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The Five Worst Contracting Rules That Waste Money

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:angry: I'm always reading about a new contracting requirement. One example of waste is the collection of data from contractors and suppliers that is not used. I know there are a lot of dumb, wasteful, or junk requirements out there--and you deal with some of it every day.

Let's see if we can identify several items that are either worthless or near worthless but they are done because it is the rule.

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:angry: I'm always reading about a new contracting requirement. One example of waste is the collection of data from contractors and suppliers that is not used. I know there are a lot of dumb, wasteful, or junk requirements out there--and you deal with some of it every day.

Let's see if we can identify several items that are either worthless or near worthless but they are done because it is the rule.

How about the interim rule "Encouraging Contractor Policies To Ban Text Messaging While Driving (FAR Case 2009-028)"?

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I don't know if these are FAR rules or agency rules, but we have to do a report twice a year with the number of Service Contract Act contract awards and Davis Bacon Act contract awards, as well as any Davis Bacon withholdings -- I heard from our bureau's policy chief that no one ever uses this information...

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The Army's Contractor Manpower Reporting requirement. While on it's surface a worthwhile and necessary requirement, the data must be entered into a system that was designed around the way the Army enters data. So each December, I get a long list of orders that we issued where the data is "incomplete" because I work for GSA and we number our contracts and task orders differently, and our fund cites do not match the expected format. After about 2 months of emails explaining that the data as listed is correct and providing copies of documents to prove that really is the contract number and fund cite, the truth is accepted until the next year - when the same contract information comes up as "incomplete" again. (sigh)

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I've always thought all the government's focus on labor provisions, especially the Service Contract Act and Davis Bacon, makes little sense and poses a huge administrative burden on both industry and the government. The reasons for passing these laws decades ago no longer are valid. Now the government has a huge bureaucracy to manage the programs and industry undergoes a big endeavor in complying.

People say the government needs to follow more commercial practices - how about adopting commercial practices in contracting for services?

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I've always thought all the government's focus on labor provisions, especially the Service Contract Act and Davis Bacon, makes little sense and poses a huge administrative burden on both industry and the government. The reasons for passing these laws decades ago no longer are valid. Now the government has a huge bureaucracy to manage the programs and industry undergoes a big endeavor in complying.

People say the government needs to follow more commercial practices - how about adopting commercial practices in contracting for services?

Not counting the Pentagon, the DOL seems to have the biggest office building in DC, next to the Dept. of Agriculture, which I doubt is full of Ag Dept employees anymore. I suspect that somebody seems to be interested in looking out for the working class, thank God.

As for the SCA, service contract administrators seem to do little if any enforcement or administration of those provisions, anyway. That is primarily left to DOL to worry about.

As for DBA, I'd agree that the applicable threshold is way outdated. I don't agree that the provisions don't serve any useful purpose, though.

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Another one is the requirement to use Earned Value Management (EVM). I know it's used well to manage many major system type buys. But it's also used whenever certain dollar thresholds are exceeded and this often varies by agency ($10 million, $20 million, $50 million, etc.). First of all, the more or less mandatory use creates a huge administration burden on contractors and this gets passed on to the government in the form of higher costs. Second, in many cases the only thing that happens is the contractor submits reports that no one looks at. Third, the Government spends a lot of time and money training people to understand EVM but that training never gets used. Lastly, I haven't seen or heard anyone saying projects now are producing better performance, more are delivered on time, and fewer without cost overuns now since they have EVM.

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American Recovery and Reinvestment Act of 2009 (ARRA) reporting requirements. These contractor submitted reports are housed in ANOTHER federal database (federalreporting.gov) and require lot of duplicative information already found in FPDS. One of the most noteworthy reporting requirements is the "Jobs Created" field that requires the contractor to calculate the number of jobs created or saved for each reporting quarter. This is done through an awkward calculation of hours performed on the contract per quarter divided by 520 regular quarter hours (2080 hours / 4 quarters = 520 qtr hrs). This must be done on FFP contracts as well. The report must be submitted by the 15th after each quarter and reviewed by at least one agency official. A government review board reviews all recipient reporting for each agency for consistency. The review board informs the Contracting Officer of any reporting issues that may need to be corrected and the CO coordinates any reporting fixes with the contractor before the 30th after each quarter. There was (and continues to be) a significant amount of training to both government and contractor employees on ARRA reporting requirements, generally developed and given by government employees. There was agency policy developed for both grants and contracting offices. Automated financial and procurement systems were altered to properly track ARRA contracts and grants. ARRA funds were available for obligation in FY09-10.

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So far, looks like ARRA goes to the top of the list, at least in the consternation and confusion department, mainly because it applies not only to federal contracts but also to any contracts with ARRA funding regardless of contracting authority: state or local government, boards, districts, universities, etc.

If you think there are training and reporting problems for federal agencies to comply with all this ARRA stuff, just think about the impact on those folks who are unaccustomed to such requirements.

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Another one is the requirement to use Earned Value Management (EVM). I know it's used well to manage many major system type buys. But it's also used whenever certain dollar thresholds are exceeded and this often varies by agency ($10 million, $20 million, $50 million, etc.). First of all, the more or less mandatory use creates a huge administration burden on contractors and this gets passed on to the government in the form of higher costs. Second, in many cases the only thing that happens is the contractor submits reports that no one looks at. Third, the Government spends a lot of time and money training people to understand EVM but that training never gets used. Lastly, I haven't seen or heard anyone saying projects now are producing better performance, more are delivered on time, and fewer without cost overuns now since they have EVM.

I agree concerning the very formal EVMS programs, as we specify, including a very expensive "IBR" process, which can cost into the hundreds of thousands of dollars or more on larger contracts.

The actual concept of earned value management systems is generally necessary for many cost type contracts in order to be able to measure cost and schedule performance. For construction contracts, it is part of good contractors' inherent business practices. They use these type of cost and schedule controls internally on fixed price as well as cost contracts.

But, unless government surveillance includes the ability to see and analyze real-time data and to be able determine trends as they are occurring, the summary level reports that we see are old history (up to 60 days or more old) and worthless for day to day oversight and management of cost contracts.

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