Service Contractor Magazine - June 2012

June 2012 / The Voice of the Government Services Industry

Journey to the

Cloud

ALso inside: 7

FINding Balance in a dynamic market

10

cloud technology

13

adapting to a cloud business model

31

Affirmative action & disability

Save the Date! september 30–october 2, 2012 • the greenbrier

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.

This members-only event grows each year, so be sure to mark your calendars and plan to attend!

Check www.pscouncil.org frequently for registration, lodging information, and sponsorship opportunities.

June 2012 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 Carrington Blencowe Manager, Event Support blencowe@pscouncil.org Bryan Bowman Manager, Marketing bowman@pscouncil.org Matt Busby Manager, Member Services busby@pscouncil.org Elise Castelli Manager, Media Relations castelli@pscouncil.org Bethany Egan Administrator, Coalition 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 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 Membership Associate tarascio@pscouncil.org Kristine Thomas Executive Assistant thomas@pscouncil.org Callander S. Turner Vice President, Marketing & Membership turner@pscouncil.org

The Voice of the Government Services Industry

10 Cloud Technology

7

Sounding Board:

Finding Balance in a Dynamic Market

13

Adapting to a cloud business model

18

PSC Turns 40

31

affirmative action & disability

4 President’s Corner / 17 Doing Good is Good Business / 23 Bill Tracker / 33 Policy Spotlight/ 34 Committee Corner / 35 Member News / 37 Market View 2012 / 38 PSC Scene and Heard

For advertising or to submit articles or items for the Member News section, contact: Bryan Bowman

Professional Services Council

Service Contractor / June 2012 / 3

PRESIDENT ’S CORNER

I

n late April, two dozen Democratic senators sent a letter to Secretary of Defense Leon Panetta raising concerns that contractors were not facing or experiencing the same kinds of pressures that federal employees are facing as a result of the current fiscal quagmire. The letter made for a good rhetorical read but it was largely lacking in substance. In fact, and as every PSC member company has witnessed, spending on contracts is coming down.

The government spent 4 percent (or nearly $10 billion) less on services in 2011 than in 2010. Add to that the tens of billions of dollars in planned reductions to the investment accounts at DoD, the mandated reductions in certain narrow categories of professional services, and more, and the reality becomes clear. This industry, which serves such a critical role in helping government agencies achieve their missions, is very much feeling the pinch. Tens of thousands of employees have already felt it, or will feel it, as well.

Yet, the sky is not falling. The government’s needs, even in a resource constrained environment, remain substantial and this industry remains an essential, and in certain sections even growing, partner in meeting those needs. So, even as the total amount of spend declines, some individual categories will remain robust and perhaps even grow.

And there lies the challenge to every company: how best to position yourself to survive, and even thrive, in the new austere environment. Of course, there are no easy answers to that multi-layered question but, in this issue of Service Contractor, we have tried to address a few facets of that challenge.

In our regular “Sounding Board” feature, three members of the PSC Board of Directors—Jim Neu (Wyle), Bob Vincent (VW International) and Shiv Krishnan (Indus) address the question of how recent trends have affected small and mid-tier businesses and how such firms might best navigate the current marketplace. Turning from the broad market dynamics to a specific and significant market force, George Newstrom (Dell Federal) and Leif Ulstrup (CSC) offer their perspectives on the opportunities and challenges associated with cloud computing. Whether the government moves to the cloud is no longer in dispute, but what that move looks like and what it means for the federal information technology sector remains an open question. I think you’ll find the perspectives the authors offer on both aspects to be interesting and informative.

We are also delighted to feature a special article from Evan Hochberg, national director of community involvement for

4 / Service Contractor / June 2012

Deloitte, on the compelling rationale for and importance of skillsbased volunteering, not only to help solve critical community needs, but also as a key recruiting and retention tool. Deloitte as a company, and Hochberg as an individual, are leaders in the national “pro bono” movement known as “A Billion + Change.” Many of you received letters from Senator Mark Warner on this topic earlier this year, challenging our industry to step up and engage in this exciting effort. To that end, Hochberg’s insights on the “whys” and the “hows” are of great and timely value.

In this issue’s legal news, Todd A. Bromberg and Jillian Volkmar from member law firm Wiley Rein explore the implications and ramifications of the administration’s proposed disability hiring rule; and Lawrence J. Halloran, PSC’s director of the International Development Initiative, discusses the risks and dynamics of the transition in Afghanistan to security provided by the Afghan Public Protection Force. Finally, our Vice President of Government Relations Roger Jordan introduces PSC’s new “Legislative Action Network,” a key tool to keep our members abreast of and engaged in significant legislative developments.

These are indeed times of uncertainty for our industry. But it is not a zero sum game. There remains a great deal of work to be done for the government and a long list of policies and practices that will determine in the long run how that work is done. Given the environment, our collective involvement and engagement has never been more important. And we look forward to continuing our work with you.

In the meantime, my thanks for your continued support of PSC.

Stan Soloway President & CEO

Professional Services Council

Professional Services Council

Service Contractor / June 2012 / 5

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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.

Finding Balance in a Dynamic Market QUESTION: What have been the most significant changes in market dynamics for small and mid-tier firms over the last few years? How do you think those dynamics will be affected, for better or worse, over the next few years, given the government’s fiscal challenges?

T

Shiv Krishnan Chairman and CEO, INDUS Corporation

he market is always filled with challenges. In the government marketplace, the last few years have been particularly brutal. Key events which led to the challenges include the two long wars drawing resources from several other programs unrelated to the wars; an unprecedented economic turmoil leading to a long recession and the resulting ballooning of the nation’s deficits and debt; a polarized country debating the healthcare law and debt ceiling; and the constant struggle over passing the annual budget. The end result for our industry has been the continuous government delays in making contract award decisions. With companies having invested enormous resources to bid on contracts that languish for several months before award, such delays impact the financial well-being of all companies, and the small and mid-tier firms in particular. The cost of this inaction is ultimately significant to the government in not being able to deploy technology to achieve efficiencies in a timely fashion. The significant changes in market dynamics can be tied to a few key areas. continued on page 8

T James E. Neu

Senior Vice President, Business Development, Wyle

here’s no question the market dynamics have changed in the last few years, perhaps with greater effect on the mid-tier services business than others.

Despite the many changes in budget, efficiency initiatives, contracting methods, and so on, I believe the organizational conflict of interest (OCI) rules have been the most significant change for Wyle and for other mid-tier companies. The OCI rules, and the change in customer attitudes about OCI, made available several outstanding services business that had to be divested. These candidates were already competing in the full and open category, and possessed domain knowledge and contract histories that fit our business model.

The single greatest threat I see to mid-tier companies is the increased emphasis on small business prime work. In April, the House Small Business Committee approved 11 bills relating to small business, including one that would raise small business prime contracting goals and other bills that would establish new classes of set-asides. These proposed actions come on the heels of a comprehensive overhaul in 2010 through the Small Business Jobs Act (P.L. 111-240), continued on page 12

A

Robert Vincent President, VW International, Inc.

ccording to the American Express “Trends in Federal Contracting for Small Business, A Research Summary” for the American Express OPEN for Government Contracts: Victory in Procurement (VIP) for Small Business Program, federal government contract spending was down in fiscal year 2011 to just under $477 billion, about 12 percent below the previous year’s spending. This reduction in government spending, along with many other market trends, has continued to put a burden on small and mid-tier businesses. Budget issues; threats from in-sourcing, regulation and enforcement; and participation costs of the procurement process have added to the many challenges of sustaining and growing small businesses.

There are two major trends that I think have had an adverse effect on all government service providers, but particularly on small businesses. They are the increasing time it takes to award a government contract (and associated costs of those delays) and the worsening climate of regulation, audit and enforcement. continued on page 30

Professional Services Council

Service Contractor / June 2012 / 7

Shiv Krishnan

continued from pg. 7

1. Acquisition Workforce Challenges Result in Delayed or Cancelled Procurements

Over the last several years, the government acquisition workforce has dwindled to a fraction of what it used to be due to several factors including budget cuts, normal turnover with no replacement, and a higher number of seasoned, well-experienced professionals retiring. The result is delayed or cancelled or, in the worst case, flawed procurements. Though government hiring has increased in the past three years, some of it through insourcing that impacts small and mid-tier firms more, it will take the government at least a decade to replace and train the new workforce to bring them to the knowledge level required to efficiently manage the increasingly complex acquisition process. With the government’s fiscal challenges, the delays are inevitable and the situation will only worsen before it gets better. Small and mid-tier contractors must strengthen their relationships with their existing customers and increase their access to existing contract vehicles to survive, let alone grow.

2. GWACs

The increase in the number of multiple award contracting vehicles, be they governmentwide acquisition contracts (GWACs), enterprisewide acquisition contracts (EWACs), or other multiple award/ agency contracts (MACs), is tied to several factors including the government’s desire to simplify the acquisition process, a lack of required acquisition resources to make single-award actions, and the user access fees they can generate to relieve agency budgetary pressures. This serves the government buyer well by cutting down on acquisition cycle times for task orders awarded under these contracts competed among pre-selected vendors. These contracts cut both ways for small and mid-tier companies. Companies well positioned to track, bid, and win a spot on these multi-year, multi-billion dollar contracts, have the opportunity to win task orders and grow their business for the following 5 to 15 years. However, small and mid-tier contractors are unfairly impacted by the time it takes for the government to award these contracts. Some of the unintended consequences of the delays are the growth out of size standards for 8(a), service-disabled veteran-owned small business, women-owned small business, HUBZone, and other small business firms that, after spending 3 to 5 years chasing these large contracts, became ineligible when the final RFP is released. The flip side of this challenge is a benefit enjoyed by several well-honed small businesses that were able to squeak in an award before their time runs out as a small business and are able to enjoy the benefits of small business task orders for 5 to 10 additional years. With the government’s fiscal challenges, the use and proliferation of these contracts will only grow in the next several years. It will provide great opportunities for small and mid-tier firms with access to these contracts and make life a lot harder for those left without one and having to wait another 5 to 10 years for the next round.

3. Lowest Price Technically Acceptable (LPTA)

You know that the era of LPTA is here when you to go to any event around town and every company large, mid-tier, or small, invariably talks about LPTA. Buying “Lowest Price Technically Acceptable” is a short-sighted and expensive way of awarding government contracts. How can the lowest price be more expen8 / Service Contractor / June 2012

sive? When the government attempts to deal with current fiscal woes by accepting mediocrity, it awards contracts based on lower technical capability. The thought process behind this is that any issues can be corrected when times are better, but the irreparable damage would have already been done. It will be a lot more expensive to fix the problems created by LPTA awards several years down the road. By using LPTA awards, the government focuses more on current fiscal challenges and not establishing the proper course of action for the future by investing in technologies which will result in needed efficiencies down the road.

4. Mid-tier Squeeze

The government’s intent to create a competitive and expanded industrial base through a strong small business program has consistently increased the number of opportunities available for small businesses to compete for. Today, over $100 billion in contracts are awarded to small businesses every year. However, these programs fall way short of achieving the objective of supporting small businesses because of competing regulations in the execution of that laudable intent. The government has established numerous (and often competing and confusing) size standards, most of which limit small business sizes to $25.5 million, especially in the information technology sector where the government spends over $80 billion a year. The unintended consequence of this has been to create several “lifestyle” businesses, constantly trying to manage their revenues to be under the size standard in order to remain small. The other regulation hurting small business entrepreneurs, albeit with good intent, requires a large business acquiring a small business, to certify that they are no longer small. This puts the revenues from small business contracts in jeopardy after an acquisition. Being successful as a small business entrepreneur means that you either eternally remain small or sell your business for a lower value—both anti-entrepreneurial. Creating transitional programs and tiered approaches to enable healthy competition among successful small businesses and mid-tiers for various government contracts will help strengthen the industrial base and add much needed jobs to the economy.

5. Lower M&A Valuation Due to Regulations

Some of the current small business regulations promulgated to protect small businesses, unfortunately and unintentionally hurt them the most. Because of the constraints of some regulations, the most successful small businesses that become mid-tiers are squeezed by not being able to compete for contracts that helped them grow their businesses in the first place and by not being able to sell for market value because of the threat of losing any small business related revenue after the sale.

Several initiatives under consideration by Congress, with PSC’s active support, have the potential to at least begin to address this critical issue for our industry. A stronger cadre of small and mid-tier firms can especially bring needed competition for smaller contracts, bringing efficiency to the government during lean times without compromising technical innovation.

Having taken advantage of mentoring from other larger firms during our growth, I continue to remain passionate about giving back by mentoring other small businesses. Let me be honest, it is certainly not all altruistic—partnering with other small and large businesses is simply good for business. It allows us to combine the capabilities of successful firms to bring our best solutions and innovations to our government. 3 Professional Services Council

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Service Contractor / June 2012 / 9

Cloud Technology– A Journey to Blue Skies

by George Newstrom Dell Federal

Cloud technology is not about technology—it is about making information technology efficient and responsive to the organization and the mission.

Although the definitions of cloud technology seem to vary by individual, the reality is that organizations are seeking the same benefits: functionality, security, and a simplified path to the future of information technology.

10 / Service Contractor / June 2012

Professional Services Council

Defining Cloud Expectations

The success of emerging technology, including cloud, relies on strategic alignment of technology and business requirements. Building a technical solution for the sake of the technology rarely produces the results required by the business. Technology must be evaluated and weighed on consistent values. Suggested values include: • Functionality: Does the solution meet functional business requirements?

• Performance: Focused on response times, I/Os per second, processing power, class of servers and storage.

• Manageability: How is the solution protected and maintained?

• Fiscal Accountability: Minimize the financial impact to the organization by leveraging existing investments in hardware, software and licenses.

Driven by an agreed upon evaluation criteria, cloud technology can be properly designed and implemented. Evaluation criteria are not a foreign concept, and are used daily by most people. When purchasing a car or home, the purchaser establishes core criteria by which the purchase is evaluated. Technology is no different: Establish the criteria and evaluate business requirements against the criteria. Application of the technology is then functional, yielding greater results.

Cloud technology continues to be confusing for most recipients. Terminology used to explain functionality is ambiguous and fluid in definition. Among all of the available terminology, the design of cloud technology hinges upon these key questions: • Is the customer ready to share computer resources with other customers? The answer to this simple question defines whether the cloud architecture will be single-tenant (“private,” with dedicated computer resources), multi-tenant (“public,” with shared computer resources) or hybrid (which bridges public and private).

• Where does the customer want the cloud and data to reside? The answer may be a little more complicated, although will end up with one of the following: the cloud service will reside within my firewall (on-site/on-premise cloud), the cloud service will reside at a commercial hosting environment (hosted cloud), and/or the cloud service will be a mix of both on-site and hosted.

• What level of security is required? Does the customer have need for federal or state certifications? Security certifications are often associated with the FISMA Act of 2002, supported by security control sets found within NIST SP 800-53, rev3.

Defined by the answers provided, cloud architecture is constructed as any one of the following: single-tenant/on-premise or hosted (private cloud), multi-tenant within an agency/onpremise or hosted (community cloud), multi-tenant/hosted cloud (public cloud). The evaluation criteria assist in defining expectations and providing the customer with a solution required to meet business need.

Professional Services Council

Alignment of Business Drivers

Cloud technology is designed to deliver business value to an organization. Cloud technology must focus on specific deliverables or services that can be leveraged by the organization to meet a business requirement. Under no circumstance should the business requirement be compromised to meet the technology. Cloud solutions that are rigid may create obstacles to the alignment of business value. Flexible cloud environments should include: • Repeatability: The cloud solution must be repeatable.

Although cloud infrastructure is designed to meet specific business requirements, a majority of the solution must be consistent and repeatable.

• Supportable: Coupled with repeatability, the cloud solution (single or multi-tenant, on-premise or hosted) must be a supported configuration. The further technology drifts away from the providers “supported” model, the more risk to the success of the cloud.

• Governance: Cloud technology must include governance within the technology, as well as the organization implementing the cloud. Cloud technology unavoidably places an additional requirement for compliance and governance. Remember, if all users are accessing the cloud, one change can impact all stakeholders and users.

• Security: Cloud security is vital to the success of an implementation. Security standards must meet an organization’s requirement. Many cloud offerings include security alternatives, certifications and enablement.

• Integration: With many information technology services managed by a cadre of integrators (contractors/staff augmentation), the cloud infrastructure must provide a simplified and open standards approach for integration.

The open nature of cloud technology enables integrators to migrate customer services to the cloud.

In addition to the business drivers aforementioned, cloud technology must deliver a result. Too often cloud providers deliver an automated virtual platform. While this may be productive for some environments, cloud technology should address specific need.

• Email as a Service (EaaS): Provide an email, collaboration environment for files, videos and communication protocols.

• Software as a Service (SaaS): Starting with the easiest applications first, services (software and computer resources) are migrated to the cloud as virtual appliances or physical hardware taking advantage of cloud orchestration and automation.

• Platform as a Service (PaaS): Providing a development environment for the future expansion of cloud services.

• Infrastructure as a Service (IaaS): Host services based on a “steady-state” infrastructure.

Path to the Future of Cloud

The technological value of the “cloud” cannot be disputed.

The new infrastructure provides an organization with automation, provisioning, availability, and the opportunity to eradicate information technology challenges of the past. The name “cloud” may someday blow away to bring clear skies once again. 3

Service Contractor / June 2012 / 11

James E. Neu

continued from pg. 7

the provisions of which are just now being incorporated into regulations. Because customers already prefer large contractors for the largest procurements, the increase in small business set-aside contracts has come at the expense of mid-tier market share.

The Center for Strategic and International Studies (CSIS) points out that market share for businesses in the mid-tier category declined from 39 percent in 2001 to 33 percent in 2009, while small companies held their share and large businesses grew from 40 percent market share to 47 percent. CSIS defines the mid-tier sector as less than $3 billion in annual revenues, but not otherwise “small.” In 2010 we saw the large business market share trend reverse a bit, as several large businesses moved to divest services entities in response to the new OCI rules and small businesses posted their largest share increase of the decade.

This increased emphasis on small business prime work can actually add to the stresses of the market dynamics, increasing program cost and schedule risk at the expense of the very customers we are doing our best to support. When you couple the drive to meet small business set-aside quotas with the current schism between the technical/program customers and their contracting organizations, you sometimes get (a) set-asides in which the winner has no chance of executing the work without providing a full 49 percent share of the work to a large business (often the previous incumbent); (b) set-asides that will immediately end the winner’s small business status; or (c) situations in which a well-run business is put in a position to fail.

12 / Service Contractor / June 2012

The rapid rise of multiple award IDIQ contracts is another change that has and will continue to influence mid-tier companies.

These contracts provide both opportunity and temptation. Often they cover efforts a company would not bid on in a single-award competition. Yet, they also increase the cost of doing business in that you have to bid multiple times to win the work—once to win the IDIQ and then again for each task order. In the first bid, it’s necessary to meet every technical qualification, regardless of whether you intend to bid every task order. This results in the pursuit of teammates and a temptation to stray from your core competencies.

Additionally, the transition to quick-response task order RFQs has required investment in people and infrastructure. We’ve made the investment in both and we believe those will pay off in what promises to be a very dynamic environment going forward.

Probably the most pernicious development has been the rise of the lowest price technically acceptable (LPTA) contracting method for complex services. LPTA is the first topic in every value-measuring discussion or article I see because of its adverse impact on the very concept of value. For companies competing in the knowledge-based, high value-added domain, it undercuts the proven value proposition. No longer is it sufficient to provide the most experienced and effective team possible—in fact, that may be a losing strategy. LPTA offers particular risk to incumbents, and to customers, as it forces emphasis on minimal compliance without understanding the minimum.

When coupled with a contracts shop isolated from the program customer, LPTA can produce bizarre results, such as a cost-plus solicitation with cost realism explicitly excluded, or a structure which deprives the technical/program customer of a reasonable review. We have seen multiple RFQs stating that the evaluation team will be provided only the lowest priced proposal.

If that proposal is deemed acceptable, the team will not evaluate any of the other proposals. That surely has an unintended effect of stifling real competition.

Yogi Berra once said, “The future ain’t what it used to be.”

But we should avoid the trap of thinking the future should be the same as the past, especially when the past decade of rapid market growth has been the anomaly and not the norm.

Yogi also said, “It’s tough to make predictions, especially about the future,” but certain outcomes seem predictable. The overwhelming reality of budget reductions will not go away and the future won’t be what it used to be. The budget pressure, and our customers’ struggles to meet their mission in the face of it, will define the near future.

That means the bigger threat for the future is simply downsizing. More customers will realize they can’t control their appetite for, or don’t have the budget for, services and they will turn to manpower limits, firm-fixed-price contracts, and, unfortunately, LPTA procurements to limit their costs. As one contracting officer stated at a recent industry day, “We must manage our customers’ expectations.” At best we can hope that LPTA gets done the right way. Even eliminating the most egregious abuses of the approach would bring some predictability back to the market.

In this dynamic environment, we need to remember we exist to support our customers, be they warfighters, census takers, air traffic controllers, engineers, scientists, or managers. Our challenge is to ride the highest swells in a receding tide—and that’s not easy. On the other hand, our customers, employees, and shareholders deserve nothing less. 3 Professional Services Council

Federal Professional Services

Must Adapt to the Cloud Business Model

by Leif Ulstrup, President, Federal Consulting, CSC

C

loud, or shared, computing will change not only how information technology (IT) is acquired, but also how nearly all professional services are consumed and sold in the federal market.

Why is there so much buzz about the “cloud”?

Cloud computing started as an evolutionary technology advance, called “virtualization.” It leverages efficient pooling of IT infrastructure, consumed as a service.

Led by VMware—in parallel with business model innovations pioneered by Google, Amazon Web Services, Apple, Salesforce. com and Microsoft—cloud computing has set in motion a whole new approach to producing and consuming information and IT. The National Institute for Standards and Technology says cloud computing includes five essential characteristics: on-demand self-service, broad network access, resource pooling, rapid elasticity and measured service. The cloud business model requires that a provider develop “service catalogs” of standardized offerings, with transparent prices and service-level expectations so that consumers can easily choose what they need.

This model can be extended to a broad array of services in an “as-a-service” model.

What has been known as “managed service” will transform from an art into a management science. “As-a-service” IT will make it possible to deliver many professional services, such as business processes and logistics support, more flexibly and at lower cost on an as-a-service basis.

Future success in delivering professional services will depend upon mastering the new business model. Scope and scale,

along with access to commercial industry and global expertise, will become more important as additional risk shifts from the consumer of services to the producer. Is your organization prepared?

Consumerization of IT The rapid adoption of high-speed, mobile smart phones and tablets amplifies demand for consumer-focused, cloud-based information and IT. It is also transforming what people expect from enterprise IT. Not since the introduction of the PC have users wrested so much control of the IT agenda away from enterprise IT organizations. Users want more freedom to consume information services in ways that make them more agile and productive.

The change is happening at internet speeds.

CIOs are struggling to keep up.

Knowledge workers want “bring your own device” (BYOD) options. They want wireless access to secure enterprise content anytime and anywhere. They have powerful information resources in their private lives that are easy to learn, use and consume, and they demand the same in their workplace. Yet CIOs face tight budgets, sharply increased cyber threats and rising compliance standards.

Balancing user demands with CIO constraints creates enormous pressures.

Many CIOs and mission organizations are experimenting with public cloud technology for lower-risk workloads while also developing more secure enterprise “private” and “hybrid” clouds. continued on page 14

Professional Services Council

Service Contractor / June 2012 / 13

from page 13

Knowledge Worker Productivity Demands will Accelerate this Change The work of the federal government and the professional services industry is “knowledge work,” as the famous management thinker Peter Drucker defined it more than 40 years ago. Productivity depends on individuals’ and organizations’ making themselves effective in complex value chains. Competition in the federal market is fierce, driving professional services providers to increase productivity. Budget pressures on federal agencies are also fierce, driving them to cuts costs while meeting demands for improving the services they deliver. This interplay will affect in many new ways acquisition, oversight, visibility, definition of work, and how professional services are packaged and consumed.

Moving Forward You can see how a perfect storm is brewing with increased pressures on federal CIOs to move a business model that offers great opportunity but also raises many questions, such as control over how work gets done. The enormous benefits of cloud computing and as-a-service delivery are pushing us all to make the technology and business model work.

Within every challenge lies opportunity. Agencies want the commercial cost advantages of public clouds while managing risk and securing mission and business-critical data and applications.

Private clouds offer the federal government the least risk with the

14 / Service Contractor / June 2012

most benefit for higher-risk, mission-critical workloads. They alleviate much of the risk by offering complete control to an organization, thereby assuring enhanced security and compliance controls.

It is critical that the correct cloud deployment model be selected, based on the type and sensitivity of data and the ability to meet individual security policies, certifications and accreditations.

Some organizations for some purposes may have workloads that can sit on a public cloud, while other workloads need a more secure private cloud. A cloud adoption assessment can help determine where to go.

At CSC, our mantra is “the right cloud, the right way.” We have seen enormous growth and demand for these solutions by our global commercial, as well as public sector, clients. We are adapting this deep expertise to our federal clients. Given the nature of the cloud business model and enabling technology, easy access to the global scope of adoption in our client base accelerates our learning and development of superior solutions and reusable platforms for federal clients.

Fiscal tightening, the explosion of data made possible by modern computing, and the public’s demand for steadily improving government services are powerful catalysts for change. Our industry has arrived at a tipping point. It is time for a fresh look at how secure cloud computing, delivered as a service, can do a lot more to transform and streamline government operations. 3

Professional Services Council

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Service Contractor / June 2012 / 15

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Professional Services Council

Doing Good is Good Business

by Evan Hochberg

National Director, Community Involvement, Deloitte Services

A

s businesses continue to face competitive pressures on all fronts, it has never been more important to drive maximum value from every investment a company makes.

Every dollar spent needs to put points on the board in deep, broad, and tangible ways.

This realization has even worked its way in to the community involvement function and employee volunteering program of companies. It no longer works to think of employee volunteerism solely as an “employee benefit” where people get a day a year to dress casually and be outdoors. Top companies recognize that putting a little more strategic planning behind their volunteering programs won’t just be a powerful driver of making a social impact in a community but would also be a cost effective differentiator in both marketplace and talent management strategies.

Put simply, creating a strong volunteerism and pro bono program is good for the community and good for business. The 2011 Deloitte Volunteer IMPACT Survey found that millennials who frequently participate in workplace volunteer activities are far more likely to be proud, loyal, and satisfied employees than those who rarely or never volunteer.

Our summer interns at Deloitte tell us that the firm’s community involvement program is one of the top three things that factor in to their employment decision.

But skills-based volunteering and pro bono don’t only help maximize social impact, they can also help the donor company maximize business value benefits. Our professionals who contribute to pro bono engagements cite their experiences as critical to their job satisfaction and skills development. They note that being on a pro bono engagement is one of the best experiences they have had at our organization. Additionally, through their pro bono work, our professionals are able to build relationships with current and future paid clients who share a mutual interest in the causes we support.

In fact, the value to our professionals and to our communities has been so significant that Deloitte recently announced a renewed commitment to provide pro bono services to nonprofit organizations that brings our total commitment to $110 million.

ganizational consensus to institute the charge code was the mechanism necessary to move from an ad hoc situation to an integrated program that drives powerful social impact and business value benefits. For other companies that may not be ready to institute a funded charge code, the mechanism for formalizing your program might be recognizing pro bono in the performance appraisal process, developing pro bono responsibilities as part of a professional’s job description, or adding those projects to a regular status report.

The Role of Business

We believe business has a powerful role to play in transforming our communities.

One company on its own can make a difference—but 500 companies working side-byside can change the pro bono marketplace.

That’s where A Billion + Change comes in.

Through A Billion + Change, the business How to Move Forward world is showing what a group of companies My guess is the majority of PSC memcan accomplish, together. ber companies already do some pro bono Stan Soloway and the Professional Serwork even if it is on an ad hoc basis. For us, vices Council helped launch the campaign formalizing our pro bono program was a which has already mobilized billions of game changer. A few years ago, we resolved dollars in pro bono and skills-based service to treat pro bono work exactly the same way from over 100 pledged companies. Under we treat paid client work and put real budthe leadership of Senator Mark Warner and get—and, ultimately, a charge code—behind the Points of Light organization, the camthe program. So once a nonprofit project is paign seeks to engage 500 companies—reapproved, they become a client like any other. gardless of industry or size—to develop or Value of Pro Bono The fact that we are not getting paid directly expand their skill-based volunteerism and Almost all volunteering is good, but all by the nonprofit is irrelevant, particularly to pro-bono programs by 2013. Together, we volunteering is not equal. At Deloitte, we’ve those tasked with getting the work done. This can create a true marketplace for leading been on a journey to achieve the maximum has enabled us to proactively source the most nonprofits to tap into the much needed social impact and business value from our ef- compelling pro bono opportunities and staff pro bono services that business has to offer forts. As with any professional services orga- them with professionals that are most qualiand help make America stronger. nization, our greatest strength is our people. fied to handle the work. It also allows us to The idea that businesses should be One of the biggest impacts we can have on schedule the work during business hours and engaged in their communities is a given our communities is to donate our knowlnot ask our people to carry out the program but it’s not O.K. for business to “just show edge and skills to help nonprofits that have on their nights and weekends. This organiza- up”. Given the preciousness of resources— effective programs become stronger, more tion-backed commitment helped elevate the especially time—companies need to push sustainable organizations. While nonprofits impact of our work in the community and their volunteerism programs to drive are not in business to make a profit, they are enabled us to seize the business case benefits maximum value. Contributing pro bono in business. Traditional volunteering may that accrue from recruits, our own people, and and skills-based offerings are not only an serve the immediate needs of many nonprof- the marketplace. effective way for your company to make its, but donating specialized business We challenge ourselves to think of a difference but also to differentiate your skills and knowledge helps nonprofits meet our organization—not just the individuals company in the marketplace. 3 their long-term potential. involved—as the volunteer. For us, gaining orProfessional Services Council

Service Contractor / June 2012 / 17

PSC Turns 40

As PSC starts the celebration of our 40th year, we look back at the many milestones we’ve reached during our years of leadership of the federal professional and technical services industry and recognize the people who have been an integral part of our history.

18 / Service Contractor / June 2012

Professional Services Council

Professional Services Council

Service Contractor / June 2012 / 19

1990

1995

Then-Rep. Tom Davis, R-Va., discusses technology with PSC member company representatives at the Congressional Technology Showcase PSC sponsored in November 1995.

1995

Rep. Jim Moran, D-Va., talks technology with then-PSC President Bert Concklin during a PSC-sponsored Congressional Technology Showcase in November 1995.

An early-1990s meeting of the Government Affairs Committee, one of PSC’s most enduring and popular committees.

Dubbed “the best information exchange in town,” the committee meets the first Friday of every month.

1994

Former PSC Chairman Kenneth Driessen, then CEO of MRJ Technology Solutions, testifies before the House Small Business Committee during a June 1994 hearing.

1994

Former PSC President Bert Concklin speaks at a 1994 White House procurement forum alongside former OFPP administrator Steve Kelman and other top contracting officials.

1995

PSC members exchange ideas at PSC’s Federal Procurement Best Practices Forum in February 1995.

1995

Then-OFPP Administrator Steve Kelman addresses PSC members at PSC’s Federal Procurement Best Practices Forum in February 1995.

20 / Service Contractor / June 2012

1996

Then-Rep. Tom Davis, R-Va., addresses the PSC board meeting held on Capitol Hill in March 1996.

Then-PSC President Bert Concklin and then-CSA President Gary Engebretson testify before Congress in this undated photo.

2000 2003

PSC President and CEO Stan Soloway speaks alongside two union leaders at a 2003 hearing on A-76.

2007

Sen. Joseph Lieberman, I-Conn., addresses PSC at a Dialogue Series luncheon in March 2007.

2008

Then-U.K. Secretary of State for Defense John Hutton meets with PSC and U.S. Defense Department officials in July 2008.

Professional Services Council

2010 2010

Then Undersecretary of State Jack Lew talks with a PSC member during a PSC Dialogue Series luncheon in February 2010.

2010

Deputy VA Secretary Scott Gould speaks at a PSC Dialogue Series breakfast in April 2010.

2011

PSC’s Alan Chvotkin, former OMB general counsel John Cooney, and former Acting Director of CBO Barry Anderson, discuss the implications of a potential federal government shutdown for industry at a PSC event during the first of several 2011 shutdown scares.

2011

PSC Executive Committee member Bonnie Carroll (second from right), chief knowledge officer at Information International Associates, testifies on behalf of PSC, during a House Small Business Committee hearing in June 2011.

Professional Services Council

Service Contractor / June 2012 / 21

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

22 / Service Contractor / March 2012

Experts for the 21st Century

Professional Services Council

Bill Tracker: 112th Congress-Second Session (2012)

Homeland Security Cyber and Physical Infrastructure Protection Act of 2011, Thompson (D-MS)

Summary Seeks to enhance cybersecurity capacity by creating and enforcing performance-based standards.

STATUS Referred to Oversight and Government Reform Committee on 2/8/2011.

H.R. 174

H.R. 282

Federal contractors participation in the E-Verify Program, Gallegly (R-CA)

Summary Would require federal contractors and subcontractors to use E-Verify to confirm the employment eligibility of all of their employees.

STATUS Referred to Judiciary Committee on 2/7/11.

H.R. 483

Electronic Employment Eligibility Verification and Illegal Immigration Control Act, DeFazio (D-OR)

Summary Would require the Secretary of Homeland Security to create and maintain a publicly available

and accessible online database of contracting and subcontracting individuals or entities which discloses the number of employment eligibility violations and employment eligibility verification rejections each contracting or subcontracting individual or entity has received.

STATUS Referred to Natural Resources Committee on 2/14/11.

H.R. 598

Alaska Native Corporations Contracting Reforms, Thompson (D-MS)

Summary Would eliminate the preferences and special rules for Alaska Native Corporations under the program under section 8(a) of the Small Business Act. STATUS Referred to Natural Resources Committee on 2/14/11. Related Bill: S. 236.

H.R. 651

United States-Afghanistan Status of Forces Agreement (SOFA) Act of 2011, Woolsey (D-CA)

Summary Would require the president to seek to negotiate and enter into a status of forces agreement with Afghanistan, mandating that U.S. Armed Services and contractor personnel be completely redeployed from Afghanistan.

STATUS Referred to Foreign Affairs Committee on 2/10/11.

H.R. 735

Government Neutrality in Contracting Act, Sullivan (R-OK)

Summary Would preserve open competition and federal government neutrality toward the labor relations of federal government contractors on federal and federally funded construction projects.

STATUS Referred to Oversight and Government Reform Committee on 2/18/2011. Related Bill: S. 119.

H.R. 829

Contracting and Tax Accountability Act of 2011, Chaffetz (R-UT)

Summary Would prohibit the award of contracts in excess of the simplified acquisition threshold unless the

prospective contractor certifies in writing to the awarding agency that the contractor has no seriously delinquent tax debt.

STATUS Reported by the Oversight and Government Reform Committee on 4/13/11.

Stop Taxing American Assistance to Afghanistan Act, Welch (D-VT)

Summary Prohibits U.S. assistance for Afghanistan unless the United States and Afghanistan enter into a

bilateral agreement which provides that work performed in Afghanistan by U.S. contractors is exempt from taxation by the government of Afghanistan.

H.R. 936

STATUS

Referred to Foreign Affairs Committee on 3/29/11.

H.R. 1136

Executive Cyberspace Coordination Act of 2011, Langevin (D-RI)

Summary Would establish within the Executive Office of the President the National Cyberspace Office to

coordinate issues relating to achieving an assured, reliable, secure, and survivable information infrastructure and related capabilities of the federal government.

STATUS Referred to Homeland Security Committee on 3/25/11.

Professional Services Council

Service Contractor / June 2012 / 23

Bill Tracker: 112th Congress-Second Session (2012) H.R. 1163

Patriot Corporations of America Act of 2011, Schakowsky (D-IL)

Summary Would grant a preference to “patriot” corporations in the evaluation of bids or proposals for federal

contracts. Provides a definition of “patriot corporation.”

STATUS Referred to Oversight and Government Reform and Ways and Means Committees on 3/17/11.

H.R. 1354

American Jobs Matter Act of 2011, Murphy (D-CT)

Summary Would amend titles 10 and 41, United States Code, to allow contracting officers to consider

information regarding domestic employment before awarding a federal contract.

STATUS Referred to Oversight and Government Reform Committee on 4/8/2011. Related Bill: S. 1363.

H.R. 1474

Summary

STATUS

Freedom From Government Competition Act of 2011, Duncan (R-TN) Would require the government to purchase goods and services from the private sector. Provides exemptions, such as inherently governmental functions. Would require the use of competitive procedures as well as public-private competitive sourcing analysis in accordance with OMB procedures.

Referred to Oversight and Government Reform Committee on 4/27/2011. Related Bill: S. 785.

H.R. 1906

Fairness in Federal Contracting Act of 2011, Cole (R-OK)

Summary Would prohibit executive agencies from requiring the disclosure of political contributions by

an entity submitting an offer for a federal contract.

STATUS Referred to Oversight and Government Reform Committee on 6/20/11. Related Bill: H.R. 2008, S. 1100.

H.R. 1949

CLEAN-UP Act, Sarbanes (D-MD)

Summary Would significantly broaden the definition of functions that the government must perform under

law and prohibit the government from undertaking A-76 competitions.

STATUS Referred to Oversight and Government Reform Committee on 6/20/11. Related Bill: S. 991.

Keep Politics Out of Federal Contracting Act of 2011, Issa (R-CA)

Summary Would prohibit inserting politics into the federal acquisition process by prohibiting the submission

of political contribution information as a condition of receiving a federal contract.

STATUS Approved by the Oversight and Government Reform Committee on 5/26/11. Related Bill: H.R. 1906, S. 1100.

H.R. 2008

H.R. 2146 DATA Act, Issa (R-CA)

Summary Would require broad contractor reporting of federal spending similar to requirements under the

American Recovery and Reinvestment Act. STATUS Passed House on 4/25/2012 by voice vote. Related Bill: S. 1222.

Transparency in Government Act of 2011, Quigley (D-IL)

Summary Would change the Federal Funding Accountability and Transparency Act to require a “look back”

period of 10 years in lieu of the current 5 year period.

STATUS Referred to Judiciary Committee on 8/25/11.

H.R. 2340

H.R. 2665 Stop Outsourcing Security Act, Schakowsky (D-IL)

Summary

H.R. 2880

STATUS

Summary

STATUS

Would phase out the use of private military contractors in the federal government.

Referred to Armed Services, Foreign Affairs and Intelligence Committees on 7/27/11. Related Bill: S. 1428.

Contingency Operation and Emergency Oversight Act of 2011, Tierney (D-MA) Would create an Office of the Special Inspector General for Overseas Contingency Operations, headed by a Special Inspector General to conduct, supervise, and coordinate audits and investigations of the treatment, handling, and expenditure of amounts appropriated for overseas contingency operations.

Referred to Oversight and Government Reform Committee on 10/3/2011.

24 / Service Contractor / June 2012

Professional Services Council

Bill Tracker: 112th Congress-Second Session (2012) H.R. 2923

Josh Birchfield Security Contract Oversight Improvement Act, Donnelly (D-IN)

Summary Would require DoD to establish a Quality Assurance Surveillance Plan setting standards to

be incorporated in DoD oversight plans governing all security contractors operating in Afghanistan, and other future contingency operations.

STATUS Referred to Armed Services Committee on 9/14/11. Related Bill: H.R. 1540.

H.R. 2980 Stop Excessive Taxpayer Payments to Government Contractors Act of 2011, Tonko (D-NY)

Summary

STATUS

Would limit the reimbursement amount for compensation paid to employees of government contractors at $200,000, the rate payable for Level I of the Executive Schedule.

Referred to Oversight and Government Reform Committee on 10/3/2011. Related Bill: S. 2198.

H.R. 3116

Department of Homeland Security Authorization Act of 2012, King (R-NY)

H.R. 3779

Small Business Growth and Federal Accountability Act of 2012, Owens (D-NY)

H.R. 3850

Government Efficiency through Small Business Contracting Act, Graves (R-MO)

H.R. 3851

Small Business Advocate Act, Graves (R-MO)

H.R. 3893

Subcontracting Transparency and Reliability Act of 2012, Mulvaney (R-SC)

Summary Includes several provisions designed to help DHS improve its acquisition planning, management

and oversight.

STATUS Approved by the Homeland Security Committee on 10/13/11. Related Bill: S. 1546.

Summary

STATUS

Summary

STATUS

Summary

STATUS

Would cut an agency’s procurement budget by 10 percent following a year in which it missed its small-business contracting goal and would offer agencies more authority to give “preference” to small companies when awarding contracts. The term “preference” is not defined in the bill.

Referred to Oversight and Government Reform and Small Business Comittees on 1/18/2012.

Would boost the annual government-wide small business contracting goal from 23 percent—a goal rarely reached—to 25 percent. It would also increase the goal of awarding subcontracted dollars to small businesses from 35.9 percent to 40 percent. To hold top agencies accountable to meeting these goals, the bill would withhold bonuses from senior agency officials when small business goals aren’t met.

Approved by House Small Business Committee on 3/7/2012.

Would assign greater authority to the Offices of Small and Disadvantaged Business Utilization (OSDBU) by making the office director a senior executive position that reports “directly and exclusively” to the agency head.

Approved by House Small Business Committee on 3/7/2012.

Summary Seeks to ensure that federal contracting opportunities help legitimate small businesses and gives small contractors a voice when their work is being unfairly insourced.

STATUS Approved by House Small Business Committee on 3/7/2012.

H.R. 3980

Small Business Opportunity Act of 2012, Herrera Beutler (R-WA)

Summary Requires small business advocates (OSDBUs) to be part of the federal procurement and acquisition

planning processes and would give OSDBUs access to acquisition plans before RFPs are released.

STATUS Approved by House Small Business Committee on 3/7/2012.

Professional Services Council

Service Contractor / June 2012 / 25

Bill Tracker: 112th Congress-Second Session (2012) H.R. 3985

Summary

STATUS

H.R. 3987

Summary

STATUS

H.R. 4081

Summary

STATUS

Building Better Business Partnerships Act of 2012, Schilling (R-IL) Would allow SBA to oversee all civilian agency mentor-protégé programs to ensure they properly benefit small businesses by improving the small business’ ability to win and perform on contracts and subcontracts. It also would authorize SBA to have mentor-protégé programs for all small businesses and not limit the program to only small businesses in the 8(a) program, those that are owned by a woman or a service-disabled veteran, or that are located in a HUBZone.

Approved by House Small Business Committee on 3/21/2012.

Small Business Protection Act of 2012, Walsh (R-IL) In response to recent efforts by SBA to create new size standards for deciding what businesses qualify as “small,” this legislation would only allow for the use of “common size standards” where each NAICS code included in the common size standard would have an independently justified size standard equal to the common size standard.

Approved by House Small Business Committee on 3/21/2012.

Contractor Opportunity Protection Act of 2012, Graves (R-MO) Would redefine various terms related to contract bundling and provide SBA and the private sector with greater ability to protest contract bundling decisions by federal agencies. Also requires significant new steps agencies must undertake and justifications that must be provided prior to issuing a solicitation for bundled contract requirements.

Approved by House Small Business Committee on 3/21/2012.

H.R. 4117

To prohibit the use of private security contractors and members of the Afghan Public Protection Force to provide security for members of the Armed Forces and military installations and facilities in Afghanistan, and for other purposes, McKeon (R-CA)

Summary

STATUS

H.R. 4118

Would prohibit DoD from entering into a contract for the performance of security guard functions at a military installation or facility in Afghanistan at which members deployed to Afghanistan are garrisoned or housed, or employing the Afghan Public Protection Force to provide such security or to perform security guard functions at such a military installation or facility.

Referred to Armed Services Committee on 3/1/2012. Related Bill: H.R. 4310.

Small Business Procurement Improvement Act of 2012, Critz (D-PA)

Summary

STATUS

Seeks to encourage greater small business participation in multiple award contracts by requiring agencies to include small businesses in such contracts to the maximum extent practicable. Would also increase the small business reserve to $200,000 and would broaden its applicability to cover multiple award contracts and the federal supply schedule program.

Approved by House Small Business Committee on 3/7/2012.

Summary

STATUS

Would update the Federal Information Security Management Act to focus information security controls based on automated and continuous monitoring. Such controls would be applicable to certain contractors.

Passed House on 4/26/2012 by voice vote. Related Bill: S. 413.

H.R. 4259

End Trafficking in Government Contracting Act of 2012, Lankford (R-OK)

H.R. 4257

Summary

STATUS

Federal Information Security Amendments Act of 2012, Issa (R-CA)

Would require federal contractors to take a number of steps to ensure that they or any of their subcontractors do not engage in any trafficking in persons activities. Also would require contractor certification that none of their employees or subcontractors have engaged in any such activities.

Referred to the Foreign Affairs and Judiciary Committees on 3/26/2012. Related Bill: S. 2234.

26 / Service Contractor / June 2012

Professional Services Council

Bill Tracker: 112th Congress-Second Session (2012)

H.R. 4310

Summary

STATUS

National Defense Authorization Act of 2013, McKeon (R-CA) Contains a number of provisions affecting the contracting community including provisions regarding total workforce management, small business contracting, private security contracting, and other areas.

Passed House (299-120) on 5/18/12. Related Bill: S. 2467

S. 21

Cyber Security and American Cyber Competitiveness Act of 2011, Reid (D-NV)

Summary Would secure the United States against cyber attack, enhance American competitiveness and

create jobs in the information technology industry, and protect the identities and sensitive information of American citizens and businesses.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 1/25/11.

S. 119

Government Neutrality in Contracting Act, Vitter (R-LA)

Summary Would preserve open competition and federal government neutrality towards the labor relations of federal government contractors on federal and federally funded construction projects.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 1/25/11. Related bill: H.R. 735.

S. 235

Lieutenant Colonel Dominic ‘Rocky’ Baragona Justice for American Heroes Harmed by

Contractors Act, McCaskill (D-MO)

Summary Would provide personal jurisdiction in causes of action against contractors of the United

States performing contracts abroad with respect to members of the armed forces, civilian employees of the United States, and United States citizen employees of companies performing work for the United States in connection with contractor activities.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 1/31/11.

S. 236

Alaska Native Corporations Contracting Reforms, McCaskill (D-MO) Summary Would eliminate the preferences and special rules for Alaska Native Corporations under the

program under section 8(a) of the Small Business Act.

STATUS

Referred to Small Business and Entrepreneurship Committee on 1/31/11. Related bill: H.R. 598.

S. 372

Cybersecurity and Internet Safety Standards Act, Cardin (D-MD)

S. 633

Small Business Contracting Fraud Prevention Act of 2011, Snowe (R-ME)

S. 761

Acquisition Workforce Improvement Act of 2011, Collins (R-ME)

S. 785

Freedom from Government Competition Act, Thune (R-SD)

Summary Would reduce the ability of terrorists, spies, criminals, and other malicious actors to compromise, disrupt, damage, and destroy computer networks, critical infrastructure, and key resources.

STATUS Referred to Commerce, Science, and Transportation Committee on 2/16/11.

Summary Would prevent fraud in small business contracting by making improvements to HUBZone and Section 8(a) programs and issuing an annual report in Congress outlining suspension, prosecution and debarment.

STATUS Passed Senate on 9/21/2011 by unanimous consent. Related bill: H.R. 2131.

Summary

STATUS

Summary

STATUS

Would establish a government-wide Acquisition Management Fellows Program and related funding and reporting requirements to improve the federal acquisition workforce.

Referred to Homeland Security and Governmental Affairs Committee on 4/7/11.

Would require the government to purchase goods and services from the private sector. Provides exemptions, such as inherently governmental functions. Would require the use of competitive procedures as well as public-private competitive sourcing analysis in accordance with OMB procedures.

Referred to Homeland Security and Governmental Affairs Committee on 4/12/11. Related bill: H.R. 1474.

Professional Services Council

Service Contractor /June 2012 / 27

Bill Tracker: 112th Congress-Second Session (2012) S. 801

Information Technology Investment Management Act of 2011, Carper (D-DE)

Summary Would require executive agency participation in real-time transparency of investment projects as

well as performance and governance reviews of all cost overruns on federal information technology investment project.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 4/12/11.

S. 991 CLEAN UP Act, Mikulski (D-MD)

Summary

STATUS

Would require executive agency participation in real-time transparency of investment projects as well as performance and governance reviews of all cost overruns on federal information technology investment project.

Referred to Homeland Security and Governmental Affairs Committee on 5/12/11. Related bill: H.R. 1949.

S. 1100

Keeping Politics Out of Federal Contracting Act of 2011, Collins (R-ME)

S. 1145

Civilian Extraterritorial Jurisdiction Act (CEJA) of 2011, Leahy (D-VT)

S. 1222

Data Accountability and Transparency Act of 2011, Warner (D-VA)

Summary

STATUS

Would prohibit inserting politics into the federal acquisition process by prohibiting the submission of political contribution information as a condition of receiving a federal contract.

Approved by Homeland Security and Governmental Affairs Committee on 5/16/12. Related bills: H.R. 1906, H.R. 2008.

Summary Would clarify and expand federal criminal jurisdiction over federal contractors and employees outside the United States.

STATUS Approved by the Judiciary Committee on 6/23/11.

Summary

STATUS

Would require accountability and transparency in federal spending.

Referred to Homeland Security and Governmental Affairs Committee on 6/16/11. Related bill: H.R. 2146.

S. 1363 American Jobs Matter Act of 2011, Rockefeller (D-WV)

Summary

STATUS

Would amend titles 10 and 41, United States Code, to allow contracting officers to consider information regarding domestic employment before awarding a federal contract.

Referred to Homeland Security and Governmental Affairs Committee on 7/13/11. Related bill: H.R. 1354.

S. 1428

Stop Outsourcing Security Act, Sanders (I-VT)

S. 1546

Department of Homeland Security Authorization Act of 2012, Lieberman (ID-CT)

S. 1694

Defense Cost-Type Contracting Reform Act of 2011, McCain (R-AZ)

S. 1736

Acquisition Savings Reform Act of 2011, Brown (R-MA)

Would phase out the use of private military contractors in the federal government.

STATUS Referred to Armed Services Committee on 7/27/11. Related bill: H.R. 2665.

Summary

Summary Includes several provisions designed to help DHS improve its acquisition planning, management and oversight.

STATUS Approved by the Homeland Security and Governmental Affairs Committee on 9/21/11.

Related Bill: H.R. 3116.

Summary Would restrict DoD’s ability to enter into cost-type contracts for the production of major defense acquisition programs (MDAPs).

STATUS Referred to Armed Services Committee on 10/12/11.

Summary Seeks to improve agency strategic sourcing, contract close-outs, and increase productivity improvements and cost efficiencies in services contracts.

STATUS

Referred to Homeland Security and Governmental Affairs Committee on 10/19/2011.

28 / Service Contractor / June 2012

Professional Services Council

Bill Tracker: 112th Congress-Second Session (2012) S. 1747

Computer Professionals Update Act, Hagan (D-NC)

Summary Would clarify that certain computer or information technology occupations meet the “professional” exemption under the Fair Labor Standards Act. STATUS Referred to Health, Education, Labor and Pensions Committee on 10/20/2011.

S. 2038

Stop Trading on Congressional Knowledge Act of 2012, Lieberman (I-CT)

Summary Seeks to limit insider trading by executive and legislative branch officials based on information they obtain through their public service. The Senate-passed version contains loosely defined terms

that would require extensive private sector reporting of regular and legitimate day-to-day communications with government officials.

STATUS Became P.L. 112-105 on 4/4/2012.

Comprehensive Contingency Contracting Reform Act of 2012, McCaskill (D-MO)

S. 2139

S. 2151

S. 2198

S. 2234

S. 2467

Summary Seeks to address the recommendations of the Commission on Wartime Contracting. Includes contracting provisions regarding suspension and debarment, trafficking in persons, and limitations on contract length and subcontracting STATUS Referred to Homeland Security and Governmental Affairs Committee on 2/29/2012.

Strengthening and Enhancing Cybersecurity by Using Research Education, Information and Technology Act of 2012, McCain (R-AZ) Summary Serves as a comprehensive cybersecurity improvement bill that includes provisions on cyber

threat information sharing (including contractor requirements), FISMA reforms, and more.

STATUS Referred to the Commerce, Science and Transportation Committee on 3/1/2012.

Commonsense Contractor Compensation Act of 2012, Boxer (D-CA)

Summary Would limit, governmentwide, the amount of reimbursable compensation to employees of govern-

ment contractors for a fiscal year to the annual amount paid to the president of the United States.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 3/15/2012. Related Bill: H.R. 2980

End Trafficking in Government Contracting Act of 2012, Blumenthal (D-CT)

Summary Would require federal contractors to take a number of steps to ensure that they or any of their subcontractors do not engage in any trafficking in persons activities. Also would require contractor certification that none of their employees or subcontractors have engaged in any such activities.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 3/26/2012. Related bill: H.R. 4259.

National Defense Authorization Act for Fiscal Year 2013, Levin (D-MI)

Summary

STATUS

Contains a number of provisions affecting the contracting community including provisions regarding contractor compensation, contingency contracting, services contracting cuts, and access to internal audits.

Approved by the Armed Services Committee on 5/24/2012.

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Professional Services Council

Service Contractor / June 2012 / 29

Robert Vincent

continued from pg. 7

For a small business to obtain the expertise necessary to successfully compete for contracts that require employee resumes to be submitted as a part of the proposal, they must hire (or at a minimum, pay a consulting fee to) properly certified/experienced individuals who would become immediately available in the event of contract award. While a large company can better absorb a six to eight month award delay, the costs of maintaining access to required expertise can devastate a small business. Just two additional people at the six figure salary range typical of such expertise adds up to $16,000 a month in increased overhead, which adds up to almost $100,000 in just six short months. These increased costs are unsustainable for many small businesses.

Back in 2009, under direction of the Obama administration, agencies were encouraged to move away from cost-reimbursement contracts and toward firm-fixed price contracts. While the general principles defining firm-fixed price contracts might be appropriate to much of the work done by government, there are many kinds of work that cannot be well defined in advance. When a contractor is made to bear the risk inherent in bidding such work on a firm-fixed price basis, the cost of shouldering those risks shows up in the price of the contracts, which must ultimately be borne by the government, even when significant elements of the risk fail to materialize. This delicate balancing of risk vs. cost is just one of many causes for the delay of contract award. The time it takes to

Guiding growth. Securing success.

Providing

resPonsive legal counsel with a strong

focus on all asPects of government contracting, small business Programs and corPorate issues

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areas of sPecial focus Mergers and Acquisitions Claims and Bid Protests Size and Status Protests Regulatory Compliance Mentor-Protégé Programs Joint Venture Agreements SCA Compliance

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technically evaluate these types of proposals can be burdensome to the contracting agency, whose expertise to perform the necessary evaluations is often minimal. It is the opinion of this contractor that the administration’s simplistic intrusion into a complex contracting process has done little to control costs, and probably escalated them significantly.

Another cause of award delays results from a developing “culture of protest” that slows the procurement process substantially. Contracting officers are becoming more risk-averse as the frequency of protests increase. An Army contracting officer commented that “the number of certified (professional) government procurement officials has declined; the fear of having to deal with contractor protests has increased; and (not surprisingly) the amount of time required to evaluate proposals continues to increase.” That same contracting officer went on to say that “the climate of encouragement surrounding government contracting employees that existed just a few short years ago has been replaced by a culture that punishes for failure more than it rewards success.”

In a white paper by Grant Thornton entitled, “Government Contractor Industry Roundtable: An Industry Under Pressure,” many compliance issues are identified that businesses must face if they choose to play within the government contracting arena.

Issues such as dealing with organizational conflicts of interest; codes of ethics and conduct; false claims; equal opportunity; and mandatory disclosure are among the many requirements. These are especially challenging for small and mid-tier organizations.

Not only do such companies need to have well-written codes of ethics and conduct, but, according to Ricky White, Grant Thornton audit senior manager, “they need to periodically test their code of ethics and conduct and document this process.”

He goes on to say that “if there is a finding during the testing, contractors should appropriately document such findings so that they do not raise questions (or additional audits) when the DCAA auditors come in.” While it is always good to train and enforce a code of ethics policy, the additional costs to test and document these and other policies add considerable costs to small business operations.

In our firm, for example, we were recently required to undergo a detailed compliance review of our equal opportunity policies and practices, performed by the Office of Federal Contract Compliance Programs (OFCCP). Although we had established an affirmative action plan, we had to hire a consultant to develop and provide demographics to support our contention that our firm “resembled” the society in which we lived and worked. The consultant told us that OFCCP would look until they found some kind of deficiency. Even though there were no goals set at the conclusion of our audit, because we had the “proper” diversity in our firm, we were nevertheless required to implement a new tracking program to monitor certain relevant information for future audit. The cost to a small business to hire a consultant and to purchase an “approved” monitoring system can be substantial.

An old mentor of mine once told me, as I was complaining about all the things that government contractors have to do to be compliant and to provide services to the government, “If it were easy, everyone would want to do it.” With the increasing costs of procurement and the continued focus on expanding the existing climate of regulation, audit and enforcement, I don’t think anyone will ever be able to say that being a government contractor is easy … nor will everyone want to do it any time soon. 3 Professional Services Council

by Todd A. Bromberg and Jillian Volkmar

Proposed OFCCP Regulations Substantially Increase Government Contractors’

T

Affirmative Action Requirement for Individuals with Disabilities

he Office of Federal Contract Compliance Programs (OFCCP) received approximately 400 comments in response to proposed regulations published in the Federal Register on December 9, 2011 that would substantially revise the requirement that government contractors engage in affirmative action regarding individuals with disabilities. The proposed regulations alter the mandatory elements of an affirmative action plan (AAP) applicable to government contractors and subcontractors that have 50 or more employees and a contract of $50,000 or more. This attempt to broaden employment opportunities for individuals with disabilities represents an important part of the Obama administration’s expansion and enforcement of the affirmative action requirements governing government contractors.

The proposed disability regulations impose an “aspirational” goal that 7 percent of a contractor’s workforce in each job group be individuals with disabilities and significantly increase contractors’ data collection obligations.

While OFCCP is analyzing comments and has yet to announce a target release date for the final rule, employers are advised to review their current policies when it comes to recruiting, hiring and recording the number of individuals with disabilities within their workforce.

Professional Services Council

labor pools from which the contractor recruits and selects.”

To that end, a government contractor meeting certain coverage thresholds must develop, maintain and execute an AAP to provide for affirmative action for minorities, women, disabled people and veterans. Section 503 prohibits employment discrimination on the basis of disability by government contractors or subcontractors and requires each covered contractor to take affirmative action to employ and advance in employment qualified individuals with disabilities. Failure to abide by the responsibilities of Section 503 may result in various sanctions, from withholding progress payments up to and including termination of contracts and debarment from receiving future contracts.

Background: A Government Contractor’s Affirmative Action Obligations Regarding Individuals with Disabilities

While federal civil rights laws prohibit employment discrimination on the basis of race, gender, disability and veteran status (among other categories), government contractors are subject to additional obligations under Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. These laws also require “affirmative action” to ensure that “over time a contractor’s workforce, generally, will reflect the gender, racial and ethnic profile of the

Proposed Changes to Affirmative Action and Nondiscrimination Obligation of Government Contractors Regarding Individuals with Disabilities

The proposed regulations substantially increase the requirement that government contractors engage in affirmative action regarding individuals with disabilities currently found at 41 C.F.R. Part 60-741. Key proposed changes of the regulation would: • Impose a specific aspirational goal that 7 percent of a contractor’s workforce in each job group be individuals with disabilities. OFCCP characterizes Service Contractor / June 2012 / 31

this as a “benchmark” against which to measure the effectiveness of the contractor’s affirmative action obligations and not a quota mandating hiring of individuals with disabilities. The contractor must evaluate annually whether it has met this goal in each job group.

• Require contractors to perform increased document collection and retention activities, including documenting their efforts to externally disseminate their affirmative action policy, their outreach and recruitment activities, and their assessment of their outreach and recruitment activities. Contractors must retain these documents for five years.

• Require contractors to invite applicants to inform the contractor whether they have a disability when an applicant applies for a position and after an applicant has received an offer of employment, but has not begun his or her job duties. Previously, a contractor could request self-identification at the pre-offer stage only under limited circumstances. In making this request to selfidentify, contractors would have to use language prescribed by OFCCP and published on the agency’s website.

• Set a minimum number of required outreach efforts and specify what some of those might be. Contractors would have to “promptly” list all employment openings with the Employment One-Stop Career Center nearest the contractor’s establishment and establish certain linkage agreements. Previously, OFCCP

suggested certain recruitment activities while leaving the precise mix of outreach efforts to the contractor’s discretion.

Practical Impact and the Employer Response

Overall, the OFCCP has underestimated the cost and time burdens of its proposed regulations. For instance, the proposed regulations create one nationwide utilization goal for every job group. This one-size-fits-all approach will place a significant burden on contractors with a low population of disabled people or for job groups with a low level of qualified disabled people.

Thus, contractors will have to engage in much more intensive recruitment efforts over a broader geographic area to “meet” the 7 percent goal. Additionally, contractors will have to regularly survey their workforces to determine the number of employees who are disabled for reporting and data collection purposes, but there is a significant risk that any information reported may be skewed because of confusion over the definition of a disability and due to significant underreporting as a result of privacy concerns. Further, the proposed regulation for pre-offer invitations for applicants to voluntarily self-identify as disabled could potentially run afoul to the Americans with Disabilities Act’s strict confidentiality requirements. Approximately 80 national employer groups, construction organizations, consulting firms, law firms, universities, and federal contractors, including PSC, and more than 60 individuals, raised similar concerns in comments submitted to OFCCP. If a final rule setting a numerical target for individuals with disabilities is implemented, contractors will also face increased risk of being sanctioned by OFCCP. A numerical target will make it much easier for OFCCP to render a judgment that a contractor’s affirmative action plan is ineffective. As a result, companies should be proactive and involve counsel to review policies and procedures for recruiting and hiring individuals with disabilities, and the AAP as a whole. Taking those steps will undoubtedly save time and money when the rule is finalized. This is especially true given the administration’s demonstrated commitment to conducting more frequent and extensive audits of AAPs. Todd A. Bromberg, chair of the Employment & Labor Practice at Wiley Rein LLP in Washington, DC, counsels clients on complex regulatory strategies and compliance matters. He has over 15 years of experience litigating a wide range of businessrelated disputes on behalf of both plaintiffs and defendants.

Bromberg’s areas of emphasis include a wide range of government contracting issues. Bromberg can be reached at 202.719.7357 or tbromberg@wileyrein.com.

Jillian Volkmar is a lawyer in Wiley Rein’s Employment & Labor Practice. She assists clients with a variety of trial and appellate matters before federal and state courts and administrative agencies. Volkmar can be reached at 202.719.7527 or jvolkmar@ wileyrein.com.

32 / Service Contractor / June 2012

Professional Services Council

Policy Spotlight

by Lawrence Halloran

Director, International Development Initiative, Professional Services Council

Insecurity

?

in Afghanistan

A

s if doing business in a war zone were not difficult enough, development companies supporting U.S. strategic and development policy goals in Afghanistan now face new challenges in providing security for their projects and personnel there. The mandated transition from the use of recognized private security contractors to exclusive reliance on the newly-formed Afghan Public Protection Force (APPF) complicates both security and business risk assessments for firms working to produce results in an already high-risk environment.

Since 2010, soon after the issuance of Afghan Presidential Decree 62 calling for dissolution of all private security companies operating there, PSC has been actively encouraging the Department of State and the U.S. Agency for International Development (USAID) to take every step necessary to ensure that the Afghanistan government’s replacement security system is transparent, accountable, and compliant with recognized security standards and required U.S. government management and oversight regimes. Presidential Decree 62 took effect for development sites on March 21, 2012, but its ban on private security only applies to development companies and non-profit organizations. Department of Defense sites have another year before they must use the APPF. State, however, has obtained a permanent exemption for its diplomatic posts and personnel.

The requirement for development firms to enter into subcontracts with this new state-owned enterprise, the APPF, to guard development projects and personnel imposes a wholly new security paradigm in a volatile environment. And the precipitous transition from known security contracting regimes to the evolving and unproven APPF processes is causing understandable unease among implementers in both for-profit companies and NGOs about the vulnerability of these untested Afghan business systems and capabilities.

In the immediate aftermath of the March effective date, the transfer of security responsibilities from private contractors to the use of the APPF at current projects presents more business process uncertainties (e.g. prompt payments to guards, interpretation of complex contract clauses, dispute resolution procedures) than questions about guards’ protection capabilities. That is because the trained private security guards (mostly Afghans) development firms relied on prior to the effective date of the decree are staying with the same projects as APPF personnel. However, when bidding on new work in Afghanistan, companies will need to rely exclusively for the first time on the APPF for the vetting, training and assigning of new guards. Given growing concerns about so-called “green on blue” attacks by uniformed Afghans on U.S. and coalition personnel, the use of new APPF guards brings new variables to the risk Professional Services Council

assessment and cost projections when deciding whether, and at what price, development projects can be successfully completed in Afghanistan.

The process is new and judgments on APPF effectiveness can only be made over time. But this much is clear now: as this transition proceeds, the U.S. government’s implementing partners will need stronger support and guidance from government agencies than has been available to date.

On February 6, 2012, PSC wrote to USAID asking the agency to do more to facilitate the transition and reduce easily addressed uncertainties in the accelerated process of contracting with the APPF. The USAID Mission in Kabul issued a blanket waiver to allow sole-source subcontracts between U.S. companies and the APPF. But the agency has not given its contracting officers or companies any additional flexibility in dealing with this extraordinary requirement to do business with the APPF. For example, PSC requested USAID issue a parallel waiver for other than full and open competition for initial subcontracts between current implementers and their Risk Management Companies (RMCs), the licensed successors to private security providers who advise implementers on security requirements and help supervise and train APPF guards.

Such a waiver would help minimize costs and risks during the early phases of the transition as companies would be able to acquire the known, trusted services of their preferred RMC. Despite the fact that fewer than half of the 28 RMC applications had been approved by the March 20 deadline, USAID issued no waiver and provided little guidance to its personnel in Afghanistan or to its implementing partners. It was an oddly business-as-usual approach to a highly unusual contracting challenge.

The Special Inspector General for Afghanistan Reconstruction (SIGAR) also warned about the risk of cost increases and inadequate communication in the transition to APPF contracting.

In the January 30, 2012 SIGAR Quarterly Report to Congress, the inspector general said the APPF was “unable to negotiate and establish legal and enforceable contracts with customers for security services.” In addition, the report points to serious doubts about the capacity of the new state-owned APPF entity “to support the business operations that are essential to manage and execute contracted security services.” In a March 15 management alert letter to USAID, the SIGAR said “the transition to the APPF could increase Afghan guard labor costs by as much as 46 percent and the number of expatriate personnel could rise by as much as 200 percent for implementing partners.” The SIGAR also told the agency that communication with implementing partners, while frequent, “often left important questions unanswered.” continued on page 36

Service Contractor / June 2012 / 33

Committee Corner: Legislative Action Network

by Roger Jordan, Vice President of Government Relations, PSC

G

overnment affairs gurus unite! PSC has created a committee just for you: the Legislative Action Network (LAN). The LAN is a forum for PSC’s member company government affairs professionals to connect to discuss legislative priorities, strategies, and grassroots activities with the intended result being a force multiplier for our collective advocacy efforts. These days, there is no shortage of legislative challenges facing our industry. While PSC engages on many of them, our member companies are a valuable asset with complementary skills and additional resources. With a bit of leadership on our part, together we can leverage all the good advocacy work that we all do on a regular basis to achieve greater results.

The LAN meets monthly, or more frequently if necessary, to collaborate and share intelligence on key issues facing industry. At our first meeting, held in April, PSC laid out the basic foundation of the network and discussed the key legislative issues confronting industry. Of primary concern were several provisions included in a Senate bill, the “Comprehensive Contingency Contracting Act of 2012,” introduced

by Sens. McCaskill and Webb. In addition, attendees focused on insourcing issues, efforts by the government to expand the use of federally funded research and development centers, contractor compensation, and DoD proposals to narrow the definition of “commercial items.”

Growth. Strength. Stability.

The second meeting occurred on May 11 and focused on a myriad of acquisition-related issues that were debated during the House consideration of the National Defense Authorization Act. Moving forward, PSC will take the lead on identifying key issues that the LAN will focus on, developing supporting advocacy materials and share information on Hill outreach above and beyond that already conducted by PSC staff. In return, LAN members have expressed a willingness to engage with PSC on key issues, conduct appropriate outreach to Hill staff and share critical feedback.

PSC has also developed an online grassroots action center that PSC members can use to communicate their messages to the Hill.1 PSC will be populating the site with issue briefs and sample letters to the Hill over the course of the legislative session and will notify LAN members of critical updates and actions.

So, if you are a government affairs professional looking to leverage your Hill efforts, broaden your network, or keep abreast of emerging issues and industry advocacy campaigns, we strongly encourage you to join PSC’s LAN. We’re confident that your participation will pay dividends. But be ready to roll up your sleeves. 3 1

http://www.pscouncil.org/i/b/Grassroots/c/b/Grassroots/Grassroots.aspx

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Professional Services Council

MEMBER NEWS DHS Recognizes Madison Services With Small Business Achievement Award

Madison Services, Inc. was presented the Department of Homeland Security’s Small Business Achievement Award for 2011. The award recognizes Madison’s outstanding work in support of the DHS Individual Assistance Program in Mississippi and, in particular, the work performed for the Federal Emergency Management Agency following Hurricane Katrina. Kevin Boshears from DHS Office of Small and Disadvantaged Business Utilization noted that Madison’s work, which included maintenance and deactivation of temporary housing, was conducted on time and under the government’s estimated budget.

Madison’s professionalism and attention to detail were apparent and recognized by FEMA and the victims that were helped. Madison’s willingness to work with the government team provided exceptional service to the government and the people of Mississippi. The award was accepted by John Lange, president of Madison Services, Inc.

Harris Corp. Names Ted Hengst President of IT Services Business and Corporate Vice President and Chief Information Officer

Harris Corp. has named Ted Hengst president of Harris IT Services, succeeding John Heller, who has decided to leave Harris to join a company in the government services industry. Hengst will also continue in his role as Harris’ corporate vice president and chief information officer (CIO). In his new role, he will lead all aspects of IT to shape growth strategies and advance innovation in the global delivery of secure, mission-enabling IT solutions to customers and internally across Harris.

Cardno President Selected for Board of the Corporate Council of Africa Russ Webster, President, Cardno Emerging Markets USA, Ltd., has been selected to serve a two year term on the Board of the Corporate Council on Africa (CCA). Webster has more than 30 years of consulting and business development experience in over 40 countries worldwide. The CCA works closely with governments, multilateral groups and businesses to improve the African continent’s trade and investment climate.

Sabre Systems, Inc. CFO is SmartCXO Winner

Sabre Systems, Inc.’s Chief Financial Officer Ben Jaurigue has been named a 2012 SmartCXO winner. SmartCXO is a recognition program organized by Philadelphia SmartCEO magazine, which serves to applaud local chief executives who support their organization’s initiatives by supplying fresh ideas, making tough decisions and building strong talent within their companies. Jaurigue is one of 10 local CFOs to receive the award, and one of 40 total high-achieving executive management team members.

Sabre Systems, Inc., President & CEO Named to NFTE Philadelphia Advisory Board

Sabre Systems, Inc.’s President and CEO Phil Jaurigue was named to The Network for Teaching Entrepreneurship (NFTE) Philadelphia advisory board. As a member of the advisory board, Jaurigue, who previously served NFTE as a business plan judge and who is the current co-chair for NFTE Philadelphia’s Visionary Gala, will be responsible for promoting entrepreneurial education among youth in the Philadelphia region, as well as helping to implement and support the program’s missions and goals.

Professional Services Council

From left to right are Dan Cleaver, DHS deputy chief procurement officer, John Lange, president of Madison Services, and Frank Spampinato, FEMA’s head of contracting activity.

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

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

Service Contract Act Training 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 31November 1

2012

Visit www.pscouncil.org

for more details and registration.

Service Contractor / June 2012 / 35

from page 33

A joint evaluation of APPF capabilities conducted in September 2011 by the Afghan Interior Ministry, NATO Training Mission/ Afghanistan and the U.S. Embassy in Kabul found that the new entity did not then have the capability to perform business and management functions required to meet future international security requirements. The report also concluded that the APPF did not then have the processes, procedures, structure, and capabilities to meet force generation, sustainment, and command and control functions. There is little evidence that these shortcomings have been fixed. Regrettably, more recent formal evaluations of APPF capabilities by U.S. and U.N. military officials have not been released.

Nevertheless, USAID told its contracting partners in January that the APPF is “open for business” and instructed development contractors to undertake every good faith effort to conclude sole-source subcontracts for complex security services with them.

Regarding another risk posed by this novel mandatory sourcing process, on February 6, 2012, PSC requested a policy determination that the fully loaded fixed daily compensation rate for APPF guards, which includes a “martyr fee” and a fixed 20 percent profit, be deemed de facto fair and reasonable inasmuch as the non-negotiable rate was set by the directed source of the procurement—the monopoly provider—the APPF. Resolving that question now would eliminate the need for retrospective justification during project audits that can take place months or years after contract performance. USAID has taken that question “under advisement,” but as of publication, no answer has been provided.

On March 29, the House Oversight and Government Reform Committee’s National Security Subcommittee convened a hearing

to examine the SIGAR’s initial findings. In response to the subcommittee’s request, PSC submitted a detailed statement for the record conveying our member companies’ concerns about the security and business impacts of Afghan Presidential Decree 62 on U.S. citizens, contractors and all of their employees.

PSC and our member companies, including development firms and security providers performing tasks vital to U.S. policy goals in Afghanistan, are working with the U.S. government to find the best ways to respect the legitimate exercise of Afghan sovereign control over armed security forces and other business and tax issues while ensuring the ability of U.S. implementing partners to do their work effectively, efficiently and safely. This reflects once again the commitment of development professionals to sustain very difficult work in challenging, and often very risky, environments.

But the magnitude of the challenge in Afghanistan cannot be minimized. To say, as some USAID officials do, that 75 percent of USAID’s current portfolio in Afghanistan does not require armed security understates the scope of the problem by focusing on a raw project inventory rather than the substantial dollar value of the many critical development efforts for which the U.S. government requires contractors to procure adequate protection of assets and personnel at considerable cost. It would be dangerously naïve to conclude that the transition to the APPF will not have a fundamental impact on how USAID, and all of its implementing partners, are able to provide U.S. development assistance in Afghanistan.

PSC will continue to be an advocate for our members on these and related development and contingency contracting matters. 3

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Professional Services Council

Timothy Callahan, executive director of DCMA, delivered a detailed practicum to breakout attendees on what every contractor should know about the defense business systems rule. Agnes Dover of Hogan Lovells moderated the session.

Carey Smith, president of Honeywell Technology Solutions, and Bonnie Carroll, chairman of the board and CKO of Information International Associates, catch up over breakfast.

Robert Robb, editorial columnist for the Arizona Republic, offered an interesting and bipartisan assessment of the upcoming election season.

John Lange, president and CEO of Madison Services, quizzes a panel.

Regional DCAA Director Don Mullinax provided an overview of hot topics from DCAA during a breakout session. Steve Weiss of CACI moderated the dialogue.

More than 200 people attended

Marketview 2012:

PSC’s Spring Conference in Scottsdale, Arizona

Isiah Harris of AMERITAC and other conference attendees talk with Vice Admiral Charles “Joe” Leidig of U.S. AFRICOM.

Conference emcee and PSC Vice Chairman John Hillen, of Sotera Defense Solutions, introduces Ken Hunzeker of ITT Exelis, Mission Systems, who moderated the key markets overview panel: a forecast from the DoD perspective. Panel participants were John Nerger, Army Material Command; Robert Griffin, Naval Facilities Engineering Command; Matthew Beebe, DLA; and Colonel Stephen Brown, Air Force.

Conference attendees enjoyed an evening of networking during dinner on Monday night. John Hillen, president of Sotera Defense Solutions and vice-chairman of PSC kicked off the evening festivities by recognizing PSC’s 40th Anniversary Celebration.

Vice Admiral Charles “Joe” Leidig, deputy to the Commander for Military Operations, U.S. Africa Command, provides the conference attendees with a holistic view of global engagement under the new defense strategy.

David Kriegman of Jacobs Technology engages in a dialogue with a Tuesday morning panel.

Professional Services Council

Service Contractor / June 2012 / 37

4

PSC: SCENE & HEARD

1

PSC members mingle at a Networking Happy Hour at Rock Bottom Brewery in February.

PSC President Stan Soloway addresses the Market Meets Market seminar PSC co-hosted with member company Houlihan-Lokey.

3

5

PSC President Stan Soloway heads a roundtable discussion with executives from PSC member company USIS on Feb. 29 at USIS’s offices in Falls Church, Va. (Photo courtesy of USIS)

5

2

6 6

3

7

4

Steve Teubner, of PSC member company CGI (left), participated in a Congressional Smart Contracting Caucus event about telework in April.

He appeared with GSA’s Wade Hannum and USDA’s Mika Cross. The panel was moderated by Federal News Radio personality Jason Miller (right).

2

1

PSC President Stan Soloway provides a government contracting update during a Watkins-Meegan “Lunch & Learn Session” on April 18.

38 / Service Contractor / June 2012

6

New members meet existing members at PSC’s New Member Breakfast in May.

7

Alan Chvotkin speaks at a special May 11 congressional field forum hosted

by Rep. Gerry Connolly regarding the innovation and procurement challenges facing government and industry. (Photo courtesy of George Burke, communications director for Rep. Connolly)

Professional Services Council

速

ebratin el

a Ye

h ip

C

g

40

rs 1972 - 2012 s of L der ea

As we mark this milestone, PSC would like to thank all of our

40th Anniversary Celebration Partners for their support throughout the years.

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Professional Services Council