December 2014 / The Voice of the Government Services Industry
Think FASt:
Shaking Up the GSA Acquisition World 18
continuing resolutions and the new normal
32
ALso inside:
time to rethink task order protests?
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PSC Council Agendas
40
PSC’s Take on BBP 3.0
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The Voice of the Government Services Industry
PSC Staff Stan Z. Soloway President & CEO soloway@pscouncil.org Alan Chvotkin Executive Vice President & Counsel chvotkin@pscouncil.org Bryan Bowman Senior Manager, Marketing bowman@pscouncil.org Matt Busby Director, Membership busby@pscouncil.org Joe Carden Vice President, Marketing & Membership carden@pscouncil.org Elise Castelli Senior Manager, Media Relations & Publications castelli@pscouncil.org Charlene Dowdy Membership Associate dowdy@pscouncil.org Paul Foldi Vice President, International Development foldi@pscouncil.org Karen L. Holmes Office Manager/Receptionist holmes@pscouncil.org Ryan Jennings Executive Assistant jennings@pscouncil.org Roger Jordan Vice President, Government Relations jordan@pscouncil.org Jeremy Madson Senior Manager, Public Policy madson@pscouncil.org Melissa R. Phillips Vice President, Events & Operations phillips@pscouncil.org Robert Piening Vice President, Finance piening@pscouncil.org Jerome Punderson Senior Vice President, Defense & Intelligence punderson@pscouncil.org Ivory Smith Marketing Associate smith@pscouncil.org Jean Tarascio Senior Manager, Events tarascio@pscouncil.org Matthew Taylor Manager, Public Policy taylor@pscouncil.org Dave Wennergren Senior Vice President, Technology Policy wennergren@pscouncil.org Cover photo illustration: Studio25 For advertising or to submit articles or items for the Member News section, Professional Services Council contact: Bryan Bowman
The Future of Government Procurement:
A Case for Change
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18
Sounding board: Continuing AS GSA Reforms, Resolutions and what changes the new normal should they make?
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2014 annual conference
32
time to rethink task order protests
4 President’s Letter / 10 New Opportunities, Challenges from GSA’s Services Consolidation / 25 Bill Tracker / 36 Council Corner / 39 CIDC Annual Conference / 40 Policy Spotlight / 41 Member News / 42 PSC Scene & Heard Service Contractor / December 2014 / 3
PRESIDENT ’S LETTER
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trategic sourcing. Category management. Procurement “hallways.” Schedules consolidation. Prices paid portals.
Gridlock may stall much of Washington, but one place that’s not sitting still is the General Services Administration (GSA), which is pushing forward on a series of initiatives to fundamentally change the face of the agency. Given GSA’s central role in the federal marketplace, these changes could change the face of the government professional services and technology industry. Yet, there has been surprisingly little conversation about how GSA will implement these changes or what their impacts will be. Most importantly, there has been little conversation about how they relate to one another or about how each individual initiative is tied into a broader vision of tomorrow’s GSA and what that means for business models and strategies. Given that GSA is on an aggressive schedule to enact the changes, it’s time to substantially expand that dialogue. At PSC, we began that expansion at the Annual Conference and will further pursue it with our special GSA Industry Day in January, hosted by PSC’s Acquisition and Business Policy Council. As a result of that session, PSC will be working with GSA to address a plethora of consensus issues and questions posed by our members. This issue of Service Contractor reflects yet another effort to educate our community about the changes and drive our collective engagement in them. Our feature story is a detailed look at the changes from the man behind them, Tom Sharpe, commissioner of GSA’s Federal Acquisition Service. In addition, our Sounding Board centers on how some in industry view the expected changes and we are grateful to Tim Atkin (SRA), Barbara Kinosky (Centre Consulting) and Sean Mullen (HP) for taking the time to share with us their perspectives. By and large they are supportive of the changes envisioned. Still, many questions exist as to the pace and the “how,” moreso than the “what.” Finally, Miguel Garrido of Bloomberg Govern-
4 / Service Contractor / December 2014
ment offers his forecast for the new consolidated schedules: how and where can we expect them to be used. Beyond the significant changes underway at GSA, the broader marketplace continues to be roiled by the ongoing fiscal uncertainties, as does the government at large. So we asked John Kamensky of the IBM Center for the Business of Government to offer his thoughts on just how this uncertainty is plaguing agency planning and program execution. He brings to the topic decades of experience and his insights are both appreciated and very valuable. And still there is more change to discuss. In this issue’s Council Corner, Kathleen Flanagan (Abt Associates) and Neil Albert (MCR), the chairs of our Civilian Agencies and Defense and Intelligence Councils, respectively, share their aspirations and plans for these important components of PSC’s new operating model. Our own Alan Chvotkin discusses the latest iteration of DoD’s Better Buying Power 3.0, and Dorn “Bo” McGrath and Will Jack, of member firm Barnes and Thornburgh, takes a close look at limitations on task order protests at GAO and the Court of Federal Claims. Gridlock? Maybe in the highest corridors of power. But where the rubber meets the road, there is anything but. As we continue to seek to keep you informed of the trends and issues that really matter, we hope this edition of Service Contractor provides meaningful, actionable insights and information. Thanks, as always, for your support of PSC.
Stan Soloway President & CEO
Professional Services Council
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The Future of Govern
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his is an inflection point in federal procurement and an important time for the U.S. General Services Administration’s Federal Acquisition Service (FAS), the only civilian agency in the federal government whose mission is acquisition. Last spring, we embarked on a three-year vision to make FAS into the Government Acquisition Marketplace. The vision of the Government Acquisition Marketplace is to transform FAS into a transparent, solution-agnostic home for acquisition and subject matter expertise. We are aiming to provide agencies across government with the tools and knowledge they need to make the right buying decisions, reduce the proliferation of duplicative contract vehicles, and deliver the best value possible to our customers and the American people. Federal procurement is complicated and challenging. GSA wants to work with all of our stakeholders to make it easier. We are addressing the challenges of today’s acquisition landscape by organizing FAS around the concepts of category management and we are developing a Common Acquisition Platform (CAP) to support and deliver the expertise and transparency that acquisition professionals need. We are also focusing on improving our solutions and how we serve our partners through vehicles like One Acquisition Solution for Integrated Services (OASIS) and Multiple Award Schedules (MAS).
Making the case for a sea change…
The current government acquisition landscape is vast and it is fragmented—500 different departments and agencies make annual purchases exceeding $430 billion. Agencies are duplicating efforts, conducting thousands of fulland-open competitions, and establishing hundreds of redundant acquisition vehicles and programs. When it comes to acquisitions, the government is not acting as one. So, what can be done to make meaningful changes? In today’s marketplace, government buyers need access to federal-wide expertise and guidance to evaluate and select from the vast range
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of solutions available to them in support of their missions. Industry needs an easier, faster, and less-costly way to work with the government. Far too often, the acquisition professionals making purchases for federal agencies are doing so with very little insight into what their counterparts across the government are buying, let alone how much they’re paying for those products and services. At the same time, they know far too little about what industry can actually provide. Quite frankly, this is not smart, and we cannot afford to operate this way. As government buyers, we are essentially forcing our industry partners to spend time, money, and energy keeping up with limitless new solicitations, bid and proposal activities, managing existing task orders, responding to RFIs, navigating protests and so much more. We can all use our precious resources more wisely and stop needlessly wasting time and money.
Professional Services Council
nment Procurement: A Case for Change By Tom Sharpe, Jr. Commissioner, GSA Federal Acquisition Service The Fix: Category Management
When we talk about implementing government-wide “category management,” we’re talking about a fundamental change in how we think about and conduct acquisition. We believe that this sea change will provide a much better tomorrow for both industry and government. Through category management we can change federal procurement for the better by working together and acting as one. FAS is moving fast to implement this new approach internally and we are fostering a serious government-wide conversation about making major changes across the procurement landscape. Category management means taking a common-sense approach to managing how the government spends money, looking at the entire $430 billion we spend each year and strategically organizing it into product or service categories such as IT or professional services and then using data to buy smarter and to better meet the government’s needs. This is how Fortune 500 companies approach acquisition. Successful implementation in the private sector has lead to smarter, well-informed business decisions, better use of purchasing channels, shorter lead times and reduced costs. In practice, category management will also connect industry with government buyers in a true collaborative relationship, where industry informs and drives category strategies. Mature category management provides buyers, at both a granular and enterprise level, with intelligence, expertise, and deep-dive analysis to improve supply chain management, pricing variances, innovation, redundancies and unnecessary duplication of effort.
On the federal side, category management will deliver immense benefits to the more than 61,000 members of the acquisition workforce, working in 500 different departments and agencies across the government. By helping them act as one, we’ll be giving everyone buying on behalf of the government the collective insight and experience they would have access to if they were all sitting in the same office and sharing the same file room. A view of all the existing contract vehicles from across government, current market trends and expertise, transactional data, and good practices helps buyers navigate the cluttered landscape, shedding a bright light on what was previously happening in the dark. This will lead to improved requirements, stronger negotiations, less redundancy, and data-driven purchasing decisions. Category management is, without a doubt, good for government procurement. It is also going to drastically improve how government interacts with industry. Because we’ll be acting as one, we’ll eliminate much of the redundancy and duplication that currently clutters the market and drives up industry’s cost for doing business with the government. Category management will ensure that industry understands the government’s needs; and government buyers will understand what can and cannot be delivered by industry today, as well as the innovations coming down the pike to meet our future needs. Category managers will be appointed across government. These individuals will be specialists in their product or service category. They may come from GSA or they may not. The agency in which the category manager resides is irrelevant; it is their subject matter expertise that is the key driver. They will be highly visible and ingrained in their category’s industry community. They will be thought-leaders and bridge-builders; and regardless of where they come from, they will be charged with providing the interface between industry and government agencies. They will have the cross-cutting relationships and the necessary expertise continued on page 8
Professional Services Council
Service Contractor / December 2014 / 7
from page 7
to ensure that everyone is on the same page regarding what is needed and what is possible. Because FAS’s mission is acquisition, we know that contracting professionals need this category expertise and guidance to help them navigate the complexities of government requirements, a rapidly changing market, and the multiple contract vehicles available to them.
Digital Delivery of Category Management
GSA is working to develop the Common Acquisition Platform (CAP) to support and deliver the benefits of category management, meet the day-to-day needs of our acquisition workforce, and to help the government act as one. CAP is a program to re-engineer the acquisition experience in government. The first element of CAP that will be available to government buyers is the Acquisition Gateway, an online workspace where buyers can access what we are calling category hallways. We see these as maturing and evolving through community input into a sort of “TurboFARSM” that will provide the expert decision support, prescriptive analytics, and acquisition life cycle process management to help acquisition practitioners navigate the Federal Acquisition Regulation, just as TurboTax© has done for taxpayers working through complex tax regulations. TurboFARSM, in conjunction with government wide category managers, will support communities to share good practices, collaborate on governmentwide requirements, manage role-based contracting processes, and make pricing, terms and conditions at contract and transactional levels available to acquisition professionals. TurboFARSM is also designed to provide decision-making support and improve acquisition outcomes; drafting better requirements, speeding the acquisition process, reducing price variability, and making smarter purchases. At the end of September, GSA stood up the Acquisition Gateway and opened up three category “hallways” to the GSA acquisition workforce, which will soon be available to the entire acquisition workforce. The first three categories that we are
focusing on, which are endorsed by the Strategic Sourcing Leadership Council, are IT Hardware, IT Software, and Office Supplies/Administrative. We have taken all of GSA’s internal expertise, data, and contract vehicles in each of those categories and put it into the hallways. We asked the federal workforce to go in and kick the tires and provide us with feedback on how to make this tool work best for them, and we expect to create or work with existing category communities across the federal government to continuously improve the value and end user experience. We are taking GSA’s role in building the foundation and being the catalyst for this new future of government procurement very seriously. Our goal is to be a transparent, contract-agnostic home for acquisition and to mobilize subject matter expertise from every corner of the government. But we are still the only civilian agency that is focused on acquisition, and we should be able to provide our agency customers with excellent contract solutions that leverage the buying power of the government and our collective acquisition expertise. This new approach puts GSA in a position where we are engaging FAS contract vehicles in a head-to-head competition for business. We are hanging our contracts up in these hallways right next to our competitors, the government-wide contract vehicles from other agencies. We are not just saying, “look at your options”—we
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are calling out the benefits and drawbacks of all available solutions. This kind of competition is going to be fantastic for FAS and even better for federal customers. In procurement, we know that competition is necessary in order to get good results, and that’s also true among government-wide contract programs. FAS must use this opportunity to optimize our vehicles. We’ll need to improve and tweak them to meet market needs and, in some cases, it will make clear that we need to look at sunsetting a FAS contract. CAP and category management will tell FAS what is working, what is good for government, and what is not. From there we’ll know how to improve FAS’s offerings and we’ll have to decide when we need to step aside and let the market use what’s working—even if that means another agency’s contract vehicle is preferred over GSA’s.
Making better use of Professional Services
FAS is implementing category management of professional services in a number of ways. We’re working on a professional services hallway in CAP, spending more time engaging with industry, implementing enterprise level account management with our customers, examining our contracts and more. FAS will be able to deliver enhanced professional services offerings to our customer agencies and improve engagement with our industry stakeholders through a number of visible initiatives. Professional Services Hallway in CAP: The professional services category hallway will be a virtual environment where acquisition professionals can access information about their agency’s professional services spending, contracting policies for services, best in class contract vehicles, best practices, market research and pricing tools, as well as FAS’s professional service contracts. We plan to launch the professional services category hallway in 2015. The initial hallway release will include beta versions of sourcing tools such as a labor category description library, price analysis tool, decision support tool for FAS’s professional services contracts, and a statements of work library. Improved GSA Professional Services Contract Offerings: OASIS and OASIS Professional Services Council
Small Business transformed FAS’s professional services offerings by providing government with access to an easy to use contract that provides both complex commercial and non-commercial services. In awarding OASIS, FAS also drove significant innovations in how IDIQ contracts will be sourced in the future, and its sourcing methodology will become a staple in GSA’s future acquisition strategies. Consolidating Professional Services Multiple Award Schedules: Over the next several years, FAS will be working to improve its professional services schedule offerings. A first step in this work will be to consolidate eight professional services Schedules that host over 4,400 contracts. The scopes of these various schedules frequently overlap, which has caused confusion about which schedule is the best fit for a federal agency’s requirements and acquisition objectives. Consolidating the professional services schedules will give agencies and contractors access to compete
services solutions through one of two vehicles: OASIS or MAS. There will be increased program efficiency for industry due to managing fewer contracts and solicitations. This will also reduce all those industry administrative costs I mentioned earlier. Unpriced Schedules Pilot: Beyond OASIS and MAS consolidation, FAS will also be working on other improvements including an “unpriced” IT and professional services schedule pilot. Improved Industry Engagement: This past year FAS improved its engagement with industry. We now host quarterly industry association briefings, bi-annual industry days with our contractors, and heavily use Interact— GSA’s social media site—to vet and discuss program changes. In late 2014, we will formally appoint an industry liaison for the category, and expand our industry engagement to include focus groups with a mix of large and small businesses to address our contrac-
Growth. Strength. Stability.
tors’ concerns and gather rich feedback about our planned initiatives. Category Management and CAP will work together in the Government Acquisition Marketplace to move federal procurement to a streamlined, more transparent future that holds incredible promise to greatly improve how industry and government conduct business together. We can’t do this important work without a commitment from all of our stakeholders, industry partners and customer agencies. In order to deliver the brighter, more efficient, effective and lesscostly future for government procurement we need everyone’s help, ideas, feedback, knowledge and expertise. The time has come for meaningful changes to how we conduct the business of government and I hope the members of the Professional Services Council will join us in our efforts to build a better tomorrow than we have today, acting as one, and delivering a more efficient government for the American people. 3
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Service Contractor / December 2014 / 9
New Opportunities, Challenges from GSA’s Services Consolidation by Miguel Garrido, Bloomberg Government
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MAC Consolidation
he General Services Administration will overhaul its professional services schedules by consolidating several multibillion-dollar multiple-award contracts (MACs) into a single new mega-schedule starting in January 2015. Currently planned to be called the Professional Services Schedule (PSS), the new vehicle may generate more than $5 billion a year in sales and would become one of the largest MACs in the federal government. The initiative, led by GSA’s Federal Acquisition Service (FAS), is designed to streamline the acquisition process by curbing contract duplication and eliminating overlapping scopes. Although GSA has already started working with firms that hold multiple professional services contracts across more than one schedule, the new initiative has largely flown under the radar of the broader contracting community. As such, all services contractors should be aware of a few key dynamics before the transition takes place in order to position themselves to succeed on the new PSS.
GSA will consolidate eight schedules into the new PSS. These eight MACs, which are some of the largest in GSA’s multiple-award schedules (MAS) program, have collectively generated annual obligations exceeding $5 billion, although this amount has declined in recent years in step with overall federal contracting. The eight schedules include 874: Mission Oriented Business Integrated Services (MOBIS); 520: Financial and Business Solutions (FABS); 871: Professional and Engineering Services (PES); 874 V: LOGWORLD; 00CORP: The Consolidated Schedule; 899: Environmental Services; 541: Advertising & Integrated Marketing Solutions (AIMS); and 738 II: Language Services. Collectively, the eight vehicles accounted for 19 percent of the $27.5 billion spent through MACs in fiscal 2013 on knowledge-based services, the largest spending category in the federal government.
New GSA Services Schedule May Generate More Than $5B a Year Obligations in billions, by fiscal year 3 874: MOBIS
3 520: FABS
3 871: PES
3 874: LOGWORLD
3 Other four schedules
$9 $8 $7 $6 $5 $4 $3 $2 $1 $0
2010
2011
2012
2013
2014
Notes: MOBIS - Mission Oriented Business Integrated Services; FABS - Financial and Business Solutions; PES - Professional and Engineering Services; LOGWORLD - Logistics Worldwide. The other four schedules include 00CORP: The Consolidated Schedule; 899: Environmental Services; 541: Advertising & Integrated Marketing Solutions (AIMS); and 738 II: Language Services. Obligations for fiscal 2014 reflect a 90-day reporting lag for the Department of Defense. Source: Bloomberg Government proprietary federal procurement database
10 / Service Contractor / December 2014
Professional Services Council
GSA’s initiative is representative of a recent governmentwide effort to consolidate contracts in order to streamline the acquisition process by eliminating overlapping scopes and reducing redundant administrative costs. The challenge is significant: as Bloomberg Government has documented, MACs have proliferated in recent years, reaching about 2,100 in fiscal 2013 from about 1,400 in fiscal 2006. Within professional services, agencies used 724 MACs in fiscal 2013, up from 465 in fiscal 2006. According to GSA, more than 500 contractors hold more than one professional service schedule contract, which has led to large inefficiencies because these individual contracts have to be negotiated, managed, and audited independently. On the government side, contract duplication can impose substantial costs on agencies, since they often have to use multiple vehicles to acquire solutions that fall under various functional areas.
generate any sales in fiscal 2013, and 52 percent won less than $25,000, GSA’s threshold of minimum annual sales for maintaining a contract on a schedule. Over the past year, GSA has canceled the contracts of about 1,000 companies on its information technology Schedule 70 for failing to generate enough sales. Another challenge pertains to the impact of the new schedule on awards made to small businesses. GSA says that the migration to the new PSS will not negatively affect small firms. An open question, however, is how small businesses will be able to compete effectively on the same vehicle against large companies with the resources to offer a broader and more robust set of services and total solutions. To meet their small-business goals, agencies using the new PSS will probably have to rely more heavily on small-business setasides than before.
Opportunities and Challenges Ahead
If the transition goes smoothly, another key dynamic to watch will be the extent to which the new consolidated schedule will compete with two professional services megaMACs outside the MAS program: GSA’s own OASIS and the Army’s Responsive Strategic Sourcing for Services (RS3). Since the scopes of the three vehicles will overlap considerably, there will likely be uncertainty over the timing and management of large procurements in professional services. Unless agencies clearly indicate which vehicle they intend to use for their requirements—as the Air Force has done with OASIS—government and industry may not fully achieve the reduced administrative and bid-and-proposal costs that GSA’s professional services contract consolidation promises. Another dynamic to watch will be the degree to which cost-based contracting will drive business away from the PSS. Since it is highly unlikely that the new PSS will offer a cost-reimbursement option (which is currently not available on the MAS program), agencies and contractors seeking a cost-based capability will probably use OASIS, RS3, or the Navy’s SeaPort-Enhanced MAC for large and complex procurements. The professional services sector has undergone a dramatic transformation in the past few years. As services become more complex and technology more advanced, their delivery to customers has likewise changed in fundamental ways. Agencies are increasingly seeking total solutions, not just goods and services. They are also looking to derive greater value from procurements amid an environment of declining budgets. The PSS is being created to fulfill both of these objectives. To make it a successful initiative, however, government and industry will have to engage more closely in the coming months on the formation and implementation of the PSS. 3
GSA has set a fairly aggressive timeline for the migration of the eight existing MACs to the new PSS. According to the agency, any nonprofessional service special item numbers (SINs) in the eight schedules will be shifted to other GSA schedules by December 31, 2014. The migration to the PSS is scheduled to begin on January 1, 2015. By February 28, 2015, GSA will close the eight existing schedules and will begin accepting offers under the PSS on March 1, 2015. According to the agency, the transitions to the PSS will be “substantially complete” by November 1, 2015. GSA’s consolidation initiative will present contractors with an opportunity to offer new services and broaden their customer bases. In March 2015, the issuance of a mass modification to all existing contract holders means that companies will have the opportunity to add other services they provide. For companies that currently manage dozens or hundreds of separate contracts with similar scopes outside the schedules, the ability to provide a broad range of services on the same vehicle will likely incentivize them to consolidate their opportunity pipelines and seek more work on the PSS. As such, a critical market dynamic to watch will be the extent to which the new schedule generates additional business for GSA beyond the sum of its eight (former) parts, or if annual obligations will continue to decline, as has been the case with the overall schedules program. The transition to the new PSS also poses new challenges to services contractors. GSA may increase its scrutiny of companies that fail to generate enough sales on the new schedule. According to BGOV analysis, about 45 percent of companies on the eight schedules being merged did not
Professional Services Council
The PSS and the Future of Services MACs
Service Contractor / December 2014 / 11
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.
GSA Schedule Consolidation: An Opportunity for Change Between schedules consolidation, the new “hallways,” category management, strategic sourcing, and more, GSA is embarked on a series of initiatives that could fundamentally change the agency’s business model and structure. If you were advising GSA’s leadership, what are the most significant reforms or changes you would recommend they pursue?
I
Tim Atkin
Chief Administrative Officer, SRA
n fiscal year 2015, GSA will consolidate several GSA services schedules into a new “Professional Services Schedule” or PSS, a move that SRA believes will be valuable to federal contractors. GSA and PSS contractors will benefit from this consolidation as there will be fewer contracts to manage and fewer contracting officers to coordinate with. As a result, industry will be able to develop a stronger partnership with our customer. An example of where the impact will be seen is in Contractor Teaming Arrangements (CTAs). Today, when the government is faced with a complex, multidisciplinary statement of work, they often need to access multiple schedules to fulfill their needs. In this scenario, CTAs are generally required, adding complexity for GSA and the contractors. Through consolidation, this need is greatly reduced, simplifying the process and enabling both GSA and contractors to focus on meeting the critical mission needs of the government. continued on page 14
G
Barbara Kinosky Esq., President, Centre Consulting, Inc.
SA, if you are listening, I’ve been given this opportunity to offer you some unsolicited advice. I have a unique perspective on the GSA Multiple Award Schedules (MAS) program as both an attorney advising clients on MAS issues and as a business owner selling training and professional services in the federal space off a GSA schedule contract. This experience allows me to see both sides of the fence. While the fence is still standing, there is some water damage on a couple of fence posts and some repair work needs to be done. So let me make a few suggestions on building a fence that will keep federal buyers and contractors from fleeing to “greener” pastures. • It’s time to revise GSA’s Commercial Sales Practice (CSP-1) Form In its third annual audit memorandum regarding “Major Issues in Multiple Award Schedule Audits,” the GSA Office of Inspector General (OIG) surprised no one in announc-
A
Sean Mullen
Vice President Sales, HP Enterprise Services, U.S. Public Sector
cquisition reform is again a major topic of discussion across the federal government. There is consensus that reform is needed to enable government customers to acquire the new style of IT solutions, such as cloud and mobility and to significantly reduce costs and increase mission effectiveness. GSA will have a significant role to play in any implementation of reform and some of their initiatives are key to that outcome. We need to strengthen GSA’s leadership as a market shaping, central management agency across the federal government. GSA is making significant strides in enhancing its value to its customers through recent initiatives, such as Multiple Award Schedules consolidation. GSA occupies a valuable and unique position in the marketplace as a central management agency. By strengthening that position government-wide, GSA can better shape markets to benefit government even more effectively.
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Professional Services Council
Clock illustration: shutterstock.com/iQoncept
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Professional Services Council
Service Contractor / December 2014 / 13
Tim Atkin
continued from page 12
SRA has been a GSA partner since the services-focused GSA Multiple Award Schedules (MAS) were first put into place and we’ve seen the federal government market realize the true value that these contracts bring to meeting the mission needs of multiple agencies. We’ve also seen that, over time, government and industry have become increasingly adept at leveraging these contract vehicles. This next step in the MAS consolidation is a further opportunity to evolve the way we do business and help us all be more efficient and agile. A great example of this is Federal Acquisition Service Commissioner Thomas Sharpe’s Category Management initiative. This is an encouraging opportunity to bring better education, understanding, and best practices to ordering agencies across the federal government. This should help bring more clarity when matching scopes of work to specific schedules, enabling agencies to focus on solving their most important challenges. Taking this one step further, establishing interactive spaces within the so-called “hallways” for customers and contractors to collaborate in virtual market research would be welcome. GSA has seen success with
Barbara Kinosky
this type of industry interaction on the recent OASIS Interact site, and is also using it for the upcoming Alliant 2 procurement. Initiatives like these drive efficiency and help to ensure that taxpayer dollars are being used in the most efficient manner.
An Industry Perspective on GSA Professional Services Schedule Contracting Standardization of Labor Categories
From the inception of the MOBIS contracts nearly 20 years ago, GSA has applied a product acquisition model to professional services acquisition. MOBIS flourished and spawned several other professional services schedules that have been embraced by the federal market. The multiple layers of competition (at the schedule and task order levels) have driven competitive pricing, ensuring federal agencies get the best deals. We’ve seen a trend toward labor category standardization over the last five years. This is challenging in the professional services market, which is an amalgam of diverse functional capabilities. We should be careful and cautious about the possible “commod-
itization” of professional services. It is best to allow industry to deliver the best value to customers, as opposed to being evaluated based on standard labor categories and lowest price technically acceptable (LPTA) criteria. Schedule holders customize each proposal based on the customer’s specific requirements, bringing together a tailored mix of talent and technology to deliver winning solutions within limited budgets. Before mandating standardized labor categories on the GSA Schedules, we recommend consideration for the flexibility in labor category descriptions that contractors need to offer so that we can represent the unique capabilities of the workforce that is the differentiator in our ability to successfully execute on the opportunities we choose to pursue. Ordering agencies should have the flexibility to receive offers and make awards to schedule holders who best meet their agency specific requirements. Keep the flexibility with the contractors, the choice with the ordering agencies, and let the market drive the price. An acquisition system with speed, agility, transparency and competitiveness that provides the services that meet the customers’ mission needs is the desired outcome. 3
continued from page 12
ing that 84 percent of the pre-award audits conducted on schedule contracts in fiscal year 2012 found commercial sales practices (CSP) disclosures that were not current, accurate, or complete. The IG also found that if the CSPs had included accurate and complete information, the government could have potentially realized cost savings of up to $188.5 million. What my colleague Jennifer Aubel of Fed Nexus Law noted as being of particular interest is the fact that GSA is not doing anything to address the fact that the CSP is seemingly designed to encourage incomplete or improper disclosures. After all, it’s not
like the OIG does audits on random GSA Schedule contractors. They focus on high-volume contract holders in order to maximize the opportunity for recoveries. If these overachievers can’t fill out a CSP correctly, what chance do mere mortals have of making compliant disclosures? • Revisit how GSA is rolling out its plan to reduce prices In recent solicitation refreshes, GSA quietly added an interesting caveat to its pricing language. This new language states: “Fair and Reasonable Pricing: To determine fair and reasonable pric-
ing, the GSA Contracting Officer may consider many factors, including pricing on competitor contracts, historical pricing, and currently available pricing in other venues. Offers which provide Most Favored Customer pricing, but which are not highly competitive, will not be found fair and reasonable and will not be accepted.” GSA is now reserving the right to assess price reasonableness, not only in relation to a vendor’s own commercial sales practices, but also in relation to the prices currently offered by other vendors for the same or similar items. This new policy means that if a vendor’s continued next page
14 / Service Contractor / December 2014
Professional Services Council
most favored commercial customer pays a price of $50 for flying widgets, GSA could decline to approve that price based on finding that a competitor offers a similar product on its schedule for $35. This is a huge change in GSA’s pricing evaluation methodology and it is designed specifically to drive down vendor prices. One could also persuasively argue that GSA’s own regulations (the GSAR) do not authorize this form of price evaluations as it does not account for differing terms and conditions, regulatory requirements, or market conditions. • Abandon GSA’s Unrealistic Performance Metrics for its Workforce and Create Consistency across GSA Branches GSA transitioned to an electronic contracting environment, eOffer, several years ago, which provides GSA with the capability to capture a number of transactional performance metrics.
However, the most basic metric they are capturing is turnaround time—the number of days (or months) that it takes a contracting officer to process an award or a contract modification. Not surprisingly, someone decided that faster was better, so the deluge of rejections began as a way to “stop the clock” on contract actions. This trend has made it incredibly difficult for contractors to get new products and services added to their schedules or make pricing changes, which makes the modification process incredibly frustrating for everyone involved. So, GSA, quit evaluating GSA contracting professionals on how quickly they can complete an offer or a modification and create more meaningful metrics that incorporate customer satisfaction as a key factor. • Train the Contracting Professionals and Offer More Meaningful Training to Ordering Agencies
We have found inconsistent training at GSA on not only the basics of negotiating key issues, but also on more complex issues such as Service Contract Act and trade agreements compliance. Additionally, let’s give ordering agencies more tools on how to draft statements of work to reflect the growing federal preference for performance work statements. The FAQs are a great start, but we really need to offer more solutions for buyers. • Continue on the Consolidation Train Finally, a solid pat on the back to GSA for deciding to consolidate the professional services schedules. By having one professional services schedule, GSA and industry can achieve better contract usability through total solutions, reduced administrative costs and better management of more limited schedules. This will reduce contract administration time on both sides of that fence. 3
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Service Contractor / December 2014 / 15
Sean Mullen
The two specific areas recommended for priority attention are: 1) Create a more highly informed and loyal buying community 2) Maximize buying power and leverage for the federal government
Informed and loyal buyers GSA is ideally positioned to help over-burdened consumers identify and get what they need. With the advent of new technologies, such as cloud and mobile, there are many “nontraditional” sellers now in the game to add to the complexity. How can GSA better help organizations get what’s needed, when it’s needed, by whom it’s needed? By offering the structure to communicate across organizational boundaries, GSA can become the “goto” place for effective leading practices that reduce time and cost. Consider the establishment of communities across the government to accelerate learning, to roll-out new practices, to share experiences, and to vet requirements. GSA then becomes the hub of knowledgeable, networked buyers. In turn, GSA gains insights to create new, valued offerings that encourage customer loyalty and may even open new customer groups. The Integrated Award Environment (IAE) is a positive example of a GSA-sponsored community. Several agencies developed a shared portfolio of electronic systems used for awarding and administering federal contracts. Buyers see a more holistic
continued from page 12
cross-agency picture of each contractor through access to past performance, federal procurement data, and contractor information. Contractors now pay attention to the reputation that emerges from these consolidated sources and so engage with the community. This is a good example of informing buyers and encouraging them to return repeatedly to community resources and insights. What are some “big rock” problems that GSA could use its central management position to help resolve on behalf of a larger community? One might be leadership in securing the supply chain. This would be highly valued by all. It would be of particular value to defense, homeland security and intelligence agencies. Interestingly, these agencies are a notoriously small part of GSA’s customer base today. In bringing such leveraged capabilities to the table, GSA also expands its customer base. This also supports the benefits of the next recommendation.
Maximized buying power The more of the government’s demand GSA aggregates and represents, the greater its influence and leverage of the market. That influence can have great impact when focused on the following transformative areas. Incent innovation. The prospect of sufficiently large, aggregated demand can unlock small and large business investment in new approaches and technologies. Even direct changes in practice, such as evaluation criteria that address innovation, can have a powerful ripple effect. Facilitate sharing. From its central management seat, GSA is well positioned to offer a “platform” for the shared services or “as-a-service”
16 / Service Contractor / December 2014
capabilities. Much of the management infrastructure is already in place for acquisition and management of pooled resources, such as through franchise or working capital funds. Lead data-driven value. GSA is already using data to improve their offerings in some arenas, especially commodities. Encouraging negotiation and buying of commodities at the enterprise level can certainly have solid pay-back. The consolidation of the schedules can also heighten value and reduce cost for both government and industry. Consider consolidation of IDIQs, as well. The multi-million dollar cost to industry (and ultimately to government) to bid and administer a large number of often similar contracts is not the best use of anyone’s resources. Imagine the possibilities if GSA and its customer agencies united to capture timely, aggregated business intelligence to better understand demand and use of products and services across government. These insights could create more effective offerings from industry, better informed negotiations, and stronger business cases for both government and industry. Frankly, it is in the interest of both government and industry to have a strong central acquisition management agency. GSA can be that agency if it is able to re-invent itself in areas of greatest value to defense, homeland security and intelligence agencies and leverage a larger population of devoted buyers. It would also have the side benefit of saving industry valuable bid and proposal dollars not chasing duplicative IDIQ type vehicles and save government resources and program management costs by having true GWAC contracts leveraged by all. 3
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Continually unResolved:
d n a s n o i t u l o s e R g n i t Continuing e g d u B n i l a the New Norm
by John M. Kamensky
Senior Fellow, IBM Center for The Business of Government
18 / Service Contractor / December 2014
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T
hese days, not even exuberant optimists believe Congress will pass, and the president will sign, all 12 appropriation bills before the October 1 start of the fiscal year. Ever since the fiscal year was moved to October 1 from July 1 38 years ago to give decision makers more time to pass the budget, this statutory target has been met only four times. In some years, like 1996 and 2013, inaction led to agencies suspending operations. This year, Congress adopted a 10-week continuing resolution for all fiscal year 2014 appropriation bills, delaying final decisions until December 11. What do these kinds of delays mean for how agencies manage their money and operations? And what effect does it have on contractors? In a 2012 report for the IBM Center for The Business of Government, University of Maryland budget expert Philip Joyce examined the impact of late budgets on the efficiency and effectiveness of government operations. He also identified useful coping strategies and offered recommendations on how to soften the adverse effects of budget uncertainty. Just What Is a Continuing Resolution? The president sends his proposed budget for the coming fiscal year to Congress each February. The fiscal year starts about eight months later, on October 1. The Congress divides the budget proposal into 12 separate appropriation bills, so technically, there isn’t one budget, but rather 12 separate budgets that Congress must pass and the president must sign before October 1. If any one of these appropriations bills is not passed, then the agencies and programs covered by a particular bill is potentially subject to “shutdown” unless there is a continuing resolution to provide temporary funding. Sometimes Congress is close on an agreement, so a continuing resolution, or CR, may last only a few days until it passes a bill and the president signs it. Sometimes the CR is extended multiple times. And
Professional Services Council
sometimes there is a longer-term CR lasting several months, even the remainder of the fiscal year. A CR oftentimes just continues the funding levels and programs from the prior year, but there are instances where Congress includes special provisions. For example, the fiscal year 2015 CR that expired December 11 stipulated
“The rate for operations . . . is hereby reduced by 0.0554 percent.” CRs also typically limit new spending. For example, the current CR says: “Except as otherwise provided . . . no appropriation. . . . shall be used to initiate or resume any project or activity for which appropriations, funds, or other authority were not available during fiscal year 2014. . . . .This joint resolution shall be implemented so that only the most limited funding action of that permitted in the joint resolution shall be taken in order to provide for continuation of projects and activities.” As a result, absent a full appropriation, agencies are constrained in how they can move forward on signing contracts. Even long-planned government projects are placed on hold, unless the CR grants an exception. For example, the current CR grants the Department of Commerce an exception to maintain
the launch schedule for the joint polar satellite system. How Do Federal Agencies Cope with CRs? CRs have negative impacts because of the uncertainty they pose for agency operations. Because agency managers cannot plan for spending beyond the timeframe of a CR, they have developed ways to cope with the uncertainty and delay. James Windel, an analyst with the Department of Energy, wrote in a September edition of Federal Times: “There is now a CR planning cycle in the executive branch beginning in the summer. The executive branch starts by assessing the impact of a CR on programs. Scenarios are built for CRs of varying durations—e.g. 90-day or 115days. The goal is to identify programs and dates when a CR causes severe problems.” The coping mechanisms will differ, depending on whether the CRs are short-term and multiple, or if they are longer-term covering several months. Several agency coping strategies include: Hiring freezes, to control personnel costs. As positions become vacant, agencies leave jobs unfilled. Furloughs, especially in cases where agencies fear a shutdown. This creates staff turmoil even if a furlough does not occur since notices have to be sent out in advance. Personnel shifts are stopped, even if an agency is shifting its mission priorities to another area. For example, the Bureau of Prisons could not maintain or improve the ratio of correction officers to inmates as the inmate population increased. Training and travel delays, which oftentimes cannot be made up at a later date. Delays in operations such as Veterans Health Administration hospitals delaying regular maintenance and the Bureau of Prisons not bringing additional prison capacity on-line because of the inability to hire staff. continued on page 20
Service Contractor / December 2014 / 19
from page 19
Shorter contract competitions because agencies have limited time left in a fiscal year. This means they are not able to fully compete and award contracts and this results in less competition and a rush to obligate funds before they lapse at the end of the shortened fiscal year. Use shorter-term contracts and grants so the duration of the contract or grant does not exceed the duration of a CR. This increases contract transaction costs and more frequent transactions can lead to errors in the contracting process since procurement and grants personnel are stretched to meet a higher workload. Forgo maintenance in order to conserve funding for other costs that are harder to defer, such as payroll or utilities. However, forgoing maintenance oftentimes leads to higher future costs because of deterioration of ships, roads, or buildings needing maintenance. Targeted reductions of programs or activities that are planned but have not
yet begun. This is increasingly being used instead of the more typical acrossthe-board reductions of all programs. Delayed implementation is another way to save money in the short term, but this can have an ef-
fect on operations. For example a new air traffic control tower was built in State College, Pa. but sat empty through the spring of 2011 because FAA could not hire an air traffic controller to staff it.
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Delayed payments can occur, as well. For example, if a CR runs beyond the beginning of a calendar year, the regularly scheduled pay increase for federal employees would be deferred, at least for the duration of the CR. What Are Some of the Adverse Effects of CRs? While none of the various coping mechanisms noted above are optimal ways of running an agency, the use of CRs creates other adverse effects for agencies, such as: time wasted preparing alternative scenarios for CRs, time wasted revising budget execution plans, and increased procurement workloads. Joyce says that there are similarly adverse effects on the contracting community. For example, some firms may forego doing business with the federal government because of the uncertainty, and as a result there is less competition for federal projects and costs are potentially higher as a result.
Interestingly, Joyce says that CRs have become more problematic in recent years. He says that in the past, the uncertainty created by CRs was over timing—when the money would be available. Now, he says, a parallel uncertainty is the level of funding—how much money would ultimately be available. For example, Deputy Defense Secretary Robert Work told Federal News Radio in October that cuts and shifts in funding priorities are needed to support readiness and modernization. However, Congress disagrees with about $70 billion in proposals the department has made, such as the elimination of the A-10 aircraft or several Navy cruisers. Work says the department is operating under the assumption that it will still be running under a continuing resolution well into 2015, probably after the fiscal year 2016 budget proposal is supposed to be submitted in February. The combination of these twin uncertainties makes it even harder for
agencies and the contracting community to manage. While there is no easy solution, Joyce offers some advice to agencies to better manage in an environment of budgetary uncertainty, such as agencies hiring earlier in the year, and delaying renewals of non-recurring contracts and competitive grant awards to the second half of the year. His key advice, though, is “The Congress should prohibit itself from using continuing resolutions!” John M. Kamensky is a senior fellow with the IBM Center for The Business of Government. He formerly served at the National Partnership for Reinventing Government, the Office of Management and Budget, and the Government Accountability Office. The report referenced by Phil Joyce, The Costs of Budget Uncertainty: Analyzing the Impact of Late Appropriations, is available free at: www.businessofgovernment.org.
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Service Contractor / Decemberr 21 12/4/14 2014 10:46 /AM
The 2014 PSC Annual
PSC Chair Ellen Glover of ICF International opens the 2014 PSC Annual Conference at the Greenbrier on October 6.
A panel of millennials offer care and feeding advice for the 21st century workforce. Pictured, from left, Helios HR’s Kathy Albarado, Ad Hoc LLC’s Greg Gershman, Abt SRBI’s Dr. Courtney Kennedy, and GovLoop’s Steve Ressler.
Former Deputy Treasury Secretary Neal Wolin was the luncheon keynote speaker at the 2014 PSC Annual Conference.
Market Connections CEO Lisa Dezzutti presented the findings of the joint PSC/Market Connections survey on the convergence trend, at the 2014 PSC Annual Conference.
Deputy Defense Secretary Robert Work offered PSC his views on the budget crisis, what it means for the Defense Department, industry, and maintaining U.S. military and technological superiority, during his opening keynote address at the 2014 PSC Annual Conference.
22 / Service Contractor / December 2014
PSC’s Stan Soloway describes the political and market landscape to set the stage for the 2014 PSC Annual Conference.
Professional Services Council
Conference
October 5-7, The Greenbriar
Four analysts offered their diagnosis of the technology and professional services market at the 2104 Annual Conference. Pictured, from left, Wayne Wilkinson of Whitney, Bradley and Brown (moderator), William Loomis of Stifel, Kevin Plexico of Deltek, and Edward Caso of Wells Fargo Bank. Not pictured: Trae Stephens of Founders Fund, who participated via video teleconferencing.
Top government acquisition leaders offered their views on the future of government acquisition at the PSC conference. Pictured, from left, OFPP Administrator Anne Rung, FAS Commissioner Tom Sharpe, and Deputy Assistant Air Force Secretary for Contracting Brig. Gen. Casey Blake. Not pictured: ASI’s Kymm McCabe, who served as panel moderator.
Annual Conference Committee Chair Kevin Beverly of Social & Scientific Systems kicked off day two of the 2014 PSC Annual Conference.
GOP political strategist Glen Bolger of Public Opinion Strategies handicapped the 2014 midterm elections at the 2014 PSC Annual Conference. His closing keynote predictions were correct.
Legal experts offered their takes on the slew of contractor-specific labor executive orders during the 2014 PSC Annual Conference. Pictured, from left, Paul Leslie of Dovel Technologies (moderator), Robert O’Hara of United Technologies Corporation, Anne Rohall of Tech Systems, and Rick Fields of Deloitte Services.
Professional Services Council
Service Contractor / December 2014 / 23
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Professional Services Council
The Voice of the Government Services Industry 24 / Service Contractor / December 2014
Professional Services Council
Bill Tracker: 113th Congress-Second Session (2014) NEW
Newly introduced since last issue
Major action taken since last issue
Bill became law since last issue
Continuing Appropriations Resolution, 2015, Rogers (R-KY) Summary Provides continuing fiscal year 2015 appropriations to federal agencies until December 11, 2014. STATUS Became Public Law 113-164 on 9/19/2014.
H.R. 124 H.R. 624
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. 731
Summary STATUS
Protecting Americans Abroad Act, Radel (R-FL) 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. 2723, H.R. 2848, S.1386.
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. Related bill: S. 2247.
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
STATUS
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. Passed the House on 2/25/2014. Reported by Senate Homeland Security and Governmental Affairs Committee on 9/18/2014. Related bills: S. 1843, S. 1611, H.R. 4435.
Global Partnerships Act of 2013, Connolly (D-VA) H.R. 1793 Seeks to streamline and improve USAID’s procurement process, to maximize transparency, Summary
STATUS
efficiency, simplicity and speed. It also expresses the Congress’ 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.
H.R. 2008 Stop Taxing American Assistance to Afghanistan Act, Welch (D-VT)
Summary Would prohibit U.S. assistance for Afghanistan unless the two governments enter into a bilateral agreement that provides that work performed in Afghanistan by U. S. contractors is exempt from taxation by the government of Afghanistan.
STATUS
Referred to Foreign Affairs Committee on 5/15/2013.
Professional Services Council
Service Contractor / December 2014 / 25
Bill Tracker: 113th Congress-Second Session (2014) NEW
Newly introduced since last issue
Major action taken since last issue
Bill became law since last issue
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. 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 Reform and Armed Services Committees on 6/19/2013. Related bills: S. 1192, S. 2286.
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. 2638 Foreign Aid Transparency and Accountability Act of 2013, Poe (R-TX)
Summary STATUS
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. Referred to Foreign Affairs Committee on 7/10/2013. Related bill: S. 1271.
H.R. 2719 Transportation Security Acquisition Reform Act, Hudson (R-NC)
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. Passed by the House (416-0) on 12/3/2013. Related bill: S. 1893.
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 bills: H.R. 731, H.R. 2848, S. 1386.
H.R. 2723 Embassy Security and Enhancement Act of 2013, Engel (D-NY)
H.R. 2848
Department of State Operations and Embassy Security Authorization Act, FY 2014, Royce (R-CA) Summary 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”. STATUS Passed by the House (284-37) on 9/29/2013. Related bills: H.R. 731, H.R. 2723, S. 1386.
26 / Service Contractor / December 2014
Professional Services Council
Bill Tracker: 113th Congress-Second Session (2014) NEW
Newly introduced since last issue
Major action taken since last issue
Bill became law since last issue
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.
Summary STATUS
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 effective security for that information. Would require contractors and subcontractors that operate or use an information system or information infrastructure on behalf of an agency 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. 3032 Executive Cyberspace Coordination Act of 2013, Langevin (D-RI)
H.R. 3345 SUSPEND Act, Issa (R-CA)
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. Reported by Oversight and Government Reform Committee on 10/29/2013.
H.R. 3696
National Cybersecurity and Critical Infrastructure Protection Act of 2013, McCaul (R-TX) Summary Would provide liability coverage for providers of approved cybersecurity technologies that defend against cyber incidents. Would require DHS to assess the effectiveness of its existing authorities for acquiring cybersecurity technologies to ensure that such processes and authorities are capable of meeting the department’s cybersecurity missions. Would establish formal and meaningful information sharing procedures between DHS and private sector entities. STATUS Passed the House (voice vote) on 7/29/2014. Security Clearance Reform Act of 2014, Lynch (D-MA) H.R. 4022 Would require that the president submit to Congress a plan to reform the security clearance Summary
process based on a shift to continuous evaluation and monitoring of local government records, commercially available information such as credit history and foreign travel, and social media, among other information. Would require that certain federal funds be withheld from local governments that do not comply with requests for records by federal agencies or contractors performing background investigations on their behalf. Would require that only federal employees perform agency final quality reviews of background investigations, background investigation interviews with the individual seeking a clearance, and background investigations for clearances at the top secret level or higher. Would prohibit the award for investigative support services to a company that also holds a contract to perform background investigation fieldwork services, and vice versa. STATUS Referred to Oversight and Government Reform and Judiciary Committees on 2/10/2014. Greater Opportunities for Small Business Act of 2014, Graves (R-MO) Summary Would increase the government-wide small business prime contracting goal to 25 percent and would increase the subcontracting goals to 40 percent. STATUS Reported by the Small Business Committee on 4/9/2014. Related bills: H.R. 4435, S. 196.
H.R. 4093
Professional Services Council
Service Contractor / December 2014 / 27
Bill Tracker: 113th Congress-Second Session (2014) NEW
Newly introduced since last issue
Major action taken since last issue
Bill became law since last issue
DHS Acquisition Accountability and Efficiency Act, Duncan (R-SC) H.R. 4228 Would enhance a number of acquisition management and policy changes implemented by DHS’ Summary
Management Directorate over the past several years, including the codification of the existing Program Accountability and Risk Management (PARM) Office. Would also require DHS to develop a multiyear acquisition strategy and would require DHS to appropriately report and take corrective actions for any programs that experience significant cost overruns or schedule delays. STATUS Passed the House (voice vote) on 6/9/2014. NASA Authorization Act of 2014, Palazzo (R-MS) H.R. 4412 Would authorize NASA programs and activities, and STEM education funding. Includes provisions Summary
STATUS
that would require the NASA FAR supplement to address contractor responsibilities regarding detection and avoidance of counterfeit electronic parts. Would also restrict contract awards to entities that have unpaid tax liabilities or criminal convictions. Passed the House (401-2) on 6/9/2014. Related bill: S. 1317.
National Defense Authorization Act for Fiscal Year 2015, McKeon (R-CA) H.R. 4435 Would authorize appropriations for military activities of the Department of Defense for Fiscal Summary
Year 2015. Includes several acquisition-related provisions including an extension of existing caps on services contracting, increases to small business prime and subcontracting goals, and cost comparison requirements between military, contractor, and DoD civilians. Also includes provisions addressing unauthorized Afghan taxes and federal IT acquisition reform. STATUS Passed the House as amended (325-98) on 5/22/2014. Related bills: H.R. 1232, H.R. 4093, S. 196, S. 2410. Department of Defense Appropriations Act for FY 2015, Frelinghuysen (R-NJ) H.R. 4870 The House-passed version would increase fiscal year 2015 funding for O&M and RDT&E and Summary
STATUS
decreases funding for military personnel and procurement. Includes policy provisions that would 1) act as an automatic debarment of contractors that have FLSA violations with a finding or acknowledgement of fault within the past 5 years 2) 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, or have delinquent tax debts. Passed by the House (340-73) on 6/20/2014. Reported, as amended, by the Senate Appropriations Committee on 7/17/2014.
Global Development Lab Act of 2014, Castro (D-TX) H.R. 4905 Would codify within USAID the administration’s recently launched program to leverage research Summary
universities and institutions to engage in the more rapid creation and scalability of foreign aid innovations. STATUS Referred to Science, Space and Technology Committee on 6/19/2014. Related bill: S. 2502.
Stop Corporate Inversion Act of 2014, Levin (D-MI) H.R. 4697 Would amend the definition of “inverted domestic corporation” retroactively to May 8, 2014. Summary
STATUS
Referred to the House Ways and Means Committee on 5/20/2014. Related bill: S.2360.
Civilian Extaterritorial Jurisdiction Act of 2014, Price (D-NC) H.R. 5096 Seeks to clarify the jurisdiction of the U.S. Justice Department over contractors and contractor Summary
employees that commit certain crimes overseas. STATUS Referred to Judiciary Committee on 7/14/2014. Related bill: S. 2598.
28 / Service Contractor / December 2014
Professional Services Council
Bill Tracker: 113th Congress-Second Session (2014) NEW
Newly introduced since last issue
Major action taken since last issue
Bill became law since last issue
Unified Savings and Accountability Act, Coffman (R-CO) H.R. 5196 Would require OFPP to issue guidance to reinvigorate the role of agency competition advocates Summary
STATUS
and would require OMB to develop governmentwide savings goals related to the use of strategic sourcing. Would also require agency CIOs to report on efforts to identify and eliminate duplicative IT investments. Referred to multiple congressional committees on 7/24/2014.
Reforming Federal Procurement of Information Technology Act, Eshoo (D-CA) H.R. 5255 Would raise to $500,000 the simplified acquisition threshold for IT services to be procured from Summary
STATUS
small businesses and would make permanent the Commercial Item Test Program. Would also codify the Presidential Innovation Fellows Program, the Digital Government Office, and would establish a Digital Service Pilot Program to support high-priority federal IT projects. Would also require a review of IT Schedule 70 and reports on the effectiveness of GSA’s 18F program. Referred to House Oversight and Government Reform Committee on 7/30/2014.
No Federal Contracts for Corporate Deserters Act of 2014, DeLauro (D-CT) H.R. 5278 Would prohibit, government-wide, the awarding of contracts and certain subcontracts to entities
NEW
Summary
or any of their subsidiaries that are considered to be inverted domestic corporations. STATUS Referred to the Oversight and Government Reform and Armed Services Committees on 7/30/2014. Related bill: S. 2704.
S. 196
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. Related bills: H.R. 4093, H.R. 4435.
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 bills: H.R. 2444, S. 2286. 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 Reported by Foreign Relations Committee on 12/20/2013. Related bill: H.R. 2638. NASA Authorization Act of 2013, Nelson (D-FL) Summary Would authorize NASA programs and activities, and STEM education funding. STATUS Reported by Commerce, Science, and Transportation Committee on 7/30/2013. Related bill: H.R. 4412.
S. 1271
S. 1317
S. 1386
Chris Stevens, Sean Smith, Tyrone Woods, and Glen Doherty Embassy Security, Threat Mitigation, and Personnel Protection Act of 2013, Menendez (D-NJ) Summary Would allow the use of cost-technical tradeoff analysis as the basis for source selection criteria for local guard contracts under the Diplomatic Security Program and would provide a 10 percent price advantage for U.S. firms’ 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. STATUS Reported by Foreign Relations Committee on 12/9/2013. Related bills: H.R. 731, H.R. 2723, H.R. 2848. Professional Services Council
Service Contractor / December 2014/ 29
Bill Tracker: 113th Congress-Second Session (2014) NEW
Newly introduced since last issue
Major action taken since last issue
Bill became law since last issue
Federal Data Center Consolidation Act of 2013, Bennet (D-CO) 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 Passed the Senate by Unanimous Consent on 9/18/2014.
S. 1611
S. 1618
Enhanced Security Clearance Act of 2013, Collins (R-ME) Summary Would establish an 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 Approved by the Homeland Security and Governmental Affairs Committee on 7/30/2014.
S. 1744
Security Clearance Accountability, Reform, and Enhancement Act, Tester (D-MT) Summary Would terminate or debar, respectively, any individual OPM employ directly or through a contract if found to be intentionally involved in misconduct affecting the integrity of a background investigation. Would automatically place on administrative leave or suspend, respectively, any individual employed directly by or through a contract of OPM during an investigation to determine whether that person was intentionally involved in misconduct. The bill would also require that contracts for background investigative services include a provision requiring the company to report any misconduct affecting the integrity of an investigation within 90 days of the discovery of the misconduct. Would mandate that the president review and update agency guidance regarding what positions require clearances every five years. STATUS Approved by the Homeland Security and Governmental Affairs Committee on 5/21/2014. Federal Information Technology Savings, Accountability, and Transparency Act of 2013, Udall (D-NM) Summary Would mandate that all federal agencies, with the exception of DoD, have only one Chief Information Officer, who would have authority over budget planning processes related to IT, programs including significant IT components, commercial items, and commercially available off-the-shelf items. Would grant each agency CIO hiring authority over personnel responsible for IT within the agency. Would designate the CIO Council as the lead interagency forum for the development and improvement of cross-agency IT-related policy and processes. STATUS Referred to Homeland Security and Governmental Affairs Committee on 12/17/2013. Related bill: H.R. 1232. Transportation Security Acquisition Reform Act, Ayotte (R-NH) Summary Would require that the administrator of TSA develop a multiyear technology investment plan that, among other things, identifies (1) opportunities for public-private partnerships; (2) TSA’s acquisition workforce needs as required for the implementation of the multiyear plan; and (3) initiatives to streamline and clarify TSA’s acquisition process for businesses of all sizes. Would encourage the authors of the plan to include feedback from the private sector. Would require the administrator of the TSA to submit to Congress a justification of any potential technology acquisition valued over $30 million. STATUS Approved by the Commerce, Science, and Transportation Committee on 7/23/2014. Related bill: H.R. 2719.
S. 1843
S. 1893
S. 2247 Contracting and Tax Accountability Act of 2014, McCaskill (D-MO)
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. Referred to Homeland Security and Governmental Affairs Committee on 4/10/2014. Related bill: H.R. 882.
30 / Service Contractor / December 2014
Professional Services Council
Bill Tracker: 113th Congress-Second Session (2014) NEW
Newly introduced since last issue
Major action taken since last issue
Bill became law since last issue
S. 2286 Cutting Contractor Use and Taxpayer Savings Act of 2014, Walsh (D-MT)
Summary STATUS
Would require additional DoD reporting requirements regarding service contract inventories and would require a DoD reduction in services contracting that would bring such spending levels in line with DoD spending on services in 2002 (adjusted for inflation). Would limit the allowable costs for contractor compensation to be no greater than the salary of the President of the United States. Referred to Armed Services Committee on 5/1/2014. Related bills: S. 1192, H.R. 2444.
S. 2360
Stop Corporate Inversion Act of 2014, Levin (D-MI) Summary Would amend the definition of “inverted domestic corporation” retroactively to May 8, 2014.
STATUS
Referred to Finance Committee on 5/20/2014. Related bill: H.R. 4697.
S. 2410 National Defense Authorization Act for Fiscal Year 2015, Levin (D-MI)
Summary Contains a number of provisions affecting the contracting community including provisions that clarify DCAA authority to interview contractor employees as part of an audit, expand “contracting with the enemy” provisions previously enacted, and would reform security clearances procedures.
STATUS
Approved by the Armed Services Committee on 5/22/2014. Related bills: H.R. 4435.
S. 2502
Global Development Lab Act of 2014, Cardin (D-MD) Summary Would codify within USAID the administration’s recently launched program to leverage research universities and institutions to engage in the more rapid creation and scalability of foreign aid innovations.
STATUS
Referred to Foreign Relations Committee on 6/19/2014. Related bill: H.R. 4905.
S. 2598
Civilian Extaterritorial Jurisdiction Act of 2014, Leahy (D-VT) Summary Seeks to clarify the jurisdiction of the U.S. Justice Department over contractors and contractor employees that commit certain crimes overseas.
STATUS
Referred to the Judiciary Committee on 7/14/2014. Related bill: H.R. 5096.
S. 2704
No Federal Contracts for Corporate Deserters Act of 2014, Levin (D-MI) Summary Would prohibit, government-wide, the awarding of contracts and certain subcontracts to entities or any of their subsidiaries that are considered to be inverted domestic corporations. STATUS Referred to the Homeland Security and Governmental Reform Committee on 7/30/2014. Related bill: H.R. 5278.
NEW
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Service Contractor / December 2014 / 31
Rethink Task Order Protests by Dorn McGrath and Will Jack Barnes & Thornburg LLP
32 / Service Contractor / December 2014
Professional Services Council
Fist illustration: shutterstock.com/Pixel Embargo
A Federal Circuit Decision Signals That it’s Time to
T
wo bid protests are filed at the U.S. Court of Federal Claims (COFC). The court takes jurisdiction over the first one but refuses to hear the second, even though it is a much larger procurement, simply because it is a task order, a widespread form of contracting largely immune from judicial review.
Professional Services Council
Service Contractor / December 2014 / 33
Congress
exteveienwdauethdority
GAO’s r
When Congress passed the Federal Acquisition Streamlining Act (FASA) in 1994 as an overhaul of federal acquisition laws to streamline the government’s buying practices, it could not have foreseen the tremendous growth of spending using task orders under multiple award indefinite delivery, indefinite quantity (IDIQ) contracts. Thus, while a prohibition on protests of individual task orders might have made sense in 1994, the shift in spending to these vehicles now makes the FASA ban on task order protests unfair and unwise.
Well-intentioned Ban to Confusing Course Corrections
As originally enacted, FASA generally barred any protest “in connection with the issuance or proposed issuance of a task or delivery order.”1 The only exception would be an argument that a task order increased the scope, period or performance, or maximum value of the IDIQ contract.2 In place of the standard bid protest process, Congress offered disappointed task order offerors recourse to an agency’s “task and delivery order ombudsman,” who can take complaints from contractors, but has no power to overturn an award.3 That changed in 2008 when Congress added another limited exception to allow Government Accountability Office (GAO) protests for task orders valued over $10 million.4 The GAO protest provision was subject to a “sunset” that would end this authority,5 but recognizing the value of GAO review of task order protests, Congress
...it all judiecffectively eli inates made iinal review fom r procure connection protests wi m as a taesnt designateth a d k order ...
extended GAO’s review authority to review task order protests under civilian agency contracts through fiscal year 2016 and eliminated the sunset of this provision for orders under defense contracts.6 In the meantime, Congress also provided for preaward and post-award protests at the COFC by granting the court jurisdiction under the Administrative Dispute Resolution Act of 1996 (ADRA).7 Although ADRA did not explicitly address the FASA ban, the COFC concluded that while ADRA expanded the court’s bid protest jurisdiction, it left intact the FASA ban against IDIQ task order protests.8 Over time, however, the COFC was confronted with a variety of cases that did not appear to be “in connection with” the award of an IDIQ task order and it took jurisdiction over bid protests that focused on other procurement issues, even though the issues were arising in the context of task order contracting. Those cases included Distributed Solutions, Inc. v. United States,9 which ruled on alternative processes, and Unisys Corp. v. United States,10 involving a contractor challenge to an agency override of the automatic stay during a GAO protest of a task order award. In BayFirst Solutions, LLC v. United States,11 the COFC noted the “variations in interpretation of the task order protest ban ... [that] arise in the complex and distinct fact patterns of individual bid protests,” in reviewing a Department of State decision to cancel a solicitation.
See Pub. L. No. 103-355, § 1004, 108 Stat. 3243, 3252-53 (codified at 10 U.S.C. § 2304c(e)); and Pub. L. No. 103-355, § 1054, 108 Stat. 3243, 3264 (codified at 41 U.S.C. § 253j, re-codified at 41 U.S.C. § 4106(f ) by Pub. L. No. 111-350, 124 Stat. 3677, 3782-83 (2011)). 2 108 Stat. at 3253, 3264. 3 Id.; FAR 16.505(b)(8). 4 National Defense Authorization Act of 2008, Pub. L. No. 110-181, § 843, 122 Stat. 3, 236-37, 238-39 (2008). 5 122 Stat. at 237, 239. 6 Congress first extended the sunset date for the FASA provision limiting protests of defense agency task or delivery orders. Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (“2011 NDAA”), Pub. L. No. 111–383, § 825, 124 Stat. 4137, 4270 (“Paragraph (3) of section 2304c(e) of title 10, United States Code, is amended to read as follows: ‘(3) Paragraph (1)(B) and paragraph (2) of this subsection shall not be in effect after September 30, 2016.’”). Section 2304c(e), even more recently, was amended in 2013 to remove the sunset provision altogether. National Defense Authorization Act for Fiscal Year 2013, Pub. L. No. 112–239 § 830, 126 Stat. 1632, 1842 (codified as amended at 10 U.S.C. § 2304c(e)) (“Section 2304c(e) of title 10, United States Code, is amended by striking paragraph (3)”). There is a different sunset provision that applies to civilian contracts. After a temporary failure by Congress to extend this sunset date in 2011 under the current version of section 41 U.S.C. § 4106(f), the sunset provision was extended to September 30, 2016. National Defense Authorization Act for Fiscal Year 2012, Pub. L. No. 112–81 § 813, 125 Stat. 1298, 1491 (“Paragraph (3) of section 4106(f ) of title 41, United States Code, is amended to read as follows: ‘(3) EFFECTIVE PERIOD. – Paragraph (1)(B) and paragraph (2) of this subsection shall not be in effect after September 30, 2016.’”). See also MORI Assocs., Inc. v. United States, 102 Fed. Cl. 503, 534-41 (2011); Technatomy Corp., B-405130, June 14, 2011, 2011 CPD ¶ 107. 1
34 / Service Contractor / December 2014
Professional Services Council
Only ap
’s intent to ...Congresosn the issuance s ban protekstorders is clear of tas from FASA’s nguage. la s u o u ig b unam
A Game-Changing Decision
In January 2014, however, the Court of Appeals for the Federal Circuit issued an opinion in SRA Int’l, Inc. v. United States,12 pulling back on the trend at the lower court to establish jurisdiction over bid protests related to task order awards. The Federal Circuit vacated the COFC’s decision to assert jurisdiction over a bid protest challenging a GSA waiver of a potential organizational conflict of interest (“OCI”) resulting from the government’s task order award. The COFC had accurately noted that the OCI waiver was issued 102 days after the task order award, a delay so long that the waiver appeared distinct from the original award.13 However, the Federal Circuit held the COFC erred in exercising jurisdiction in the case, stating that, in this area, the FASA ban gave the court “no room to exercise jurisdiction over claims made ‘in connection with the issuance or proposed issuance of a task or delivery order.’”14 The Federal Circuit was not wholly unsympathetic to the disconnect the FASA ban creates by limiting COFC bid protest jurisdiction, acknowledging that “this statute is somewhat unusual in that it effectively eliminates all judicial review for protests made in connection with a procurement designated as a task order—perhaps even in the event of an agency’s egregious, or even criminal, conduct. Yet Congress’s intent to ban protests on the issuance of task orders is clear from FASA’s unambiguous language.”15 The Federal Circuit’s SRA decision did not absolutely rule out COFC jurisdiction in other instances, citing Pub. L. No. 104–320, § 12, 110 Stat. 3870, 3874 (1996) (codified in relevant part at 28 U.S.C. § 1491(b)(1). See American Federation of Government Employees, AFL-CIO v. United States, 258 F.3d 1294, 1300 (Fed. Cir. 2001). 8 See, e.g., A & D Fire Prot., Inc. v. United States, 72 Fed. Cl. 126, 133-34 (2006). 9 539 F.3d 1340, 1345-46 (Fed. Cir. 2008). 10 90 Fed. Cl. 510, 517, 520 (2009). 11 104 Fed. Cl. 493, 503, 507 (2012). 7
Professional Services Council
proximatel 90 bid protestys are filed an nuall with the CO y FC.
one or two possibilities, such as Global Computer Enters. v. United States,16 where the court exercised jurisdiction over a post-award modification to an issued task order.17 Nonetheless, the question remaining for future potential bid protests at the COFC is whether the issues raised are “in connection with the issuance or proposed issuance” of a task order, or constitute separate grounds apart from the task order itself. The relief requested, such as rescission of the task order, suggests a prohibited task order protest, whereas other relief might not.
New Rules to Meet Modern Market
After SRA, the focus should shift back to Congress for new and expanded task order protest rights. Compared to the number of federal procurements every year, bid protests occur relatively infrequently. In addition to GAO protests, only approximately 90 bid protests are filed annually with the COFC. The resulting court opinions often answer questions that GAO is not in a position to address. There is also the potential benefit of the enhanced formality and finality afforded by COFC proceedings. While the more limited GAO review process remains the only option available for task orders, for now, with that exception for civilian agencies set to expire in fiscal year 2016, Congress has another perfect opportunity to address this critical gap. With each passing year, as billions of dollars in task orders continue to replace standalone contracts, there is no good reason to block judicial review when necessary for bid protests arising under these significant procurements, if the goal remains to ensure that funds appropriated by Congress are lawfully spent. 3
766 F.3d 1409 (Fed. Cir. 2014). Id. at 1412. 14 Id. at 1413. 15 Id. 16 88 Fed. Cl. 350, 410, 412 (2009). 17 SRA, 766 F.3d at 1413-14. 12 13
Service Contractor / December 2014 / 35
Council Corner:
Taking PSC to the Next Level
The chairs of two of PSC’s core councils discuss their priorities for advancing PSC’s policy agenda.
Civilian Agencies Council
A
Kathleen Flanagan
Chair of PSC’s Civilian Agencies Council and President and CEO, Abt Associates
s a next step in implementing PSC’s new operating model, we’ve convened the Civilian Agencies Council (CAC) as the primary forum to address the unique issues impacting buying behaviors in the federal civilian agencies services market. The goal of the council is to foster best practices, transparent communication, and improved efficiency within the community of federal civilian agency customers and the dedicated cadre of services providers that support them. While the CAC is a new initiative at PSC, it will build upon the work of PSC’s ongoing HHS, DHS, and VA Taskforces, and expand PSC’s reach to other key civilian agencies such as Energy, Labor, Education, and beyond. In addition, the council will conduct its work through regular meetings; committees, workings groups, and communities of interest to be formed as needed; tailored research and analytical efforts; and other work to facilitate an ongoing dialogue between PSC and the civilian agencies on key topics impacting both communities. The CAC will also host timely and topical events, highlighted by a yearly civilian agency-centric conference. In carrying out all of these efforts, collaborating with and leveraging the work of PSC’s other customer-focused councils, and especially its policy-oriented Acquisition and Business Policy and Technology Councils, will be a top priority. To help guide the CAC’s activities, I have the honor of chairing an Executive Advisory Board (EAB) composed of a dozen senior executives from PSC’s membership who possess a continued next page
Defense and Intelligence Council
T
Neil Albert
Chair, PSC’s Defense and Intelligence Council and Vice Chairman of MCR
he Defense and Intelligence Council (DIC) is PSC’s principle venue for engagement with the defense and intelligence community. As chair of the DIC’s Executive Advisory Board (EAB), I am pleased to be driving PSC’s continuing work to improve how the Department of Defense and the Intelligence Community acquire the professional services and technological capabilities that are so necessary to maintaining a competitive edge and to successfully complete their missions. The budget realities, market shifts, and technological changes of today demand the Department of Defense and Intelligence Community employ innovative approaches to confront the diverse and ever-changing international threat environment. We seek to help drive that innovation. The DIC’s EAB is comprised of 16 senior executives from companies that support every aspect of the defense and intelligence community’s work. These executives bring a vast wealth of experience and have firsthand knowledge of what is working, and what is not, in these areas. The EAB held its inaugural planning meeting in November, where we began charting the priorities and the mission of the council going forward. We hope that the EAB can make an impact and meet the defense and intelligence community’s expectations by engaging the right resources and getting the appropriate insight to the issues at hand. continued on page 38
36 / Service Contractor / December 2014
Professional Services Council
Kathleen Flanagan
continued
wealth of experience across the range of civilian agencies. The EAB will be developing priorities and plans for the council with broad input from across the PSC community and, most importantly, ensuring that results are achieved. At our first CAC EAB meeting in October, we developed a draft set of key priorities which will be refined based on broader feedback from the PSC membership. Among the initial topics we identified were: • Strengthening the Acquisition Workforce – develop a framework for partnering with a specific agency (such as VA and its Acquisition Academy) to provide feedback, best practices, and assistance developing new strategies for educating the workforce, as a model to further engagement with other agencies. • FISMA/Data Privacy – gain clarity on roles and responsibilities of agencies and of contractors for obtaining an Authorization to Operate (ATO) for contracts handling personally identifiable data. Generally the CIOs office has the responsibility to provide an ATO. • Administering Firm Fixed Price Contracts – acquisition personnel who are often more experienced and comfortable with cost reimbursement contracts may need
additional training or guidance on awarding and administering FFP-type contracts. • New Conflict of Interest Policies – the Centers for Medicare and Medicaid Services (CMS) action to require certain contractors to adopt government-specified conflict of interest policies and company organizations is the most recent example. Are they the right policies for the right set of services? • Competition for IDIQs at DHS and elsewhere. These are just a sample of the topics that the CAC will tackle as it works with PSC members and our agencies to establish an environment where contractors can continue to be successful while enhancing outcomes for civilian agencies. This is a far-reaching effort that will require engagement throughout PSC’s membership, and I encourage all interested PSC members to become involved with the Civilian Agencies Council, and attend the first full council meeting on February 2, 2015. Only through a robust, collaborative effort drawing upon the energy and expertise of PSC’s dedicated members will we be able to bring our vision for successful civilian agency acquisition and missions to fruition. 3
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Neil Albert
continued from page 36
The first full meeting of the council will be held in February. Participation in the council, as well as any of the committees or working groups under the council, is open to all PSC members, and we welcome everyone to become engaged. Only with your input can PSC successfully advocate for our entire industry. The DIC is also the new home for PSC’s Intelligence Community Task Force (ICTF), co-chaired by Matt Carroll, vice president of secure services at Fluor Corporation, and Charlie Sowell, senior vice president of Salient Federal Solution. The ICTF allows PSC to focus on the diverse group of elements comprising the intelligence community. The PSC staff lead for the DIC is new Senior Vice President of Defense and Intelligence Jerry Punderson, formerly the director of contracts for the Naval Sea Systems Command, who joined the PSC staff in December. While at NAVSEA, Punderson was responsible for a multi-billion dollar portfolio that includes the nation’s most complex
shipbuilding and weapons systems procurement programs, as well as the SeaPort-e services vehicle. His expertise and knowledge provides critical insight for our advocacy, educational, and collaborative efforts. In sum, defense and intelligence business practices and acquisition procedures are in a period of transformation. Serious acquisition reform efforts are under way in both the executive branch and Congress. Budget constraints requires more be done with less. And technological evolution and the changing R&D environment require the defense and intelligence community to reassess how it engages with industry, traditional government contractors and those providing cutting edge capabilities in the commercial market alike. Yet, of course, the threats at home and abroad do not wait for us to get our house in order. But I am confident that the defense and intelligence community, and the industry partners that support it, are up for the challenge. 3
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Professional Services Council
CIDC Chair Jim Boomgard, president and CEO of DAI, opens Development 2014: The CIDC Annual Conference.
Ambassador Alfonso Lenhardt, deputy USAID administrator, discusses the need for innovation and collaboration in international development, during his keynote address to Development 2014.
Development 2014: The CIDC Annual Conference
Panelists discuss the shifting donor base and new international development opportunities at Development 2014. Pictured from left: Susan Rae Ross, CEO and Founder of SR International; Charito Kruvant, Co-founder and CEO, Creative Associates International; Raj Kumar, President and Editor-in-Chief, Devex (moderator); Beth Heider, Chief Sustainability Officer, Skanska USA; Dr. Trevor Gunn, Managing Director, International Relations, Medtronic.
Sen. Tim Kaine, D-Va., talks about the importance of funding international development at Development 2014.
A panel explores the trends and dynamics of the international development market at Development 2014. Pictured from left: Stan Soloway, President and CEO, Professional Services Council (moderator); Jorge Uquillas, Quantitative Analyst, Bloomberg Government; Kate Eltrich, Partner, Sixkiller Consulting; and Denis O’Brien, Chairman, Digicel Group.
Outgoing CIDC Chair Jim Boomgard, president and CEO of DAI, hands the gavel to incoming CIDC Chair Susanna Mudge, president and CEO of Chemonics. Mudge will lead CIDC in 2015.
Professional Services Council
Service Contractor / December 2014 / 39
Policy Spotlight
DoD’s Better Buying Power 3.0 – A Work in Progress that Needs More Progress
by Alan Chvotkin, PSC Executive Vice President & Counsel
O
n September 19, Under Secretary of Defense Frank Kendall issued a draft of the third installment of the “Better Buying Power” (BBP) series, which was first initiated in 2010. The latest edition, known as BBP 3.0, places a new emphasis on initiatives that encourage innovation and promote technical excellence, with the goal of ensuring that the U.S. military has the dominant capabilities to meet future national security requirements. BBP 3.0 includes proposed actions in eight major areas, including stimulating productivity, encouraging innovation, cultivating a professional acquisition workforce, and improving tradecraft in the acquisition of services. The workforce and tradecraft in services segments were also included in the prior versions, with several of the specific action items from prior versions retained in BBP 3.0. The department asked PSC and others for comments on the issues that are addressed in the BBP 3.0 draft, as well as the gaps it contains. We broadly solicited input from our member companies and PSC submitted comments on BBP 3.0 directly to Kendall, his senior team, and DoD’s public website. PSC also engaged with the department on earlier versions of the BBP releases. PSC strongly endorses the goals of BBP 3.0. As Defense Secretary Chuck Hagel and Under Secretary Kendall have noted, the United States’ technological superiority over potential adversaries is being threatened and the military is too dependent on capabilities that originated in the 1970s and 1980s. We can’t allow that to continue. Based on the extensive work by, and the recommendations of, the PSC 2013 Leadership Commission and the PSC 2014 Acquisition Policy Review Committee, PSC offered specific recommendations for how the department can tap in to the technology advances in the private sector. But we also expressed concern that BBP 3.0 remains too focused on internal DoD processes rather than on outcomes that could be achieved from the acquisition ecosystem. It also misses the mark by failing to address opportunities for leap-frog initiatives in areas of productivity and innovation
40 / Service Contractor / December 2014
and in making fundamental changes to the way the federal government (and industry) attracts and trains its acquisition workforce. Here, too, we drew on the extensive earlier PSC initiatives and our long-standing engagement on these issues to offer a comprehensive set of comments on the content and the gaps in BBP 3.0. Beyond the formal comments and extensive discussion with DoD senior leaders, PSC’s Defense and Intelligence Council, in conjunction with PSC’s Acquisition and Business Policy Council, will continue to engage with DoD and other government leaders on these important issues. We encourage the entire PSC membership to get involved with us on these important national security issues. 3
Professional Services Council
MEMBER NEWS EMCOR Group, Inc. Construction Workers & Clients in 6 Cities Form Giant Human Pink Hard Hat Ribbons, Thousands More Wear Pink Hard Hats
For the sixth straight year, more than 6,000 of EMCOR Group, Inc. employees donned pink hard hats in October to support Breast Cancer Awareness Month and the company’s “Protect Yourself. Get Screened Today” campaign. Employees in six cities wore the pink hard hats and formed massive human pink ribbons as part of EMCOR’s “signature” event, creating “calls to action” and awareness for the importance of breast cancer screening. The ribbons were formed at the following places and dates: • University of California-San Diego Jacobs Medical Center, La Jolla, Calif., Sept. 30
location. With a capacity for 30 plus employees, it is equipped with comprehensive communications capabilities and collaboration areas, allowing employees to connect on different platforms, in or out of the office.
Rich Wilkinson Joins NeoSystems as Vice President of Client Services
Richard Wilkinson joined NeoSystems as vice president of client services, the company announced on November 11. Wilkinson will have a leadership role in helping clients to create a strategic back office that enables the execution of growth initiatives. Wilkinson formerly served as director in the Government Contracting & Technology Practice of Watkins Meegan LLC and was previously with Deltek for 15 years.
• Tishman Speyer at 201 Folsom, San Francisco, Calif., Oct. 2 • Gilda’s Club New York at Alexandria Center for Life Science-NYC, New York, N.Y., Oct. 7 • Elkhart General Hospital, Elkhart, Ind., Oct. 9 • Yale Cancer Center and Smilow Cancer Hospital, New Haven, Conn., Oct. 15 • EMCOR Customer Solutions Center, Phoenix, Ariz., Oct. 22
Have a story for Service Contractor’s Member News section? E-mail Bryan Bowman at bowman@pscouncil.org.
EMCOR’s more than 7,000 service vehicles also carried posters with the “Protect Yourself. Get Screened Today” message, reaching millions of people as they traveled throughout October. For more information visit EMCOR’s Pink Hard Hat site: http://www.emcorgroup.com/pinkhardhat.
NeoSystems Corp. Secures $15 Million Growth Investment Led by OFS Capital Corporation
NeoSystems Corp. closed a $15 million growth capital investment led by OFS Capital Corporation, the company announced September 15. Peter Rothschild, managing director of OFS Capital, was also appointed to serve on the Board of Directors of NeoSystems. NeoSystems was advised on the transaction by Clearsight Advisors, a strategic and financial advisory firm based in McLean, Va. that specializes in capital raising services for high growth professional services and technology companies. The funding will be used to further strengthen and expand NeoSystems’ software and service lines that enable clients to reduce back office costs and operate more efficiently.
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strong focus on all asPects of government contracting, small business Programs,
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TWD & Associates Inc. relocates headquarters to Tysons Corner
TWD & Associates Inc., relocated its office headquarters from Arlington County to the Tysons Corner, Va. area, the company announced October 8. The move brings the company closer to new commercial and construction contractor clients, while maintaining a presence in the government community. The new 10,000-square-foot office, located at 1751 Pinnacle Drive, consolidates two office spaces into a single headquarters
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1. PSC EVP Alan Chvotkin speaks at a September 24 event on Employee Stock Ownership Plans. 2. Government and industry executives discuss their views on the convergence trend at a joint PSC/Market Connections event on October 14. Pictured, from left, Commerce Department CIO Steven Cooper, AT&T VP Chris Smith, Vion VP John Garing, Booz Allen Hamilton VP Julie McPherson, GDIT VP Stanley Tyliszczak, and Market Connections CEO Lisa Dezzutti. Not pictured: PSC SVP Dave Wennergren (moderator). 3. OMB Deputy Director for Management Beth Cobert discussed administration technology initiatives at the inaugural PSC Technology Council meeting on September 15. 4. The Labor Department’s Tim Helm answers PSC member questions about a series of contractor-specific labor executive orders during a September 10 meeting of PSC’s Human Resources and Labor Policy Committee. 5. Market Connections CEO Lisa Dezzutti presents the results of a joint PSC/Market Connections survey on convergence at an October 14 event.
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6. A panel of experts from USAID and PSC member companies discuss the best practices and lessons learned from working in Ebola affected areas, at an October 29 PSC event held at Tetra Tech. Pictured, from left, Bruce Cohen of Marsh & McLennan Companies, Patricia Rader of USAID, Aman Djahanbani of USAID, Dr. Farley Cleghorn of Futures Group, Jan Auman of Tetra Tech, and Stan Soloway of PSC (moderator). 7. USAID’s Alex Their (left) and the State Department’s Tom Perriello (right) discuss the QDDR with PSC’s CIDC in October. 8. PSC Tech Council Chair Anne Altman sets out the council’s agenda for the year at the first Tech Council meeting on September 15, along with PSC Senior Vice President for Technology Dave Wennergren. 9. A panel of experts discuss the legal and practical impacts of continuous monitoring of social media and other employee behaviors on security clearances and employment decisions, at an October 15 joint PSC/ Equal Employment Advisory Council (EEAC) event. Pictured, from left, Charlie Sowell of Salient Federal Solutions, Mike Eastman of EEAC, Mike Londregan of the Defense Intelligence Agency, and Alan Chvotkin of PSC (moderator).
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Professional Services Council
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