PSC's Service Contractor Magazine - June 2013

June 2013 / The Voice of the Government Services Industry

ALso inside: 6

sounding Board

9

Q&A with dan Tangherlini

17

oasis or A mirage

23

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

The Voice of the Government Services Industry

13

6

Sounding board

17

OASIS or a Mirage?

23

27

the limitations Furlough laws on subcontracting

4 President’s Corner / 9 Q&A with Dan Tangherlini / 20 Marketview 2013 26 Grant Thorton’s Government Contracting Survey /29 Bill Tracker / 33 Policy Spotlight / 34 Committee Corner / 35 Member News / 38 PSC Scene and Heard Cover base photo: Devonyu/istockphoto.com. Photo illustration: Studio25

Professional Services Council

Service Contractor / June 2013 / 3

PRESIDENT ’S CORNER

L

ast month, a group of us met with Defense Secretary Chuck Hagel and his senior team. The meeting was an opportunity for the Secretary to meet senior defense industry leaders (and vice versa) and to continue a series of frank exchanges we have had with DoD over the last two years.

Not surprisingly, the discussion centered on three well-established themes on which all parties are in agreement: budget clarity, communication, and quality of both acquisition processes and acquisition outcomes.

While that is welcome news, we all know that clarity will only come when our leadership across the board can find a way to work together. And enhancing communications and improving acquisition and program quality, while more within the control of departmental leadership, remain significant challenges. Indeed, the disconnects between senior leadership and the front lines are significant. Workforce resources and skills are both at risk. Across government, business decisions are being made to satisfy an instant budgetary requirement at the expense of longer term cost and performance. Daunting tasks, yet they are issues we have no choice but to attack.

In this issue of Service Contractor, we have included some early discussion about the work of the PSC Commission on Driving Innovative and Effective Services Outcomes, which will identify a set of actionable recommendations that, if implemented, could break the current logjam and move us closer to those objectives. The commission’s report will be issued around the time this issue of Service Contractor is published, so we thought it would be enlightening to share some of the early findings of our working groups as a backdrop against which the report’s recommendations will emerge. Thanks to MCR’s Neil Albert (Efficiency Working Group); Unisys’ PV Puvvada (Innovation Working Group); and Ernst & Young’s Marc Anderson (Taxonomy Working Group) for their hard work on the commission and for taking the time to share the direction their working groups are headed.

Also in this issue we feature an interview with Acting GSA Administrator Dan Tangherlini. He arrived at GSA in

4 / Service Contractor / June 2013

the aftermath of the Las Vegas conference controversy and has spent his time on the job seeking to rebuild confidence in GSA—both internally and externally. On a related note, the last few months have been marked by extensive discussions surrounding GSA’s latest government-wide acquisition vehicle—OASIS. PSC co-hosted one industry forum on OASIS and then held its own additional forum with OASIS Program Manager Jim Ghiloni. In these pages, we are pleased to share some of our perspectives on the program in the form of a column published in Washington Technology, as well as the perspectives of URS Federal Services’ Christopher Bishop, which has taken a deep interest in the procurement.

To round out a very full issue, we also have an excellent piece by Rich Rector, Nicole Smith, and Michelle Sumner from PSC member firm DLA Piper on the legal ins and outs of furloughs, an expert assessment of the current state of play relating to subcontracting from PilieroMazza’s Grant Madden and Jon Williams, and a summary of the 2013 Grant Thornton Industry Survey, of which PSC is a co-sponsor, from GT’s Julian Rosenberg. All three of these articles also have a direct bearing on the challenges we face going forward as we seek to continue to deliver excellence in an era of constrained resources and uncertain funding.

As always, it is our hope that you find the magazine to be of real value. We also look forward to your comments, your thoughts, and, of course, your continued support.

Stan Soloway President & CEO

Professional Services Council

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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.

Driving Efficient and Innovative Services Outcomes In January, PSC launched the PSC Commission on Driving Efficient and Innovative Services Outcomes (the PSC Commission) to identify actionable strategies that can help drive real efficiencies and performance improvements across key government programs and activities. In anticipation of the forthcoming Commission report, for this issue of Service Contractor, we asked three of the five working group chairs to answer the following:

What are the key findings and recommendations from your subcommittee?

What were the big surprises?Â

6 / Service Contractor / June 2013

Professional Services Council

T

Venkatapathi R. Puvvada (PV)

Unisys PSC Commission Innovation Working Group Chair

he federal government is facing unprecedented fiscal, economic and political challenges.

Government employees are forced to think of dramatically new ways to deal with this crisis. Industry is also forced to come up with significant improvements in delivering their services to compete and survive.

The PSC Commission on Driving Efficient and Innovative Services Outcomes, which was formed in January, sees the tremendous opportunity this crisis presents to embrace innovation in government by putting aside outdated perceptions by balancing risks and rewards. We have assembled some of the leading thinkers and innovators in the industry to craft a path forward.

We also have been engaged in active and constructive dialog with many leaders from the government CIO, CAO and CHCO communities.

While we have not finalized our recommendation quite yet, here is an early peek into some of our thinking.

Innovation means different things to different people. The PSC Commission views innovation as the application of new technology or solutions or services resulting in the improved delivery of government services and mission outcomes. This can be accomplished by introducing continued on page 22

R

Marc E. Andersen

Ernst & Young LLP PSC Commission Taxonomy Working Group Chair

ecently, I had the opportunity to participate on the Professional Services Council (PSC) Commission on Driving Efficient and Innovative Services Outcomes serving as the chair of the Taxonomy working group and as the vice chair of the Innovation working group. The goal of the commission is to develop a set of actionable strategies that can help drive real efficiencies and performance improvements across key government programs and activities.

Specific to taxonomy, we wanted to answer the question: what is the proper definitional taxonomy that best describes the services the government acquires, and how should that taxonomy map to acquisition strategies, including award decisions, contract types and length? That seems to be a pretty straightforward question, but in the process of answering it, we were reminded exactly how complex the subject is. Thankfully, we were fortunate to have a number of talented PSC members contribute answers to the question.

Currently, the government lacks any pre-award, principle-based, decision-making framework, or taxonomy, for assessing the attributes of services to be acquired. In our view, the lack of such framework creates a challenge for the government to differentially develop requirements and differentially acquire the associated service(s) to best meet mission requirements. We believe the government, and industry, would significantly benefit from having a pre-award, principle-based, decision-making framework that focuses not only on an acquisition itself, but on the nature and attributes of an acquisition. Such framework would aid in best determining which services to continued on page 22

S Neil F. Albert

MCR PSC Commission Efficiency Working Group Chair

uccessful outcomes in an era of austerity can only be achieved by focusing on both efficiency and effectiveness. A single-minded focus on efficiency while ignoring effectiveness, or vice versa, will not allow the government to obtain the outcomes it requires at the price it can afford. While reduced costs may seem attractive to the government, it is important that the government does not focus exclusively on costs at the expense of mission outcomes and results. At the same time, the government must work to eliminate unnecessary costs within the acquisition process and to find efficiencies in both what they buy as well as how they buy it. Only by focusing on both efficiency and effectiveness (that is, by focusing on achieving successful mission outcomes for the best value) can the government fulfill its directive to cut costs while still providing excellent services.

While change in the acquisition process is necessary, the implications and effects of these changes on both industry and government must be carefully considered. Attempts at improving efficiency often run the risk of morphing into shortsighted cost-saving measures, which can increase long-term lifecycle costs or result in solutions that fail to meet mission demands.

These are not savings at all, and are precisely the type of action that must be avoided if government is to truly do more with less. Real savings are possible, but these savings must be found in ways that do not compromise the government and industry’s ability to successfully achieve mission outcomes. continued on page 25

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Service Contractor / June 2013 / 7

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& A Q

with Dan Tangherlini Acting Administrator, General Services Administration

Service Contractor (SC): What is the biggest change that needs to be made to GSA and its culture in order for the agency to fully meet its mission objectives?

the quality of our own organization, we are better positioned to provide the best acquisition and real estate support to the entire federal government.

Dan Tangherlini (DT): Last April we conducted a top to bottom review of every aspect of GSA, but as valuable as that process was, it was just the beginning. Since then we have implemented a series of common sense reforms that have created $73 million in internal savings alone.

GSA has begun a consolidation process that is aligning and streamlining our central services, such as IT and HR. This will enable us to work more efficiently and better serve our partners. Early in 2013, GSA developed a new mission statement and six priorities to capture who GSA is and what it does. These changes reflect input and ideas from employees at every level of GSA and demonstrate why, in the current budget climate, GSA’s work is more important than ever. We also created more than $5 million this year in savings directly from employee suggestions during the “Great Ideas Hunt.” This project generated more than 600 ideas and 20,000 comments.

As we move forward, we must continue to look critically at ourselves. If we are to fulfill our obligation to the American public, a strong culture of ongoing examination and reexamination is essential to our success.

SC: How do you see GSA’s role changing over the next 3-5 years?

SC: The Las Vegas meeting issue clearly impacted GSA on many levels. The external effects have been fairly apparent to all.

What would you say have been the biggest internal impacts?

DT:

I would say the largest impact inside GSA was that it inspired a thorough review of the agency, a process designed to examine every aspect of how we operate. This review incorporated the input from not only individuals at every level of GSA, but also feedback and input from our vendors and government partners. As a result, we have clarified the mission of the agency and developed priorities that will shape its future.

For example, the consolidation of our central services within GSA will change the way we work as an agency and help us work together more effectively and efficiently. After all, by improving

DT:

GSA was created to leverage the buying power of the federal government and provide savings and drive down prices for our partner agencies. Right now, GSA has an annual business volume of more than $60 billion, manages more than 200,000 fleet vehicles, owns or leases about 9,600 real estate assets, and maintains an inventory of approximately 370 million rentable square feet of workspace. By any standard, that is an impressive amount of business and assets, but I believe GSA can do more. Over the next three to five years, I would like to see our market share increase. I know that if GSA manages more purchasing, a larger fleet, and increased assets, we will not only deliver more savings for our partners and the American people, but also deliver higher quality services.

GSA will continue to emphasize innovation in government by building on our accomplishments in this area. The agency is a leader in implementing cloud computing. GSA introduced a program called FedRAMP that eased the security clearance of cloud providers for multiple agencies. We created Challenge. gov, which has enabled federal agencies to reach beyond their walls and crowd source solutions and ideas with the public.

The agency also manages USA.gov, the federal government’s web portal. This site provides trusted, timely, valuable government information and services to the American people by using mobile apps, public polls, user-generated comments, text messaging, electronic readers, crowd sourced data, and social media activity. We need to build on this foundation and use it to support innovation throughout the government, providing more efficient service for the American people.

SC: How will GSA adjust to reduced federal spending on contracts?

DT:

At a time when the entire federal government is experiencing constrained budgets, the role of GSA is more important than ever before. It is critical that every public servant makes every taxpayer dollar count. As a recontinued on page 10

Professional Services Council

Service Contractor /June 2013 / 9

sult of the reduced federal spending, more agencies are looking to GSA to deliver the services and resources they need.

Through programs such as strategic sourcing, which commit agencies to purchasing certain commodities at the best value, we have saved the American people more than $300 million since 2010. Recently, GSA announced an initiative that will give federal agencies the opportunity to replace their aging fleets with fuel efficient hybrid vehicles. We expect to increase the number of hybrid vehicles by 10,000, resulting in the reduction of approximately 1 million gallons of fuel per year. Those savings are even more significant when multiplied over the life of these vehicles.

Through initiatives such as these, GSA can do more for the federal government, which will enable our partner agencies to focus more on their missions.

At the same time, we recognize that GSA has to drive down its internal costs to continue to deliver savings for the agencies. Through common sense internal reforms developed in our top to bottom review, GSA saved $73 million alone. Through these reforms and through the ongoing review of our own practices and processes, we can reduce costs for services both internally and externally, protecting our partner agencies and their missions in a very challenging fiscal environment.

SC: Where does OASIS fit into the broader scheme of multiple award vehicles?

DT:

OASIS and OASIS Small Business are two new acquisition vehicles that expand small business opportunities and provide full service contracting opportunities for agencies in need of complex professional services.

Both of these vehicles were developed with significant input from GSA’s industry and federal partners. They will meet an expressed need within the government for a complete acquisition solution that crosses multiple disciplines and allows for both commercial and noncommercial requirements while leveraging the government’s buying power.

OASIS will also provide the flexibility needed to use all types of contracts not currently allowed on Multiple Award Schedules.

SC: There has been increasing discussion about growing audit requirements of schedule contract awards. Do you have any perspective on it?

DT:

The GSA Inspector General performs contract audits on the award and administration of all of our contracts. Those audits are essential to our success and provide valuable information for our entire agency making it possible for us to give our partners the kind of value and transparency that they need. 3

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OASIS A Strategic Acquisition Game Changer

Background Illustration: vitan/istockphoto.com

by Christopher Bishop Vice President, Marketing and Business Development, URS Federal Services

Professional Services Council

Service Contractor / June 2013 / 13

O

n March 28, GSA released one of the most highly anticipated draft RFPs that the professional services industry has been waiting to see: the “One Acquisition Solution for Integrated Services” or OASIS. It became clear upon initial reading that GSA’s Federal Acquisition Service (FAS) had made tremendous strides towards achieving their goal of creating the next generation multipleaward contract targeted at complex, integrated professional services. The objective of OASIS is to provide a total solution contract vehicle for all government clients to use that provides flexibility, scope, and contractual elements capable of meeting agencies’ most challenging, cross-domain requirements.

The OASIS contract will establish the first government-wide indefinite delivery/ indefinite quantity (IDIQ) contract of its kind for both commercial and noncommercial professional services and allowing the use of all contract types.

OASIS comes at a pivotal time for government professional service buyers as they continue to deal with federal deficit concerns and sequestration cutbacks. Additionally, the explosive growth of agency and enterprise-wide contracts has added unnecessary complexity to our marketplace as well as increase the likelihood of redundancy and inefficiency. With its flexible, streamlined ordering procedures and ability to support large-scale, cross-discipline projects, OASIS should be an outstanding mechanism for agency buyers to address these challenges.

From an industry perspective, OASIS has the potential to fill a critical gap in our professional services portfolios. Unlike the information technology market that enjoys a broad portfolio of agency-specific IDIQ contracts and government-wide acquisition contracts (GWACs), the professional services market has been largely underrepresented. More importantly, it has not been able to address complex, integrated services and cost-reimbursable contracting with the existing professional services GSA Federal Supply Schedule contracts such as FABS and LOGWORLD. While the existing contracts serve a critical role in addressing smaller, discipline-specific requirements, these contracts are really not designed to address the professionals services based requirements

due to scope and contract type limitations.

OASIS will not nullify the need for these existing Schedules contracts, but it will establish a much-needed alternative for agencies’ professional services needs.

GSA has created one of the most innovative acquisition strategy development processes industry has seen, adopting an inclusionary rather than exclusionary approach with industry, which seems to be more the norm these days. Some of the best practices created specifically for OASIS have included: • Early and persistent engagement with industry; • Continuous and transparent communication via multiple avenues, e.g., Twitter, Interact, Federal Business Opportunities (FBO); • Sharing the underlying business case and long-term objectives for OASIS; • Listening to and incorporating industry input as appropriate; • Clearly articulated rationale and feedback when industry recommendations were not considered; • Iterative responses to industry suggestions and questions; and • Cooperation with industry organizations such as Professional Services Council (PSC) and American Council for Technology – Industry Advisory Council (ACT-IAC) to ensure broad industry representation.

GSA has structured OASIS to potentially be the new, innovative contracting standard for large, complex procurements across government. They carefully researched current market trends, agency spending patterns, and other existing vehicles to determine the need and viability of the OASIS concept. What resulted was a clear business case that, done strategically and correctly, OASIS would be able to deliver solutions that addresses the unique professional services market, leverages government buying power, and drives enhanced contract performance.

The April 2013 OASIS draft RFPs reflect a thoughtful balance between the needed contract structure to achieve post-award performance objectives and a straightforward and streamlined acquisition process.

Some of the more innovative features of the OASIS program including: Scope of Work – allows for a broad array of complex professional service

14 / Service Contractor / June 2013

disciplines to include integrated solutions across multiple disciplines; focuses on “Best in Class” service contractors; Contract Type – provides mechanism for all contract types, including cost reimbursable, as well as the mechanisms to convert cost-reimbursable to fixed-price and non-performance-based to performance-based; Period of Performance – provides for a 10 year period of performance (with ability to continue task order performance for five years beyond expiration), allowing greater flexibility for government buyers while promoting industry investment and performance; Small Business – establishes both set-aside and full and open contracts, with aggressive small business subcontracting goals, to provide maximum opportunity for small businesses under varying size standards and NAICS codes; Affiliates and Subsidiaries – allows affiliates and subsidiaries to combine to submit an OASIS offer subject to a prime letter of commitment and meaningfulrelationship documentation; Contract(or) Dormancy – recognizes that, in order to achieve its performance and competition goals, the contract must stay relevant over the life of the contract; innovative on-ramp and off-ramp provisions ensure continued contractor commitment while raising quality, expanding solution sets, and ultimately lowering costs of services/solutions procured; Price Competition – differentiates between “strategic acquisition” and “strategic sourcing,” recognizing that buying professional services is not the same as buying commodities; innovative pricing model appropriately focuses price competition during the task order competition; Evaluation Criteria – builds on best practices and lessons learned from previous GSA contracts such as Millennia and Alliant though an objective scoring feature that removes any doubt as to how proposals will be evaluated.

While industry continues to work closely with GSA on several challenging issues, OASIS is a “game changer” for smart, strategic acquisitions within the U.S. government. The approach represents a “win-win-win” scenario for small business, large business, and most importantly, government customers and the missions they serve. 3 Professional Services Council

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OASIS…Or A Mirage?

by Stan Soloway PSC President and CEO

Illustration: mgkaya/istockphoto.com

O

ne of the most closely watched procurements of the year is the General Services Administration’s proposed “OASIS” vehicle, a multiple award contract designed to provide integration services for complex solutions. GSA issued the draft request for proposals in March and is expected to issue the final request for proposals later this spring. To its great credit, in developing the RFP, the agency has engaged in what can only be described as one of the most open and continual efforts to engage with the private sector that we have seen.

There seems to be no forum at which GSA leaders, particularly OASIS Program Manager Jim Ghiloni, will not appear to answer questions, absorb feedback and share perspectives. While the ultimate impact of that outreach will not be known until the process is complete, no one can claim that GSA has failed to communicate. It’s been “Mythbusters” (the Office of Management and Budget memo) on steroids and, in an era where industry-government communications continue to struggle, that is no small thing.

Still, despite the exceptional level of dialogue, GSA still needs to address several core questions if the agency expects OASIS and the agencies using it to benefit from optimal competition, incentivize innovation, and create the greatest opportunities for success.

For example, GSA initially tied OASIS to the Federal Strategic Sourcing Initiative (FSSI). At a forum co-hosted

by PSC and three of our partner associations, the agency’s leaders explicitly cited OASIS’ link to FSSI and made clear that one key goal will be to drive down, and hold down, the cost of professional services. While cost control remains a key element of the program, as it should, the emphasis on strategic

sourcing seems to have since dissipated.

Hopefully this is due to the realization that many of the services required under OASIS are not commodities, which is where strategic sourcing is most effective. Yet it remains a cloud hovering over the procurement and merits additional clarification. continued on page 18

Professional Services Council

Service Contractor / June 2013 / 17

from page 17

Further, while company past performance will be heavily weighted in the source selection, past performance in a government environment will receive twice the credit that other past performance is given. GSA explains this is because it can validate government past performance through government databases, which do not capture commercial experience. This raises several concerns. First, it assumes that the federal past performance database and process is up to date and effective.

Yet every recent analysis has suggested quite the opposite. Government past performance records are often inadequate, outdated, and missing relevant information and context. Industry has long advocated the use of past performance, recognizing that it is the best indicator of future success. But we have also frequently noted that the current system is far from robust or reliable.

GSA’s acknowledgement that it lacks the capability to evaluate commercial past performance should itself be a concern. If OASIS’ objective is to provide the best possible integration capabilities to federal agencies, shouldn’t one of the agency’s goals be to create

a reference checking capability that would enable them to more effectively evaluate non-government performance?

Intentionally or not, the scoring plan assumes that the government’s record of integrating complex solutions is superior to that of the private sector, a rather dubious supposition that could bias the source selection against world class capabilities. Wouldn’t the extra effort required to check the performance of companies that have successfully performed similar work for major private customers expand the competitive base of providers on, and perhaps the innovations available through, OASIS? Wouldn’t that enhance the appeal of the contract to customer agencies?

There are a slew of other questions that have been raised and GSA will be addressing them in the next iteration.

Those questions include how to handle the different size standards that apply to the major functional areas and the requirement that a bidder be ISO certified or make the case that they have a similar and equally effective quality certification. That latter requirement places yet more burdens on the bidder and raises the specter that those who

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are not ISO certified will be penalized if evaluators have inadequate knowledge or understanding of other, equally legitimate, third-party quality certifications that are well known in the commercial space.

Today’s professional services sector is broad and diverse and includes some services that are commodities and many others that clearly are not.

Hopefully, GSA’s initial inclination to treat most or all professional services as commodities, and thus place all under a strategic sourcing construct, has been eliminated. That would be a dangerous road to head down. But as we move to the next phase of OASIS, the answers to these and other core questions also remain essential. They will also tell us something about where the broader federal marketplace for professional services is headed.

This article first appeared in Washington Technology, an online publication for which Stan Soloway writes a monthly column on market and policy trends in federal contracting. To read his columns visit www.WashingtonTechnology.com.

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Doug Berenson of Avascent presents a deep budget dive into the civilian agency markets during a special post-conference session at Marketview2013 in Tampa, Fla. on April 9.

Marketview PSC Chairman John Hillen of Sotera Defense welcomes members to Marketview2013 in Tampa, Fla. on April 8.

PSC GAC Chairman Tom Callahan of PAE asks a question during a Marketview 2013 panel.

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20 / Service Contractor / June 2013

Professional Services Council

URS Federal Services’ Dave Swindle (left) moderates Marketview2013 DoD Landscape panel featuring (on stage) SOCOM’s Col. James Smith, CENTCOM’s Brett Scharringhausen, (on screen) NAVFAC’s Bob Griffin, USAF’s Carl Shofner, and AMC’s John Nerger.

Tampa CBP Area Port Director Gary McClelland gives the closing keynote speech of Marketview2013 on April 9.

2013:

CSIS’ David Berteau explores the Defense Department budget and outlook at a special post-conference session at Marketview2013 in Tampa, Fla. on April 9.

DCAA Director Patrick Fitzgerald spoke to Marketview2013 about audits, oversight and backlogs via video teleconference.

Army Small Business Programs Director Tracey Pinson discusses the Small Business Landscape at Marketview2013 as panel moderator Deepak Hathiramani of Vistronix and co-panelist Joe McDade, USAF’s small business programs director listen.

Professional Services Council

Service Contractor / June 2013 / 21

Venkatapathi R. Puvvada (PV) new ideas through solutions, processes, and business models in collaboration with the private sector. Innovation differs from improvement/efficiency in that innovation refers to the notion of doing something very different rather than doing the same thing better.

Our recommendations follow three broad categories and themes: • Establishing an Ecosystem that Leverages Private Sector Innovation: Where government takes advantages of investments made by the private sector • Government Investments in Innovation: Where government makes investments in innovations through R&D funding and innovation programs • Processes to Foster Innovation: Where government implements new processes and makes changes to existing

Marc Anderson

continued from pg. 7

processes to foster innovation and realize the benefits of new ways of doing things.

Our recommendations include ideas to simplify access to commercial items and best practices, to share risks between industry and government, to protect industry intellectual property and to speed up the acquisition process to leverage the benefits of innovation.

We are considering best practices for investing in innovation and how to optimize return on investments (ROI). We believe this will require a commitment to build a culture of innovation within government, including encouragement from senior management for employees to take risks and not be afraid of failing.

A good way to sustain innovation is to institutionalize processes that involve the employees at the field level, not just

management at agency headquarters. We also are tackling suggestions on ways that acquisition policies can be better aligned to tap innovation as well as address human capital issues.

The PSC Commission recognizes that, compared to the private sector, government faces significant real and practical difficulties to acquire and implement innovative solutions and business model due to statutory, legal and process constraints. However, we believe there is enough flexibility in government structures to creatively overcome these constraints and challenges. It comes down to building and committing to a culture of improved skills as well as collaboration across various functional roles and organizations within the government and industry. 3

continued from pg. 7

acquire and how best to acquire them in order to achieve a more efficient and effective procurement process and obtain optimal results.

The government currently uses post-award taxonomies, but these fail to provide pre-award information and do not play a role in planning or executing acquisitions. All federal agencies use the Federal Procurement Data System’s services codes (the A-Z codes) to capture and categorize post-award transaction data.

The A-Z codes fail to adequately capture the types of services available in the market and the differences among them.

Also, the codes do not provide a useful construct for agency policymakers to understand the nature of their “spend” for services. Furthermore, the Department of Defense (DoD) uses these same codes to create eight “buckets” to group that same spending data into higher-level categories, further masking the details of the DoD’s spending on services.

In our view, any taxonomy for capturing transaction data should provide a framework for how an agency actually buys a given service. At a minimum, the current A-Z codes should be revised to filter services from non-services and should be rearranged to capture informa-

tion about how agencies purchase services.

Without such a framework, decisions devolve into the details of a specific acquisition strategy for a particular service.

Basically, not all services are created equal, and it is critical that this distinction be made prior to the government determining its sourcing strategy for these types of procurements. Services vary along a continuum in various groupings—from those things that are relatively commoditized, as well as sustaining of existing operations, to services that transform the operations of a particular agency. The government must determine where a particular service falls on this continuum to properly understand the relative complexity and risk of the service and use the most appropriate sourcing strategy. The outcome-focused approach involves directly linking the intended outcomes of an acquisition to mission objectives. Similarly, even as one evaluates a requirement against that continuum, one must also assess it against the nature of the technology—and thus the pace at which it must be acquired. For example, application development and fielding might be just a six week sprint, even though that which is being procured is not a commodity. This also adds a layer

22 / Service Contractor / June 2013

of complexity that also must, but often does not, be part of the analysis.

However, when developing requirements, practitioners should be able to link the service acquired directly to how it will support the mission of the organization.

Clearly articulating this relationship can be leveraged to shape the acquisition strategy and drive performance to the intended outcome of the acquisition. Articulating the outcome to mission relationship can also help match contract type and source selection approach. In all cases, a contracting officer’s objective should be to choose a contract type that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical performance. Key drivers in choosing the appropriate contract type should be to align responsibility, accountability, risk and reward. The alignment of these factors yields a contract vehicle that is truly an instrument calibrated to provide the greatest opportunity for achieving acquisition outcomes. 3 The views expressed are those of the author and not necessarily those of Ernst & Young LLP

Professional Services Council

Understanding the Limitations on Subcontracting:

Where They Are Now, and Where They Are Headed

by Jon Williams and Grant Madden PilieroMazza PLLC

Illustration: exdez / istockphoto.com

T

he “limitations on subcontracting” clause of the Federal Acquisition Regulation, FAR § 52.219-14, is an important component of all set-aside contracts. The clause ensures that small businesses benefit from set-aside contracts by restricting the amount of work that may be subcontracted. Though the reasoning for the limitations may be clear, it can be difficult to interpret how they apply to the various types of small businesses and contract vehicles. Given that we have recently seen an increase in the amount of audits and enforcement actions related to compliance with the limitations on subcontracting (also referred to as the performance of work requirements), it is critical for all firms that perform setaside contracts to understand the current requirements and changes that are on the horizon.

Currently, the FAR clause1 states that small business prime contractors must perform a specific percentage of the labor costs incurred under their set-aside contracts with their own employees. The percentage varies depending on the type of contract. For example, the required percentage of work for a prime contractor on a set-aside contract for services is 50 percent. In this context, “labor costs” means direct labor costs, as well as general and administrative (G&A) and overhead expenses attributable to those costs. Tracking compliance based on costs is often difficult for small businesses.

Generally, the small business prime contractor is required to satisfy the ap-

plicable percentage of work on its own.

However, there are exceptions for HUBZone firms and service-disabled veteranowned small businesses (SDVOSBs), which are permitted to satisfy the requirement through their own employees or through subcontracts to other HUBZone firms and SDVOSBs, respectively.

According to the Small Business Administration’s rules, “[t]he period of time used to determine compliance [with the

limitations on subcontracting] will be the period of performance which the evaluating agency uses to evaluate the proposal or bid.”2 If the agency does not specify a period of performance for evaluation of proposals, SBA’s rules state that the contract’s base year, excluding options, will be used to determine compliance.

Contractors are also often confused about how to apply the current performance of work requirements to task order continued on page 24

1 2 3

FAR § 52.219-14 13 C.F.R. § 125.6(g) 13 C.F.R. § 124.510(c)

Professional Services Council

Service Contractor / June 2013 / 23

from page 23

contracts. SBA’s regulations indicate that, on 8(a) task order contracts, compliance is assessed every six months for all orders issued during that period, although different requirements apply during the first six months of the contract.3 For other task order contracts, however, there are no specific regulatory guidelines. The prevailing view is reflected in a 1997 bid protest decision in which the GAO held that the FAR limitations on subcontracting clause applies to the contract as a whole, not each task order issued there under.

To address some of the confusion and to make the requirements easier to enforce, Congress included several important changes to the limitations on subcontracting requirements in the National Defense Authorization Act of 2013 (NDAA). Notably, the NDAA modified the measurement of compliance from labor costs to total contract price. For contracts that are a mix of services and supplies, the subcontracting limitation is based on the amount awarded under the contract for services

These changes should make it easier for contractors to meet the requirements and for the government to track compliance.

or supplies (whichever, in the contractor’s view, accounts for the greatest percentage of the contract). These changes should make it easier for contractors to meet the requirements and for the government to track compliance.

The NDAA also provides more flexibility for small businesses to comply with the performance of work requirements

through subcontracts to “similarly situated entities.” Whereas the current rules only provide such flexibility to HUBZone firms and SDVOSBs, the NDAA permits all small businesses to meet the applicable percentage of work through their own employees as well as subcontracts to similarly situated small businesses (i.e., 8(a) to 8(a), SDVOSB to SDVOSB, etc.). However, there is no regulation yet that defines the term “similarly situated small businesses.”

In addition to these carrots, the NDAA includes a stick: the penalty for noncompliance with the limitations on subcontracting will be a fine of $500,000, or the amount expended on subcontractors in excess of the permitted level under the FAR clause, whichever is greater. Prior to the NDAA, there were no clear penalties or methods for enforcing the limitations on subcontracting.

The new provisions in the NDAA should not be effective for a particular contract until the contract is modified to include a new version of the limitations

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on subcontracting FAR clause, which will need to be revised based on the NDAA. While the NDAA did not deal directly with the application of the limitations on subcontracting to multiple award contracts, there is a pending SBA rule that would do just that. In May 2012, SBA proposed that compliance with the performance of work requirements on multiple award contracts would be assessed per task order. SBA considered looking to the aggregate of work performed at any point in time during the contract, but concluded that judging performance on an order-byorder basis would be easier to monitor.

Neil Albert

SBA’s proposed rule regarding multiple award contracts may be finalized this year.

With these changes on the horizon, and given the government’s increased efforts to enforce the performance of work requirements, as well as the overall emphasis on ensuring small business contracts truly benefit small businesses, the evolution of the limitations on subcontracting bears watching for all firms that perform on set-aside contracts. 3 Jon Williams is a partner in the Government Contracts Group at PilieroMazza PLLC, where he also handles corporate

and employment law matters. Grant Madden is an associate in the Government Contracts Group. Founded in 1983, PilieroMazza is a boutique government contracts law firm in Washington, DC. The firm’s practice areas primarily focus on government contracts, the federal procurement programs for small businesses, business & corporate, labor & employment, and litigation.

Mr. Williams can be reached at jwilliams@pilieromazza.com, Mr. Madden can be reached at gmadden@ pilieromazza.com, and both may be reached at (202) 857-1000.

continued from pg. 7

To ensure these goals are achieved, the PSC Commission on Driving Efficient and Innovative Service Outcomes Efficiency Subcommittee’s findings and recommendations can be summarized in the following manner.

Government and industry can improve efficiency and effectiveness by applying contract type and evaluation techniques in a more consistent and objective manner.

Whether it is implementing a Lowest Price Technically Acceptable contract, evaluating past performance, or determining what is technically acceptable, the right contract type needs to be applied, the marketplace needs to sufficiently understand the evaluation criteria, and the resulting contract needs to be managed as the contract is written. By redefining these terms and conditions, the government sets up industry for failure; and with industry failures comes government’s ineffectiveness.

The greatest opportunity for achieving efficiency and effectiveness requires that government and industry increase communication with each other and collaborate on how they can work together to improve results.

By improving communication with each other, government and industry can focus on what each other brings to the table to shape opportunities, to understand the requirements, to achieve savings, to define the best solutions for the mission, and to understand what may go wrong and how it can be corrected. The current lack of communication has created a level of distrust and has reduced actions to be reactive rather than proactive in improving results.

Government also needs to carefully focus on the balance between oversight and efficiency/effectiveness.

Government has become the prescriber of how industry should bid, of what process they should use, of how to report it, and of what market value is to be ascribed to individual functional expertise. In other words, government is limiting industry’s ability to be innovative, provide the kind of expertise their experience suggests is needed, or effectively and efficiently execute the program or contract to the best of their capabilities. Too often the government has pursued a “check the box” Professional Services Council

approach to execution and focused on procedural perfection rather than excellent outcomes.

Both government and industry need to look internally to improve efficiency and effectiveness.

For government, this means sharing best practices across agencies, reducing duplication of audits (e.g., DCAA vs.

DCMA), eliminating multiple contracts that attempt to accomplish the same or similar mission, cross functionally training acquisition professionals, and strategically determining how dollars are spent particularly if spending more upfront will result in lower life-cycle costs. For industry, it’s about improving processes, ensuring costs are fair and reasonable, incentivizing outstanding performance, being held accountable for poor business judgment, and avoiding grade creep. In either case, focusing on the mission and the end result must be a priority.

The biggest surprise in assessing and evaluating the issues that potentially affect our ability to be more efficient and effective was the change we have seen over the last four or more years in industry’s and government’s interaction. Having a strong and honest relationship between government and industry is all but gone. The best results have always been in times was when industry and government freely and openly communicated. Issues were discussed and constructive discussion followed. Based on conversations with both government and industry practitioners, it is increasingly clear that today’s environment is dominated by a “we vs. them” mentality where distrust, over-specification of process requirements, and an excessive focus on non-value added compliance requirements have soured what used to be a cooperative and collaborative environment.

This focus on efficiency, effectiveness, and productivity can be seen in the Department of Defense’s Better Buying Power (BBP) 2.0 initiatives and similar initiatives that OMB and other agencies have established across government. Together industry and government must help each other to succeed in this new and challenging environment so they can best achieve the outcomes and missions they are required to meet. 3 Service Contractor / June 2013 / 25

Grant Thornton’s 18Th Annual Government Contractor Industry Survey

by Julian Rosenberg Director, Government Contractor Advisory Services, Grant Thornton Grant Thornton has released its 18th Annual Government Contractor Industry Survey, which summarizes financial and non-financial information provided by the survey participants.

The Grant Thornton Annual Government Contractor Survey includes responses from chief executive officers, chief financial officers, and other key officials of companies that consider the federal government to be a significant customer. Through collection and analysis of these participant responses, Grant Thornton’s Annual Survey provides a perspective on how the government contracting industry has evolved and discusses trends that may affect the industry in the future.

For companies considering entering the government contracting market, survey findings provide a comprehensive look at the industry, as well as detailed information on the day to day challenges of being a government contractor. Some of the more significant findings in the survey are: 1. REVENUE TRENDS The survey presents very useful information on the revenue trends from government contracts and reports on changes in revenue for various contract types (cost reimbursable, time and material, firm fixed price).

The business strategies can change when faced with significant changes in revenue or changes in contract type mix and these strategies are discussed in the survey. This year’s data indicate that about 36 percent of responding companies are experiencing revenue increases from federal contracts, while 38 percent are reporting decreases. Compared to last year’s survey, this represents a 15 percent decline in increased revenues and a 9 percent upswing in companies reporting less revenue. This is the first time in many years that the survey showed more companies experienced reductions in federal business than those showing an increase.

2. PROFIT BEFORE INTEREST AND TAXES Prior surveys supported the conclusion that, contrary to conventional wisdom, the profit rate from government contracting is rather modest. Of the companies reporting this year 5 percent reported a profit of 11-15 percent, 31 percent reported profits in the 6-10 percent range and 60 percent reported 5 percent or less in profits. This year’s survey was significantly worse than the 37 percent reporting 5 percent or less profits in last year’s survey.

3. INDIRECT COST RATES The survey presents information on indirect cost rates, labor multipliers, and trends in the indirect cost rates. It also provides information on provisional rates and the practices followed to true-up provisional rates to actual rates. Rates are increasing at 42 percent of the companies reporting, compared to 39 percent in the previous survey. Only 17 percent of companies reported that indirect cost rates are decreasing—a significant drop from the 23 percent last year.

4. IDENTIFYING CLAIMS FOR OUT OF SCOPE WORK Surveyed companies were asked to rate the effectiveness of their procedures for identifying out of scope work. They were also asked how the companies address requests from government officials for out of scope work without a contract modification. The failure to effectively identify and seek compensation for out of scope work is a contributor to low profit rates from government contracts. This year 82 percent indicated that they felt their procedures were either very effective or somewhat effective which is consistent with previous surveys. Remarkably, the survey found that 84 percent of the respondents always or sometimes perform the out of scope work requested, while only 23 26 / Service Contractor / June 2013

percent stated that they applied for equitable adjustments as a result.

This behavior can be risky in an environment of shrinking budgets and increasing contract terminations for the convenience of the government.

In the event of a termination, companies may not be able to recover the costs of out of scope work. Additionally, funding for compensation of convenience terminations is limited to original contract value, modified by equitable adjustments for out of scope work. Contractors run the additional risk of the government not having sufficient funds available to cover all termination costs.

5. COST ISSUES Companies responded to a series of questions regarding cost issues challenged by DCAA and the methods used to rebut the government’s position on the most frequently challenged costs. The most frequent cost issue continues to be executive compensation. The survey also presents suggestions on the proven most effective manner to rebut DCAA challenges to executive compensation and other frequently challenged costs. Issues related to executive compensation and employee compensation continue to be the leading cause of DCAA challenges.

6. UNCOMPENSATED OVERTIME The survey includes information on the cost accounting practices followed by surveyed companies for uncompensated overtime. There appears to be a reduction in employees working uncompensated overtime to roughly 60 percent this year, down from 65 percent reported in last year’s survey. The survey also includes information on acceptable systems per DCAA guidelines and the best practices to adopt depending on the extent of cost reimbursable contracting with the government 7. RELATIONSHIP WITH DCAA DCAA has become much less flexible and far more demanding in dealing with contractors since GAO’s scathing report on DCAA in 2009.

The survey found that 47 percent thought that DCAA audit positions were substantiated with appropriate references to regulations and only 40 percent considered auditors to be open-mined and receptive to their rebuttals.

8. GOVERNMENT EFFICIENCY IN RESOLVING CONTRACT ISSUES The 2009 GAO report has also had a significant impact on the processes adopted by the government when negotiating matters with the contractor. Surveyed companies answered several questions in this regard and, notably, only 18 percent of companies thought that issues were resolved efficiently, a decrease from the 22 percent reported last year. The trend of this metric has been steadily decreasing over the last four years.

9. BUSINESS SYSTEMS The government has established stringent new standards for various business systems and the failure to comply with these standards can have adverse financial consequences and also be the basis to deny a contract award. Twenty-nine percent of respondents reported that they had made recent improvements to their business systems in order to comply with the new requirements. Of the respondents, 33 percent reported that they had undergone an audit of their business system s since the new rules were implemented.

For more findings from the survey visit www.GrantThornton.com. If you wish to participate in next year’s survey or would like information on purchasing the full results of this year’s survey, please contact Julian Rosenberg at 703.637.4100 or Julian.rosenberg@us.gt.com Professional Services Council

Employment Challenges

Earle Williams (right) receives the first Krueger Medal from then-Chairman Joe Kampf (left) at the 30th Anniversary Gala in 2003.

In the Era of Sequestration

by Richard Rector, Nicole Smith, and Michelle Sumner, DLA Piper

Photo illustration: hronos7/istockphoto.com

J

ob losses. Furloughs. Salary reductions. These are some of the tough employment issues facing contractors around the nation as sequestration and federal budget cuts have taken effect in 2013. The squeeze on contract spending has taken a substantial toll on government contractors, who have seen contracts and orders delayed, descoped, deferred, and terminated.

When faced with these types of contractual changes, employers often are forced to cut costs in one of the most significant areas of spending: labor. After calculating salaries, leave, healthcare, retirement benefits, insurance, taxes, overhead, and collective-bargaining costs, labor is usually the most significant cost driver for employers, particularly in the services industry. And for some government contractors, an extra layer of complexity might be added in the form of mandatory wage determinations, affirmative action requirements, and oversight of subcontractors.

In this new era of fiscal austerity, employers face hard decisions regarding whether to reduce the hours, wages, or numbers of their employees; to relocate employees to a more cost-efficient location; or to offer a voluntary separation program prior to commencing a reduction-in-force. When considering these options, contractors should be aware of the hidden obligations that could create liability.

This article addresses some of the key issues for contractors to consider when evaluating potential changes in workforce structuring, composition, and compensation: WARN Act, disparate impact analysis, affirmative action, wage determinations, collective bargaining, and prime-sub commitments.

WARN Act. The Worker Adjustment and Retraining Notification (WARN) Act requires that employers with at least 100 or more employees, including certain part-time employees, provide at least 60 days’ advanced notice before the employer (i) closes a plant that results in an employment loss for at least 50 employees during a 30-day period or (ii) conducts a mass layoff (or “reduction in force”) that results in an employment loss at a single site of employment during any 30-day period for either 50 employees (if they comprise at least 33 percent of the active workforce) or at least 500 employees.

Employers may be surprised to note that the term “employment losses” captures more than just employee terminations. An “employProfessional Services Council

ment loss” may also occur when an employer reduces an employee’s hours by more than 50 percent each month for a six-month period or when the employer relocates a position to a location outside an employee’s reasonable commuting distance.

In addition to the federal WARN Act requirements, many states have implemented “mini-WARN Acts” to provide even greater protections for employees. Therefore, any contractor that is considering an action that could constitute an employment loss should check the laws of states in which they operate to ensure that state-specific requirements are met.

Disparate Impact Analysis. The most important factor for any employment decision is documentation. Whenever an employer contemplates an adverse employment action—such as an employment termination, salary reduction, change in job duties, relocation of certain employees, or reduction in hours—the employer should conduct a disparate impact analysis.

To perform this analysis, the employer should establish a set of objective criteria (e.g., job performance, tenure, prior performance evaluations, criticality of a position, etc.) to identify those employees or positions whose terms and conditions of employment will be modified. The employer should then evaluate those selected employees to see if, when compared with the relevant population, the employer’s actions will significantly impact any classes protected under state or federal law (factors include gender, age, race, ethnicity, disability, nationality, veteran status, etc.).

If any protected group is affected more than another, the contractor should reassess the criteria, reexamine the individual employment decisions, and confirm that all determinations are impartial. Finally, the contractor should ensure that its process has been well-documented and that all supporting materials are gathered in the event of a disparate impact claim.

Affirmative Action. Under Executive Order No. 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Act of 1974, federal contractors must take steps to recruit and promote qualified minorities, women, individuals with disabilities, and covered veterans. When conducting employment terminations, contractors must review and revise their Service Contractor / June 2013 / 27

EEO-1 and VETS-100 or VETS-110A reports, as applicable, to ensure that any terminations are accurately reflected.

For contractors who are required to produce a written affirmative action plan, contractors should (i) update the figures to reflect any employment actions, (ii) re-evaluate the goals delineated in the affirmative action plan and ensure that the reduction in force does not result in under-representations with respect to reported classes, and (iii) if any class has been significantly affected more than another, be sure to provide information related to the decision-making process and include the disparate impact analysis discussed above.

Wage Determinations. Contractors governed by the Service Contract Act or the Davis-Bacon Act must comply with a complex list of minimum salaries and benefits for each position, determined according to task and geographic location. For instance, a computer programmer in Texas will likely have a different wage rate than an accounting clerk in California. Before making sweeping wage cuts, contractors must evaluate the applicable wage determination in each location, for applicable contracts, and ensure that the salaries and benefits being provided meet the minimum requirements.

Collective Bargaining. Contractors with a union workforce should review applicable collective bargaining agreements prior to taking any employment action to determine whether the proposed changes are a mandatory subject of bargaining. For instance, employers with a union workforce are typically required to bargain with a union over employees’ wages, hours, and working conditions (e.g., job duties and work assignments, transfers, severance pay, pension and 401(k) plans, vacations, work schedules, layoffs and

recalls). At a time when certain actions seem necessary to protect the health of the company, employers must nevertheless remember their third-party agreements, such as collective bargaining commitments, that may significantly limit the range of available options.

Prime-Sub Commitments. The issues outlined above address an employer’s obligations to its workforce, but another consideration is the prime and subcontractor relationship. When a prime contractor accepts a government contract, it commits that it will “flow down” certain contract clauses to its subcontractors to ensure their compliance with various government obligations. These clauses frequently relate to employment issues—from affirmative action to E-Verify. At a time when employers at every level are cutting costs, the prime contractor’s attention to properly flowing down these obligations to its subcontractors’ is more crucial than ever and any evaluation of an employer’s adjustment must include an assessment of the impact on subcontractors.

For the foreseeable future, contractors will likely face declining contract spending at the federal level. Accordingly, government contractors and human resource professionals will need to engage in a dialogue on how to best manage a costly workforce, while limiting potential liability. Addressing the issues outlined above will be pivotal in meeting this challenge.

Richard Rector is a partner and chair of the Government Contracts practice at DLA Piper in Washington, D.C. Nicole Smith is a partner, and Michelle Sumner is an associate, in DLA Piper’s Labor & Employment practice in D.C. 3

Service Contract Act Training

S C A

Complying with the Service Contract Act (SCA) is one of the most technically challenging aspects of administering a federal service contract. The SCA governs pay rates for many service occupations—get it wrong, and your company can face loss of reimbursement or even debarment. But getting it right is no small feat.

To comply with the SCA, the entire contracting operation—from executive leadership to business developer, from proposal writer to accountant, from project manager to human resources specialist —needs to be conversant with the requirements of the act.

PSC is pleased to offer the only SCA training conducted in partnership with the U.S. Department of Labor, Wage & Hour Division.

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

October 23-24, 2013 Visit www.pscouncil.org for more details and registration.

28 / Service Contractor / June 2013

Professional Services Council

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

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

Federal Cost Reduction Act of 2013, Connolly (D-VA)

Summary Would encourage greater planning and transparency regarding the federal government’s data center consolidation initiative and would require greater detail on cost savings as a result of data center consolidation.

STATUS Referred to Armed Services, Oversight and Government Reform, and Transportation and Infrastructure Committees on 2/4/2013.

H.R. 472

NEW Balancing Act, Ellison (D-MN)

Summary Seeks to replace sequestration with other spending reductions and revenue-generating measures.

Includes a provision that would limit the allowable cost of contractor compensation to $200,000 per year.

STATUS Referred to Ways and Means, Budget, Oversight and Government Reform, Armed Services, Education and the Workforce, Transportation and Infrastructure, and Financial Services Committees on 2/5/2013.

H.R. 505

H.R. 548

NEW

Border Infrastructure and Jobs Act of 2013, Grijalva (D-AZ)

Summary Would prohibit an agency from awarding a contract related to border security unless 30 percent of the labor for the performance of the contract is performed by a local subcontractor, with exceptions.

STATUS Referred to Homeland Security, Ways and Means, Transportation and Infrastructure, Small Business, Oversight and Government Reform, Foreign Affairs, and Agriculture Committees on 2/6/2013.

Cyber Intelligence Sharing and Protection Act, Rogers (R-MI)

Summary Would establish cyber threat intelligence sharing procedures between the intelligence community and certain private sector entities.

STATUS Passed by the House (288-127) on 4/18/2013.

H.R. 624

H.R. 731

Protecting Americans Abroad Act, Radel (R-FL)

H.R. 735

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

Summary

STATUS

Summary

STATUS

Would allow the State Department to use best-value contracting in awarding local guard or protective service contracts in high-risk areas abroad under the diplomatic security program.

Referred to Foreign Affairs Committee on 2/14/2013.

NEW

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

Referred to Homeland Security and Transportation and Infrastructure Committees on 2/14/2013.

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

Summary

STATUS

Would propose for debarment any contractor with an unpaid, seriously delinquent tax debt.

Would require prospective contractors to certify that the contractor has no unpaid, seriously delinquent tax debt.

Passed by the House (407-0) on 4/15/2013.

Professional Services Council

Service Contractor / June 2013 / 29

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

Newly introduced since last issue

H.R. 929

Major action taken since last issue

Bill became law since last issue

Patriot Corporations of America Act of 2013, Schakowsky (D-IL)

NEW

Summary Would give preference in bid proposals to any entity that is a patriot corporation as defined by the Internal Revenue Code. Would reduce tax rates for patriot corporations by 5 percent of the taxable income of the corporation.

STATUS Referred to Ways and Means and Oversight and Government Reform Committees on 2/28/2013.

Department of Defense, Military Construction and Veterans Affairs, and

Full-Year Continuing Appropriations Act of 2013, Rogers (R-KY)

Summary Would fund government operations through September 30, 2013, and provide for full-year

defense appropriations and military construction/veterans affairs appropriations. Would extend funding at the level required by the March 1 sequestration order. Would extend the pay freeze for federal employees.

STATUS Became Public Law 113-6 on 3/26/2013.

H.R. 933

H.R. 1109

To amend title 10, United States Code, to require cost or price to the Federal NEW Government be given at least equal importance as technical or other criteria in evaluating competitive proposals for defense contracts., Grayson (D-FL)

Summary Would require that cost or price of a contract be given at least equal importance as technical or

other criteria in evaluating competitive proposals for defense contracts.

STATUS Referred to Armed Services Committee on 3/13/2013.

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

NEW

H.R. 1232 Federal Information Technology Acquisition Reform Act, Issa (R-CA)

NEW

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

NEW

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

NEW

H.R. 1688

NEW

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.

Summary

STATUS

Seeks to reform federal government acquisition of information technology by providing additional 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.

Reported by Oversight and Government Reform Committee on 3/20/2013

Summary Would allow contracting officers to consider information regarding domestic employment before awarding a federal contract.

STATUS Referred to Oversight and Government Reform and Armed Services Committees on 3/21/2013.

Summary

STATUS

Would amend the Small Business Act to exclude as a small business, for purposes of meeting federal agency contracting goals with small businesses, any small business (or subsidiary thereof) that is publicly traded, or any business (or subsidiary thereof) with more than 50% non-U.S. citizen ownership.

Referred to Small Business and Oversight and Government Reform Committees on 4/18/2013.

Never Contract with the Enemy Act, Shea-Porter (D-NH)

Summary Would give a Senior Procurement Executive or the commander of a geographic combatant command the authority to terminate for default or void a contract or restrict the future award to the contractor if a company or its employees are identified as providing funds directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States.

STATUS Referred to Oversight and Government Reform and Armed Services Committees on 4/23/2013. Related bill: S. 675.

30 / Service Contractor / June 2013

Professional Services Council

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

Newly introduced since last issue

Major action taken since last issue

Bill became law since last issue

H.R. 1793 Global Partnerships Act of 2013, Connolly (D-VA)

Summary

STATUS

NEW

Seeks to streamline and improve USAID’s procurement process, to maximize transparency, 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. 1960

NEW

National Defense Authorization Act for Fiscal Year 2014, McKeon (R-CA)

Summary Contains a number of provisions affecting the contracting community including provisions regarding total workforce management, small business contracting, procurement of information technology and other areas.

STATUS Referred to Armed Services Committee on 5/14/2013.

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

Summary

STATUS

S. 21

Would provide a preference to offerors for procurements over $25,000,000 that employ veterans as at least 5 percent of its workforce. Would also make a contractor’s repeated failure to comply with laws relating to employment and reemployment rights of members of the military as grounds for suspension or debarment.

Referred to Veterans’ Affairs Committee on 1/22/2013.

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

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

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

S. 169

Immigration Innovation Act of 2013 (I-Squared Act), Hatch (R-UT)

Summary Would raise the annual H1-B visa cap and would uncap the advanced degree exemption for employees with an advanced degree from a U.S. college or university.

STATUS Referred to Judiciary Committee on 1/29/2013.

S. 171

Military Pay Continuation Act of 2013, M. Udall (D-CO)

Summary Would require DoD to continue to pay active members of the armed services, civilian DoD personnel who support the armed services, and DoD contractor personnel who directly support the armed services during a government shutdown.

STATUS Referred to Appropriations Committee on 1/29/2013.

Assuring Contracting Equity, T. Udall (D-NM)

Summary Would raise the government-wide small business contracting goal to 25 percent from 23 percent and would also increase the goals of each of the various small business subcategories to 10 percent. Would also limit to two the number of small business subcategories in which agencies could take credit for small business performance.

STATUS Referred to Small Business and Entrepreneurship Committee on 1/31/2013.

S. 196

S. 675

INever Contract With the Enemy Act, Ayotte (R-NH)

NEW

Summary Would give a Senior Procurement Executive or the commander of a geographic combatant command the authority to terminate for default or void a contract or restrict the future award to the contractor if a company or its employees are identified as providing funds directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 4/9/2013. Related bill: H.R. 1688.

Professional Services Council

Service Contractor / June 2013 / 31

Wyle Tackles the Tough Jobs

Wyle’s team of engineers, scientists and flight crew tackle the tough jobs, such as completing the first airborne refueling of the Joint Strike Fighter F-35B short takeoff/vertical landing variant.

With 16 years of dedicated support for the JSF program, Wyle provides engineering and program management support; foreign military sales management; flight test support; threat reprogramming, analysis and assessments; and basing and ship suitability services. For more information, go to www.wyle.com

32 / Service Contractor / June 2013

Experts for the 21st Century

Professional Services Council

Reproduced with permission from Federal Contracts Report, 99 FCR 559, 05/07/2013.

Copyright©2013 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

Policy Spotlight

New Cybersecurity FFRDC Proposal Would Compete with Private Sector Capabilities

by Roger Jordan, PSC Vice President of Government Relations

T

he National Institute of Standards and Technology (NIST) is seeking to create a Federally Funded Research and Development Center (FFRDC) to help it accelerate the widespread adoption of integrated cybersecurity tools and technologies. The intentions are noble, but NIST is overlooking a critical element by taking the FFRDC route: private-sector capabilities. The majority of the capabilities NIST is seeking are already well established and available from many private-sector corporations, thus negating the need and legal justification for establishing an FFRDC. NIST’s April 22 Federal Register notice announcing the creation of the FFRDC states that the proposed National Cybersecurity Center of Excellence (NCCoE) FFRDC will have three primary purposes: • research, development, engineering, and technical support; • program/project management; and • facilities management.

The notice goes on to say that ‘‘NIST has identified the need to support the NCCoE’s mission though the establishment of an FFRDC. In evaluating the need for the FFRDC, NIST determined there are no existing FFRDCs or contract vehicles that provide the scope of services NIST requires.’’

First, based upon review of the scope of work described by NIST, it is logical to conclude that the capabilities sought are available from private sector companies. In fact, many would argue that elements of the private sector are actually leading the way in cyber.

Thus, one must question whether NIST conducted broad market research—beyond just an analysis of existing contract vehicles—that fully explored the private sector’s capabilities to meet its needs.

Furthermore, the organizational conflicts of interest that existed several years ago that led towards a preference for FFRDCs no longer exist, in large part. Hence, NIST should also be questioned about whether they fully considered divestitures across industry or simply assumed that conflicts of interest existed.

Second, while NIST may be accurate in its determination that there are no existing contract vehicles available to purchase the types of services they are seeking, that is not what the FAR requires in the assessment of whether to establish an FFRDC. In fact, it is irrelevant. What the FAR requires is that the sponsoring agency ensure ‘‘existing alternative sources for satisfying agency requirements cannot effectively meet the special research or development needs.’’1 1

So while there may not be an existing contract vehicle available, that is not the same thing as determining whether the capabilities are in fact not available in the private sector. So, at best, NIST is loosely applying the circumstances necessary to justify the creation of an FFRDC. The potential consequences of such an approach are well known. Tasks assigned to FFRDCs are often noncompetitive, solesource assignments, of the type so often criticized by members of Congress when they are made to private-sector firms. As a result NIST is opening itself to significant cost vulnerabilities. An analysis of what little FFRDC data is available demonstrates that FFRDCs are often significantly more expensive than contractors, due in no small part to their noncompetitive nature.

What is of further concern to industry is that the decision to create an FFRDC seems to have already been made. While NIST’s request in the Federal Register notice for information about ‘‘the presence of any existing private- or public-sector capabilities in this area that should be considered’’ offers a glimmer of hope that the final decision to use an FFRDC has not been made, history proves otherwise. It is not unrealistic to presume NIST will follow the same path that the National Institutes of Health (NIH) followed in their recent creation of an FFRDC to implement the Patient Protection and Affordable Care Act. In that case, NIH provided the three notices of their intent, as required by the FAR, but failed to provide any additional, meaningful details in the subsequent notices and largely ignored requests for more information or concerns posed by industry that the work they sought was widely available in the competitive market.

Cybersecurity and health care reform are critical issues, and the competitive marketplace is an excellent source of support for development and implementation efforts. As we all know, in our current fiscal environment, cost must also be a priority consideration. And there may be considerable cost savings available by rethinking the FFRDC approach in this situation. At the very least, greater justification for relying on an FFRDC in lieu of private sector companies and a vigorous analysis of how NIST will ensure competition for work assigned to an FFRDC is necessary prior to allowing NIST to move forward. 3

Federal Acquisition Regulation Part 35.017.2(a)

Professional Services Council

Service Contractor / June 2013 / 33

Committee Corner:

The PSC Contract Finance and Cash Flow Committee

by Alan Chvotkin, PSC Executive Vice President and Counsel

F

ollow the money. That guidance makes smart business sense. It is also a wise choice when evaluating how to maximize your membership when selecting appropriate PSC committees and task forces for your engagement.

The PSC Contract Finance and Cash Flow (CF2) Committee is one of PSC’s longest-standing policy committees and joining it will help you achieve both.

The CF2 Committee addresses a broad range of issues associated with contract payments and financings, including the cost accounting standards, the costs principles and the government’s audit policies. The committee also serves as the lead for PSC’s relationships with the Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA) and the Defense Finance and Accounting Service

Providing

resPonsive legal counsel with a

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Mergers and Acquisitions Government Contracts Law Claims and Bid Protests Business and Corporate Law Size and Status Protests Small Business Programs Regulatory Compliance Labor and Employment Law Mentor-Protégé Programs Litigation Joint Venture Agreements Intellectual Property Law SCA Compliance Government Relations Services Native American Law Trade Association Law Guiding growth. Securing success.

888 17th Street, NW 11th Floor Washington, D.C. 20006 202-857-1000 www.pilieromazza.com pmpllc@pilieromazza.com

34 / Service Contractor / June 2013

(DFAS). However, the committee’s scope and charter is not limited to Defense Department activities. In addition, the committee serves as a focal point for PSC member company discussions of a wide range of finance and cash flow issues, including those relating to sequestration and prompt payment. A relevant government speaker is often invited to address the committee. For example, in each of the last five years, the committee has separately hosted representatives from DFAS and from DCMA for “annual updates.”

The committee’s recent key contributions have included assisting in PSC’s development of several rounds of extensive written comments on the Defense Department’s defense business systems rule and on accelerating payments under various government electronic pay systems. CF2 also worked with DFAS and the government acquisition community on standardizing the payment terms under government contracts to facilitate payment validation and processing and worked with (and at times against) DCAA on several DCAA contractor audit programs. In addition, the committee met with the Treasury Department and submitted extensive comments on Treasury’s proposed electronic invoicing and payment system—many of which were incorporated into Treasury’s final system design.

The committee generally meets every other month, with additional sessions as necessary to cover emerging topics or opportunities. For more information about the committee, or to join, visit the Committees and Task Forces page of the PSC website. 3

Stay up-to-date on the state of our industry with a

Market & Policy Briefing

by PSC staff or subscribe to PSC’s quarterly industry updates on our YouTube Chanel

http://www.youtube.com/user/ ThePSCouncil Professional Services Council

MEMBER NEWS Marc Anderson Honored As 2013 Community MVP by Washington Football Legends

PSC Board Member Marc Andersen, of Ernst & Young, received the Daniel Snyder Community MVP Award at the 2013 Washington Football Legends event on March 23 in recognition of his business and philanthropic achievements as a business leader in greater Washington. As a charter member of the Redskins Charitable Foundation, Andersen has worked for a decade to raise money, awareness and provide support to the foundation and its signature programs. Andersen worked with the foundation to create the Touchdown for Literacy campaign, and with the support of his firm, raised tens of thousands to support literacy programs. A scholarship was named in his honor.

Stan Soloway (left) joins Tom Brokaw and the Transformation Systems, Inc. team (starting top right): Martin Leppitsch, Robert Wilson, Sharon Flinder and (bottom starting right): Altyn Clark, Janelle Millard and Marta Wilson, at the Easter Seals Advocacy Awards on Apr 16, celebrating the organization’s veterans employment programs. TSI actively supports, and TSI Founder and CEO Wilson is a board member of Easter Seals Serving DC | MD | VA. Photo courtesy of Easter Seals Serving DC | MD | VA.

SSP Recognizes SPA President with Lifetime Achievement Award

PSC Board Member Marc Andersen (3rd from right), of Ernst & Young, received the Daniel Snyder Community MVP Award at the 2013 Washington Football Legends event on March 23. He is joined by (from left) Shaq Harris, Bob McCarthy, Glenn Harris, Brian Westbrook, Byron Leftwich, Herman Boone, Ken Houston, Thomas Morehead and Doug Williams. Photo Courtesy of Washington Football Legends.

Transformation Systems Celebrates Veterans

Transformation Systems Inc. celebrated the contributions Easter Seals Serving DC | MD | VA has made to the military, veterans and their families in the region at Easter Seals’ annual Advocacy Awards on April 16, which honored NBC’s Tom Brokaw and actor Gary Sinise, among others.

Easter Seals Serving DC | MD | VA is one of TSI’s charities of choice for its “Feed to Lead Program.” In addition, TSI Founder and CEO Marta Wilson serves as a board member of the organization. The mission of TSI’s Feed to Lead Program is to nourish the body, mind and spirit by supporting leadership potential in those who need a helping hand. To this end, TSI supports strategically aligned organizations including So Others Might Eat, Marine Toys for Tots Foundation Literacy Program, Equal Footing Foundation, American Red Cross and Easter Seals Serving DC | MD | VA. TSI makes community investments with these charities of choice through funding and volunteer hours while providing and sponsoring opportunities for employees to get involved with Feed to Lead activities each month. As recognition for the impact of its Feed to Lead Program, TSI received the 2012 National Jefferson Award for Public Service.

Professional Services Council

Rear Adm. Terry Benedict, director of the Navy’s Strategic Systems Programs (SSP), presented Phillip E. Lantz with the Fleet Ballistic Missile (FBM) Lifetime Achievement Award during a ceremony May 9. Lantz is the President and CEO of Systems Planning and Analysis, Inc. (SPA), headquartered in Alexandria, Va. The award recognizes “significant lifetime contributions in the field of science and engineering that have been pivotal to the development and success of the FBM Strategic Weapons System,” according to a letter presented with the award.

Lantz’s association with the FBM program began in 1960, when then-Ensign Lantz was one of 100 members of the first submarine school to include Ensigns since World War II. After qualifying in submarines, he was assigned as Assistant Navigator on the Ballistic Missile Submarine USS TECUMSEH while it was being built. Lantz left the Navy in 1964, and began working with Strategic Programs (SP) as part of the Johns Hopkins Applied Physics Lab in 1965. His support of Strategic Weapons System programs has continued uninterrupted since then.

He founded SPA in 1972, and has worked directly with 11 of the 13 SSP Directors.

In his remarks, Lantz thanked the many people he has worked with in SSP over the years, several Rear Adm. Terry Benedict presents Phillip SPA division directors, Lantz with the FBM Lifetime Achievement and his wife, Paula, for Award. Photo courtesy of SSP and SPA. Photo courtesy of SSP and SPA. her 51 years of supService Contractor / June 2013 / 35

MEMBER NEWS port. Mrs. Lantz also received a certificate from the program, thanking her for her contributions to “SSP, the Navy, and our nation.”

SPA Welcomes Retired Admiral Kirk Donald to Executive Team

Systems Planning and Analysis, Inc. (SPA) announced April 26 that retired Admiral Kirkland H. Donald, will join the company in early June as executive vice president, chief operating officer, and a member of SPA’s Board of Director. SPA plans for Donald to become the president and CEO before the end of the calendar year. Phillip E. Lantz, founder and current president and CEO of SPA will continue as chairman of the Board of Directors after serving as president of SPA for 41 years.

Baker Tilly Virchow Krause, LLP and Holtz Rubenstein Reminick LLP Announce Merger

Baker Tilly Virchow Krause, LLP (Baker Tilly) and Holtz Rubenstein Reminick LLP announced the merger of the two firms, effective June 1, 2013. The name of the combined firm will be Baker Tilly Virchow Krause, LLP. Holtz Rubenstein Reminick, a New York firm with offices in Manhattan and on Long Island, will be the platform for Baker Tilly’s New York practice and further expands the firm’s presence on the east coast.

Sabre Systems COO James Krout Receives Executive Management Award

Sabre Systems, Inc. Chief Operating Officer (COO) James Krout was named a 2013 Executive Management Award winner by Philadelphia SmartCEO magazine on March 14. The awards program highlights chief executives who have gone above and beyond to support their organizations’ initiatives.

The winners are recognized for their creative management vision, leadership philosophy, innovative strategy and undeniable work ethic. Krout was one of 12 COOs to receive the award among a total of 30 high-achieving executives.

Sabre Systems, Inc. Appoints Mariano Alicea Jr. as Senior Vice President, Corporate Development

Sabre Systems, Inc. has named Mariano Alicea Jr. as the company’s senior vice president for corporate development.

Alicea will have executive management responsibility and authority over Sabre’s business development and marketing activities within federal civilian agencies, Department of Defense (DoD), international and commercial market sectors. Alicea will place a focus on new market entry, business diversification and strategic partnering and will play a key role in the company’s merger and acquisition (M&A) activities.

NeoSystems Announces Staff Expansion in Three Service Areas

NeoSystems Corp. announced that it has recently hired 10 highly experienced professionals to assist its clients in three strategic areas: Deltek Consulting, Financial Planning & Analysis, and IT Services. The new staff has an average of 15 years of business related technology and financial services experience.

Recent additions to technical staff include: Deltek Consulting Kevin Birns, Consultant Louis Delouiser, Principal Consultant Stacy Francois, Consultant Leroy Holloway, Senior Consultant Christine Liu, Principal Consultant Mike O’Malley, Principal Consultant Financial Planning & Analysis Imran Hasnain, Financial Analyst Athar Jatoi, Financial Analyst IT Services Bruce Merevick, Technical Consultant Byron Ward, Technical Consultant

CETRA Language Solutions Expands with New Hires

CETRA Language Solutions announced the addition of five staff members who will play a significant role in the company’s global expansion plan. Three of the new hires are employed at the company headquarters in Pennsylvania while the other two will be working for CETRA Ireland Ltd, a subsidiary of CETRA, Inc. Robin Smith joined the Interpretation Services Department in Elkins Park, PA as project manager. William Gao and Mark Newman joined the Translation Services Department as project managers in the Elkins Park office. Hans Breuer, a native of Germany, was contracted by CETRA Ireland to serve as its business development manager in Europe. Gabriela Luta, a native of Romania, joined the CETRA Ireland office as a project manager.

Pragmatics Appoints New Vice President and General Manager Federal Civilian Division

Pragmatics appointed Christopher Hegedus as vice president and general manager of the company’s Federal Civilian Division. Hegedus will manage and lead all aspects of Pragmatics’ service to customers including the Departments of Homeland Security and State, the Federal Aviation Administration, the U.S. Patent and Trademark Office, and other federal agencies. services since 1995. Larry brings expertise in behavioral health service systems—particularly at the state level—national technical assistance, and workforce development.

Have a story for Service Contractor’s Member News section?

E-mail Bryan Bowman at bowman@pscouncil.org.

36 / Service Contractor / June 2013

Professional Services Council

2

3

PSC: SCENE & HEARD 1

5

4

1

PSC Pres. Stan Soloway speaks at the 8th Annual Market Meets Market seminar on April 24, which PSC co-hosted with member-company Houlihan Lokey.

2

GSA’s PEO for OASIS, Jim Ghiloni, provides PSC members with an overview of the OASIS draft RFPs and discusses changes that GSA is already considering, at an April 18 OASIS Working Group meeting.

3

PSC Pres. Stan Soloway (right) testifies before the Senate Homeland Security and Governmental Affairs Committee on the cost and impacts of budget uncertainty during a March 13 hearing that also featured academic, state and union leaders.

38 / Service Contractor / June 2013

4

PSC EVP Alan Chvotkin (right) moderates a panel on joint ventures in the federal marketplace at an April 24 event PSC co-hosted with Venable, Republic Capital Access, Aronson, and Federal Strategies Group.

5

PSC Pres. Stan Soloway (center) discusses the challenges federal contractors face in the current budget environment during an April 18 Bloomberg Government, Public Contracting Institute and PSC event, “Navigating Federal Contracting in the New Budget World.”

Professional Services Council

o Ctobe r 6–8, 2013 • th e gr e e nbr i e r

Save the Date PSC’s hallmark event of the year gathers more than 500 business leaders and government officials to discuss the major market, industry, and policy trends and challenges.

Save big by regiStering before July 15! registration and sponsorships are now open. visit www.pscouncil.org for full details.

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