Hot or not: Acquisition was a hot spot

Lawmakers and Bush administration officials spent more time on acquisition issues in 2007 than at any time in recent memory. With workforce certification, multiple-award contracts and greater contractor oversight in the limelight, the past 12 months offered  agency officials plenty to think about. State and local governments spent 35 percent more on information technology products and services listed on the General Services Administration’s Schedule 70 contract. Sales increased $83 million to $323 million this year, compared with $240 million in sales in 2006, according to GSA figures.The cooperative purchasing program, which opens GSA’s schedule contracts to state and local governments, gave Schedule 70 a needed boost. Overall, however, the contract’s sales figures merely kept pace with those in past years.Schedule 70 sales reached $16.9 billion in fiscal 2007, compared with $17.3 billion in 2006 and $16.8 billion in 2005, according to GSA. Sales remained relatively steady, even though three major companies — Canon, EMC and Sun Microsystems — pulled out of the Schedule 70 contract this fall. Major companies might continue to opt out of the schedule in 2008, but sales continued to be strong in 2007.“We’re hovering on stability,” said John Johnson, the Federal Acquisition Service’s assistant commissioner for integrated technology services. “We expect that through our enhanced relationships with state and local governments, we’re going to see growth.”Johnson said the expected growth would help Schedule 70 business and would improve interoperability among federal, state and local governments. To enhance the program, Johnson said he wants Schedule 70 to include products that agencies will need for mandatory programs such as Homeland Security Presidential Directive 12.Although agency spending on GSA’s Schedule 70 contract for IT dropped only about $400,000 this year, signs of leaner days ahead are beginning to appear. For GSA, one worrisome sign is that many agencies are making their purchases from the schedule without GSA’s assistance, said Kevin Plexico, executive vice president of operations at market research firm Input. He said agencies want to avoid paying service fees to GSA, and many of them now believe they can handle purchasing better than GSA or other agencies that offer such services.Larry Allen, executive vice president of the Coalition for Government Procurement, said Schedule 70 lost its edge because of GSA’s inaction. It didn’t flourish this year because no one at FAS paid much attention to it, he said.“The focus was on Networx, Alliant and assisted acquisitions,” Allen said, referring  to major contracts that GSA awarded this year. “Schedule 70 has suffered from this benign neglect for several years and has more or less limped along.”However, Allen added, that’s starting to change. FAS officials recognize that a healthy Schedule 70 contract is essential to a healthy FAS. As a result, the contract will get greater attention in 2008 as officials find better ways to market it.“It is the engine that drives FAS, but it took a while for everyone to see that,” Allen said.In the past three years, federal acquisition workforce leaders have been laying the basic building for dealing with the loss of contracting officers, program managers and other acquisition experts. In 2007, all of those efforts started paying dividends, said Karen Pica, director of the Federal Acquisition Institute.“We were able to take advantage of resources, leadership and partnerships in 2007, and that is why you saw all the activity,” she said.FAI, the Office of Federal Procurement Policy and other organizations stayed busy addressing workforce gaps. OFPP issued five policy memos related to the acquisition workforce. Those memos set requirements for assessing workforce skills and established certification requirements for program managers and contracting officer’s technical representatives.FAI and the Defense Acquisition University continued to develop government-wide training classes for acquisition workers. FAI trained more than 19,000 federal procurement workers this year, Pica said.The data that OFPP gathered about workforce skills provides a foundation for future training efforts, she added. “The data behind the scenes helps you determine budget priorities, and that is huge because if you want to do solid planning, you must have access to good data,” Pica said. “The certification laid the framework that highlighted the skills that are needed. It also provided the policies that allowed agencies to hire targeted people.”GSA’s assisted acquisition services came under fire from the Defense Department’s inspector general for being a waste of money. As it weathered criticism, GSA officials struggled to implement an updated business model for the services.In an October report, DOD’s IG said the Air Force wasted $607,000 when it used those services. The IG said the Air Force should have sought assistance from DOD’s procurement officers, not GSA, for the orders it placed under the Network-Centric Solutions contract.“The use of GSA was not a best-business practice since options were available within DOD at a lower cost,” the IG wrote.The IG issued that statement a month after GSA officials were forced to shuffle about 250 assisted acquisition services employees to other parts of the agency as part of a cost-recovery plan to put the business in the black. Mary Davie, FAS’ assistant commissioner for assisted acquisition services, said 2007 was a challenging year because the customer base continued to shrink.To regain customers, especially DOD buyers, the assisted acquisition services business is working hard to improve the ways it manages agency projects and funding, Davie said. “Overall, I want to make sure we’re of value to the government.”Senior government officials recommitted their agencies to meeting small-business contracting goals, and the Small Business Administration decided to make sure they kept that promise. SBA issued a score card that showed agencies for the first time how far off they were from meeting those goals. The score card released in August showed that half of the 24 agencies measured failed to meet their small-business goals.“It attracted enormous attention at the executive level,” said Arthur Collins, SBA’s director of government contracting.Some agency officials said they had no knowledge of their agency’s small-business goals until SBA issued the score card.For some senior executives, success in attaining their small-business goals will be reflected in their performance evaluations. Some portion of their executive compensation is tied to reaching those goals.Senior officials are working with SBA to determine their small-business goals for 2008 and 2009, Collins said. SBA will release its next score card in January and another in June or July. Agencies are not incorporating applicable Section 508 standards when they buy electronic and information technologies, Office of Management and Budget officials reminded agencies in a November memo.The seven-year-old Section 508 standards are designed to ensure that federal employees with disabilities can use IT to assist them in their work and that agency Web sites are accessible to members of the public with disabilities. But agencies are paying little attention to the standards.Governmentwide, only 3 percent of solicitations for IT products properly include the standards, according to a GSA assessment of solicitations published on the Federal Business Opportunities Web site. About 75 percent of IT solicitations make no mention of the Section 508 standards.OMB’s memo reminded chief information officers that incorporating the standards in purchase documents is mandatory. David Capozzi, director of technical and information services at the U.S. Access Board, said he was frustrated by the lack of compliance. However, he said, it would be wrong to label Section 508 standards “not hot” in 2007. The low compliance “should not be interpreted to mean that the Section 508 standards didn’t garner a lot of attention from agencies,” he said. The board answered questions and held training sessions, and the Section 508 pages on the board’s Web site received more than 3.4 million user sessions and 62.4 million hits this year, Capozzi said.The fallout from a September incident in which armed guards from State Department contractor Blackwater Worldwide killed 17 Iraqi civilians in Baghdad intensified calls for more oversight of federal contractors.In 2007, contractor oversight was a frequent theme of inspectors general, government auditors and lawmakers. The issue was a recurring one for Democrats, who, after achieving majorities in both the Senate and the House in late 2006, took aim at the Bush administration’s management style.“Contract spending has soared under this administration with virtually no corresponding increase in the government’s ability to manage and oversee these contracts,” said Rep. Henry Waxman (D-Calif.), chairman of the Oversight and Government Reform Committee. “In Iraq and Afghanistan, we have seen contract management at its worst. That is why it’s crucial that Congress continues to hold oversight hearings on contractors who are being paid billions of dollars to perform some of the government’s most critical operations.”Performance-based contracting also was a common buzzword. Agencies often opted for multiphase, task-order contracts as a way to improve accountability.Concerns that poorly performing contractors continue to win business were also prominent in the past year. Some observers blame that problem on the lack of standardization, which makes sharing information across agencies difficult. For example, there is not one governmentwide, comprehensive, consolidated database that includes contractor performance, IG and Government Accountability Office reports, legal actions, and agency feedback.   Despite Bush administration projections that public/private job competitions will save the government more than $1 billion over the next decade, the policy initiative governed by Circular A-76 was not popular with lawmakers or agencies.Federal employee unions took advantage of the power shift in Congress and worked with Democratic lawmakers to amend all 11 agency spe ding lls for fisca 2008 with provisions that would prohibit or limit competitive sourcing. Those measures were coupled with a lack of Bush administration attention to competitive sourcing this year. “There is no question, the water torture of years of congressional pecking at the process made it untenable,” said Stan Soloway, president of the Professional Services Council and a former DOD acquisition official. “There are sizable A-76 competitions, and sometimes they are robustly competed. But by and large, the process and faith in its credibility [are] at an all-time low.”Most recently, DOD’s fiscal 2008 authorization bill restricted the military’s ability to conduct competitions by adding more stringent requirements for competitive sourcing studies involving 10 or fewer employees and by providing protest rights to certain employees.“With all the amendments and limitations, there has been very little discussion on the best way to manage the government going forward,” Soloway said. “The ramifications for agencies over the next few years could be significant. This is a political victory” for those who oppose competitive sourcing, he said.