Trump’s Budget Will Require 10 Percent Spending Cuts at Non-Defense Agencies

The Trump administration will require $54 billion in cuts at non-national security federal agencies in its preliminary fiscal 2018 budget proposal, an Office of Management and Budget official said Monday. Nearly every domestic agency will shoulder a share of the reductions.

The spending decreases will offset an equal increase in spending at the Defense Department, which the official said will primarily be given to the Pentagon to spend as it sees fit. The proposed boost, which still must go through the congressional appropriations process, would represent about a 10 percent increase to the Defense budget. The White House will propose that foreign aid be cut to partially offset the new spending.

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Controversial R&D rule may get important tweak

The Defense Department may tweak a controversial policy put into place last year for companies using government research money.

The rule requires companies to consult with the Pentagon about research done partly on the government’s dime.

But Allison Stiller who is performing the duties of principal civilian deputy assistant secretary of the Navy for research, development and acquisition said the actual implementation of the rule has been flawed in its execution.

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An Early Look at Mattis’ Cost-Cutting Strategy

Two memos signed this month by Defense Secretary James Mattis offer a glimpse into how he plans to steer the Pentagon toward his intended goal of fiscal responsibility.

Unlike the rest of the federal government that is bracing for steep budget cuts, the Pentagon is poised to receive a funding boost. President Trump’s campaign promise to build up the U.S. military, however, does not amount to a blank check, Mattis has said.

The Pentagon expects to get about $570 billion in fiscal year 2017, and will request an additional $18 billion to $25 billion to cover immediate war expenses. But to fund next-generation weapons and expand the size of the force over the next several years, the Defense Department will need tens of billions more per year.

With the entire government under a fiscal squeeze, Mattis will have to generate funds from within the Defense Department to help pay for the modernization of the military. He is quickly moving to attack overhead, administrative and contracting expenses. And he will lead efforts to dramatically change the Pentagon’s procurement organization.

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Updates from the procurement innovation front

Regular blog readers will hardly be surprised to learn that I am an advocate for innovation in the procurement system, and in government management in general. This does not reflect a view that all innovations are good things. Some innovations could probably have been predicted not to work in advance (and thus probably never should have been tried). For others, trying the innovation was a justified risk to take, but after the fact we can clearly conclude that it turned out not to work.

Nonetheless, I characterize myself as a cheerleader for innovation for two reasons. One is that if we believe — as I suspect most observers do — there is a performance gap between current government management in general (and procurement management in particular) and the reasonable expectations we should have for good quality government performance, innovations of some sort by definition are necessary to improve. Second, I believe there are enough disincentives to innovation in government to justify putting a thumb on the scale in the direction of general innovation enthusiasm, to counter the anti-innovation bias of current government management.

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Taking Credit for Subcontractor Past Performance


  • Procurements under FAR Part 8 are subject to a different default rule than FAR Part 15 procurements, GAO rules.
  • Absent clear direction from the solicitation, an agency conducting a Part 15 procurement must consider significant subcontractors’ past performance references, while an agency conducting a Part 8 procurement has discretion to disregard such references.
  • Offerors may wish to seek clarification if a solicitation is not clear regarding whether the agency will evaluate subcontractor past-performance references.

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Defense Secretary Asks DoD to Seek Organizational Efficiencies

WASHINGTON, Feb. 21, 2017 — Defense Secretary Jim Mattis has distributed guidance to the Defense Department today concerning organizational and structural reforms and establishing cross-functional teams to address mission effectiveness and efficiencies, Pentagon spokesman Navy Capt. Jeff Davis said.

“The secretary has directed the department to address several things,” he said, “[such as] the disestablishment of the office of the undersecretary of defense for acquisitions, technology and logistics, to reform the functions of the chief management officer, and to optimize information management and cyber operations.”

Additionally, DoD will review its core business functions to make those operations more efficient, Davis said.

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Department of Defense Further Clarifies Its Defense Federal Acquisition Regulation Supplement Cybersecurity Requirements

On January 27, 2017, the Department of Defense (DoD) issued an updated Frequently Asked Questions (FAQ) regarding the application and requirements of DFARS 252.204.7012 Safeguarding Covered Defense Information and Cyber Incident Reporting. Though questions remain regarding various nuances of the rule, the FAQ is a helpful document for those contractors still working on implementation of DFARS 252.204.7012.  Divided into three sections ¾ (1) General Application, (2) Security Requirements, and (3) Cloud Computing ¾ the FAC provides answers to 59 commonly asked questions and provides greater clarity on a number of important points, which are discussed in greater detail below.

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Defense Industry Calls on Pentagon to Withdraw Proposed Changes to IR&D Rules

In public comments submitted earlier this month, the defense industry and the public contract bar called upon the Department of Defense (DoD) to withdraw or significantly revise a proposed rule altering how independent research and development (IR&D) costs are treated.  These public comments reflect the defense industry’s growing concern that DoD is moving to constrain the industry’s ability to utilize IR&D projects as a tool for furthering technical innovation.

The proposed DFARS rule change would require contracting officers managing procurements for major defense acquisition programs and major automated information systems in a development phase to adjust the total evaluated cost/price of a proposal to account for the contractor’s proposed reliance on government-funded IR&D projects. The goal of the rule is to address the concern in the Better Buying Power 3.0 Implementation Directive that contractors may use IR&D such that “development price proposals are reduced by using a separate source of government funding (allowable IR&D overhead expenses spread across the total business) to gain a price advantage in a specific competitive bid.”

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GAO Expands List of Programs Vulnerable to Waste, Fraud and Abuse

The Government Accountability Office added three new items to its biennial list of high-risk federal programs, which it released to Congress on Wednesday. There’s some good news though: One important issue was removed from the high-risk list—the multi-agency effort to manage terrorism-related information—and progress on other programs over the last decade has resulted in savings of $240 billion, GAO estimates.

To the grab bag of what now includes 34 programs across government in urgent need of improvement, Congress’ watchdog added the 2020 Census, tribal health and education programs run by the Interior and Health and Human Services departments, and environmental programs run by the Energy and Defense departments.

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GSA moves one step closer to replacing DUNS

The General Services Administration took an important step toward reducing its reliance on a proprietary business entity identifier system in government contracting.

The agency released a request for information on Feb. 13 in advance of the possible adoption of a new numbering system for “government-wide entity identification and validation services.”

Currently the federal contracting system relies on the Data Universal Numbering System, or DUNS number, from Dun & Bradstreet.

The pitfalls associated with using a proprietary reference system first came to public attention in 2014, when a key contract covering data use on the website expired, and D&B pulled its data from the site. was considered at the time the gold standard for spending transparency, and the loss of rich transactional data activated many in the open government community to advocate for an open standard as a replacement.

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