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NAICS code appeals can be powerful, and while they’re infrequent, they often succeed. But NAICS code appeals are subject to a strict, 10-day deadline–and that deadline isn’t extended by deliberations with the Contracting Officer.
In a recent NAICS code appeal decision, the SBA Office of Hearings and Appeals reiterated that the 10-day deadline isn’t affected by discussions with the procuring agency.
OHA’s decision in NAICS Appeal of AMEL Technologies, Inc., SBA No. NAICS-5892 (2018) involved a NAVFAC solicitation for construction management services. NAVFAC issued the solicitation as a small business set-aside and assigned NAICS Code 236220 (Commercial and Institutional Building Construction), with an associated $36.5 million size standard. The solicitation was issued on January 25, 2018.
AMEL Technologies, Inc. believed that the correct NAICS code was 541330 (Engineering Services), which ordinarily carries a $15 million size standard. AMEL apparently initiated discussions with the Contracting Officer shortly after the solicitation was issued, asking the Contracting Officer to change the NAICS code to 541330.
The Contracting Officer didn’t respond to the request until March 1, 2018. The Contracting Officer didn’t address the merits of AMEL’s request, but simply stated that she considered the matter closed because AMEL had not filed a formal NAICS code appeal with OHA. AMEL subsequently filed a NAICS code appeal on March 6.
OHA wrote that “nder applicable regulations, a NAICS code appeal must be filed within 10 calendar days after issuance of the solicitation, or within 10 calendar days of an amendment affecting the NAICS code or size standard.” OHA “has no discretion to extend, or waive, the deadline for filing an appeal.”
OHA continued, “deliberations with a procuring agency which do not result in any change to the solicitation, do not extend the [NAICS] appeal deadline.” Therefore, “the fact that [AMEL] requested that the CO reconsider the NAICS code does not alter [AMEL’s] deadline for bringing a NAICS code appeal at OHA.”
AMEL “filed this appeal 40 calendar days after issuance of the RFP.” Thus, “[t]he instant appeal is untimely and must be dismissed.”
OHA dismissed AMEL’s NAICS code appeal.
When an agency assigns an apparently erroneous NAICS code, it’s not a bad idea to approach the Contracting Officer about a change, as AMEL did. Doing so can avoid unnecessary administrative litigation. Additionally, giving the Contracting Officer the chance to reconsider before filing a NAICS code appeal may be beneficial from a “relationship standpoint.” However, as the AMEL Technologies case demonstrates, informal discussions about NAICS codes don’t extend the strict NAICS code appeal deadline–the 10-day clock keeps ticking.
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A pair of large contracts for administrative services with the Centers for Medicare & Medicaid Services (CMS) are great but two pairs are better. In a recent case, National Government Services, a company holding multiple contracts with CMS, protested when agency rules prevented them from competing for several more. Ultimately, the agency was able to successfully defend the limitations written into their solicitation, and the case provides a template for other agencies that may find themselves in similar circumstances.
Read the full article at Petrillo & Powell's Patterns of Procurement.
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By Barbara Kinosky:
Congress’s Section 809 Panel has made their first move on DoD acquisition system reform. The committee is made up of 18 experts in government contracts and is “charged with making recommendations that will shape DoD’s acquisition system into one that is bold, simple, and effective.” Yours truly testified before them. Section 809 Panel has the difficult job of thoroughly reviewing every DoD acquisition regulation ever written, and then conclude which regulations should remain active and which should be eliminated.
After a year of study, the panel has released its first report, containing 73 recommendations for procurement reform. This first volume focuses on commercial buying, contracts audits from DCAA, small business policy, and more. One of the top recommendations is to create a “mission driven” acquisition system to replace the current “process-oriented” system. The idea proposed by the panel is to grant DoD officials the ability to choose from various contracting procedures, so they may choose one that produces the best results for their mission.
A major takeaway from the report is the segmentation of the current acquisition process. The report defines these four “lanes” of procurement:
- Lane 1 – “Readily Available: This lane encompasses existing products and services that require no vendor customization to meet DoD’s needs.”
- Lane 2 – “Minor Customization: The second lane includes products and services that are primarily sold in the private sector, and for which DoD may be one of many potential buyers.”
- Lane 3 – “Major Customization: This lane includes products and services for which DoD may be one of few potential buyers, and for which there may be little or no private‐sector applicability.”
- Lane 4 – “Defense‐Specific Development: In this lane there is no private‐sector applicability, as the products and services are developed exclusively for defense‐related use.”
Major missions outlined by the report:
- Commercial Buying – “Streamline and simplify DoD’s access to the commercial market.”
- Contract Compliance and Audit – “Improve the contract compliance and audit processes by focusing on the needs of contracting officers and acquisition team members.”
- Small Business – “Refocus DoD’s small business policies and programs to prioritize mission and advance warfighting capabilities and capacities.”
The report outlines various other missions as well, and is only the first volume out of three – which will all cover the panels comprehensive examination of acquisition reform.
About the Author:
Barbara Kinosky is the Managing Partner of Centre Law and Consulting and has more than twenty-five years of experience in all aspects of federal government contracting. Barbara is a nationally known expert on GSA and VA Schedules and the Service Contract Act, and she has served as an expert witness for federal government contracting cases.
The post Section 809 Panel: Taking Action on Acquisition Reform appeared first on Centre Law & Consulting.
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A former student of mine is part of a team conducting a survey to gauge interest in a Mentoring program for Acquisition. If you work in federal acquisition and work for a federal agency (including DoD), please take a few minutes to complete the survey. The more junior you are, the better. From the team:Quote
As part of the Leadership Excellence for Acquisition Professionals (LEAP) most recent cohort, a team is researching and developing new approaches that will hopefully enable the acquisition field to become more effective in their day-to-day responsibilities. They have been working on developing a mentoring program specific to the acquisition field that would provide the opportunity to serve as a mentor or be assigned as a mentee with another acquisition professional - with the overall goal of providing an outlet for the sharing of information through one-on-one communication.
To help gain insight on whether a program like this would aid you in your professional development, they would like to invite you to take a short 10-question survey using the following link: https://www.surveymonkey.com/r/NPJ9WDT. The survey is completely anonymous, and should take no more than 5 minutes to complete. The information provided will enable the team to generate quantifiable data that can later be presented to Senior Executives from numerous federal agencies and the DOD in the hopes of moving this program forward. Please feel free to forward the survey to any acquisition professionals you know.
Thank you in advance for your participation.
Each year brings about new budgets and new National Defense Authorization Acts (NDAA). NDAAs address funding, strategic plans, and rules affecting the defense acquisition process. NDAA 2018 is no exception and here are the highlights regarding cost, price, and accounting.
The NDAA includes a number of provisions that reinforce the Congress’ commitment to the acquisition of commercial items under commercial terms. These include requirements for a reassessment of what general procurement statutes should apply to commercial items and the establishment of a so-called “Amazon for Government” online portal for the acquisition of commercial off-the-shelf (COTS) items.
Section 846, termed “the Amazon provision,” mandates establishment of a program “to procure commercial products through commercial e-commerce portals … through multiple contracts with multiple commercial e-commerce portal providers, and shall design the program to be implemented in phases with the objective of enabling Government-wide use of such portals.”
- No later than 90 days after the date of enactment of the NDAA, the Office of Management and Budget (OMB) and General Services Administration (GSA) must submit an implementation plan to Congress.
- No later than one year after submission of the implementation plan, the OMB and GSA must conduct a market analysis of commercial e-commerce portal providers and recommend “any changes to, or exemptions from, laws necessary for effective implementation” of the program.
- No later than two years after the date of submission of the implementation plan, the OMB and GSA must issue guidance to implement and govern the use of the program, such as protocols for compliance with product screening requirements, data security and data analytics.
The delay in full implementation of the program was incorporated into the provision during conference consideration of the NDAA to address concerns from various segments of the contracting community. The goal of the provision is to:
- streamline and simplify the DoD’s acquisition of many COTS items
- enhance competition
- expedite procurement
- enable market research
- ensure reasonable pricing and create cost-savings
- promote increased transparency and accountability
Section 847 proposes to add language to 41 U.S.C. § 103 to clarify that non-developmental products or services developed at a private expense and sold competitively in “substantial quantities” to “multiple foreign governments” also qualify as “commercial items.” If enacted, this language would broaden paragraph #8 of the definition in FAR 2.101 of what constitutes a commercial item, perhaps opening up the United States commercial item market to foreign vendors that regularly sell non-developmental items to foreign governments.
Section 848 provides that the DoD’s acquisition of an item through commercial item procedures constitutes a “prior determination” that the item is a commercial item that is binding on future DoD acquisitions unless (i) the head of contracting authority determines that the prior determination was improper or (ii) the senior procurement executive for a military service or the DoD determines that it is no longer appropriate to acquire the item under commercial item procedures. This change may improve consistency within the DoD acquisitions system and streamline the determination process for future acquisitions.
Note that NDAA 2016, and corresponding DPAP memo, and PGI (DFARs) guidance put an emphasis on relying on prior written Commercial Item Determinations. NDAA 2018 says that a contract for items acquired using FAR 12 commercial item procedures shall serve as a Commercial Item Determination. We suspect that DoD will use this guidance for FAR 12 acquisitions going forward, but may not consider FAR 12 acquisitions that occured prior to NDAA 2018. In other words, if you’re currently trying to make a commercial item argument based on an acquisition that occurred before December 12, 2017, you may still have a battle to fight.
Section 849 requires the Secretary of Defense to comprehensively review the procurement statutes and regulations applicable to commercial item acquisitions not required by statute, but have nevertheless been applied through the DFARS based on a determination that it is in the government’s interest . The Secretary of Defense is required to review each provision and provide an exemption, by December 12, 2018, from the statute or regulation for commercial item acquisitions unless he or she “determines there is a specific reason not to provide the exemption.” This provision provides a strong signal to the DoD that Congress wants a reduction in the number of provisions applicable to commercial item acquisitions.
Perhaps the most important aspect of all these changes is the requirement for DoD to promulgate new regulations implementing the changes. The DAR Council must propose new rules, publish them in the Federal Register, solicit public feedback, and institute the final rule. Follow all of the DFARS cases here. Register here for Federal Register notifications.
If you have questions about these changes and your federal contract, please contact Robert@LeftBrainPro.com or call (614) 556-4415.
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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.
Last year, a conversation between Amazon Business and one of the senior leaders in government contract management today was hosted at NCMA’s Government Contract Management Symposium. This session opened many people’s eyes to the technological “disruption” we’re all familiar with in our private lives, but not always in our professional ones.
Today, many of us have fully “plugged” ourselves into the digital automation of the modern day. We shop and acquire a whole host of products and services online; stream our music, books, and other forms of entertainment; engage actively in social media and other forms of previously non-existent forms of communication; hail car rides here and there, etc. while continually downloading new apps to our smartphones (anyone still hanging on to their flip phones out there?) to facilitate ever more management of daily tasks and lifestyle behaviors. Looking back just five years ago, when compared to today and the changes in our lives are quite dramatic.
However, any form of significant, wide-scale implementation of this “technological disruption” in federal programs or contracts is still in relative infancy. Yet, seemingly out of nowhere, a proposed “DATA Act” this year would require the Department of Defense to develop an “online marketplace” (that is, an Amazon-like platform solely for defense acquisition), which has many thinking of how that may upend existing policies and processes. What about small business or other socioeconomic goals? What about the Competition in Contracting Act (CICA)? What about sealed bidding and negotiated procurement as we know it today? What about the roles of agencies such as GSA, DLA, and VA in centralized contracting and provisioning? Similarly, what about the future of governmentwide acquisition contracts—such as SEWP, NITACC, and the Federal Acquisition Schedules—as centralized contracting instruments?
There is much to learn and define as this form of “disruption” comes, just as there is much to prepare for as those tools used to execute “smart contract management” become more intelligent. Yes, the roles and responsibilities of today’s contract management professional may change, but certainly how those roles and responsibilities are executed will definitely change.
Today’s contract management professional must (like everyone else) be prepared for this forthcoming sea change. If you didn’t think it could happen to you—think again. NCMA’s Contract Management Body of Knowledge (CMBOK) already reflects this shifting paradigm, adding new professional competencies and expanding the “reach” of today’s contract management professional to become more multidisciplinary in role, including ever greater reliance on “soft-skills” for success. If you pride yourself on your complete understanding of the FAR and strict adherence to processes and policy, congratulations; you know the rules and can apply them. However, start complementing and expanding those abilities by developing other business competencies, which will be necessary for future success. Don’t wait for some policy office to issue guidance, or DAU to offer a new class.
Just as many of us no longer use agents to book hotels, cruises, or other vacations in favor of online travel services such as Expedia and Orbitz; or have traded in our cable TV packages for streaming video services (known as “cutting the cord”); or cancelled our newspaper and magazine subscriptions for free or paywall online news services, the entire contract management enterprise is shifting to more digitally driven, results-oriented models—which means today’s contract management professionals must reevaluate their skill sets and reassess their value-add. The analytics and measuring tools available continue to increase. Can you not only use them, but just as with understanding existing statute and regulation, can you interpret and apply them? Do you have relationship-building skills relevant in today’s team-oriented, business management program culture?
There was a time when being strict and inflexible might have been considered an asset in the contract management profession—e.g., noncompromising or hardball tactics that ensure adherence to process, technical integrity, and meeting negotiation goals. All that still matters, but automation has filled some of that expertise with improved analytics and data, placing greater reliance on “soft skills” for professional growth and success.
It’s important for all of us to prepare for this coming technological “disruption.” It’s already arriving. Make sure you’re ready, so you offer the improved professional contract management alternative when your company or agency “cuts the contract management cord!”
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All proposal managers and writers should read a recent GAO bid protest decision: CR/SWS LLC, GAO B-414766.2, Sept. 13, 2017. In that case the agency was buying a commercial item--integrated solid waste management services at an Air Force base.
The solicitation required offerors to submit a “technical proposal” that was to consist entirely of a “Mission Essential Contractor Services Plan” (MECSP). The proposal preparation instructions said:Quote
Develop and submit a Mission-Essential Contractor Services Plan required IAW DFARS Provision 252.237-7024, Notice of Continuation of Essential Contractor Services.
That’s it. There were no supplemental instructions and no formatting or page limitations.
The solicitation said that the agency would evaluate proposals and select a contractor in a series of steps. The first step would be to evaluate the technical proposal (the Mission Essential Contractor Services Plan) for acceptability on a pass or fail basis. It said:Quote
Mission-Essential Contractor Services Plan
Description: The Mission-Essential Contractor Services Plan must meet the requirements established in DFARS Provision 252.237-7024, Notice of Continuation of Essential Contractor Services.
This requirement is met when the offeror’s proposal contains a Mission-Essential Contractor Services Plan that meets the requirements established in DFARS Provision 252.237-7024.
Measure of Merit: This requirement is met when the offeror’s proposal contains a Mission-Essential Contractor Services Plan that meets the requirements established in DFARS Provision 252.237-7024.
The solicitation defined acceptable and unacceptable as follows:Quote
Acceptable: Proposal clearly meets the minimum requirements of the solicitation.
Unacceptable: Proposal does not clearly meet the minimum requirements of the solicitation.
The solicitation said that only those offerors whose technical proposals (the Plan) were determined to be acceptable would move on to the next phase of the evaluation, which would entail a past performance/price tradeoff analysis and decision. The solicitation said that the agency planned to award without discussions.
Here is the text of DFARS 252.237-7024:Quote
NOTICE OF CONTINUATION OF ESSENTIAL CONTRACTOR SERVICES (OCT 2010)
(a) Definitions. “Essential contractor service” and “mission-essential functions” have the meanings given in the clause at 252.237-7023, Continuation of Essential Contractor Services, in this solicitation.
(b) The offeror shall provide with its offer a written plan describing how it will continue to perform the essential contractor services listed in attachment _______, Mission Essential Contractor Services, dated ________, during periods of crisis. The offeror shall–
(1) Identify provisions made for the acquisition of essential personnel and resources, if necessary, for continuity of operations for up to 30 days or until normal operations can be resumed;
(2) Address in the plan, at a minimum—
(i) Challenges associated with maintaining essential contractor services during an extended event, such as a pandemic that occurs in repeated waves;
(ii) The time lapse associated with the initiation of the acquisition of essential personnel and resources and their actual availability on site;
(iii) The components, processes, and requirements for the identification, training, and preparedness of personnel who are capable of relocating to alternate facilities or performing work from home;
(iv) Any established alert and notification procedures for mobilizing identified “essential contractor service” personnel; and
(v) The approach for communicating expectations to contractor employees regarding their roles and responsibilities during a crisis.
(End of clause)
Note that despite the capital letter at the beginning of each subparagraph, paragraph (b) is one long sentence.
(Whether such a requirement was properly imposed in an acquisition of commercial item solid waste management services is a matter that I will not address in this blogpost.)
The agency rated both the successful offeror’s and the protester’s plans to be acceptable. The successful offeror’s plan was less than two pages long. The protester’s plan was 14 pages long. The successful offeror won based on its lower price and past performance rating of “satisfactory confidence”.
The protester, which had a higher price but a better past performance rating, complained that the successful offeror’s plan did not address all the topics required by DFARS 252.237.7024 paragraphs (b)(2)(ii) and (b)(2)(iii), “time lapses” and “training issues”. The GAO agreed, sustained the protest, and recommended that the agency either reject the successful offeror’s proposal or conduct discussions, solicit revised proposals, and make a new source selection decision. It also recommended that the agency reimburse the protester’s costs of filing and pursuing the protest.
Yes, the agency was dumb. It did not take its own proposal preparation requirement seriously or plan its evaluation carefully. But that’s not the point of this blog post. The point of this blog post is that proposal managers and writers better pay close attention when reading and complying with proposal preparation instructions. They better dissect each and every sentence and phrase and identify each and every submission requirement. Details matter.
Now, look back at DFARS 252.237.7024 paragraph (b)(2), which specifies the topics that a Mission Essential Contractor Services Plan must “address”. How many are there? At first glance, there are five, specified in subparagraphs (i) through (v). But, in fact, there are many more than five. Here is my phrase-by-phrase analysis of what DFARS 252.237.7024, paragraph (b)(2), requires offerors to “address”;
1. challenges associated with maintaining essential contractor services during an extended event;
2. time lapse associated with:
2.1. the initiation of the acquisition of essential personnel
2.2. the initiation of the acquisition of essential resources
2.3. the actual availability of essential personnel on site;
2.4. the actual availability of essential resources on site;
3. components for:
3.1. identification of personnel who are capable of relocating to alternate facilities
3.2. identification of personnel who are capable of performing work from home
3.3. training of personnel who are capable of relocating to alternate facilities
3.4. training of personnel who are capable of performing work from home
3.5. preparedness of personnel who are capable of relocating to alternate facilities
3.6. preparedness of personnel who are capable of performing work from home
4. processes for:
4.1. identification of personnel who are capable of relocating to alternate facilities
4.2. identification of personnel who are capable of performing work from home
4.3. training of personnel who are capable of relocating to alternate facilities
4.4. training of personnel who are capable of performing work from home
4.5. preparedness of personnel who are capable of relocating to alternate facilities
4.6. preparedness of personnel who are capable of performing work from home
5. requirements for:
5.1. identification of personnel who are capable of relocating to alternate facilities
5.2. identification of personnel who are capable of performing work from home
5.3. training of personnel who are capable of relocating to alternate facilities
5.4. training of personnel who are capable of performing work from home
5.5. preparedness of personnel who are capable of relocating to alternate facilities
5.6. preparedness of personnel who are capable of performing work from home
6. any established alert procedures for mobilizing identified “essential contractor service” personnel
7. any established notification procedures for mobilizing identified “essential contractor service” personnel
8. approach for:
8.1. communicating expectations to contractor employees regarding their roles during a crisis.
8.2. communicating expectations to contractor employees regarding their responsibilities during a crisis.
By my count there are 27 planning topics to be addressed, not just five.
(By the way, what’s in a “plan”? Some persons would think that a plan specifies who, what, when, where, and how.)
My kind of analysis might accomplish three things.
- First, it will ensure that your proposal addresses each and every proposal preparation requirement. Agency personnel are not always aware of just what their proposal preparation instructions require of offerors. Read the convoluted instructions in some of the RFPs floating around out there. Read the sentences. There can be a lot of hidden eddies in bureaucratic stream-of-consciousness writing, as the Air Force learned in CR/SWS LLC.
- Second, it might alert complacent agency evaluators as to what they should be looking for in all proposals. This will give you a leg up if the competition has not been as thorough as you.
- Third, if you lose, it might give your attorney a basis for assessing whether the agency adhered to its evaluation criteria and ammunition for a protest, as it did in CR/SWS LLC. The protester was more conscientious than both its competitor and the agency, and so it won.
Did the Department of Defense really intend for offerors to plan mission-essential contractor services in great detail? Was it practical to ask offerors to do so before contract award, i.e., before they understood what performance would actually be like on the Air Force base? What did the agency really want and expect from offerors? Who knows? It did not matter. Neither the agency nor the successful offeror took the proposal preparation instructions seriously, and it cost them.
As for you agency personnel--you better think when you write proposal preparation instructions, and you better read what you’ve written when you plan your evaluations, and you better take what you’ve written seriously. And you better supplement and explain lousy boilerplate instructions like those in DFARS 252.237-7024.
I assume that the Air Force will do as the GAO recommended: conduct discussions, seek proposal revisions, and make a new source selection decision. I wonder if it will supplement and clarify DFARS 252.237-7024. I wonder how comprehensive and how long the offerors’ Mission-Essential Contractor Services Plans will be in the second go-round.
In the 1973 futuristic mystery thriller Soylent Green there’s an exchange between Detective Thorn (Charlton Heston) and Hatcher (Brock Peters):
Det. Thorn: Ocean's dying, plankton's dying . . . it's people. Soylent Green is made out of people. They're making our food out of people. Next thing they'll be breeding us like cattle for food. You've gotta tell them. You've gotta tell them!
Hatcher: I promise, Tiger. I promise. I'll tell the Exchange.
Det. Thorn: You tell everybody. Listen to me, Hatcher. You've gotta tell them! Soylent Green is people! We've gotta stop them somehow!
Acquisition Reform is like Soylent Green, it’s people. I don’t mean the Congresscritters, like Representative Thornberry and Senator McCain, and their Committees. I don’t mean the Administrator of the Office of Federal Procurement Policy, whoever he or she may turn out to be. I don’t mean the acquisition and procurement policy wonks in the Pentagon and elsewhere.
This past week (i.e., 14 – 20 May 2017) was a big week for the professional acquisition reformers:
The Advisory Panel on Streamlining and Codifying Acquisition Regulations issued the “Section 809 Panel Interim Report” (May 2017). Read the 60 page report, and formulate your own opinion if it will fix the problems in Government acquisition. Frankly, I think it will take more than getting rid of the $1 coin requirement, but I could be wrong.
Representative William McClellan "Mac" Thornberry introduced H.R. 2511 “To amend Title 10, United States Code, to streamline the acquisition system, invest early in acquisition programs, improve the acquisition workforce, and improve transparency in the acquisition system.” The short title on that would be ‘‘Defense Acquisition Streamlining and Transparency Act’’. (sic) Read the 80 page resolution, and formulate your own opinion if it will fix the problems in Government acquisition. [If we have Representative Thornberry, can Senator McCain be far behind? (Or, is that FAR behind?)]
A (moderately) reliable source has told me that the Department of Defense will be leaving Better Buying Power behind, now that Mssrs. Carter and Kendall are gone. But, wait, acquisition reform has not been abandoned. Apparently, it will go on, but now as “Continued Acquisition Reform.” Presumably that will be abbreviated as “CAR.” Continued Acquisition Reform should not be confused with Continuous Acquisition Reform nor Continued Acquisition Reform, nor Continuous Process Improvement, for that matter, those would all be bygone days.
The professional acquisition reformers have time and again passed legislation and issued regulations to “fix” the acquisition process. This fiscal year (2017) Title VIII (i.e., Acquisition Policy, Acquisition Management, and Related Matters) of the National Defense Authorization Act (NDAA) had 88 sections. The year before, 77 items. And, yet, Representative Thornberry and Senator McCain believe there is a need for a lot more acquisition reform legislation this year. Title VIII has included over 500 sections over the last ten years, but we still need more. What we have at issue here is what is referred to as the Law of the Instrument. Although he was not the first to recognize the Law, Abraham Maslow is probably the one best remembered for articulating it, "I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail." For those of us on the receiving end of the Congressional output that would be, “I suppose it is tempting, if the only tool you have is a legislation, to treat everything as if it were a bill." I suspect, although I cannot be positive, that most, if not all, of the folks doing the legislating have never had to use the Federal Acquisition Regulation (FAR) to buy anything. If they had, they would not be nearly so cavalier in tossing around statements about how bad the acquisition process is, and how more legislation is the answer.
Will such legislation solve the acquisition problem? According to the Honorable Frank Kendall the answer is a resounding “NO.”Quote
Frank Kendall, then undersecretary of defense for acquisition, technology and logistics (USD(AT&L)), condemned, or “slammed,” or “blasted,” such legislation.
Frank Kendall, who has served as the Pentagon's top weapons buyer since October 2011, blasted Congress's acquisition reform efforts, which he said almost inevitably create more bureaucracy and regulation.
Kendall called legislative action “an imperfect tool to improve acquisition results.”
“It is not a good instrument to achieve the results that I think the Hill is after, but they keep trying,” he said. “To be honest, I believe that as often as not, what they do does not help. In some cases, it has the opposite effect.”
Bloomberg Federal Contracts Report, “Outgoing DOD Weapons Buyer Slams Congress’ Acquisition
But, in all fairness, it’s not just them. Since we last had a reissuance of the FAR in March 2005, the FAR Council has brought us 95 Federal Acquisition Circulars (FACs) to update and expand the FAR. Since we last has a reissuance of the Defense Federal Acquisition Regulation Supplement (DFARS) in January 2008, the Defense Acquisition Regulations Council has brought us 211 Defense FAR Supplement Publication Notices (DPNs). With all of that, there are still dozens of open FAR and DFARS cases yet to be heaped on our plate. Although legislation may have been a major root cause of much that change activity, we can probably offer some of our “thanks” to the President, OMB, OFPP, GAO, Boards of Contract Appeals and Courts. Admittedly, now and again, a good idea actually gets slipped into the regulations. [Note: The number of FACs and DPNs issued in 2017 was artificially suppressed as a result of Executive Order 13771 – Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs. The two councils (i.e., FAR Council, Defense Acquisition Regulations Council (DAR Council) and the Civilian Agency Acquisition Council (CAA Council)) withheld publication of a large number of cases while policies and procedures were “sorted out.”]
[Note: Refer to Augustine’s Laws, Law Number XLIX: Regulations grow at the same rate as weeds.]
And, if that were not enough, we have institutional acquisition reform (e.g., policy letters, memoranda, directives, instructions, guidebooks, handbooks, manuals). Everyone seems to want to get into the act in one way or another. It is interesting to note, however, that the “perpetrators” of this institutional acquisition reform do not see it in the same light as acquisition reform legislation.
But, I recognize the lesson that King Canute was trying to teach when, in the apocryphal anecdote, he had his throne taken to the sea and ordered the tides not to come in. They did anyway. Legislators will legislate, it’s what they do. Regulators will regulate, it’s what they do. Policy makers will policymake, it’s what they do. None of them will willingly give up their rice bowls.
Let’s get back to Soylent Green.Quote
“Acquisition improvement is going to have to come from within. It is not going to be engineered by Hill staffers writing laws for us,” Kendall said. “It's going to be done by people in the trenches every day, dealing with industry, trying to get incentives right, trying to get the performance right, trying to set up business deals and enforce them, set reasonable requirements in our contracts.”
Bloomberg Federal Contracts Report, “Outgoing DOD Weapons Buyer Slams Congress’ Acquisition Fixes,” Andrew Clevenger, January 17, 2017
Better Buying Power (BBP)? The Honorable Mssrs. Carter and Kendall were responsible for BBBP, in all its iterations. Did that rise up from the trenches? Or, was it handed (or pushed) down from above? Isn’t this a bit like the pot calling the kettle black? If you will permit the adding of a single letter to a line of Hamlet by William Shakespeare, "The laddy doth protest too much, methinks."
[Note: Refer to Augustine’s Laws, Law Number L: The average regulation has a life span one-fifth as long as a chimpanzee's and one-tenth as long as a human's, but four times as long as the official's who created it.]
Well, whichever way you look at it (i.e., upside, downside, sidewise) it is all more work for the acquisition professionals that must do the daily work of buying supplies and services for the Government. If you want to have an idea of how all of this acquisition reform weighs us down, then take a look at William Blake’s illustration “Christian Reading in His Book” for John Bunyan’s The Pilgrim's Progress. It will depend on how many pixels the image you find has, but it looks to me that he is reading the FAR.
Who are the Soylent Green? Not the policymakers, but the people in the trenches, doing the hard work of acquisition on a daily basis, day in and day out, week in and week out, month in and month out, year in and year out. The contract specialist, contract negotiator, contract administrator, cost or price analyst, purchasing agent or procurement analyst just trying to get the job done. These are, for the most, part the unsung heroes and heroines of acquisition reform. These are the ones who, through innovation and personal initiative reform that acquisition process, one acquisition at a time. And, if we are lucky, or clever, are able to pass successes along to others.
As acquisition professionals, we must pass on our successes, and failures, to others, so that they may join in the fruits of success, and avoid the pitfalls of failure. You cannot count on “Lessons Learned,” alone. How often do lessons learned go unread and unlearned? You cannot count on “Best Practices,” alone. How often do best practices, go unread and unpracticed? Share with others. Share quickly. Share often. Share wherever you can.
A final thought.Quote
So what is to be done? By and large the answer to that question is well understood—in fact, many friends of mine such as former Deputy Secretary of Defense David Packard; the head of the Skunk Works Kelly Johnson; Air Force General Bennie Schriever; Admiral Wayne Meyer and Army General Bob Baer, among others, were providing the answer decades ago. What is required is simply Management 101. That is, decide what is needed; create a plan to provide it, including assigning authority and responsibility; supply commensurate resources in the form of people, money, technology, time and infrastructure; provide qualified leadership; execute the plan; and monitor results and strenuously enforce accountability. Ironically, little of this requires legislation—but it does require massive amounts of will . . . from all levels of government. Unfortunately, many of the problems are cultural—and it is difficult to legislate culture. But there is much that could be done.
Views from the Honorable Norman R. Augustine
The Acquisition Conundrum
DEFENSE ACQUISITION REFORM: WHERE DO WE GO FROM HERE? A Compendium of Views by Leading Experts, STAFF REPORT PERMANENT SUBCOMMITTEE ON INVESTIGATIONS UNITED STATES SENATE (October 2, 2014)
The absolute final thought. I’m sorry, I can’t help myself. I don’t care about King Canute: Don’t legislate. Don’t regulate. Just leave us alone to do our work as best we can.
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The long-standing principle that the federal government had the same implied duty of good faith and fair dealing as any commercial buyer was put in jeopardy by a 2010 decision of the U.S. Court of Appeals for the Federal Circuit, Precision Pine & Timber, Inc. v. U.S., 596 F.3d 817 (Fed. Cir. 2010). There a panel of the court adopted a narrow rule seemingly limiting application of the principle to situations where a government action was “specifically targeted” at the contractor or had the effect of taking away one of the benefits that had been promised to the contractor. Although the decision concerned a timber sales contract not a procurement contract, when I wrote it up in the May 2010 Nash & Cibinic Report (24 N&CR ¶ 22), I expressed the fear that the reasoning would be subsequently applied to procurement contracts.
My fear was realized in a construction contract case, Metcalf Construction Co. v. U. S., 102 Fed. Cl. 334 (2011). In that decision, the judge described eggregious conduct on the part of the government officials that would have been held to be a breach of the implied duty of good faith and fair dealing under many earlier cases. However, the judge held that under the Precision Pine standard, the contractor had not proved that the actions were specifically targeted at the contractor. In the February 2012 Nash & Cibinic Report (26 N&CR ¶ 9), I criticized this decision but stated that I believed that even if the decision was affirmed on appeal, most contracting officers would not take this as a signal that the proper way to administer contracts was to abuse the contractor.
Fortunately, a panel of the Federal Circuit has reversed the decision, Metcalf Construction Co. v. U. S., 2014 WL 519596, 2014 U.S. App. LEXIS 2515 (Fed. Cir. Feb. 11, 2014). The court held that the lower court had read Precision Pine too narrowly and that “specific targeting” was only one example of the type of conduct that could constitute a breach of the implied duty of good faith and fair dealing. Importantly, the court also rejected the government’s argument that this “implied duty” only could be found when it was footed in some express provision of the contract. The court concluded that the correct rule was only that the express provisions of a contract had to be examined to ensure that they had not dealt with the conduct of the government; for if they had, they would override the implied duty.
This leaves us in a tenuous position with regard to the views of the Federal Circuit. We have one panel in Precision Pine stating a narrow rule, another panel in Metcalf Construction stating the traditional rule, and a third panel in Bell/Heery A Joint Venture v. U.S., 739 F.3d 1324 (Fed. Cir. 2014), ruling in favor of the government because the contractor had not alleged facts showing that the government had “engaged in conduct that reappropriated benefits promised under the contract” (which is part of the Precision Pine reasoning). Thus, it is difficult to state where the judges of the Federal Circuit stand. Hopefully, the court will agree to take either Metcalf Construction or Bell/Heery to the full court for an en banc review of the issue.
I’ve never been sure why the Department of Justice has so vigorously argued that the government should not be held to the same standards of conduct as a commercial buyer. Of course, persuading the courts and boards that a narrower standard should be applied to the government is a way to win litigated cases. But, in my view, encouraging abusive or non-cooperative conduct hurts the government as much as it hurts its contractors. I have taught for many years that in the long run the government benefits from actions that show industry that it is a fair contracting partner. A line of published judicial decisions that demonstrates that the government is not such a partner is one more of the many messages that tell companies they should sell to the government only when they can find no other customer. Surely, this is not the message that government agencies in need of products and services on the commercial marketplace want to convey to companies that can provide those products and services.
Many years ago when I came to Washington to work in the field of government contracting, I concluded that there was one major advantage to being on the government side of the negotiating table. That advantage was that I was under no pressure to extract money from the contractor by unfair bargaining or unfair contract administration. To me fairness was an integral part of the job of a government employee. I still believe it and teach it. Thus, no matter what the outcome of the good faith and fair dealing litigation, I will continue to urge government employees that fair treatment of contractors is the only way to go.
Ralph C. Nash
When I get older, losing my hair
Many years from now . . . .
When I'm Sixty-Four
John Lennon, Paul McCartney
Shortly after we celebrate our country's independence on July 4, 2013, Wifcon.com will end its 15th year on the internet. With much help from the Wifcon.com community, I've raised a growing teenager. When I started, I was 49 and my hair was so thick that I often shouted ouch or some obscenity when I combed it. Wifcon.com has existed in 3 decades and parts of 2 centuries. During that period, I've updated this site for every work day--except for the week or so when I called it quits. I remember the feeling of relief. I thought it was over. However, many of you convinced me to bring it back. Yes, just when I thought I was out, many of you pulled me back in.
As I mentioned in an earlier post, someone once told me that Wifcon.com was my legacy. I once had great hopes for a legacy. Perhaps, a great saxophone player belting out a solo in front of thousands of fans and seeing them enjoying themselves. Instead, here I sit in my solitude looking for news, decisions, etc., to post to the home page. For many years, my dog Ambrose kept me company. Now, my dogs Blue Jay and Lily stare at me and look for attention. With my sights now set realistically, I accept that Wifcon.com is my legacy. It's the best I could do.
Every now and then, I receive an e-mail from someone thanking me for Wifcon.com. They tell me how it helped their careers. These e-mails keep me and Wifcon.com going.
Send me a postcard, drop me a line,
Stating point of view
Indicate precisely what you mean to say
Yours sincerely, wasting away
Give me your answer, fill in a form
When I'm Sixty-Four
John Lennon, Paul McCartney
The thoughts in these e-mails won't let me quit. I still search each night for something to add to the site in hopes that it will increase your knowledge. If I find something new, I still get excited. Often, it feels like a self-imposed weight around my neck. What started as a release for my imagination has evolved into a continuing and daily addition to the contracting community. In the evenings, it is as if I'm Maillardet's automaton. I head over to my office, sit before the computer, and update. Then I send the updated pages to Virginia where it is accessed from around the world. Maybe I'm addicted to Wifcon.com; maybe I was born with the Wifcon.com gene.
If you haven't added the numbers, I'm 64 now. Wifcon.com and I are showing our age. I can comb the top of my head with my fingers. The ouches and other obscenities caused by my once thick hair are gone. A recent upgrade to the discussion forum requires that I turn the "compatibility mode" off on my browser. In that mode, I realized that Wifcon.com is ugly. I have current software for the needed future redo of this site.
I am Wifcon.com; Wifcon.com is me. It is my legacy and my albatross. As always, thank you for your support.
You'll be older too,
And if you say the word,
I could stay with you.
When I'm Sixty-Four
John Lennon, Paul McCartney