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bob7947

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  1. bob7947
    We all have different stories about how we entered the field of government contracting.  Here's mine.  I started working at the General Accounting Office (GAO) in July 1971.  At the request of a new Comptroller General, Congress changed the name to the to the Government Accountability Office because GAO didn't do accounting work.  For a political appointee, that's considered innovation.  GAO always had problems with titles.  I started as a GAO Auditor, then a GAO Analyst, then a GAO Evaluator and I was waiting to become a GAO Accountabilist.  It never happened so I kept telling people I was a GAO auditor.  
    Getting back to my story.  I never intended to be in government contracting.  I never intended to be in government.  I just wanted a job.  Having interviewed with GAO months earlier, I was offered a GAO position from out of the blue in a Friday afternon phone call.  At the beginning of my career, GAO had three primary operating divisions;  Civil Division, Defense Division, and the International Division.  Civil involved audit work of civilian agency programs, Defense included work at DoD agencies and the National Aeronautics and Space Administration, International was audit work around the world while you were stationed in Germany.  There were never any openings in the International Division.  If you can't imagine why, I can't help you. 
    In 1971, GAO hired "trainees" directly into its Civil Division and the managers of the Civil Division, for the most part, ran GAO.  Trainees in the Civil Division were assigned to GAO audit sites located within the office space paid for by the government agencies it audited.  Imagine a bunch of freeloaders watching what you did and squealing to your boss when you did something wrong.  That was GAO's Civil Division when I was hired.  A trainee in his/her first year would have 3 assignments:  1,  2-month assignment and 2, 4-month assignments before he/she moved on to a 1-year assignment.  To find out where you would go on your 1 year assignment, you had to visit GAO's personnel office and pick one of the openings that were available in GAO.  Those changes in assignments were referred to as the "rotation" process.   If you rotated at the beginning of a month for your 1-year assignment, you had a nice choice of places to go in the Civil Division.  By the end of the month, all the good slots were gone and you were left with the dregs of the agency.  My first two trainee assignments in the Civil Division were at the Department of Housing and Urban Development and the Department of Agriculture's Food and Nutrition Service which were in Southwest D.C.  My third trainee assignment was at the Food and Drug Administration in Rockville Maryland.  Nearly everyone in the Civil Division was young or relatively young.   It was growing and vibrant and the people were alive.
    Then there was the Defense Division.  It was a separate entity of its own.  Closed off from the rest of GAO, I never met any trainee that was hired into the Defense Division in 1971.  The Defense Division was located in GAO's dingy main building on its dingy 4th floor in Northwest DC.  The space was old and ugly and it was rumored to be staffed with old weirdos.  It seemed as if no one went into that "space" and no one came out.  Think of Dr. Brakish Okun from the 1996 movie, Independence Day greeting you at the door.
     
    Needless to say, new trainees learned one thing through the trainee grapevine.  Stay out of the Defense division!  Shortly after I was hired, GAO decided to shake things up in the Defense Division by reorganizing it into three new divisions; the Procurement and Systems Acquisition Division (PSAD) (pronounced P-sad), the Personnel, Logistics and Readiness Division (PLRD) (pronounced Plurd or P-lard) and the Federal Personnel and Compensation Division (FPCD).  The new GAO trainees didn't know that part of the shake-up in the Defense diivisions would involve human sacrifices too.  GAO couldn't fool its new trainees, though.  Instead of stay out of Defense, the new trainee warning became stay out of PSAD, PLRD, and FPCD.  As my Mother told me while I was growing up; you can't polish a turd.
    My rotation date for my 1-year assignment was scheduled for early Spring 1972 and, of course, it was at the end of the month.  I walked into the personnel office and was congratulated for completing my training assignmnets.  That was the last positive thing I heard that day.  I was given my choices to pick from and there were three available; one in PSAD, one in PLRD, and one in FPCD.  Like any 21 year old who suddenly believed his career had ended, I hemmed and hawhed as long as I could.  Then I was told, You know, we don't have to give you a choice.  After I had gone limp, I put my head down and picked PSAD.  No one in the Civil Division said anything good about my pick.  They just walked away from me.  I was now a member of P-sad.  Things went downhill after that.  
    There were three of us rotating into PSAD that Monday morning.  All graduating trainees from the Civil Division and we were never told we were part of GAO's human sacrifice experiment to reduce the overall age of the new defense divisions.  Once in PSAD, a PSAD representative explained that PSAD consisted of three sub-divisions titled Major Systems (MAG), Science and Techology (S&T), and General Procurement (GP).  The first two of us were going to MAG and S&T and when the work was explained to them it sounded interesting. Next, it was my turn and I was feeling a little better.  Then the PSAD representive tried to explain what GP did.  He tried to keep a straight face but he could only laugh.   The trainee who who went to S&T that day is still my friend today.  We often laughed about that meeting in PSAD and we still laugh about it today.  I tell him that I rotated into Geek Place and not General Procurement that day.  And so it was.  In the months ahead, I met Crazy Jack, Shaky Charlie, and the Slurper.  Then there was the Chomper.  I was told to avoid eye contact with the Chomper.  And I did.
    And that is how I was introduced into federal contracting.
     
     
  2. bob7947

    Why Not an Insider: Leslie Anne Fields as Administrator for Federal Procurement Policy
    I only add the quote about Gene Dodaro to show that Actings can effectively manage organizations.  He's been running GAO for 12 years now.  I was relieved to see that an insider was finally made the Comptroller General.  Someone that knew the agency, someone that could hit the ground running, someone that could get the job done.  That's enough about Gene, this entry is about the Office of Federal Procurement Policy and its next Administrator.
    I'm feeling a little nasty this morning because its raining here and my dogs and I already got soaked.  I've been grumbling to myself for the past week about the previous nominee for Administrator, his prepared opening statement before the Senate Committee and the failure to nominate an obvious choice for Administrator.  First things first-that awful prepared opening statement.  Prepared Statement before the U.S. Senate Committee on the Budget.  Please read it--it's only 1 1/2 pages.  Did he have any plans as Administrator?  (I've deleted all the nasty questions I would have asked the withdrawn nominee if I were a Senator.)
    Now here's Lesley Anne Field and here is a biography from a University Alumni Association meeting from 2015.  Let's look at a couple highlights:
    the Acting Administrator periodically since September 2008, and a contracting officer and procurement policy analyst. You can read about her educational qualifications, some of what she has done at OFPP, and listen to her speaking in the recording for the University event.  It's time the President removes the Acting word from her title and nominates her as Administrator--period.
     
  3. bob7947
    Each year about this time, I read an editorial by Francis Pharcellus Church that was published in The Sun on September 21, 1897. The editorial is in response to a letter written by eight-year-old Virginia O’Hanlon.  Now, this entry is not about the contents of the editorial but I will add my favorite part of the editorial:
    Mr. Church's prose is beautiful.  He died in 1906 and Virgina died in 1971.  Check out the brief description of the two in Wikipedia.  In her letter to The Sun, Virginia printed her address as 115 W. 95th St.  Does it still exist?  Yes, see 115 W. 95th St.  Between 113 and 117 you will see 115 in the center above the windows.  To the left of 115, you will see The Studio School at the entrance.  The Studio School is a private, elementary-middle school and was founded in 1971, the year Virginia died.  In 2009, The Studio School honored Virginia by attaching a plaque to 115 which you can see on the Google Maps image.  What does the placque say?  You cannot read it on Google Maps but I've added the contents as the final part of this entry.
     
  4. bob7947
    Many years ago, as a teen, I noticed a magazine on a barbershop table with an incredible black airplane on the cover. Huge engines on each side of a delta wing and a long thin fuselage with a cockpit near the front. I never forgot that airplane, it was an SR-71 Blackbird. Fifty-five years later, I wrote a brief article about the first Blackbird -- the A-12. It's the fastest and highest flying jet airplane that was ever built. Everything about the A-12 was incredible. A requirement was developed to:
    make an airplane so fast that nothing could catch it, make it fly so high that nothing could reach it, and make it nearly invisible. Add to that the fact that no one knew how to do it, the materials didn't exist and it had to be done quickly.  Groom Lake and Area 51 were built for the U-2 and then used for the A-12, Clarence "Kelly" Johnson and his Skunk Works built the U-2 and then built the A-12.  The A-12 was a Central Intelligence Agency (CIA) spy plane just as the U-2 was originally. 
    ----------------------------------------------------
    In September 2020, I finished this 20 page article on the A-12 and placed it on the Analysis Page.  I never thought to post it to the Wifcon Blog.  I'm doing that now.  The article took a long time to write because the building of the A-12 was incredible.  Much of the material used to write this article was from 60 years ago and many potential sources confused the SR-71 story with that of the A-12 story.    Others were flat out wrong.  I used sources from people who worked on or flew the A-12.  Fortunately, the CIA finally declassified some documents on the A-12 sometime after 2000--maybe 2007 or 2013--and made it available to the public.  There wasn't much of it but it filled in some of the missing pieces.
    There are many facts and stories about the A-12 that are of interest.  One is that, in the A-12, the engines produced only about 20 percent of the power at crusing speeds.  Most of the power came from from the pointed cones sticking out of the nacelles.  Also, the A-12 ran its afterburners continuously.  Then there were the 2 Buick "nailhead" V-8s that were conected to each other to "spool-up" and start each A-12 engine.
    At the end of the article, I list the places you can still see an A-12 and added links to Google Maps.  If you look closely at the maps, you will find an image of an A-12.  I also list where the only YF-12A, a derivative of the A-12, is at.  Now, the YF-12A is another story.
    Please read:  Faster Than A Speeding Bullet, Three Times Higher Than The Tallest Mountain.
  5. bob7947
    Last week, I posted an article on the Wifcon Forum in which Dr. Mark J. Lewis, the Director of Defense Research and Engineering for Modernization provided some thoughts about defense projects.  The article was entitled Risk Aversion Impedes Hypersonics Development.  Within the article was a 44- minute video that includes, in part, his discussion of the race for hypersonic weapons systems.  I listened to the video and found it interesting.  The article itself started with this quote:
    I lived through the 1960s and I'm in no hurry to go back there.  What did Dr. Lewis mean?  In so many words he was saying, being the fallible humans that we are, expect failures as we push the current envelope of technology.  It's hard moving forward into something new.  He mentioned two types of failures, the first one he called a noble failure.  Think about it.  We do our homework, test, and something unexpected happens.  From that failure, learn from it, and move forward with the program.  The second type of failure is one that is caused by a stupid mistake and you don't learn much, if anything, from it.  He also noted that since we must expect failures, we must have the resources to test, correct, and move the system forward. 
    As an example of having available resources for testing, he mentioned the X-15 research vehicle that had 199 test flights in the 1950s and 1960s.  The X-15 was dropped from a B-52, its small rocket engine was ignited for a little over a minute so it could reach space.  It would then glide to earth and land on its skis.  He contrasted that to DoD's X-51 program that had 4 test flights planned from 2010 through 2013.  In short, looking back to the 1960s means that you learn from testing if you plan for enough tests.  I agree.
    I took Dr. Lewis's advice and went back to the 1960s and looked on my own.  In truth, I've been looking at the 1960s for some time.   Here is an excerpt from Dr. Lewis's article that caught my attention.  About hypersonic weapons, he said.
    If DoD and Dr. Lewis believe hypersonic weapons are important to develop again and field again, then do it with adequate testing and resources.  But what if we already tested such a system in a real operational airplane, in less than 5 years, over 60 years ago.  Here is an excerpt from Clarence  L "Kelly" Johnson's book, KELLEY, More than My Share of it All.  He was writing about the Air Force's YF-12A, first flown in 1963, which is a derivative of the CIA's A-12, first flown in 1962.  The YF-12A was being tested to drop missiles from its bomb-bay doors.  Now compare the numbers in the quote below to those in Dr. Lewis's above quote.
    Although the YF-12A was sending hypersonic missiles at targets successfully in 1963, we now are hoping to do it in 2025.  That's over 60 years after we first did it.  What happened?  Well, the YF-12A program was killed by Robert Strange McNamara, then Secretary of Defense, who is infamous for his efforts in Southeast Asia.  Accoding to Kelley Johnson, McNamara said:
    McNamara was working in the moment and had no vision of the future.  Although Congress appropriated money for the YF-12A program for three successive years, McNamara refused to use our technological advantage with hypersonic systems and move forward with it.  Before the program was killed, there were 3 YF-12A's built but only one exists today at the National Museum of the United States Air Force in Dayton, Ohio.  Here it is.  
    Now, let me take you and Dr. Lewis back to the 1960s and design, develop, and field real airplanes and beat his 5-year window.  Let's start at the beginning of 1960 when the A-12 contract was signed by Kelly Johnson and the CIA.  In April 1962, 2 1/2 years later, the A-12 was on its first flight.  The YF-12A was an A-12 derivative that the Air Force and Kelly Johnson converted to an interceptor.  It's first flight was in August 1963.  The SR-71, another A-12 derivative, built by Kelly Johnson and the Air Force, had its first flight in November 1964--less than 5 years after the award of the A-12 contract.  Let's slip back into the mid 1950s for a moment and the U-2.  Kelly Johnson built the U-2 in 8 months.  You've caught on--Kelly Johnson was an absolute aviation genius and his U-2, A-12, YF-12A, and SR-71 were incredible operational airplanes.  The A-12, YF-12A, and SR-71 were all Mach 3.2 airplanes.  They didn't reach Mach 3.2 with afterburners for a few minutes.  They cruised at that speed for hours.  By the way, the U-2 is still flying and Lockheed is still selling it--about 65 years after its first flight.  
    If Dr. Lewis wants to go back to the 1960s for ideas on how to field real airpalnes quickly, he's going to have to go back and resurrect Kelly Johnson.   
    Let's take one last brief trip back to the 1960s.  How about July 20, 1969 as the United States was landing humans on the Moon.  A few years later, that program was ended as a result of budget cuts.  After the Moon landing, I went to my Summer job in the factory that I worked at during my college years.  I expected to see happy faces and hear loud talk about our country's great achievement.  As I approached my workspace on the factory floor, I heard grumbling from the workers.  It was depressing, I was ready for Mars and theses guys were still dreaming about P-38s--which, of course, Kelly Johnson helped to build.  All I heard from the workers was something like:  we did it, let's quit.
    I agree with much of what Dr. Lewis says but he stated the obvious.  However, more is needed.  We built technology to down enemy aircraft with hypersonic missiles in 1963 but that achievement was squandered by a politiical appointee who couldn't see past his green eyeshades when he terminated the YF-12A.  Now, nearly 60 years later, we're competing with China and Russia in a race to build hypersonic weapons.  Did we take a technology break so the rest of Earth could catch-up?
    We landed humans on the moon in 1969, politicians terminated the program to save money, and we are now among several nations hoping to land on the moon--50 years after the United States did it before.  Did we take a success break?
    If we achieve something truly remarkable and important this year, how do we know our politicians and political appointees will recognize its importance and build on the achievement.  Or, will they decide that we did it, let's quit.
  6. bob7947
    I've been reading some discussions from the Contracting Workforce Forum.  As some of you know, I abhor the use of management phrases like "cool kids organizations."  What the hell is a "cool kids organization?"  Is it an excuse for something?  I spent my working career listenting to the latest meaningless phrases like that.  I was around when the words Human Capital became popular.  The words Human Resource preceded it.  If you look at the definition for capital and resource, you will see they are much the same.  Perhaps it is my own personal perception but I always hated the thought of being considered an inanimate object by some stiff holding a management position.  Why not get rid of the words capital and resource and just treat each other as human?
    That leads me to a story about a so-called manager--think Senior Executive Service--who clearly had risen beyond his abilities within an organizaion and one of his unfortunate underlings.  The manager wanted to fire the underling because the manager claimed that the underling lacked any initiative.  Oh, how things can go so wrong for an incompetent manager.
    I remember the manager's face as having a permanent scowl and marching around looking like that.  He must have been permanently constipated.  No one wanted to work for the manager because he was an asshole and he screamed at people.  All I can remember about the underling is that he reminded me of one of the Mario Brothers because of his mustache.  
    One morning, the underling was standing on a crowded subway platform waiting for a train.  The signal showed that the train was approaching the platform when a woman fell onto the track.  To save the woman on the track, someone had to quickly jump down onto the track--avoid electrocution by the 3rd rail--and lift the woman to the platform.  There was no time to hesitate.  Only one person jumped onto the tracks that morning to save the woman.   He didn't have time to think about what to do, he didn't have time to change into a Superman outfit, he just did it within seconds.  The moment that he saved the woman and climbed back onto the platform, the underling was hailed as a hero.  I can still see the newspaper article in my mind describing the hero's actions.
    How do you fire a hero because he lacked initiative?  You don't.  You pull the paperwork that the manager was planning to use to fire the underling and you make sure it never finds the light of day.  And, that's what happened.  Years later on the day I retired, I remember seeing the hero in the GAO lobby.  He still had that mustache.  The manager went no futher in GAO and was no longer there.
    So what's the moral of this story?  Its obvious.  You'll figure it out.
     
  7. bob7947
    In 1972, the Commission on Government Procurement wrote that Congress should limit its acquisition legislation to fundamental acquisition matters and let the Executive Branch implement Congress's policies through specific acquisition regulation.  If Congress had listened, it would be passing less acquisition legislation, doing a better jub of fulfilling its oversight responsibility of acquisition activities, and the FAR Councils would be performing their regulatory duty to implement Congress's acquisition policies.
    Unfortunately, Congress didn't listen--to its own creation. Today, Congress doesn't deal with fundamental acquisition matters, it deals with acquisition minutiae and esoteric details--especially when it comes to the Department of Defense (DoD). Someone has an idea and before you know Congress is passing another section of acquisition legislation. No idea is too small for Congress to more on its acquisition legislation dump-truck.  For the most part, Congress meddles in the acquisition process through the House and Senate Armed Services Committees. These committees propose acquisition legislation in their annual National Defense Authorization Acts (NDAA) with much of it in Title VIII of the NDAAs. Title VIII is usually labeled: Acquisition Policy, Acquisition Management, and Related Matters.  You can run from it, you can stall it, but you cannot hide from it.
    In the past 17 NDAAs, Congress has passed 725 sections of legislation in Title VIII of the NDAAs.  Another 166 sections of acquisition legislation are included in other Titles of the 17 NDAAs.  That's at least 891 sections of acquisition legislation in the past 17 NDAAs.  What is worse, Congress is picking up its legislative pace and has passed more sections of acquisition legislation in the past 3 years than ever before. 
    If you have been a follower of Wifcon.com for the past 17 years, you would be familiar with the 17 NDAAs by viewing them here.  Take a look at the National Defense Authorization Act for Fiscal Year 2018 sections for Title VIII.  Do you see coherent acquisition policy?  No, you do not!  Its a lot of junk legislation patched onto a growing body of junk legislation that is called Title 10 of the U. S. Code. 
    Don't think you are safe if you are in a civilian agency.  Remember, the NDAA is an annual event and during debate on the Senate or House NDAA versions, any stray piece of legislation may attach itself to the NDAA.  It's kind of like a tick or leech latching onto you.  Take another look at the sticky bomb idea on another of my blog entries.  If you throw an amendment at the NDAA during the debate process, it might stick to the NDAA and become law.  See if you can identify the source of TITLE XVII that is included in this year's NDAA.
    I'm getting angry again just thinking about this so I better end here.  However, you should get angry too.  Your the ones who have to deal with it on a daily basis.  If you need some incentive to get angry, there are about 250 sections from the last 3 NDAAs waiting for the FAR Councils to deal with them.  
    I've posted an article with tables to the Analysis Page with the same name as this blog entry.  You can probably see my anger growing with sarcasm as I progress towards the end of that article--see the part on zombie legislation.
    Some of you are too young to remember the movie Network.  However, there is a part of the movie where the character Howard Beale decides he has had enough.  I looked at it again this morning. 
  8. bob7947
    In early 1977, Gordon Wade Rule (Rule) sat in a chair in a corner of a conference room at the Naval Material Command reading a document that I had prepared about his negotiations on the CGN-41, a nuclear-powered guided missile cruiser.  Days earlier, I was among a group that was briefed by a staff member of Admiral Hyman Rickover (Rickover), the Director of the Naval Nuclear Propulsion Program.  Although, the briefing was supposed to be about the CGN-41 negotiation, we were treated to a 3-hour lecture on how the Navy's shipbuilders were trying to "pin the rose" on Rickover. In this case, pinning the rose had nothing to do with the shipbuilders asking the Admiral to a prom.
    When I began writing this blog entry, I had planned to include only the work I had done decades ago for the Chairman, House Committee on Armed Services.  That work involved Rule's negotiation of Modification 31 to the contract that included the CGN-41, the eventual USS Arkansas. I wanted you to figure out if the modification that Rule signed was done in a manner that would allow it to survive a court test.  It took 2 courts to decide that question so it wasn't as easy as it sounded.  Unfortunately I read too much surrounding material and I realized that I was taking Rule's actions out of the context in which they happened back in the 1970s.  So, I added a bit more information.  You will see Rule as the contracting officer, Rickover as a program officer interfering with the contracting officer, Senator William Proxmire apparently acting for Rickover and himself, and Deputy Secretary of Defense William P. Clements, Jr. (Clements) trying to resolve the shipbuilding claims problem in any manner he could.  You cannot choose sides on this one.  All characters, including government agencies and shipbuilders, were trying to manipulate and influence anyone that became involved with the CGN-41.  It seemed as if sides were drawn by identifying the enemy of an individual's enemy.  
    A Brief Introduction to the Shipbuilding Claims Era
    In the early 1970s, cost overruns and shipbuilders' claims had become a major problem.  By 1976, it had reached epidemic proportions with $1.9 billion in shipbuilder claims.  The shipbuilders, the Navy, the Department of Justice, and Rickover were in a war.  In the case of the CGN-41, Newport News Shipbuilding and Drydock Company was the industry player.  
    Clements wanted to settle the ship claims problem with the use of P. L. 85-804.  A June 21, 1976, Business Week article explains his early effort.  The excerpt below is a quote from the article entitled:  The Shipbuilders Balk at 40 Cents on the Dollar.  The article explained that Clements had planned to settle $1.9 billion of shipbuilding claims against the Navy for "between $500 million and $700 million" but that plan fell fiat with the Navy's shipbuilders.  He explained that "the shipyards are giving me trouble."  The article further described:
    After failing to reach a settlement himself, Clements called Navy management to his office for a meeting of the status of shipbuilding claims.  Nothing had been accomplished by them either.  He then focused on the CGN-41.  The work on this ship had been stopped by Newport News because of issues it was having with the Navy.  The contract was in court and work had started again under the condition that the Navy negotiated in good faith with Newport News to resolve the issues.  The court's time limit for good faith negotiations was running out and something had to be done.  Since the CGN-41 contract was in court, the Department of Justice was required to play a part in the review of any settlement proposed to the court.  
    This is where our story begins.  I have added the dates on which the actions occurred so that you can follow.  All facts are based on documents that I had reviewed in the 1970s or documents that I recently reviewed.  I needed to limit the length of this entry so I added enough information to give you a flavor of the times.  Sometime in the future, I may write a larger article.  Rule was appointed as a special contracting officer on the CGN-41 to resolve the issues that the Navy and the Secretary of Defense could not accomplish.  Undoubtedly he knew he was heading into a mighty storm that might harm him.  
    Contract Modification P00031 To CGN-41:  Chronology of Events
    July 13, 1976:  Clements held a meeting to discuss Navy shipbuilding claims.  Among those in attendance were:
    Deputy Secretary of Defense (Clements) Consultant to the Deputy Secretary of Defense Assistant Secretary of the Navy (Installations and Logistics) (ASN (I & L)) Chief of the Naval Material Command (NAVMAT) Vice-Chief of the Naval Material Command  (NAVSEA) General Counsel of the Navy, and  Gordon Rule, Director, Procurement Control and Clearance Division, Naval Material Command. (Rule) In regard to the Newport News claims, a member of the meeting quoted Clements as saying that he was "irrevocably committed to solving this problem; unlike Admiral Rickover."  Clements then asked the Navy officials why they had not reformed the contract, indicating that if they would not, he would.  He then stated that he wanted to see four changes incorporated in the CGN-41 contract:  (1)  a new escalation clause; (2) a new "changes" clause; (3) a new ceiling price; and (4) a new delivery date.  (emphasis added)
    During the meeting it was agreed that Rule would become negotiator for the CGN-41.  He was to report directly to the Chief, NAVMAT and the Vice Chief, NAVMAT was to meet with Clements each day at 9:15 a.m to report on the progress of the negotiation.
    July 14, 1976:  Rule telephoned Newport News to explain that he had been assigned principal negotiator on the CGN-41 and requested a meeting.
    July 15, 1976:  Newport News was contacted by a consultant to Clements who explained Rule's authority. Rule and Newport News held their first meeting.
    July 16, 1976:  The Assistant Secretary of the Navy (Installations and Logistics) wrote to the Chief, NAVMAT informing him that the Chief would be responsible for the direct discussions between Rule and Newport News.  Rule would be the principal negotiator and Rule would be assisted by NAVSEA and the Navy General Counsel, as required.
    July 16, 1976:  Rule sent a memo to Clements describing his first meeting with Newport News.  As a note, he mentioned that he intentionally did not contact the Navy's Supervisor of Shipbuiliding, Conversion and Repair (SUPSHIPS), Newport News.
    July 19, 1976:   Rule sent a memo to the Deputy Commander for Contracts, NAVSEA asking for brief descriptions of what the Navy considered as key issues for negotiation and the Navy's negotiating position so he could develop his own negotiation position.
    July 28, 1976:  The Vice Chief, NAVMAT and a consultant to Clements held discussions with Newport News.  Areas discussed were: when the CGN 41 problems would be solved, ceiling price, and escalation provisions.
    August 10, 1976:  Rule telephoned Newport News and requested a meeting in Washington on August 12,1976.
    August 12, 1976:  During a meeting in Washington between Rule and Newport News, Newport News left a general outline for negotiations.
    August 12 and 13, 1976:  The Vice Chief, NAVMAT asked Rule about the August 12 meeting so he could inform Clements.  Rule explained that Newport News had delivered a proposal and he did not approve of it.
    August 17, 1976:  Rule telephoned Newport News and requested a negotiating session to be held on August 20, 1976.
    August 19, 1976:  The Deputy Chief of Naval Material (Procurement and Production) issued Rule an appointment as Contracting Officer with "unlimited authority with respect to negotiations with Newport News."
    August 20, 1976:  Negotiations were held between Rule and Newport News.
    August 23, 1976:  The Vice Chief, NAVMAT and Rule met with Clements to brief him on the August 20th negotiations.  According to Rule, Clements' comment on the negotiations was "fine."  After the meeting with Clements, Rule received a note from the Chief, NAVMAT to meet him in the Office of the Assistant Secretary of the Navy (Installations and Logistics).  Among those attending were:
    Assistant Secretary of the Navy (Installations and Logistics), Chief, NAVMAT,  Vice Chief, NAVMAT, Rule, Director, Procurement Control and Clearance Division, Naval Material Command, Commander, NAVSEA, Deputy Commander for Contracts, NAVSEA, At this meeting, the Chief, NAVMAT ordered Rule to describe the results of the August 20 negotiations.
    August 24, 1976:  Rickover wrote to the Chief, NAVMAT that he had heard a rumor of a settlement on the CGN-41 between Rule and Newport News.  Rickover commented point-by-point about the rumored settlement and said such a settlement "would show that the Government will not require Newport News to honor its contracts."  Rickover recommended that any
    August 24, 1976:  Senator William Proxmire wrote to the Attorney General, Department of Justice expressing concerns about Gordon Rule's views on the CGN-41 negotiations and telling the Attorney General:
    August 25, 1976:  Newport News telephoned Clements and read a prepared press release.  The consultant to Clements said he and Clements approved of the press release, an excerpt of which stated:  "The parties have agreed to sign a definitive contractual document embodying the negotiated agreement for the construction of the CGN-41."  Later that day, the Assistant Secretary of the Navy (Installation and Logistics) telephoned Newport News, informed them that he was perturbed by the Newport News press release and stated that the Navy would issue its own press release stating that agreement had been reached in principle but that the matter was to be reviewed by higher authority.  On this same date the Navy issued a press release explaining an "agreement in principle" was being drafted for review and approval.  (Emphasis added)
    August 26, 1976:  The Chief, NAVMAT sent Rickover a response to his August 24, 2016 letter stating:  
    The Chief, NAVMAT further wrote:  For reasons such as this, you must stand apart from these negotiations unless the technical areas regarding naval nuclear reactors become involved.
    August 27, 1976:  Rickover responded to the Chief's, August 26, 1976 letter to him.   In response to the wide distribution he used for his letter of August 24, 1976, Rickover explained that: 
    He used the same distribution list for this 6-page letter as he did in his August 24, 1976 letter.
    August 30, 1976:  Newport News met with Rule in Washington and delivered the first draft of Modification P00031.
    The Chief, NAVMAT sent a letter to Rule explaining that, prior to a binding agreement on the CGN-41, the elements of the agreement must be submitted to the Chief, NAVMAT for review and approval.  The review was to be conducted by the Vice Chief, NAVMAT, the Deputy Chief, NAVMAT (Procurement and Production), the NAVSEA Deputy Commander for Contracts; and the General Counsel for the Navy.  Mr. Rule was to provide the proposed contract modification, the business clearance justifications, and other supporting papers for review prior to signature by the contracting officer.
    Gordon Rule forwarded a draft memorandum to the Chief, Naval Material that summarized his negotiations with Newport News.
    August 31, 1976:  The General Counsel of the Navy noted the Rule draft memorandum and told Rule of the General Counsel's responsibility to review the summary of negotiations.  Additionally, the General Counsel requested more information to support Rules' summary.
    September 1, 1976:  Rule sent a summary of his negotiations to the Chief, NAVMAT.
    September 3 1976:  In response to the August 31, 1976 memo from the Navy General Counsel, Rule sent him additional information supporting his summary of negotiations.  He also provided a copy of the first draft of Modification P00031.
    September 14, 1976:  Members of Rule's and Newport News negotiating teams and DCAA auditors met in Washington to discuss provisions in the first draft of Modification P00031.  DCAA was asked to review certain provisions of the proposed modification.
    September 16, 1976:  The Attorney General, Department of Justice, responded to Senator Proxmire's August 24th letter by writing:
    September 20, 1976:  NAVSEA's Deputy Commander for Contracts and a member of the "review team" submitted his analysis of the first draft to the Vice Chief, NAVMAT.  This analysis was not made available to Rule.
    September 24, 1976:  DCAA submitted its analysis of certain provisions of the first draft to a member of Rule's negotiating team.
    September 27, 1976:  Newport News delivered a second draft of the modification to Rule and Rule requested DCAA to review the draft.
    [September 28, 1976:  Clements wrote a letter to the Attorney General, Department of Justice, commenting on the August 24 letter of Senator Proxmire.  In regard to Rule, he wrote:
    In regard to the Department of Justice's review of the CGN-41 negotiation, he said:  "Let me assure you that we in DoD have no intention to by-pass or withhold from your department any information which you determine that your department needs in connection with legal proceedings under the court order."
    September 28, 1976:  DCAA submitted its analysis of the second draft to Rule.  
    October 4, 1976:  NAVSEA submitted its estimate of the cost of the draft modification.  Rule rejected the NAVSEA estimate.
    October 5, 1976:  Rule submitted a memorandum to the Chief, NAVMAT for his approval.  It included the estimated dollar impact of his negotiated settlement.  For those in contracting, it would be similar to a negotiator's memorandum.  The Navy General Counsel sent its analysis of the information supplied by Rule to the Attorney General.  In the memorandum, Rule noted that a member of his negotiating team could not complete an analysis he requested because of interference from Rickover and his staff.  However, he was able to devise a workaround to complete his cost estimate of the modification for the Chief's review and approval.
    October 7, 1976:  Newport News carried a third draft of the proposed modification to Rule.  The cover letter from Newport News attached to the modification said "I have executed the enclosed modification on behalf of the company and request you immediately return a fully executed copy."
    Rule took a copy of the cover letter to the Chief and Vice Chief, NAVMAT in the afternoon.  He returned to his office and received a letter from the Chief, NAVMAT telling him that neither he nor his review group had a copy of the proposed modification that accurately reflected the results of Rule's efforts.  Final review had not been completed and the proposed modification could not be consummated before the review was done.
    According to Rule, he thought about the CGN-41 negotiation effort all afternoon after he met with the Chief and Vice-Chief, NAVMAT.  He explained in a deposition that he:
    October 8, 1976:  The Vice Chief, NAVMAT called Rule into his office at 8:22 a. m.  He gave Rule a letter dated October 7, 1976 that explained that he did not have authority to sign the modification.  Rule explained he had signed it and the Vice Chief requested Rule to give him all signed copies.  Rule refused but said he would give them to Clements.  The Vice Chief then left for his 9:15 am meeting with Clements.  Rule returned to his office dictated a transmittal letter imposing two conditions upon the modification and gave Newport News a copy.  The Vice Chief, NAVMAT called Rule into his office and told him that the Undersecretary of the Navy would keep all executed copies of the modification but Rule told him that he already had signed it.  He returned to his office, signed the transmittal sheet, and handed it to Newport News at 10 A. M.  Shortly afterward at 11:50 a. m., Rule was notified that his appointment as contracting officer was rescinded.  
    March 8, 1977:  The District Court for the Eastern District of Virginia ruled that:
    February 27, 1978:  The United States Court of Appeals, Fourth Circuit ruled that
     
  9. bob7947
    At the end of calendar year 2014, I analyzed the number of Federal Acquisition Circulars (FACs) issued by the FAR Council, by month, from 2014 through 2000.  I had mentally noticed that the Council had a penchant for issuing FACs in December so I wanted to see if the actual numbers matched what I thought was happening.  The numbers did!  My mind was still working.  So this year, I updated my 2014 analysis. Well, in 2016 and 2015, the Council was quite merry in December.  They issued 2 FACs during December in each of those years. Since the beginning of 2000, or for the past 17 years, there have been 133 FACs issued. They are grouped by the 12 months of the year below.  (By the way, in 2014 I typed the incorrect number.  I typed 188 when the actual number was 118.)
    January -- 11 FACs February -- 4 FACs March -- 16 FACs April -- 13 FACs May -- 10 FACs June -- 11 FACs July -- 14 FACs August -- 7 FACs September -- 9 FACs October -- 7 FACs November -- 11 FACs, and December -- 20 FACs. As you can see, the FAR Council celebrates the December holidays by issuing FACs. The largest number of FACs--20--have been issued in December. Additionally, the FAR Council has issued FACs in 14 of the 17 Decembers. The only years that they missed were 2011, 2008, and 2005. (I just noticed that the years they missed were three years apart.  Obviously, a government conspiracy.)  In those 3 years, only 6 FACs were issued--the lowest number of FACs issued in any year. Perhaps, they just ran out of gas in those years.
    Getting back to December, in 6 of the 17 years, including 2016 and 2015, the Council issued 2 FACs in December.  Again, that is the most for any month.  What can we conclude?  How about this.  Since the Council spreads holiday cheer in the only way it can during December by issuing FACs, they just love all of you.  And guess what.  There are still several business days left in 2016 and the Council has never issued 3 FAC's in any December, or for that matter, in any month.  If they feel extra cheery this year, maybe they will give you a third to ponder.
  10. bob7947
    The Competition in Contracting Act of 1984 requires the Government Accountability Office (GA0) to report to the U. S. Congress annually when government agencies fail to fully implement its bid protest recommendations. GAO has posted these reports on its website since fiscal year (FY) 1995. Initially, these reports provided little information but by FY 2004, GAO published its "Bid Protest Statistics" covering FY 2004 through 2001. I have added every one of these reports to the fiscal year numbers at the top of the bid protest statistics.
    Beginning in its report for FY 2013, GAO began listing its "most prevalent reasons for sustaining protests" during the FY. This has continued for FY 2014, FY 2015, and FY 2016. Although the information provided does not include cases where an agency took corrective action before a formal sustained decision was reached, it does provided information on 366 sustained decisions. In that sense, it may provide some help whether you are trying to prevent a protest or whether you may protest a procurement.
    For FY 2016, there were 139 sustained protests compared to the 227 protests for the previous 3 Fiscal Years. Since GAO does not provide the number of sustained protests by most prevalent causes, I have ranked the most prevalent causes considering the number of sustained protests during a year.  For example, I divided the number of protests in each of FY 2016, 2015, 2014, and 2013 by 1.  That resulted in the following factors:
    FY 2016 (139/100=1.39) FY 2015 (68/100=.68) FY 2014 (72/100=.72) FY 2013 (82/100=.82) I then multiplied each factor by each most prevalent reason in each Fiscal Year using GAO's ranking.  Then I added my raw rankings of individual reasons for each Fiscal Year to come up with my final numerical ranking.  Yes, it's somewhat crude but all that GAO provides is general information.  
    Below is my ranking of the most prevalent reasons for sustained protests listed by GAO for FY 2016 through FY 2013 with my numerical ranking:
    failure to follow the evaluation criteria (Numerical Ranking of 8.4 and it was listed 3rd in FY 2015 and 1st in FYs 2014 and 2013) unreasonable technical evaluation (Numerical Ranking of 8.28 and it was listed 5th in FY 2015, 3rd in FY 2014, and 1st in FY 2016) unreasonable cost or price evaluation (Numerical Ranking of 7.05 and it was listed 1st in FY 2015, 4th in FY 2013, and 3rd in FY 2016) and unreasonable past performance evaluation (Numerical Ranking of 6.89 and it was listed 2nd in FY 2015 and FY 2016) inadequate documentation of the record (Numerical Ranking of 3.97 and it was listed 4th in FY 2015 and 2nd in FY 2013) Anyway, that is my way of trying to quantify the reasons.  
    Other reasons for sustained protests GAO listed include
    flawed selection decision (Numerical Ranking of 2.75 and it was listed 2nd in FY 2014) unequal treatment of offerors (Numerical Ranking of 2.42 and it was listed 4th in FY 2014 and 3rd in FY 2013) In addition to listing the most prevalent reasons, GAO also gives 1 example decision for each of the most prevalent reasons it lists in a FY.  For example, under unreasonable technical evaluation which GAO placed first in FY 2015, GAO lists Deloitte Consulting, LLP, B-412125.2, B-412125.3, Apr. 7, 2016, 2016 CPD ¶ 119.
    To me, the most striking reason for GAO sustaining a protest is inadequate documentation. That can be prevented by a thorough review of what documents are provided in the evaluation and selection decision. If there is something missing, identify it and correct it. You can get more information on the documentation issue by looking at the Wifcon.com protest page FAR 15.305 (a)(3): Technical Evaluation - Documentation.
    Another striking reason for sustained protests is the first that I list--failure to follow the evaluation criteria. One time a friend of mine was sitting on an evaluation panel for a GAO procurement that I had no involvement in at all. He had something extra he wanted to include in his evaluation of proposals and he asked me about it. Although I was stunned at the question, I simply told him that he must follow the evaluation criteria in the solicitation and if he had any questions he should ask the contracting officer--not me.
    Before ending this entry, I will once again remind you that the information provided by GAO only includes sustained protests. These are decisions in which the agency digs in its heels and fights the protest to a final decision. As GAO explains, "agencies need not, and do not, report any of the myriad reasons they decide to take voluntary corrective action." What you see here may be the tip of the iceberg.
  11. bob7947
    On June 20, 2015, Vern Edwards introduced us to F & F Laboratories, Inc., ASBCA 33007, 89-1 BCA ¶ 21207 (Sept. 14, 1988).
    In early 1986, the Defense Personnel Support Center (DPSC) awarded a contract to F & F Laboratories, Inc. (F & F) for "starch jelly bars" as part of the military's abandon ship ration procurement. F & F offered its commercial jelly bar as part of its proposal and it was incorporated into the contract documents. Unfortunately, the commercial product didn't fit into the abandon ship ration package and F & F was terminated for default. In an Armed Services Board of Contract Appeals (ASBCA) decision, the termination for default was converted into a termination for convenience because DPSC "was obligated to reject [F & F's] offer prior to award and that its failure to do so until [F & F] manufactured over half the supplies after award was a material breach of the contract."
    If life was simple and straightforward, we could end there.
    In 1985, DPSC's records showed that its last procurement for jelly bars was with the Chuckles Division of Nabisco in 1982. The Chuckles bar came in 5 pieces to a bar and one current image shows the bar is nearly 5 Inches long today. That is larger than the federal specification size from the ASBCA case. The F & F bar, in 1986, was over 6 inches with 5 pieces also. Since both firms were Illinois firms, I assume that the sizes of the commercial bars were about the same in the 1980s. That is a long way of concluding that the Chuckles Division probably produced a non-commercial jelly bar for DPSC's needs in 1982.
    Chuckles is now part of the Ferrara Candy Company which, in addition to Chuckles and other candies, makes "Atomic Fireball" candies. I may not have been a fan of Chuckles as a kid but I can remember those fireballs. F & F was in bankruptcy in 2010 and is now The Smith Brothers Co. You can track it down with Google Maps.
    So what's the punch-line here? That's the funny part. I never saw an F & F jelly candy bar--until a day or two ago. Read through the discussion on this site and pay special attention to the image of the "Jelly Bar." You can enlarge the size of the image. The Abandon Ship ration the fellow tested was probably made between 1986 and 1992. You will see that the jelly bar was made by Lucy Ellen Candies which, if you do a bit of research, was a division of F & F. We can assume that after the ASBCA decision F & F and DPSC worked things out and F & F produced a non-commercial jelly bar to federal specifications. For that brief period of time, Lucy Ellen may have found happiness at DPSC.
  12. bob7947
    Yesterday, Don Mansfield posted an article entitled Lying to Ourselves: Dishonesty in the Army Profession. After reading the digest of the article and bristling at some of the jargon used, I can report on what was written in simple language. It is: under some circumstances Army officers can accept a lie as truth. Why single out Army officers? I won't. The truth is that humans can accept a lie as truth. I've written about that before.
    The article made me remember an episode of 60 Minutes from the early to mid-1980s, possibly 1985. For some reason, the Army had agreed to a television test of the Division Air Defense Gun System (DIVAD). DIVAD's mission was to guard tanks on the battlefield from hostile fixed-wing aircraft, helicopters, and lightly armored ground vehicles. Yes, this is the legendary system that was claimed to have identified a latrine fan as an enemy. However, this blog entry is not about the system nor is it about the Army. It's about us. I have been unable to obtain a tape of the program from 60 Minutes so I will explain what I remember.
    The show began and DIVAD's representative (an Army officer) explained what was going to happen. There would be two types of tests--one stationary and several drones. Off in the distance was a white object--the apparent stationary target. DIVAD's turret whirred back and forth, locked onto the target, and began firing its cannons in anger. After the cloud of dust cleared, the target appeared--unharmed. Next was the drone test. From the left side of the television screen a slow moving aircraft appeared. DIVAD gave it a taste of shock and awe with its cannon and the drone disappeared to the right of the screen--unharmed. A second drone appeared on the left side of the screen. Once again, DIVAD's cannon unleashed a merciless barrage but the drone flew off--unharmed. Finally, a third drone appeared from the left of the screen and DIVAD gave it everything it had. I saw a slight hit on the wing of the drone as it flew off to the right of the screen. Shortly after the drone disappeared from view, there was an explosion. (Later it was reported that the third drone was detonated by a self-destruct device.)
    Now it was time to hear from DIVAD's representative about the test. I was young and naïve back then so I felt bad for the guy and wouldn't have blamed him a bit if he ran off and disappeared to the right of the television screen too. The person from 60 Minutes sheepishly approached the DIVAD guy not knowing what to say. However, the DIVAD guy jovially declared success for DIVAD. What did I miss? What did the entire audience miss? I don't know if the Secretary of Defense was watching but he cancelled the system after this episode of 60 minutes aired. Maybe the DIVAD representative had his fingers and toes crossed. Maybe he was conditioned to view the test as a success. All I know is I sat in front of the television stunned.
    What's the moral of the story? Again it's simple: As humans, we all can lie. We even will lie about a lie. It isn't restricted to any organization nor is it restricted to any national border. Its universal. Try this. If you're going to a business meeting today, tell your boss that his/her stupid idea is stupid. Maybe you're going to a party this weekend. Tell everyone what you really think about them and see how that works for you. Remember those little white lies our Mothers told us about after we told a whopper. An online dictionary defines them as: an often trivial, diplomatic or well-intentioned untruth. It's not a lie; its an untruth. Maybe that is a fib. One of my most used lines when I was a kid was: she did it! She being my sister. We all can lie--we're human! We may call it a social grace, more than likely, its a survival tactic. Just don't be surprised if the person on the other side of the negotiation table is telling you an untruth. Its part of our life experience. Besides, I'd never lie to you.
  13. bob7947
    No, they are not candy; no they are not turtles. However, they did have an iron shell. Pook Turtles were designed by Samuel M. Pook and were the "City Class" of armored gunboats that sailed the Mississippi and its tributaries beginning in early 1862. They were called Pook Turtles because people thought they looked like turtles. The seven ships were the USS Cairo, Carondelet, Cincinnati, Louisville, Mound City, Pittsburg, and St. Louis. The recovered remnants of the USS Cairo now rest at the National Military Park in Vicksburg, Mississippi.
    The contract is between James B. Eads, the ships' builder, and Montgomery C. Meigs. Among other accomplishments, Meigs was the architect and engineer of the Pension Building, now the National Building Museum, across G street from the GAO Building. In the contract, Eads is referred to as the "first part" and Meigs is referred to as the "second part." You will see reference to an 1808 act in the contract. That was a law passed to prevent members of Congress from benefiting from government contracts.
    I found this 1861 contract while I was doing research for a future article. As you read it, you will notice some concepts that are in current government contracts. In fact, as you read the Wifcon Forum, you will note that its members ask questions about some of the same concepts that are in the following contract
    Oh! About the price and delivery date--the price more than doubled and the delivery slipped by several months due to design changes. Some things never change!

  14. bob7947
    For those of you who are not familiar with the auditing world, GAGAS is the acronym for Generally Accepted Government Auditing Standards and it is written and maintained by the Government Accountability Office (GAO). Compliance with GAGAS is mandatory for an auditor during the conduct of an audit and a memo noting compliance with GAGAS should be in the auditor's assignment folder for each audit.
    Although I was a member of the auditing community during my career with the GAO, I also viewed myself as a member of the contracting community, As an auditor, I too was bound by GAGAS and I satisfied all of the training necessary to be a professional auditor. As a member of the contracting community, I reviewed thousands of contract files at contracting offices throughout the United States. In addition, I gained an MS in Procurement Management and I wrote GAO's contracting course which I specifically designed for auditors.
    Before you think I'm a braggart of some sort, let me explain that I never awarded a federal contract, never wrote a justification and approval, never wrote a determination and findings, never wrote a negotiator's memorandum, etc. I never was a contract specialist and I don't think any auditor should have been one. My interest as an auditor was in how contracting should be done; not how it was being done. There could be a big difference between the two. But enough of this. Why am I writing this entry?
    GAGAS CAN BE A SHAM
    Recently, I read one of the worst pieces of garbage issued by an auditing activity in my lifetime. It was so pathetically awful that I couldn't read the report. It was page after page of unintelligible gibberish. That brought me back to a longstanding problem I have with GAGAS. It is why GAGAS should make you gag. GAGAS includes things that an auditor should possess for an audit. Below, is an excerpt from GAGAS on an auditor's Competence at section 3.69. I bolded and italicized the word collectively.

    If an auditor does an audit on contracting, must the individual auditor know something about contracting? Simple answer. No! Let's dive a little deeper into the area covering an auditor's Technical Knowledge at section 3.72.

    Let's ask another question. If an auditor does an audit on contracting, must the individual auditor know what the auditor is talking about? Simple answer. No!
    Go back and look at the two quotes. Notice how I highlighted the word "collectively." Collectively is an agency's way out. The staff assigned to an audit might include an attorney assigned to review the draft audit report once the audit is finished. Maybe, the attorney has some familiarity with contracting but the attorney will not be involved in doing the work. Perhaps, the staff assigned to an audit has an advisor who is knowledgeable but that advisor has no real authority over the conduct of the audit. I served as such an advisor. So much for "collectively possess." GAGAS can be a sham.
    Over the years, I listened to agency officials' stories about ignorant auditors who would review their contracts. One of my favorites was the auditor who asked the contracting officer to point out the solicitation for him in the contract file. I wonder what the auditor was going to do with it when he was shown which document it was. You may have had your own unfortunate experiences.
    During one of the final audits that I performed, I had contract files stacked in an agency conference room. From time to time, contract specialists would stop in the conference room and talk to me and we would discuss contracting issues. Towards the end of my stay in that conference room, an experienced contracting officer stopped in to see the anomaly--an auditor who could talk intelligently about contracting. I was proud of that. It let that contracting officer and other contract specialists know that I, as a reviewer of their work, took the time in my life to become familiar with the subject matter of their careers.
    If the current version of GAGAS ensures an auditor's technical competence, why are there so many horror stories about auditors contracting ignorance? Why was I viewed as the anomaly during my entire career? The honest answer is that GAGAS, as it is currently written, does not ensure an auditor's technical competence in the field of contracting. That's it!
    GAGAS CAN BE REVISED EASILY
    Now for my suggestion. GAO should rewrite GAGAS's section 3.69 on Competence as I describe below.

    GAO should rewrite GAGAS section 3.72 on Technical Knowledge as I describe below.

    My suggestion places responsibility for Competence and Technical Knowledge in one individual--the person who directs the audit. Normally, that person is called an auditor-in-charge or something similar. This can easily be done for contracting audits. For example, I was responsible for the conduct of an audit that included 17 subordinate auditors who had no experience with contracts. The work was done at several agencies and several sites around the country. To do the audit, I brought all members of the team to Washington, D. C. and trained them specifically for the work to be done. By the time we were done with the training, my staff knew what to look for and what the documents would look like. They had no trouble identifying problems and documents. As my staff performed their work, I visited with each of them, reviewed their workpapers, and reviewed the contract files, if it was necessary. Throughout the audit, I was available to assist and answer contracting questions. The audit was successful and it had an effect on the way you do contracting.
    More and more, an ignorant Congress depends on what auditors report as contracting findings and recommendations. As a result, the work of ignorant auditors can affect contracting careers and contracting laws. Additionally, when an agency sends an ignorant auditor out to identify contracting problems the ignorant auditor doesn't know what to look for and couldn't identify the problem if it him him/her.
    MORE SUGGESTIONS
    In addition to GAO making the changes I noted to GAGAS, I suggest that agencies that conduct audits

    identify auditors who have an interest in contracting and provide the technical training and knowledge they will need as they become auditors-in-charge on contracting audits.

    require officials signing an audit to identify the auditor-in-charge on the signature page and certify that the auditor complies with the revised version of GAGAS's Competence and Technical Competence standards. Further, I suggest that contracting agencies who are the subject of an audit require

    their procurement executive or designee to request proof of auditor compliance with GAGAS sections 3.69 and 3.72.
    officials that comment on the draft audit report to note any auditor non-compliance with GAGAS sections 3.69 and 3.72 in their comment letter.
  15. bob7947
    In Thomas F. Neenan, as Trustee of the Thomas F. Neenan, Sr., Revocable Trust, v. U. S., No. 11-733C, August 22, 2013, you are taken through some of the basics of federal contracting. How many basic points can you identify in this 10-page opinion? I've listed those that I identified below:
    1. Offer and acceptance, unconditional offer, preliminary negotiations.
    2. Change in ownership, death of party, trust agreement.
    3. Pattern or practice.
    4. Contract specialist's authority, integral part of the duties assigned.
    5. Express authority, implied authority, actual authority, apparent authority.
  16. bob7947
    In my last post on the Wifcon Blog, I proposed a House and Senate Committee on Contracting and Assistance. Why, you might ask? Remember the Clinger-Cohen Act? It was part of the National Defense Authorization Act for Fiscal Year 1996, P. L 104-106. What about the SBIR/STTR Reauthorization Act of 2011? It was part of the National Defense Authorization Act for Fiscal Year 2012, P. L. 112-81. What about the new Limitations on Subcontracting provision that was mentioned on the Wifcon Forum? You may have guessed: The National Defense Authorization Act for Fiscal Year 2013, P. L. 112-239, Section 1651.
    So how does government-wide contracting legislation end up in the annual National Defense Authorization Acts? Think "sticky bill!" To be more exact, and maybe more accurate as it affects contracting, remember the scene in Saving Private Ryan where Tom Hanks' character explains how the remnants of his unit will deal with tanks--"
    ." As the annual National Defense Authorization Act makes its way through the corridors of Congress, you throw your sticky bill at it and hope it sticks.It doesn't begin nor end there. Remember our old friend the Federal Acquisition Streamlining Act of 1994? It was originally introduced in the old Senate Committee on Government Affairs, now the Senate Committee on Homeland Security and Governmental Affairs. This Senate Committee has a counterpart in the House of Representatives--the House Committee on Oversight and Government Reform, formerly the old Committee on Government Operations. If Congress cannot keep the names of its committees simple, how can it keep contracting legislation streamlined? I'll answer that--it cannot. Getting back to the House Committee on Oversight and Government Reform, this year its chairman introduced H. R. 1232, the Federal Information Technology Acquisition Reform Act. Currently, H. R. 1232 is wallowing in the full House of Representatives. It may eventually stick to something and get passed. Pray it doesn't.
    Finally, there are agencies totally overseen by a single committee in the House and Senate. These committees treat their agencies as their own turf, and of course, write agency-specific contracting laws. I remember sitting with some bright, young, eager, staff members of one such committee. They were writing a piece of legislation that would affect an agency's contracting law. As I read the bill, all I could think of was--at least they heard of the Competition-in-Contracting Act. Eventually, the bill was passed without question and became another piece of garbage legislation affecting one agency's contracting. If you are working in one of these agencies' contracting offices, woe are you.
    I only will briefly mention that the House and Senate Small Business Committees can initiate their own legislation and eventually pass it too.
    In our wonderful game of baseball, one pitcher stands on a hill and throws the ball towards the batter to start the action. If Congress wrote the rules for baseball, all 8 players facing the batter would throw balls toward the batter and the catcher squatting behind the batter would take some cheap shots at the batter. If you work in a contracting office or if you are a contractor, you are the batter in Congress's version of baseball.
  17. bob7947
    I had planned to write a detailed article about my plan for the above committees. However, I'm never going to get to it. So, I'm going to try a series of quick posts to get my thoughts published. Don't tell me that these committees will never be formed. I know they won't. Committees and subcommittees are entities run by politicians for politicians. However, I can dream.
    You can see from the titles of my proposed committees that they would deal with federal contracting and federal assistance. For now, this blog entry will deal with federal contracting only. In fact, this blog entry will deal only with the structure of the committees. Both the House and Senate committees will have the same jurisdiction and subcommittees. Here we go!

    I view the first 4 subcommittees as oversight committees that would work with the last 2 subcommittees. However, I see much work for the final 2 subcommittees beginning with Day 1.
    More later.
  18. bob7947
    Imagine quoting on a procurement in which you submitted the lowest-priced, technically acceptable quote. Instead of winning the award, you were told that your quote was unacceptable and ineligible for award because you did not possess the requisite facility clearance prior to award. Although you submitted your facility clearance information to the contracting officer on December 6, 2012, nearly two months later on February 1, 2013, little had been done on it.
    You protest to the U. S. Court of Federal Claims and everything seems to be going your way until you read the following quote from the opinion:
    Nonsense! Even the dictionary cannot tell me what propinquent means. However, the dictionary does define propinquity. My interpretation of the phrase that I italicized is "good enough for government work." That's not good enough for me. I disagree with the judge's ruling! In addition, I disagree with the judge's singling out one individual for a process issue.
    Now, let's look at the cause for the nearly 2-month delay in processing the facility clearance. I blocked out the individual's name because I want you to look at this as a process issue.

    I'm asking you to look at the above quote and the entire opinion to identify ways to improve the process in this procurement. I'm not looking for an answer here. Instead, how would you initiate the improvements? I'll point out a few items to give you a start.
    He was on personal leave for sixteen days during that time period.
    He halted the processing of DD Form 254 requests for a two-week period in January while the Defense Security Service was questioning whether a bona fide need existed for any facility clearances under SINs 132-54 and 132-55 under Schedule 70.
    The splitting of responsibilities in the Memorandum of Agreement between the Defense Information Systems Agency and the General Services Administration.

  19. bob7947
    GAO supplies us with its contracting rules in bid protest decisions. These rules are repeated and this is one of the reasons I provide key excerpts from bid protest decisions on Wifcon.com's Bid Protest pages. If you read these rules repeatedly, you will remember them. For example, here is a rule on what GAO reviews on a past performance issue.

    Think "consistent with the solicitation’s stated evaluation criteria" for this blog entry.
    Recently, GAO's decision in American Apparel, Inc., B-407399.2, Apr 30, 2013, drew my attention. We know a solicitation's terms are important because it is what bidders and offerors rely on to prepare their bids and offers. However, could GAO's own rule that states "consistent with the solicitation’s stated evaluation criteria" leave it with an oddly written decision. I believe that it did.
    In the American procurement, the solicitation stated that

    All of you probably have seen something similar to the above in a solicitation. It is not the solicitation language in this procurement; it is the events that interest me. The solicitation closed on September 22, 2010 but the contract wasn't awarded until January 18, 2013, over 2 years later. Things can happen in 2 years and in this procurement things did happen. American claimed that during this 2-year period, the successful offeror--Bluewater Defense--had performance deficiencies. However, in response to the protestor's claim GAO said

    My problem with using FR Countermeasures, Inc., in its decision as an example is that, in FR Countermeasures, there was a short period of time between the solicitation closing date and contract award. In the American decision, this time period was over 2 years. However, GAO happily states its rule without dealing with this 2-year period. That bugs me. Case closed, decision over, the protester loses. Maybe this caused some scratching of heads in GAO's bid protest unit too. I don't know but it left me wondering.
    A skilled writer can use sleight-of-pen to make it appear that it dealt with an issue without really dealing with it. In my opinion, that is what GAO did and dealt with the 2-year time period in its background section. GAO mentions that the source selection authority (SSA) made its selection decision on January 13 without adding which year. (The decision also includes 2 different solicitation closing dates so I assume that the missing year was an oversight.) However, the sequence of events leads me to assume that the date was January 13, 2011. GAO further explains, that the procurement record (probably the contract file) included a memorandum from the contracting officer dated November 1, 2012, about a briefing given to the SSA on the results of a "supplementary past performance review." The memorandum explains that this review was written due to the length of time that had passed between the solicitation closing date and the award decision. GAO included a blurb from that memorandum which explained

    Remember GAO did not discuss this memorandum in its "ruling" section of its decision. To complete its story, GAO wrote in the background section that

    In the end, GAO issued its decision using its rule on the solicitation's requirements, ignored the 2-year period in its ruling, but deals with the 2-year period in the background section. Would GAO have mentioned it in the ruling section, if during the 2-year period, there was a substantial decline in the winning offeror's past performance? Anyway, it had me wondering.
    There are 2 decisions you might want to read. They are FR Countermeasures, B-295375, February 10, 2005, mentioned in the decision, and International Business Systems, Inc., B-27554, March 3, 1997 for the "too close at hand" passage mentioned by the protester.
  20. bob7947
    In Lockheed Propulsion Company; Thiokol Corporation, B-173677, June 24, 1974, GAO issued its bid protest decision on the Solid Rocket Motor (SRM) Project for the Space Shuttle Program. This decision was issued before the National Aeronautics and Space Administration (NASA) had its first SRM and before it had its first Space Shuttle.
    One part of the Lockheed protest dealt with the proposed costs for ammonium perchlorate (AP), a major part of the propellant in the SRM. Two offerors, Lockheed and Thiokol, had proposed different costs for the AP even though they would be getting the AP from the same suppliers. GAO concluded that the offerors' evaluated costs should be the same for the AP because of this. As a result, GAO proposed a $68 million dollar adjustment to the evaluated costs of Lockheed and Thiokol. Since NASA had concluded that Lockheed and Thiokol were technically equal and that their evaluated costs were both in the $800 million range, a proposed adjustment of this size could affect the outcome of the selection.
    GAO recommended that
    NASA promptly considered GAO's recommendation and continued with its original selection of Thiokol for the SRM award.
    Nearly 39 years later, I was reminded of this decision by GAO's decision in BC Peabody Construction Services, Inc., B-408023, May 10, 2013. In this procurement, the Corps of Engineers rated the same subcontractor as acceptable for Edens Construction Company but unacceptable for BC Peabody Construction Services.
    GAO explained
    Although GAO concluded that the two offerors had been treated unequally by the Corps, GAO further explained that it
    Unlike in the Lockheed decision, GAO decided that BC Peabody did not have a chance to win because it still would have received a "deficiency" for not having a letter of commitment from a subcontractor.
    The moral of this story is that even after proving that a mistake was made, if the protester cannot win anyway, it still loses.
  21. bob7947
    The General Services Administration (GSA) has about 19,000 Multiple Award Schedule (MAS) contracts. About 80 percent are contracts with small businesses. Last year, GSA proposed terminating thousands of small business contracts for not meeting the $25,000 annual sales threshold. Apparently, GSA forgot to pay the contractors something--$2,500.
    The House Committee on Small Business did some checking--more likely someone told them--and found that GSA owed some money. Here is the story.
    You can read all about it at the Small Business Committee site.
  22. bob7947
    I was reading a decision of the Armed Services Board of Contract Appeals (ASBCA) about a week ago and I found the following.
    Why read the ASBCA decision when I could go straight to the horse's mouth! So I searched the Court of Appeals for the Federal Circuit (CAFC) web site and I found the Sharp decision--and it was recent. Here is a brief description of the issue in the Sharp case.
    On September 18, 2001, the General Services Administration (GSA) awarded a multiple award schedule (MAS) contract to Sharp Electronics Corporation for office equipment. On December 1, 2005, the Army issued a delivery order "in accordance with and subject to terms and conditions" of Sharp's MAS contract. The order provided for a four-year lease of copier equipment, including one base year and three option years, with the last option year ending on December 1, 2009. Option years one and two were exercised in full. The Army partially exercised option year three for six months and subsequently extended the lease for three more months. The lease finally ended on August 31, 2009.
    Sharp filed a claim with the Army contracting officer (CO) citing the termination fee provisions of its schedule contract. The Army CO did not respond and did not refer Sharp's claim to GSA's CO who was responsible for Sharp's MAS contract. After 60 days, Sharp appealed to the ASBCA which determined that it did not have jurisdiction and dismissed the case. Sharp then filed an appeal with the CAFC.
    What should an agency CO do with a dispute on an order? What should an agency CO do if there is a question of contract interpretation with the MAS contract and that interpretation affects the interpretation of the agency order? Well, in a majority decision, the CAFC tells us this.
    It is easy for the CAFC but is it that easy for you? There was a minority opinion in this CAFC case too which looked at it differently.
    Anyway, the CAFC case is Sharp Electronics Corporation v. John McHugh, Secretary of the Army, No. 2012-1299, February 22, 2013. The ASBCA decision is Impact Associates Inc.
  23. bob7947
    We've all seen this before. The government and contractor sign a contract with a base period and several 1-year options. Sometimes, the 1-year option periods even mirror the government's fiscal year. A nice little puppy. Then, the harsh realities of government take over and our little puppy grows into an unwieldy mongrel. Such is life in federal contracting and here is a story about one such dog.
    On February 27, 2009, the Army National Guard and Glasgow Investigative Solutions, Inc. (GIS) signed a contract for armed security guard services at the National Guard Armory, Washington, DC. The contract included a 3-month base period from March 1, 2009 to May 31, 2009 (CLIN 0001) and 4 option years (CLINs 2 through 5) beginning October 1, and ending September 30 of 2010, 2011, 2012, and 2013. There is another option to extend the base period for 4 months from June 1, 2009 to September 30, 2009 (CLIN 0006). Of course, the contract included the clause at FAR 52.232-18, Availability of Funds (Apr 1984).
    Mod 1, a bilateral agreement, exercised the option in CLIN 0006 for the 4 months to the base period from June 1, 2009 to September 30, 2009 and added the clauses in FAR 52.217-6 Option for Increased Quantity and 52.217-8 Option to Extend Services.
    Mod 2, a bilateral agreement, fully funded the contract through September 30, 2009.
    Mod 3, a bilateral agreement, modified the contract by extending CLIN 0006 from October 1, 2009 through January 31, 2010 and fully funded this 4-month extension. The 4, 1-year option periods in CLINs 0002, 0003, 0004, and 0005 were reset to begin February 1 and end January 31 of the following years.
    Mod 4, a bilateral agreement, exercised the first 1-year option period in CLIN 0002 from February 1, 2010 through January 31, 2011.
    Mod 7, a bilateral agreement, extended the first option period in CLIN 0002 for 2 months, from February 1, 2011 through March 31, 2011.
    Mod 8, a unilateral agreement, and Mods 9 and 10, bilateral agreements, extended the first option period in CLIN 0002 from April 1, 2011 through June 30, 2011.
    By now, the contractor was irritated with the extensions to the first option period. After all, the parties signed an original contract that contained 1-year options--not 1- or 2-month extensions to the first option period. The contractor notified the contracting officer about its concerns. On June 28, 2011, the contracting officer noted the contractor's concerns but explained that "due to limited funding, the government is unable to exercise a one (1) year option to the contract at this time." Instead, the contracting officer said she was prepared to extend the contract for an additional 30 days through July 31, 2011. The contractor agreed to the 30-day extension but maintained its position that the modification is contrary to the original contract.
    On November, 17, 2011, the contractor filed a claim due to fundamental changes in the original option periods. The contractor had signed up for 1-year options not 1- or 2-month extensions. The contractor filed a notice of appeal to the Armed Services Board of Contract Appeals on April 27, 2012 and about 1 year later the Board rendered its decision.
    So what did the Board say? Find out on the bottom of page nine at Glasgow Investigative Solutions, Inc.
  24. bob7947
    On April 26, 2007, the Army awarded an indefinite delivery, indefinite quantity, fixed price, job-order contract to Lakeshore Engineering Services, Inc., for repair, maintenance, and construction services at Fort Rucker, Alabama. Lakeshore performed 79 construction delivery orders in the base year and 74 construction delivery orders in the first option year.
    On March 10, 2009, Lakeshore filed a claim with the contracting officer seeking $1,996,152.40 for losses it incurred while performing during the base and first option year. Lakeshore claimed that it had lost money as a result of the Army's pricing scheme. The contracting officer issued a final decision denying the claim and Lakeshore took the matter to the Court of Federal Claims.
    The pricing scheme was a bit complex. Offerors were told that offers were to be priced using three coefficients – one for work (1) during normal hours on pre-priced items, (2) during overtime work on pre-priced items, and (3) on non-pre-priced items. For the pre-priced items, the coefficient was to be "multiplied by the unit prices listed in a Universal Unit Price Book (UUPB) to price a job or project on individual job orders. According to the Solicitation, the coefficient was "a numerical factor that represents costs (generally indirect costs) not considered to be included in the [uUPB] prices, e.g., general and administrative and other overhead costs, insurance costs, bonding and alternative payment protection costs, protective clothing, equipment rental, and contractor’s profit." The Solicitation said the coefficient should account for a wide variety of risks of doing business, adding at a later point, the coefficient "shall contain all allowable contractor costs, including contingencies and profit." It further stated that the "offeror’s coefficient shall contain all costs other than the pre-priced unit prices, as no allowance will be made after award." The Solicitation, however, allowed for adjustments in the coefficient for the option years, to be based on the Engineering News Record building Cost Index (BCI), in accordance with the Economic Price Adjustment Clause, Army Federal Acquisition Regulation Supplement 5152.237-9000.
    The Solicitation designated the Gordian Group Construction Task Catalog (the Gordian Catalog) and PROGEN Online as the UUPB and accompanying software, respectively, to be "used by the contractor in development of price proposals for individual Task Orders." According to the Solicitation’s technical specification, "[t]he UUPB, modified for Fort Rucker, contains pricing information (i.e., Government Estimate) for the description of work to be accomplished and for the units of measure specified." This segment further indicated that the "UUPB consists of Divisions 1 through 16 that are applicable to Divisions 1 through 16 of the Job Order Contract Technical Specifications." It additionally specified that the "UUPB modified for Fort Rucker contains unit pricing data to be used by the Contractor in development of price proposals for each work order," adding that "[t]he pricing data is presented as basic items and as price adjustment modifiers to the basic item."
    The pricing information available to offerors also included the caveat that: "[w]hile diligent effort is made to provide accurate and reliable up-to-date pricing, it is the responsibility of the Contractor to verify the unit prices and to modify their Adjustment Factors accordingly."
    What happened at the Court of Federal Claims? See Lakeshore Engineering Services, Inc. v. U. S., No. 09-865C, April 3, 2013.
  25. bob7947
    In the U. S. District Court for the District of Columbia, a recent opinion was issued in which 3 hospitals wanted to avoid being labled as government subcontractors to avoid the Department of Labor's rules covering subcontractors.
    The hospitals had contracts with UPMC Health Plan to provide medical services and supplies to individuals enrolled in its program. UPMC contracted with the U. S. Office of Personnel Management (OPM) to provide coverage for federal employees in the Federal Employees Health Benefits Program. Since the hospitals provided medical services to federal employees pursuant to their agreements with UPMC, the Department of Labor concluded that the hospitals qualified as subcontractors and were subject to certain statutory and regulatory requirements imposed on subcontractors.
    Part of the judge's opinion stated that the "Provision of medical services and supplies was a critical component of the UPMC's contract. The contract depended on medical providers like the [hospitals] to offer medical services and supplies necessary for UPMC to meet its obligations under its contract with OPM." "Therefore, they qualify as subcontractors under the Secretary's regulations."
    You can see the full opinion here.
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