Congress and Acquisition Reform
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Congress and Acquisition Reform Charting a course in uncertain waters April 30, 2008 Jon Etherton Etherton and Associates, Inc. What is acquisition reform?.

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Congress and Acquisition ReformCharting a course in uncertain watersApril 30, 2008 Jon Etherton Etherton and Associates, Inc.

What is acquisition reform?

re·form 1. n., the improvement or amendment of what is wrong, corrupt, unsatisfactory, etc.: social reform; 2. an instance of this. 3. the amendment of conduct,belief, etc. 4. v. (used with object), to change to a better state, form, etc.; improve by alteration, substitution, abolition, etc. 5. to cause (a person) to abandon wrong or evil ways of life or conduct. 6. to put an end to (abuses, disorders, etc.).

The evolving vision of acquisition reform
The Evolving Vision of Acquisition Reform

  • 1983-1985

    • Full and open competition is the rule, not the exception.

    • Pricing controls for spare parts, repair parts and support equipment not subject to full and open competition .

    • Increased oversight of costs on cost-type contracts.

  • 1986

    • Organizing for improved outcomes on major weapon programs.

    • Packard Commission.

    • Goldwater Nichols.

    • Defense Enterprise Programs.

    • Revolving Door limitations.

  • The evolving vision of acquisition reform1
    The Evolving Vision of Acquisition Reform

    • 1987 – 1989

      • Piecemeal, case-specific legislation.

      • Rationalizing acquisition law.

      • Cold war and defense industry winding down.

  • 1989-1994

    • Section 800 Panel.

    • Commercial-Military industrial integration.

    • Commercial products and practices.

    • Entrepreneurial government .

    • FASA.

    • FACNET and reducing the acquisition workforce.

  • 1995

    • Preference for commercial products and services.

    • Efficient and streamlined acquisition.

    • Decentralized IT acquisition.

    • Clinger-Cohen .

  • 2003 2008 concerns without a vision
    2003-2008Concerns without a vision

    • Contractors are performing too critical many critical government


    • Federal acquisition management capabilities are eroding.

      • Contractors have too much influence and control.

      • Requirements development is a major concern.

      • The government is losing its most experienced personnel.

      • The government is losing its ability to manage large, complex programs

        and large service contracts.

  • Major program cost growth is out of control.

  • There is not enough competition, especially with IDIQ contracts.

  • Agencies are using too many cost-type (“cost-plus”) contracts.

  • Not enough transparency.

  • Commercial practices and commercial item procurements do not protect taxpayer’s interest.

  • Agencies are abusing interagency contract vehicles.

  • Major systems acquisition contract services general acquisition policy transparency

    Main Areas in National Defense Authorization Act for FY2008

    Major Systems Acquisition- Contract Services- General acquisition policy- Transparency

    Major defense acquisition programs mdaps

    Major Defense Acquisition Programs (MDAPs)

    Section 815 – Procurement of Commercial Items

    Amends 10 U.S.C. 2379 regarding acquisition of commercial items as major systems.

    For major systems, requires a contractor to provide sufficient information for price analysis and authorizes contractor officer to request cost data if information is insufficient to establish price reasonableness.

    Adds a similar requirement for commercial subsystems, components or spare parts of major systems that are purchased by DoD under a prime contract and that are not off-the-shelf commercial items.

    Services contracts

    Services Contracts

    Section 805 – Procurement of Commercial Services

    “Of a type” commercial services may be treated as commercial for purposes of TINA only if the contractor officer has determined in writing that the offeror has submitted sufficient information to determine price reasonableness through price analysis. Contracting officer may request submission of cost data if other information is insufficient

    Commercial (FAR part 12) time and materials contract s may only be used to acquire:

    services in support of a commercial item,

    emergency repair services, and

    other commercial services only to the extent that the head of the agency approves a written determination by the contracting officer that the services to be acquired are commonly sold under T&M contracts to the general public and the use of a T&M contract is in the best interest of the government.

    Services contracts1

    Services Contracts

    Section 806 – Specification of Amounts Requested for Procurement of Contract Services

    Starting with FY10 budget submission, DoD required to specify by account (other than RDT&E and MilCon) the amounts for contract services by component, activity or installation.

    Section 807 – Inventories and Reviews of Contracts for Services

    Starting in FY08, SecDef required to submit an annual inventory of activities performed during the prior fiscal year under services contracts including:

    the functions performed

    the contracting organization in DoD

    the number of contractor FTE’s

    a determination whether the contract is a personal services contract

    Service Secretary or head of agency is required to review his or her respective portion to ensure:

    Personal services contracts are being performed in accordance with applicable requirements

    Activities do not include inherently governmental functions (FAR 7.503(c))

    Activities do not include functions closely associated with inherently governmental functions (FAR 7.503(d)) to the maximum extent practicable.

    Services contracts2

    Services Contracts

    Section 843 – Enhanced Competition for Task or Delivery Order Contracts

    Government-wide provision

    Prohibition on single source task or delivery order contracts above $100 million unless head of agency determines in writing that certain detailed conditions are met.

    Extends competition requirements for individual task or delivery order awards in section 803 of the FY2002 NDAA to all agencies.

    Requires detailed solicitation requirements for individual task or delivery order awards above $5 million and an opportunity for post-award debriefing.

    Authorizes a GAO protest of the award of an individual task or delivery order award above $10 million that is made 120 days after January 28, 2008 and for three years thereafter.

    General policy

    General policy

    Section 852 – Acquisition Workforce Development Fund

    Establishes a DoD Acquisition workforce development fund for recruiting, training, and retention of DoD personnel from a percentage of the funds for contract services in each budget account.

    The percentages are:

    0.5% - FY08

    1.0% - FY09

    1.5% - FY10

    2.0% - FY11 and thereafter

    SecDef has authority to credit less, but minimum amounts are specified.



    Section 844 – Public Disclosure of Justification and Approval Documents

    Government-wide provision

    Requires Federal agencies to make publicly available on the agency website and through a government-wide website within 14 days after contract award J&A’s for the use of other than competitive procedures.

    Section 845 – Disclosure of Government Audit Findings

    Government-wide provision

    Requires each agency inspector general to submit to Congress as part of its semiannual audit report an annex on final, completed contract audit reports issued to the contracting activity containing unsupported, questioned or disallowed costs in excess of $10 million or other findings the agency IG determines to be significant.

    Requires each agency head to provide within 14 days a full and unredacted copy of any audit described in the report to various congressional committees upon written request. The agency would be required to identify any information in the audit exempt from public disclosure under 5 U.S.C. 552(b).

    Current acquisition policy issues

    Current Acquisition Policy Issues

    S. 680/HR 1362 Conference

    Acquisition workforce revitalization (title I)

    Undefinitized contract actions (sec. 301)

    Transparency and Contractor responsibility


    Tax delinquency

    Fraud reporting

    HAC-D – Acquisition Policy/Contracting


    Implementation of the section 804 report

    HASC – Two thrusts

    Clarification of inherently governmental positions

    Buy American

    SASC – Implementation of last year’s bill provisions

    DoD Legislative Packages

    Obstacles to a congressional reform vision

    Obstacles to a Congressional reform vision

    Many cooks

    House and Senate Armed Services Committees

    Senate and House Government Reform


    House and Senate JudiciaryCommittees

    House Appropriations Committee

    Congress versus Executive Branch

    Different messages from different agencies on reform

    Problems driven by issues larger than the Federal

    acquisition policy reach

    Funding process and constraints

    National demographics

    Industry and technology trends

    No blueprint in sight

    Concluding thoughts

    Concluding thoughts

    Congress will remain very active in legislating

    elements of process reform.

    A coherent vision of reform with reinforcing parts is unlikely

    to emerge until well into next year if ever.

    Some type of blueprint is needed that encompasses an

    understanding of the limiting conditions on any reform


    Rationalization of the legislation will be critical at some