How Contractors View Trump’s Budget and Government Reform Agenda

The Trump administration’s “skinny budget” released last week after an executive order on reorganizing the government drew cheers as well as brickbats from the contracting community.

The Professional Services Council, which represents 400 companies, said in a statement it backs the budget’s “increases for defense spending and believes that, if they are focused on sustainment and legacy systems modernization, those increases will help increase military readiness around the globe.”

But the council plans to work with Congress to alter some of President Trump’s priorities. “We are particularly concerned about arbitrary and disproportionate reductions in some agencies, cuts that do not align with the vital missions and functions of those agencies,” said President and CEO David Berteau. “Contractors can help bridge that gap.”

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More budget activity likely for contractors in fourth quarter of fiscal year

More than 100 days stand between the third and fourth quarters of fiscal 2017, but industry partners say keeping up with the transition is going to be crucial for contractors.

Civilian spending in this quarter is slow and unpredictable due to the current continuing resolution that is funding government.  Larry Allen, president of Allen Federal Business Partners, said it is almost futile for agencies and contractors to make plans until the fourth quarter — but they should still stay alert.

“Any time you get that uncertainty, it’s going to affect the acquisition process,” Allen said on the Federal Drive with Tom Temin. “But, the fourth quarter, particularly after this past week in Washington where we had cold and snow, may seem like it’s far away off … but it’s really where you want to keep your sights focused because that’s when a lot of confusion that is going to dominate the next month or so will be cleared up.”

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White House’s Annual Cyber Report Counts 30,000 Incidents but Only 16 are ‘Major’

Federal agencies have made solid progress securing their sensitive data against malicious hackers and employee lapses, but there’s still a long road ahead, according to a recently released White House report.

More than 30,000 data security incidents compromised federal information systems during the 2016 fiscal year, 16 of which were categorized as major incidents that needed to be reported to Congress, according to the White House’s 2016 Federal Information Security Management Act report released March 10.

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When ‘compliance’ should be a dirty word

I recently saw a new report from the Department of Defense inspector general titled Defense Organization Officials Did Not Consistently Comply With Requirements for Assessing Contractor Performance. The IG reviewed past performance report cards prepared at four defense non-warfighting commands, including the contracting organization for the Defense Information Systems Agency.

Reading the report, I was reminded of the kinds of worries about IG investigationsthat I raised in a recent blog post. Reading the report, it turns out that report cards were submitted for every contract where one should have been, but this fact is passed over with scarcely a mention, and certainly with no kudos to these organizations. The IG noted that about a quarter of the reports from three of the four commands were submitted late; the performance of the command that submitted all reports on time was simply left out and not mentioned! (The decision rules here seems to have been the opposite of what your mother told you: if you don’t have something bad to say, don’t say anything at all.)

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GAO Weighs in on the State of Federal Contracting

Contractors working with major federal agencies delivered $438 billion in products and services in fiscal 2015, a 24 percent decrease from fiscal 2011, according to a wide-ranging roundup from the Government Accountability Office.

The 66-page report titled “Contracting Data Analysis: Assessment of Government-wide Trends” said the drop-off occurred mostly at the Defense Department, which saw contracting go down by 31 percent in that timeframe.

Services contracts have now risen to 60 percent of total government obligations — 50 percent of Pentagon awards and 80 percent of those let by civilian agencies over the past five years, GAO said. Such services as professional and management support to information technology needs were used most by the Air Force and Army, while the top civilian agencies procuring services (worth at least $10 billion) were the departments of Energy, Health and Human Services, NASA, Homeland Security and Veterans Affairs.

Other notable observations GAO provided included that nearly two-thirds of federal contracts are now fixed price arrangements, while noncompetitively awarded time and materials/labor hour contracts represent 11 percent of total obligations. Roughly a quarter of federal agency contracting in fiscal 2015 was to procure existing commercial items.

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Contracting Data Analysis: Assessment of Government-wide Trends

Federal agencies spent over $430 billion on contracts for goods and services in 2015—almost 40 percent of all discretionary spending. To strengthen contracting practices and increase oversight of government spending, we analyzed contract data and identified overall trends in spending, competition, and contract type.

From 2011 to 2015, we found that spending at defense agencies decreased by almost 32 percent, while spending at civilian agencies remained fairly steady. We also found that contracts awarded through competition stayed steady at about 64 percent, and the use of fixed price contracts stayed steady at over 63 percent.

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DCMA’s capability working groups help streamline business processes

FORT LEE, Va., March 9, 2017 — Thirteen working groups have been implemented and kicked off under the Defense Contract Management Agency’s Business Capabilities Framework initiative.

According to the capability framework’s website, “DCMA’s capability framework is a set of high level contract management functions that underpin the agency’s strategic plan and capture the results of the daily, multi-functional activities of our personnel in order to provide actionable insight to the Defense Acquisition Enterprise.”

Pam Sutton, the director of the Strategic Analysis Division, said the initiative will allow everyone across the agency to communicate with a similar message the value of DCMA’s mission of providing acquisition insight and oversight.

“We wanted a means to communicate to the undersecretary of defense for acquisition, technology and logistics, and to the Department of Defense as a whole, the value that DCMA brings to the department and communicate in dollars the return on investment,” said Sutton, whose team is responsible for providing support by helping the capability working groups achieve their goals.

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The FAR Council Wishes Contractors a Happy New ‘Privacy Training’

The FAR Council issued a final rule on December 20, 2016, amending the Federal Acquisition Regulation (FAR) to add FAR Subpart 24.3, requiring privacy training for all contractor employees who (1) access a system of records; (2) handle personally identifiable information (PII); or (3) design, develop, maintain, or operate a system of records. A “system of records” is a “group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual.” 5 U.S.C. § 552a(a)(5); FAR 24.101.

These requirements apply to all contracts and flow down to all subcontracts involving access to a system of records. This includes commercial item contracts, contracts below the simplified acquisition threshold (SAT), and contracts for commercially available off-the-shelf (COTS) items.

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New Approaches for Fighting Fraud

The Fraud Reduction and Data Analytics Act, signed into law in June 2016, requires the Office of Management and Budget to set guidelines for agency identification and assessment of fraud risks and the design and implementation of controls to prevent them. These guidelines must incorporate the leading practices in the Government Accountability Office’s Framework for Managing Fraud Risks in Federal Programs. The act also requires OMB to lead interagency coordination among agencies to share and promote best practices in the law’s implementation.

Agencies are grappling with the practicalities of implementation of the new law. Given the variability in fraud risks, fraud risk management must take place at different levels within an organization. And because fraud risk assessments are relatively new, taking an incremental approach makes sense.

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Congress Boots “Blacklisting” Regulation and Sends it to President’s Desk

On March 6, 2017, on a narrow straight party line vote of 49–48, the U.S. Senate passed a Congressional Review Act (CRA) Joint Resolution of Disapproval, which moots Executive Order (EO) 13673, “Fair Pay and Safe Workplaces“—also referred to as government contractor “blacklisting”— and which revoked its implementing regulations and Labor Department guidance. The U.S. House of Representatives passed the joint resolution, H.J. Res. 37 on February 2, 2017. The next step is to send the Joint Resolution of Disapproval to the president for signature.

If signed by the president, the CRA Joint Resolution of Disapproval prohibits the future re-issuance of a federal regulation in the same or substantially similar form without authorization of Congress.

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