment and drive more efficient use of available resources; and • Attracting and retaining the workforce of the future. As it stands now the government doesn’t have enough S&T people and industry must step up to support the missions. Our panel ultimately concluded that this is still a time of tremendous opportunity, but only if we’re willing to practice the change we preach. It will require integrated teamwork across government agencies, industry and academia that must continue yield unmatched operational advantage to our war fighters and homeland defenders. Randy Fuerst moderated and Jay Cohen participated in a panel discussion on this topic at the 2013 PSC Annual Conference.

Service Contractor / December 2013 / 27

Background image: Carlos Amarillo/shutterstock.com

t the 2013 PSC Annual Conference, we participated in a panel that explored the game-changing, current advances in the uptake of cloud services, cybersecurity, “big data” analytics, mobile security, electronic warfare, counter-space, and counter-weapons of mass destruction and other critical domains that must advance in order to meet our evolving national security missions and goals. There are two strong forces at work in the marketplace today. The first is the rapid pace of technology change and the opportunities presented by a serviceoriented approach. From social media, to cloud computing and mobility, the future will be a self-service, cloudbased, secure, mobile device world, and we must adapt. The second force is the tremendous financial pressures that government organizations will feel for years to come. It is crucial the government avoid falling back on bad habits and old solutions during these tough financial times, particularly as the old threats, like nuclear weapons, are not nearly as great as the new threats in our increasingly cyber-connected world, where everything is just a one or a zero (except the dollar bill under our mattress, though it is backed by a system based on those ones and zeros). Our entire society—from banking to the power grid, to communications and more—is connected virtually and thus at great risk from state and non-state actors. As we navigate this new security environment, there is much to keep an eye on, including: • Improving government’s use of data in terms of both exposing it for use and doing better business intelligence;

2013 Greater

Washington Government Contractor Awards™

1. Dr. Ernst Volgenau, founder and chairman of SRA International is presented the Hall of Fame Award by Tom Mazich of Deltek. 2. Prashant Gaur, president (left), and Sid Chowdhary, CEO (center), of Credence Management Solutions LLC receive the Contractor of the Year in the less than $25M annual revenue category from Harry Klaff of Jones Lang LaSall. 3. XLA CEO Lloyd Mustin receives the Contractor of the Year in the $25M to $75M annual revenue category from Elliott Ichimura of Microsoft Dynamics.

7 6. Tim Cook of Alion Science (left) with Bill Parker, COO of Salient Federal Solutions (winner of the Contractor of the Year in the $75M $300M annual revenue category) and PSC President & CEO Stan Soloway (right). 7. The 2013 Government Contractor Awards winners.

11 10. PSC’s Stan Soloway and Congressman Jerry Connelly at the 2013 Government Contractor Awards. 11. Craig Abod, president and

Photos by: Eli Turner Studios

CEO of Carahsoft is presented the Contractor of the Year in the greater than $300M annual revenue category by Jean Stack of Houlihan Lokey. 12. Mary F. Maguire, SVP for strategic communications at Abt Associates receives the Executive of the Year award in the greater than $300M annual revenue category award on behalf of Abt President and CEO Kathleen Flanagan. Mike Mannix of Holland & Knight presented the award.

28 / Service Contractor / December 2013

Professional Services Council

4. Dr. Nick Nayak, DHS chief procurement officer is presented the Public Sector Partner of the Year Award by Doug Brown of PNC Bank’s Government Contracting Group. 5. Brad Antle, CEO of Salient Federal Solutions receives the Contractor of the Year in the $75M - $300M annual revenue category from Vic Seested of UBS Private Wealth Management

8. Kymm McCabe, CEO of ASI Government, receives the Executive of the Year award in the less than $75 million annual revenue category from Lexy Kessler of Aronson.

9. PSC EVP Alan Chvotkin talks with

another attendee of the 2013 Government Contractor Awards.

13. CALIBRE President & CEO Joseph A. Martore receives the Executive of the Year award in the $75M - $300M annual revenue category from Lynn McUmber of Marsh & McLennan. 14. Sid Chowdhary, CEO of Credence Management Solutions LLC (winner of the Contractor of the Year in the less than $25M annual revenue category) and Deepak Hathiramani, founder and CEO of Vistronix.

Professional Services Council

Service Contractor / December 2013 / 29

PSCâ&#x20AC;&#x2122;s Service Contract Act Training The Service Contract Act is one of the most technically challenging aspects of competing for the award of, and successfully administering a federal service contract. SCA sets minimum pay and benefit rates for many service occupations.

S C A

The SCA affects many different decisions made by many different people in a company. Everyone, from executive leadership to proposal writers, to accountants, project managers, and human resource specialists, needs to be conversant with the requirements of the act. This course will give your staff the knowledge to be SCAsavvy in opportunity identification, capture strategy, bid/no-bid decisions, contract pricing, contract price adjustments, wage determinations, and fringe benefit calculations. PSC is pleased to offer the only SCA training conducted in partnership with the U.S. Department of Labor, Wage & Hour Division.

Upcoming sessions held at the NRECA Conference Center 4301 Wilson Blvd., Arlington, VA:

March 4-5, 2014 June 3-4, 2014 November 4-5, 2014 This course has been approved for 12.5 CLE or HRCI credits!

Visit www.pscouncil.org for more details and registration. 30 / Service Contractor / December 2013

Professional Services Council

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

Federal Cost Reduction Act of 2013, Connolly (D-VA) Summary Would encourage greater planning and transparency regarding the federal government’s data center consolidation initiative and would require greater detail on cost savings as a result of data center consolidation. STATUS Referred to Armed Services, Oversight and Government Reform, and Transportation and Infrastructure Committees on 2/4/2013. Related bill: S. 1611.

H.R. 472

Balancing Act, Ellison (D-MN) Summary Seeks to replace sequestration with other spending reductions and revenue-generating measures. Includes a provision that would limit the allowable cost of contractor compensation to $200,000 per year. STATUS Referred to Ways and Means, Budget, Oversight and Government Reform, Armed Services, Education and the Workforce, Transportation and Infrastructure, and Financial Services Committees on 2/5/2013.

H.R. 505

H.R. 548

Border Infrastructure and Jobs Act of 2013, Grijalva (D-AZ) Summary Would prohibit an agency from awarding a contract related to border security unless 30 percent of the labor for the performance of the contract is performed by a local subcontractor, with exceptions. STATUS Referred to Homeland Security, Ways and Means, Transportation and Infrastructure, Small Business, Oversight and Government Reform, Foreign Affairs, and Agriculture Committees on 2/6/2013. Cyber Intelligence Sharing and Protection Act, Rogers (R-MI) Summary Would establish cyber threat intelligence sharing procedures between the intelligence community and certain private sector entities. STATUS Passed by the House (288-127) on 4/18/2013.

H.R. 624

H.R. 731

Protecting Americans Abroad Act, Radel (R-FL)

H.R. 735

Federal Protective Service Improvement and Accountability Act of 2013, Thompson (D-MS)

Summary STATUS Summary STATUS

Would allow the State Department to use best-value contracting in awarding local guard or protective service contracts in high-risk areas abroad under the diplomatic security program. Referred to Foreign Affairs Committee on 2/14/2013. Related bills: H.R. 2848, S.980.

Would create within DHS the “Federal Protective Service (FPS) contract oversight force” to monitor contractors providing security services through the FPS and ensure that such contractors meet training and certification requirements. Would require the DHS to establish a one-year pilot program to “research the advantages” of converting guard positions at high-risk federal facilities protected by the FPS from contractors to federal employees. Referred to Homeland Security and Transportation and Infrastructure Committees on 2/14/2013.

H.R. 882 Contracting and Tax Accountability Act of 2013, Chaffetz (R-UT)

Summary STATUS

Would propose for debarment any contractor with an unpaid, seriously delinquent tax debt. Would require prospective contractors to certify that the contractor has no unpaid, seriously delinquent tax debt. Passed by the House (407-0) on 4/15/2013.

Professional Services Council

Service Contractor / December 2013 / 31

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

H.R. 929

Summary STATUS

Major action taken since last issue

Bill became law since last issue

Patriot Corporations of America Act of 2013, Schakowsky (D-IL) Would give preference in bid proposals to any entity that is a patriot corporation as defined by the Internal Revenue Code. Would reduce tax rates for patriot corporations by 5 percent of the taxable income of the corporation. Referred to Ways and Means and Oversight and Government Reform Committees on 2/28/2013.

H.R. 1109

To amend title 10, United States Code, to require cost or price to the Federal Government be given at least equal importance as technical or other criteria in evaluating competitive proposals for defense contracts, Grayson (D-FL) Summary Would require that cost or price be given at least equal importance as technical or other criteria in evaluating competitive proposals for defense contracts. STATUS Referred to Armed Services Committee on 3/13/2013. Related bill: H.R. 1960.

H.R. 1163 Federal Information Security Amendments Act of 2013, Issa (R-CA)

Summary Seeks to enhance the governmentwide management, oversight, and coordination of information security risks, including contractor-related systems and information. STATUS Passed the House (416-0) on 4/16/2013. Federal Information Technology Acquisition Reform Act, Issa (R-CA) H.R. 1232 Seeks to reform federal government acquisition of information technology by providing additional Summary

authorities to agency CIOs, consolidating data centers, enhancing IT spending tracking and strategic sourcing, and creating assisted acquisition centers of excellence within the federal agencies. STATUS Reported by Oversight and Government Reform Committee on 3/20/2013. Related bill: H.R. 1960.

H.R. 1332 American Jobs Matter Act of 2013, Bustos (D-IL)

Summary STATUS

Would allow contracting officers to consider information regarding domestic employment before awarding a federal contract. Referred to Oversight and Government Reform and Armed Services Committees on 3/21/2013. Related bill: S. 1246.

H.R. 1622 Fairness and Transparency in Contracting Act of 2013, Johnson (D-GA)

Summary STATUS

H.R. 1688

Summary STATUS

Would exclude from the calculation of small business federal contracting participation any awards to a small business (or subsidiary thereof) that is publicly traded, or any business (or subsidiary thereof) with more than 50 percent non-U.S. citizen ownership. Referred to Small Business and Oversight and Government Reform Committees on 4/18/2013. Never Contract with the Enemy Act, Shea-Porter (D-NH) Would give a senior procurement executive, in coordination with a commander of a geographic combatant command, the authority to terminate for default or void a contract or restrict the future award to the contractor if its employees are identified as providing funds directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States. Referred to Oversight and Government Reform and Armed Services Committees on 4/23/2013. Related bills: H.R. 1960, S. 1197, S. 675.

Global Partnerships Act of 2013, Connolly (D-VA) H.R. 1793 Seeks to streamline and improve USAIDâ&#x20AC;&#x2122;s procurement process, to maximize transparency, Summary

STATUS

efficiency, simplicity and speed. It also expresses the Congressâ&#x20AC;&#x2122; preference for strong competition and a wide range of nonprofit and for-profit partners in development initiatives. Referred to Foreign Affairs, Oversight and Government Reform, Rules, and Ways and Means Committees on 4/26/2013.

32 / Service Contractor / December 2013

Professional Services Council

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

H.R. 1960

National Defense Authorization Act for Fiscal Year 2014, McKeon (R-CA) Summary Contains a number of provisions affecting the contracting community including provisions regarding total workforce management, small business contracting, procurement of information technology and other areas.

STATUS

Passed by the House (315-108) on 6/14/2013. Related bill: S. 1197.

H.R. 1999 SAVE Act, Murphy (D-FL)

Summary Would require OMB to issue government-wide savings goals for the strategic sourcing of goods and services by executive agencies and would require agency CIOs to report to OMB on agency efforts to identify and eliminate potentially duplicative information technology investment. STATUS Referred to Oversight and Government Reform, Appropriations, Agriculture, Energy and Commerce, and Ways and Means Committees on 5/15/2013.

H.R. 2008 Stop Taxing American Assistance to Afghanistan Act, Welch (D-VT)

Summary Would prohibit United States assistance for Afghanistan unless the two governments enter into a bilateral agreement that provides that work performed in Afghanistan by United States contractors is exempt from taxation by the government of Afghanistan.

STATUS

Referred to Foreign Affairs Committee on 5/15/2013.

H.R. 2055 Integrated Electronic Health Records (iEHR) for Military and Veterans Act, Roe (R-TN)

Summary Would establish a program to award a prize and contract for the development of a fully integrated electronic health records program for use by the DoD and the VA.

STATUS

Referred to Armed Services and Veterans Affairs Committees on 5/20/2013.

H.R. 2061 Digital Accountability and Transparency Act of 2013, Issa (R-CA)

Summary STATUS

Would require the director of OMB to establish highly detailed, government-wide financial data standards for federal funds. Would require a review of existing financial reporting requirements to consolidate and eliminate duplicative reporting. Would establish a pilot program authorized to collect detailed reports from federal fund recipients and to identify barriers and burdens related to data collection related to federal spending. Passed the House (388-1) on 11/18/2013.

H.R. 2098 Federal Prison Industries Competition in Contracting Act of 2013, Huizenga (R-MI)

Summary Would amend federal criminal code provisions relating to Federal Prison Industries (FPI) to establish government-wide procurement policies for purchases from FPI based upon competitive procedures.

STATUS

Referred to Judiciary Committee on 5/22/2013.

Military Construction and Veterans Affairs, and Related Agencies Appropriations Act, H.R. 2216 2014, Culberson (R-TX) Summary

STATUS

Would appropriate approximately $73.3 billion in discretionary spending for military construction and the Department of Veterans Affairs for fiscal year 2014. Includes contracting- related provisions from previous years, and a new section that would prevent contracts from being awarded to contractors who have been convicted within the last three years or are presently indicted for crimes such as fraud, theft, bribery, making false statements, and tax evasion. Passed by the House (421-4) on 6/4/2013.

Professional Services Council

Service Contractor / December 2013 / 33

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

H.R. 2217 Department of Homeland Security Appropriations Act, 2014, Carter (R-TX) Summary STATUS

Would appropriate approximately $38.9 billion in discretionary spending for the Department of Homeland Security for fiscal year 2014. Would prevent contracts from being awarded to contractors who have been convicted within the last three years or are presently indicted for crimes such as fraud, theft, bribery, making false statements, and tax evasion. Passed by the House (245-182) on 6/6/2013.

H.R. 2232 Make Every Small Business Count Act of 2013, Graves (R-MO)

Summary Would allow certain prime contractors to count toward their small business subcontracting plan goals any small business subcontracting that occurs beyond the first tier. STATUS Referred to Small Business Committee on 6/4/2013. Related bill: H.R. 1960.

H.R. 2358 Preference for Local Veteran Contractors Act, Cohen (D-TN)

Summary

Would give preference in bid proposals to contractors whose principle office or location is within a 60-mile radius of the facility of the Veterans Affairs Department covered by such contract. STATUS Referred to Veterans’ Affairs Committee on 6/13/2013.

H.R. 2397 Department of Defense Appropriations Act, 2014, Young (R-FL)

Summary STATUS

Would appropriate approximately $512.5 billion in “non-war” discretionary spending for the Department of Defense for fiscal year 2014. Includes contracting-related provisions from previous years, and a new section that would prevent contracts from being awarded to contractors who have been convicted within the last three years or are presently indicted for crimes such as fraud, theft, bribery, making false statements, and tax evasion. Passed by the House (315-109) on 7/24/2013.

H.R. 2411

To prohibit the federal government from contracting with an entity that has committed fraud or certain other crimes., Grayson (D-FL) Summary Would prevent contracts from being awarded to contractors who have been convicted within the last three years for crimes such as fraud, theft, bribery, making false statements, and tax evasion. STATUS Referred to Oversight and Government Reform Committee on 6/18/2013. Civilian Contractors Engaged in Intelligence Activities Reduction Act of 2013, Jackson Lee (D-TX) H.R. 2434 Would mandate a 25 percent reduction in the number of contractors with top secret security Summary

STATUS

clearances that are engaged in intelligence activities. Would direct the Director of National Intelligence to conduct a study to determine the extent to which contractors are used in the conduct of intelligence activities and the type of information that they can access. Referred to Intelligence Committee on 6/19/2013.

H.R. 2441 Small Business Fairness Act of 2013, Lummis (R-WY)

Summary STATUS

Contains a number of provisions affecting the contracting community including provisions regarding total workforce management, small business contracting, procurement of information technology and other areas. Referred to Small Business Committee on 6/19/2013. Related bill: S. 1190.

H.R. 2444 Commonsense Contractor Compensation Act of 2013, Tonko (D-NY)

Summary Would limit the cap on allowable contractor compensation to the salary of the vice president, $230,700. STATUS Referred to Oversight and Government and Armed Services Committees on 6/19/2013. Related bill: H.R. 1960, S. 1192, S. 1197. 34 / Service Contractor / December 2013

Professional Services Council

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

H.R. 2606 Stabilization and Reconstruction Integration Act of 2013, Stockman (R-TX)

Summary Would establish an Office for Contingency Operations to consolidate reponsibility for “overseas stability and reconstruction operations” currently divided among the Department of Defense, Department of State, and USAID. The director of the Office for Contingency Operations would report to the Secretary of State and the Secretary of Defense. STATUS Referred to Armed Services, Foreign Affairs, and Oversight and Government Reform Committees on 6/28/2013.

H.R. 2609

Energy and Water Development and Related Agencies Appropriations Act, 2014, Freylinghuysen (R-NJ) Summary Would appropriate $30.4 billion in discretionary funding for covered agencies for fiscal year 2014. Includes contracting-related provisions from previous years, and a new section that would prevent contracts from being awarded to contractors who have been convicted within the last three years or are presently indicted for crimes such as fraud, theft, bribery, making false statements, and tax evasion. STATUS Passed by the House (227-198) on 7/10/2013.

H.R. 2610

Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2014, Latham (R-IA) Summary Would appropriate $44.1 billion in discretionary funding for covered agencies for fiscal year 2014. Includes contracting-related provisions from previous years such as sections that would prohibit awarding a contract to a company that was convicted of a felony criminal violation or has any unpaid tax liabilities within the last two years. Exceptions may be made if the agency has considered suspension or debarment of the company and determined that further action is not necessary to protect the government’s interests. STATUS Reported by Appropriations Committee on 7/2/2013. National Aeronautics and Space Administration Authorization Act of 2013, Palazzo (R-MS) H.R. 2687 Would authorize $16.9 billion in discretionary spending for NASA for fiscal year 2014. Includes Summary

STATUS

contracting-related provisions from previous years, and a new section that would prevent contracts from being awarded to contractors who have been convicted within the last three years or are presently indicted for crimes such as fraud, theft, bribery, making false statements, and tax evasion. Reported by the Science, Space, and Technology Committee on 7/18/2013.

H.R. 2719 Transportation Security Acquisition Reform Act, Hudson (R-NC)

NEW

Summary STATUS

Would direct the administrator of the Transportation Security Administration to develop a strategic multiyear technology acquisition plan. Would require the agency to report on the plan’s implementation as well as TSA’s goals for small business contracting. Reported by Homeland Security Committee on 11/21/2013.

Summary STATUS

Would allow the Secretary of State to award local guard contracts on the basis of best value. Would reduce the bid price of proposals received from American citizens and joint ventures by 10 percent. Referred to Foreign Affairs and Oversight and Government Reform Committees on 7/18/2013. Related bill: H.R. 2848.

H.R. 2723 Embassy Security and Enhancement Act of 2013, Engel (D-NY)

H.R. 2751 Commonsense Construction Contracting Act of 2013, Hanna (R-NY)

Summary STATUS

Would prohibit the use of reverse auctions for contracts for design and construction services. Referred to Small Business Committee on 7/19/2013.

Professional Services Council

Service Contractor / December 2013 / 35

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

H.R. 2740 Stop Outsourcing and Create American Jobs Act of 2013, McNerney (D-CA)

Summary STATUS

Would give a preference in awarding a contract to any potential contractor that has not engaged in outsourcing (i.e. relying on an overseas workforce to perform contract functions) during the previous fiscal year. Referred to Ways and Means and Oversight and Government Reform Committees on 7/18/2013.

H.R. 2775 Continuing Appropriations Act for FY 2014, Black (R-TN)

NEW

Summary Provides funding amounts until January 15, 2014 for continuing operations, projects, and activities conducted in fiscal year 2013. STATUS Became Public Law 113-46 on 10/16/2013.

H.R. 2787 Commerce, Justice, Science, and Related Agencies Appropriations Act, 2014, Wolf (R-VA)

Summary STATUS

Would appropriate $47.4 billion in discretionary funding for covered agencies for fiscal year 2014. Includes contracting-related provisions from previous years such as sections that would prohibit awarding a contract to a company that was convicted of a felony criminal violation or has any unpaid tax liabilities within the last two years. Exceptions may be made if the agency has considered suspension or debarment of the company and determined that further action is not necessary to protect the government’s interests. Reported by Appropriations Committee on 7/23/2013.

Summary STATUS

Would allow the Department of State to use cost technical trade off source selection criteria for the selection of local guard services under the Diplomatic Security Program when such services are to be provided in an area that qualifies as a “high risk, high threat post”. Reported by Foreign Affairs Committee on 8/1/2013. Related bill: H.R. 2723, S. 980.

H.R. 2848 Department of State Operations and Embassy Security Authorization Act, FY 2014, Royce (R-CA)

H.R. 2855

Department of State, Foreign Operations, and Related Programs Appropriations Act, 2014, Granger (R-TX) Summary Would appropriate $34.1 billion in discretionary spending for the State Department, USAID, and other foreign operations for fiscal year 2014. Would require that U.S. assistance to foreign governments be reduced by an amount equaling 200 percent of the total taxes on U.S. assistance assessed by that foreign government in the previous fiscal year. STATUS Reported by Appropriations Committee on 7/30/2013.

H.R. 2860

OPM IG Act, Farentold (R-TX) NEW Summary Would allow the inspector general of OPM to use money from the revolving fund for audits, investigations and oversight of security clearance process. STATUS Reported by the Oversight and Government Reform Committee on 11/15/2013.

H.R. 2912 Afghanistan Suspension and Debarment Reform Act, Chaffetz (R-UT)

Summary STATUS

Would give the Special Inspector General for Afghanistan Reconstruction (SIGAR) suspension and debarment authority for foreign and Afghan contractors operating in Afghanistan when agencies fail to initiate a “timely” review of contractors identified by SIGAR. SIGAR would have the authority to make exceptions that permit a debarred or suspended contractor to be awarded new contracts in specific cases. Referred to Foreign Affairs and Oversight and Government Reform Committees on 8/1/2013.

36 / Service Contractor / Decemberr 2013

Professional Services Council

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

H.R. 3032 Executive Cyberspace Coordination Act of 2013, Langevin (D-RI)

Summary STATUS

NEW

Would establish a National Office for Cyberspace to coordinate cybersecurity efforts. Would prohibit agencies from entering into contracts involving information technology without including in the contract requirements to provide effect security for that information. Would require contractors and subcontractors that operate or use an information system or information infrastructure on behalf of an egency to conduct an annual audit to assess compliance with cybersecurity regulations. Referred to Homeland Security and Oversight and Government Affairs Committees on 8/2/2013.

H.R. 3098 Service Disabled Veteran Owned Small Business Relief Act, McNerney (D-CA)

NEW

H.R. 3107 Homeland Security Cybersecurity Boots-on-the-Ground Act, Clarke (D-NY)

NEW

H.R. 3184 Audit the Pentagon Act of 2013, Coffman (R-CO)

NEW

H.R. 3210 Pay Our Military Act, Coffman (R-CO)

NEW

Summary STATUS

Would grant service-disabled veteran-owned small businesses, whose service-disabled veterans owner pass away, a three year transition period during which the company could keep its SDVOSB status. Referred to Veterans’ Affairs Committee on 9/12/2013.

Would require DHS to develop comprehensive classifications for individuals performing cybersecurity-related activities within the department. Would require DHS to assess how many cybersecurity positions are filled by contractors and wether those individuals are receiving sufficient information security training on a regular basis. Reported by Homeland Security Committee on 10/29/2013.

Provides incentives or penalties for DoD to encourage audit readiness. Prohibits the procurement of any DoD ERP business system estimated to take longer than three years to fully deploy. Any ERP taking longer than three years to deploy would also be authorized to be terminated at no cost to the government. Referred to Armed Services Committee on 9/26/2013. Related bill: S.1510.

Would appropriate funds during fiscal year 2014 to provide pay and benefits to members of the Armed Forces and the civilian personnel and contractors who who support them if there is a lapse in appropriations. Became Public Law 113-39 on 9/20/2013.

H.R. 3341

NEW VALUE Act of 2013, Kingston (R-GA) Summary Would require agencies, before establishing a rule, to make clear the source of the problem that the rule is designed to address, to assess the rule’s costs and benefits, and to identify and assess potential alternatives to the rule. STATUS Referred to Judiciary Committee on 10/24/2013.

H.R. 3344

Fraudulent Overseas Recruitment and Trafficking Elimination (FORTE) Act of 2013, NEW Royce (R-CA) Summary Would require the State Department and USAID to attempt to ensure that foreign assistance programs do not contribute to human trafficking. Would require contractors to identify annually any foreign labor recruiters they used to the Department of Labor. Would require foreign labor recruiters to identify any subcontractors they use for foreign recruiting. Would create a “safe harbor” for employers who use properly registered foreign labor contractors and do not intentionally ignore known violations. STATUS Referred to Education and the Workforce, Foreign Affairs, and Judiciary Committees on 10/28/2013. Professional Services Council

Service Contractor / December 2013 / 37

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

H.R. 3345 SUSPEND Act, Issa (R-CA)

NEW

Summary STATUS

Would establish a Board of Suspension and Debarment within the GSA to act as a centralized body to manage all executive agency suspension and debarment activities. Provides waiver authority for agencies that meet strict metrics. Retains, and expands, the authorities of the Interagency Suspension and Debarment Committee. Requires public posting of suspension and debarment officials’ decisions not to take suspension or debarment action on cases referred to the suspension and debarment official. Ordered reported by Oversight and Government Reform Committee on 10/29/2013.

Summary STATUS

Would provide a preference to offerors for procurements over $25 million that employ veterans as at least 5 percent its workforce. Would also make a contractor’s repeated failure to comply with laws relating to employment and reemployment rights of members of the military as grounds for suspension or debarment. Referred to Veterans’ Affairs Committee on 1/22/2013.

S. 6 Putting Our Veterans Back to Work Act of 2013, Reid (D-NV)

S. 21

Cybersecurity and American Cyber Competitiveness Act of 2013, Rockefeller (D-WV)

Summary Encourages Congress to enact bipartisan cyber security legislation that would improve communication and collaboration between the government and the private sector.

STATUS

Referred to Homeland Security and Governmental Affairs Committee on 1/22/2013.

S. 169

Immigration Innovation Act of 2013 (I-Squared Act), Hatch (R-UT) Summary Would raise the annual H1-B visa cap and would uncap the advanced degree exemption for employees with an advanced degree from a U.S. college or university. STATUS Referred to Judiciary Committee on 1/29/2013.

S. 171

Military Pay Continuation Act of 2013, M. Udall (D-CO) Summary Would require DoD to continue to pay active members of the armed services, civilian DoD personnel and DoD contractor personnel who directly support the armed services during a government shutdown. STATUS Referred to Appropriations Committee on 1/29/2013. Assuring Contracting Equity, T. Udall (D-NM) Summary Would raise the government-wide small business contracting goal to 25 percent from 23 percent and would also increase the goals of certain small business subcategories to 10 percent. Would also limit to two the number of small business subcategories in which agencies could take credit for small business performance. STATUS Referred to Small Business and Entrepreneurship Committee on 1/31/2013.

S. 196

S. 675

Never Contract With the Enemy Act, Ayotte (R-NH)

Summary Would give a senior procurement executive, in coordination with a commander of a geographic combatant command, the authority to terminate for default or void a contract or restrict the future award to the contractor if its employees are identified as providing funds directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States. STATUS Referred to Homeland Security and Governmental Affairs Committee on 4/9/2013. Related bill: H.R. 1688.

38 / Service Contractor / December 2013

Professional Services Council

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

Chris Stevens, Sean Smith, Tyrone Woods, and Glen Doherty Embassy Security and S. 980 Personnel Protection Act of 2013, Menendez (D-NJ) Summary STATUS

Would allow the use of cost-technical tradeoff analysis as the basis for source selection criteria for local guard contacts under the Diplomatic Security Program and would provide a 10 percent price advantage for U.S. firmsâ&#x20AC;&#x2122; proposals for such work. Would also restrict the ability of interested parties to file a protest against a Department of State contract awarded under non-competitive procedures for an emergency security requirement. Reported by the Homeland Security and Governmental Affairs Committee on 11/6/2013. Related bill: H.R. 2061.

Summary STATUS

S. 994

Digital Accountability and Transparency Act of 2013, Warner (D-VA)

S. 1190

Small Business Fairness Act of 2013, Enzi (D-WY) Summary Would allow agencies to count toward their small business contracting goals any service-disabled veteran-owned, 8(a), women-owned, or HUBZone small businesses performing work through a teaming arrangement. STATUS Referred to Small Business Committee on 6/19/2013. Related bill: H.R. 2441.

S. 1192

Commonsense Contractor Compensation Act of 2013, Boxer (D-CA) Summary Would limit the cap on allowable contractor compensation to the salary of the vice president, $230,700. STATUS Referred to Homeland Security and Governmental Affairs Committee on 6/19/2013. Related bill: H.R. 1960, H.R. 2444, S. 1197. National Defense Authorization Act for Fiscal Year 2014, Levin (D-MI) Summary Contains a number of provisions affecting the contracting community including a provision that would limit the cap on allowable contractor compensation to $487,325. STATUS Reported by Armed Services Committee on 6/14/2013. Related bill: H.R. 1960.

S. 1197

S. 1246

American Jobs Matter Act of 2013, Murphy (D-CT)

Summary Would allow contracting officers to consider information regarding domestic employment before awarding a federal contract. STATUS Referred to Armed Services Committee on 6/27/2013. Related bill: H.R. 1332.

S. 1271

Foreign Aid Transparency and Accountability Act of 2013, Rubio (R-FL) Summary Would require the development of guidelines regarding the establishment of measurable goals, performance metrics, and monitoring and evaluation plans that can be applied with reasonable consistency to U.S. foreign assistance. STATUS Ordered reported by Foreign Relations Committee on 11/14/2013.

Professional Services Council

NEW

Service Contractor / December 2013 / 39

Bill Tracker: 113th Congress-First Session (2013) NEW

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

S. 1276

Security Clearance Oversight and Reform Enhancement (SCORE) Act, Tester (D-MT) Summary Would allow the inspector general of OPM to use money from the revolving fund for audits, investigations and oversight of security clearance process. STATUS Passed the Senate on 10/10/2013.

S. 1284

Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2014, Harkin (D-IA) Summary Would provide clarification regarding the treatment of HHS contracts for severable services. In addition to providing broad appropriations for the Departments of Labor and HHS, this bill specifically provides funding for DoL’s Wage and Hour Division and the Office of Federal Contract Compliance Programs. STATUS Reported by Appropriations Committee on 7/11/2013. Financial Services and General Government Appropriations Act, 2014, Udall (D-NM) Summary Would require civilian agencies to insource “closely associated with inherently governmental functions” to the maximum extent practicable. Would also reduce the allowable compensation cap for contractor employees to a level no greater than the president’s salary ($400,000). STATUS Reported by Appropriations Committee on 7/25/2013.

S. 1371

S. 1510

Audit the Pentagon Act of 2013, Coburn (R-OK) NEW Summary Provides incentives or penalties for DoD to encourage audit readiness. Prohibits the procurement of any DoD ERP business system estimated to take longer than three years to fully deploy. Any ERP taking longer than three years to deploy would also be authorized to be terminated at no cost to the government. STATUS Referred to Armed Services Committee on 9/17/2013. Related bill: H.R. 3184. Federal Data Center Consolidation Act of 2013, Bennet (D-CO) NEW Summary Would require covered federal agencies to conduct assessments of federal data centers, develop data center consolidation and optimization plans, and measure cost savings associated with data center optimization initiatives. STATUS Reported by the Homeland Security and Governmental Affairs Committee on 11/2/2013. Enhanced Security Clearance Act of 2013, Collins (R-ME) NEW Summary Would establish a “enhanced security clearance system” by directing modifications to the existing security clearance database and would require more frequent security clearance reviews using the “enhanced security clearance system.” STATUS Referred to Homeland Security and Governmental Affairs Committee on 10/30/2013.

S. 1611

S. 1618

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40 / Service Contractor / December 2013

Professional Services Council

Policy Spotlight

Revisiting Security Clearances

by Alan Chvotkin, PSC Executive Vice President & Counsel

Photo: vician/shutterstock.com

mployees’ security clearances remain essential qualifications under many professional services contracts because of the security requirements imposed by federal customers. Nearly a decade ago, the federal government’s processes for determining who was eligible for a security clearance and how individuals were vetted, adjudicated and monitored, was universally viewed as broken. The vetting process took too long and cost federal agencies and companies too much time and resources. Over that decade, PSC joined in a multi-association initiative to offer recommendations for streamlining that clearance process and expanding the use of technology in that review and the government has since adopted many of those recommendations. A streamlined application process, a requirement for more information to be provided and reviewed electronically, and other technological advances over the past several years have improved the system. The government also strengthened and revised its adjudication guidelines and centralized the clearance granting process. Yet the number of security clearance holders continued to grow. According the 2012 annual report of the Direction of National Intelligence (DNI), more than 4 million military and federal civilian employees and more than 1 million contractor employees held a clearance. It is against this backdrop that the actions of Private Manning, Edward Snowden and Aaron Alexis unfolded, drawing renewed attention to the security clearance process. All three had permission to access significant amounts of classified information. Both Manning and Snowden misused their authority, leaking treasure troves of classified documents. While Alexis did not misuse classified information, questions have been raised about why his alleged mental state and changed behaviors were not identified in his initial security clearance review or why information about his subsequent behavior did not surface to authorities after his clearance was granted. Congress is now deliberating legislation to address questions about the quality of information that might be available to the government during either an applicant’s initial background investigation or any subsequent periodic review; about the mechanisms for surfacing adverse information between an initial clearance being granted and a periodic reinvestigation being conducted; and about whether periodic reinvestigations should occur more frequently. The outcome of these deliberations

Professional Services Council

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will alter how government and contractor employees obtain clearances, how those employees are managed, and how those clearances are transferred when employees change jobs. Simultaneously, some in Congress and in federal agencies are considering whether additional personal information, particularly related to mental health or medical or psychological traits, should be disclosed and should serve as the basis for adverse government action. Others go further, seeking to add to the mix factors such as financial trouble, unpaid federal taxes, or disturbance arrests that don’t result in any prosecution or plea agreement. Such an expansion could result in individuals giving away privacy rights for the privilege of being granted access to national security information. PSC believes that an individual’s privacy rights do not have to be sacrificed for the privilege of obtaining or maintaining a security clearance and that other, less invasive steps, can provide the same assurances to the government. PSC has remained engaged on this issue since the Snowden incident first came to light. In addition, shortly after the Navy Yard tragedy, PSC wrote to key members of Congress, the Navy, the Secretary of Defense and the Director of the Office of Management and Budget to encourage a comprehensive and thorough review of all elements of the security clearance

Service Contractor / December 2013 / 41

and facilities access programs. As a key stakeholder in the clearance process, PSC offered our member companies’ expertise to help inform those reviews. We also convened a meeting of member-company security officers to obtain insight into the detailed workings of the security clearance process and gauge reaction to options that were being discussed. We then briefed House and Senate staff on the clearance process to highlight that both federal employees and contractors are subjected to the same investigative and adjudication mechanisms and to reiterate that decisions regarding what positions require clearances and who qualifies for a clearance are already “inherently governmental” decisions. We echoed those briefings in an extensive statement for the record to the Senate Homeland Security and Governmental Affairs Committee for their October 30 hearing, and provided it to numerous congressional and agency offices. We also conducted dozens of press interviews to be sure that industry’s views were heard.

The purpose of security clearances remains unchanged: certifying the suitability of an individual to have access to national security information when that person has a reason to have such access. But security clearances are also critical for government’s and industry’s ability to execute work that requires access to national security information. The vetting process must function well and be able to act in a timely manner. While steps can be taken to minimize the risk of errors, no review will be infallible. The questions being raised now involve the proper balancing of the role of contractor and government officials, the standards for reviewing and granting clearances, and the extent to which the government should have access to personal information to help inform those security clearance adjudication determinations. PSC will continue to ensure that our industry’s views are heard by policymakers at all levels of government on these important policy issues. 3

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Professional Services Council

Committee Corner:

Health and Human Services Task Force

by Roger Jordan, PSC Vice President of Government Relations

Photo: Tashatuvango/shutterstock.com

ealthcare fervor is nothing new in Washington, D.C., but most don’t need the insight of healthcare enthusiasts to recognize that the level of discontent regarding ongoing reforms reached new heights this fall in Congress. Without question, the Affordable Care Act is resulting in seismic shifts in health care policy and the healthcare market. So where can PSC’s members turn to hear from Department of Health and Human Services (HHS) officials about these big changes? The PSC’s Health and Human Services Task Force, a customer-facing task force established by PSC in 2010 in anticipation of the imminent debates that have occurred over the past three years and will likely continue for several more. The task force identifies pressing acquisition policy issues affecting member companies that provide professional and technical services to HHS and its components, while also providing member companies with opportunities to share best practices regarding HHS activities and discuss emerging HHS business issues with senior HHS and HHS-component officials. To date, the committee has addressed challenging issues facing companies that partner with HHS, such as conflicting guidance from HHS about severable vs. non-severable services and associated funding implications; and arbitrary limitations on contractor salaries adopted—and lowered—via congressional appropriations bills. The task force also served as a resource as PSC led opposition to the creation of a $1 billion sole source award by CMS to a Federally Funded Research and Development Company (FFRDC) to assist with the implementation of the Affordable Care Act. PSC argued, and continues to assert, that much of the work being assigned to the FFRDC is readily accessible in the private sector and, hence, should be subject to the benefits and savings that could be achieved through a competitive acquisition process. The task force is also communicating with HHS officials about the ongoing impacts of unclear funding levels as a result of sequestration and consecutive continuing resolutions to fund the federal government, and what we view as non-strategic insourcing actions being taken across the components.

Professional Services Council

Beyond the policy issues, the task force seeks to provide market insights for the members. Past speakers that help PSC members understand the strategic direction being taken within the massive department include Nancy Gunderson, the deputy assistant secretary for the Office of Grants, Acquisition Policy and Accountability; Dan Kane, director of the Office of Acquisition and Grants Management; and Angela Billups, associate deputy assistant secretary for Acquisition for the department. Other speakers have included representatives from the Administration for Children and Families and the Program Support Center, which serves as the department’s shared services organization. The HHS task force is planning an active year in 2014, and will be seeking to build upon its relationship with the Program Support Center as well as foster new relationships with other HHS components such as Substance Abuse and Mental Health Services Administration and the Centers for Disease Control and Prevention. Given the broad attention continuing to be heaped on healthcare issues and their expected long-term impact o the professional services market, the HHS Task Force provides significant value. For PSC member companies, the task force will continue to drive an agenda that makes its future meetings “must-attend” events. 3

Service Contractor / December 2013 / 43

MEMBER NEWS Awards and Honors: SPA President Honored for Decades of Contributions

Phillip E. Lantz, president and CEO of Systems Planning and Analysis, Inc. (SPA), was honored Oct. 24 for more than 50 years of personal contributions to the U.S. Navy submarine programs. The Naval Submarine League presented Lantz with the Distinguished Civilian Award at their annual symposium banquet. The award recognizes “the personal contributions of a government or industry individual whose contributions have been of extraordinary value to the success of the Navy submarine program.” Lantz has served the Submarine Force for more than 50 years, and supported 11 of the 13 Navy Strategic Systems Program Directors during that time. Early in his career, he served as a Navy Submarine Officer, and later led a conceptual design study for the Navy that resulted in the Trident Submarine and Weapon System programs. He also led the first SSBN Security Program at The Johns Hopkins University Applied Physics Laboratory, a program which continues today. In 1972, Lantz founded SPA, which grew under his leadership from a threeperson company to a $100M per year organization. Over the past four decades, he and SPA have led major technical support programs for the Navy and other national security programs throughout the Departments of Defense, Homeland Security and Energy. Lantz will step down as SPA president and CEO at the end of the year, but will remain as the chairman of SPA’s Board of Directors.

MAXIMUS’ John Boyer Receives Award from the RFK Center for Justice and Human Rights

MAXIMUS’ Dr. John Boyer will receive the Ripple of Hope Award from the Robert F. Kennedy Center for Justice and Human Rights on December 11 in New York City. The RFK Center for Justice and Human Rights was founded in 1968 to continue Robert Kennedy’s commitment to a more just and peaceful world. The Ripple of Hope Award recognizes international business and entertainment leaders who demonstrate an extraordinary commitment to social change. Boyer is passionate about providing disadvantaged populations with access to quality health care. As a member of the MAXIMUS executive team, he helped plant the seeds of the company’s health services operations, improving the lives of millions of Medicaid, Medicare and Children’s Health Insurance Program beneficiaries across the nation. Today, he continues to serve as the chairman of the MAXIMUS Foundation, a philanthropic platform for providing assistance to vulnerable populations in our local communities. During the past several years, Boyer has also worked with RFK Center to help Gulf Coast fishermen and the communities most affected by hurricanes and the Deepwater Horizon disaster. As a result, the RFK Center helped broker a deal with BP to provide medical care and services for those 44 / Service Contractor / December 2013

living in the affected areas with or no access to health care. In addition, he also serves on the Advisory Board for Health eVillages, a collaborative initiative between the RFK Center and Physicians Interactive. Past RFK honorees include President Bill Clinton, Archbishop Desmond Tutu, Bono, George Clooney and Vice President Al Gore. In addition to recognizing Boyer’s many accomplishments, Kennedy family members, celebrity guests and the Masters of Ceremonies Stephen Colbert and Sarah Silverman will also pay tribute to Swedish Nobel Peace Prize winner and inventor of microfinance Muhammad Yunus and Swedish philanthropist Niclas Kjellström-Matseke.

Bank of America Recognized for Exemplary National Guard and Reserve Support

Bank of America received a 2013 Secretary of Defense Employer Support Freedom Award, the highest recognition given to companies for support of their employees who serve in the National Guard and Reserve. Freedom Award winners are recognized for their implementation of formal policies and informal initiatives that go above and beyond in assisting and encouraging National Guard and Reserve service. In 2012, Bank of America established the Military Affairs Advisory Group, an internal team dedicated to coordinating programs across the company focused on supporting Guard and Reserve employees, and veterans. In addition, the company works with these employees through the Military Support & Assistance Group, a resource that creates opportunities for advancement and leadership development through networking, mentoring and information forums. Bank of America also supports the military through contributions to service-focused nonprofit organizations such as the George W. Bush Institute Military Service Initiative and Wounded Warrior Project (WWP), and by providing differentiated banking services for service members. In 2012, the company broadened its efforts by announcing a threeyear commitment to make up to 1,000 properties available to nonprofits and local government programs that provide homes for veterans and first responders. A national selection board of senior defense department officials, business leaders and prior awardees selected the 15 Freedom Award recipients from a pool of nearly 2,900 nominations submitted earlier this year by National Guard and Reserve service members.

TSI Ranks on the Inc. 5000 List for the 5th Consecutive Year

Inc. magazine ranked Transformation Systems number 4,620 on its seventh annual Inc. 500|5000, an exclusive ranking of the nation’s fastest-growing private companies. The list represents the most comprehensive look at an important segment of the economy—America’s private companies. This marks TSI’s fifth consecutive year on the list. Complete results of the Inc. 5000, including company profiles can be found at www.inc.com/inc5000. Professional Services Council

MEMBER NEWS Unanet Recognized in 2013 Loudoun County Chamber of Commerce Healthy Business Challenge

Unanet was presented with The Small Business Silver Award for the 2013 Healthy Business Challenge on August 15 at Bluemont Vineyard. The 2013 Healthy Business Challenge is a program of the Loudoun County Chamber of Commerce that encourages the development of wellness programs and policies regarding disease prevention, nutrition, fitness, company policies, and self-care and stress management. The award was accepted by Kristina Maddox, Unanet’s benefits and HR administrator.

Transitions News: Integrity Names Mark Kulungowski as New VP of Operations

Integrity Management Consulting, Inc. has named Mark Kulungowski as vice president of operations. Kulungowski has over 30 years of military and business experience, directing complex operations in diverse and challenging positions. He is a graduate of the United States Military Academy, West Point, the U.S. Army Command and General Staff College, as well as the Senior Service College with a Fellowship at JFK School of Government, Harvard University. He retired from the Army as a colonel where he served in multiple command and senior staff positions. Kulungowski most recently was executive vice president for an international management firm. Additionally, he’s had experience in business as a chief operating officer, corporate director of operations, manager, and as a consultant.

PwC US Announces Intent to Acquire HumanR, Inc.

On October 24, PwC US announced its intent to acquire substantially all the assets of HumanR, a Herndon, VAbased consulting firm specializing in organizational development consulting. HumanR will become a part of PwC’s Human Resource Services (HRS) practice, within its Saratoga™ workforce analytics team. According to a PwC statement, PwC’s focus on workforce analytics is aligned with HumanR’s mission to help organizations create a better, more trust-based and productive work environment for employees. Through the acquisition,

PwC will not only gain intellectual and analytical capabilities and technology platforms, it will also combine two of the leading names in workforce analytics and employee surveys, the statement said. Mary Saily, CEO of HumanR will join PwC as a leader in the PwC Saratoga practice. Burgess Levin, founder of HumanR, will serve as a senior executive consultant. The deal was expected to close in November.

Sabre Systems Welcomes New Employees

Sabre Systems announced the addition of Christopher Le, Bill Posnett and Stuart Taylor to the company. Le was named vice president of solutions and sales and is responsible for market strategy and new business development efforts in the federal, commercial and international market sectors. Le will develop and execute business strategy to grow sales across a broad portfolio of service solutions for the company. Posnett joins Sabre as a senior engineering scientist supporting NAVAIR customers in the area of systems engineering design and implementation. Taylor will serve as national security and intelligence advisor, and as a senior director he is responsible for market strategy and new business development across federal, state, local and international sectors for homeland security, counterterrorism and critical infrastructure protection.

Christopher Le

Bill Posnett

Stuart Taylor

Sabre Systems, Inc. Promotes Scharlotte Bagge

Sabre Systems, Inc. promoted Scharlotte Bagge to the position of director of Indiana operations for the company. Bagge replaces David Wright who is retiring after a successful five-year career with Sabre. Bagge began her career with Sabre in China Lake, Calif. before relocating to Bloomington, Ind. last year. She is credited with improving Sabre’s business operations and relationships with customers and teammates since transferring to Bloomington.

Have a story for Service Contractor’s Member News section? E-mail Bryan Bowman at bowman@pscouncil.org.

Professional Services Council

Service Contractor / December 2013 / 45

PSC: SCENE & HEARD

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PSC President and CEO Stan Soloway receives the GCN IT Industry Executive of the Year award from Anne Armstrong, chief content officer of 1105 Media. Photo courtesy of: 1105 Media, Inc.

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Rep. Gerry Connolly, D-Va., addresses the PSC Political Action Committee on Sept. 10. Members network during a PSC Dialogue Series event. Members of the PSC CIDC network before a meeting. PSC President and CEO Stan Soloway (second left) speaks at an Atlantic Council event on Oct. 18.

PSC President and CEO Stan Soloway presents the findings of the PSC Leadership Commission to the House Homeland Security Committee on Sept. 19. 46 / Service Contractor / December 2013

Ambassador Patrick Kennedy talks with PSC President and CEO Stan Soloway and PAE VP Tom Callahan before the Sept. 19 Dialogue Series event where Kennedy was the speaker.

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Rep. Jim Moran, D-Va., addresses members of PSC’s Political Action Committee on Sept. 20. PSC EVP Alan Chvotkin and Boscobel President and CEO Joyce Bosc at the Lohfeld Fiscal New Year’s Party on Oct. 12. Photo

courtesy of Boscobel.

PSC EVP Alan Chvotkin talks about the 2014 budget at the Tysons Regional Chamber of Commerce’s “Government Opportunities Outlook for 2014” event on Sept. 25. Photo courtesy of Tysons Regional Chamber of Commerce.

Professional Services Council

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Professional Services Council

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Professional Services Council

Service Contractor / December 2013 / 47

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