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New GSA Pricing Rule Met with Wariness from Industry

The General Service Administration’s (GSA) proposal to amend acquisition rules to collect contractor pricing information is raising concerns across industry. The change was proposed in March 2015, and a public meeting was held mid-April to discuss the impact. 

The March 2015 Federal Register announcement explained that, “GSA is creating a Common Acquisition Platform (CAP), an online marketplace to identify best-in-class contracts issued by GSA or other agencies, best practices, and other information agencies need to reduce the proliferation of duplicative contract vehicles and deliver the best value possible to federal customers and the American people. A critical component of the CAP, and smarter buying in general, is the availability of the prices previously paid by other government buyers for a similar product or service under similar terms and conditions. Government buyers will be able to use that data, in combination with other relevant information—such as customer satisfaction with the performance of the contractor-furnished solution—to determine fair and reasonable pricing as part of a best value solution.”

The proposed rule would introduce a transactional data reporting clause that would support GSA’s price analysis and better determine reasonable pricing for Federal Supply Schedule (FSS) and non-FSS vehicles. This clause would take immediate effect for GSA’s government-wide non-FSS vehicles. FSS vehicles would introduce the change in phases. Although government customers have benefited from price reductions in the past, these have typically resulted from voluntary clauses like market rate pricing, rather than from mandatory customer tracking. GSA completed analysis of modifications for nine of its FSS contracts from October 1, 2013 until August 4, 2014. These contract vehicles included several favored by agencies for IT products and services: Schedule 70, Mission Oriented Business Integrated Solutions (MOBIS), and Professional Engineering Services. Findings from this analysis revealed that only about 3 percent of price reductions were linked to the customer tracking. Most decreases (around 78 percent) resulted from adjustments to commercial pricelists and market rate changes. GSA concluded that the findings supported attempting a different approach to making better pricing available.

During the public meeting on April 17, leadership from GSA indicated that the changes to acquisition rules would help the agency clear hurdles it faces with growing contracts, price variation across vehicles, lack of transparency and outdated guidelines. Once the transactional data reporting clause is implemented, the organization anticipates benefits including better pricing, administrative savings, increased opportunities for small business participation, and standardization of practice. GSA’s Kevin Youel-Page informed attendees that in early May the Federal Acquisition Service will launch an improved automated price reductions tool for schedule contract holders. 

Federal News Radio and FCW reported on reactions from industry, suggesting a mixed reception. Despite cautious optimism, concerns persist around the security of vendor data, the cost of information collection systems, as well as potential unintended consequences related to new policies. The Common Acquisition Platform is one of several efforts GSA has introduced to improve federal acquisition. Other initiatives including activities aligned with contract data analysis and category management. As these projects work to deliver greater savings to government buyers, GSA leadership has expressed interest in working with industry to better understand the burdens and implications of adopting an increasingly data-driven approach to acquisition.

 

Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWinIQ. Follow me on twitter @FIAGovWin.

 

Treasury Reprimanded for Erroneous IT Dashboard Reporting

The Senate Homeland Security and Governmental Affairs Committee is scrutinizing federal agencies’ IT Dashboard reporting.  Treasury is the first agency under fire for discrepancies between IT project information reported to Congress and ratings for the same programs on the IT Dashboard.

On April 20th, Senators Ron Johnson (R-WI)and Tom Carper (D-DE), the chairman and ranking member of the committee, sent Treasury CIO Sonny Bhagowalia a letter requesting explanations for the reporting differences. “Inaccurate or dated information prevents the public from understanding how their tax dollars are being used and inhibits Congress’ ability to track the progress of IT projects over time,” states the letter

The IT Dashboard was established by OMB in 2009 to provide the public with performance and risk information regarding federal IT projects.  CIOs rate project performance for cost, schedule, and risk on an ongoing basis.

The IRS is also required to report summary level risk assessments to Congress on a quarterly basis for 13 major IT programs. The assessments are based on meetings between the IRS CTO and Deputy CIOs regarding each project’s performance in the areas of cost, schedule, scope, risk, technology and organizational readiness.

In the fourth quarter of FY 2014, three IRS projects were cited as “red” and four as “yellow” for cost and schedule variances by the IRS CTO in the report to Congress.  The seven projects represent more than $1.4B in spending for FY 2015. However, the IT Dashboard ratings for these projects show a rating of “green,” low risk or moderately low risk for all of FY 2014.

The discovery of these discrepancies follows in the wake of a March GAO report chastising IRS for continued problems with IT project reporting.  GAO stated that IRS had made limited progress regarding Congressional reporting on IT projects, and admonished IRS for not fully implementing their prior recommendations regarding cost, schedule and performance reporting for IT projects. 

Additionally, GAO reported earlier this month that agency CIOs claim IT reporting to OMB as not useful for their own IT management.  This makes me wonder if reporting to the IT Dashboard is viewed as just another item on the CIO “To Do” list rather than a valuable exercise that deserves a high level of attention and effort.  

The Senate committee has asked Bhagowalia to explain why there are discrepancies between what was reported to Congress by the IRS CTO and what is reported on the IT Dashboard.  Additionally, the committee wants to know the degree to which component CIOs and CTOs are consulted for IT Dashboard ratings, and why none of the 60 major Treasury projects tracked on the dashboard are rated as “red” and only eight rated as “yellow.”  The Treasury CIO has until May 8th to respond.

 

The DATA Act: The Road to Federal Funding and Spending Transparency

The Digital Accountability and Transparency Act (DATA) promises to lend visibility into the world of federal finances, and as such has received a good deal of attention since it was signed into law four months ago.  

The purpose of the act is to 

  • Disclose direct federal agency expenditures and link federal contract, loan, and grant spending information to federal programs to enable taxpayers and policy makers to track federal spending more effectively.  
  • Establish government-wide data standards for financial data and provide consistent, reliable, and searchable government-wide spending data that is displayed accurately for taxpayers and policy makers on USASpending.gov.  
  • Simplify reporting for entities receiving federal funds by streamlining reporting requirements and reducing compliance costs while improving transparency.  
  • Improve the quality of data submitted to USASpending.gov by holding federal agencies accountable for the completeness and accuracy of the data submitted. 
  • Apply approaches developed by the Recovery Accountability and Transparency Board to spending across the federal government.

Work has already begun to meet the seven year implementation timeline.   OMB and Treasury are tasked with delivering data standards by May 2015.   Agencies are to start submitting data that meets the new standards before May 2017. 

The DATA Act is different from other transparency laws in that oversight is baked into implementation requirements.  The Act calls for agency Inspectors General, in conjunction with GAO, to audit samples of spending data submitted to USASpending.gov to test for quality, timeliness, completeness and accuracy and to report findings to Congress three times over the next six years.  The first IG reports are due to Congress in November 2016.

On September 26th, Treasury released an RFI for the best data exchange standards implemented across the government or in the private sector.  Treasury and OMB are also creating a 12 to 36 month implementation roadmap. 

At a Data Transparency 2014 event in DC earlier this week, Dave Mader the controller of OMB said, "This will be a very iterative approach and we will rely on lessons learned, and we also will look at opportunities to experiment because we don't want to do, nor does anyone have the resources to build the world's biggest database. We believe that technology and data, and data analytics will allow us to create a very innovative approach for how to implement the next iteration of spending that's transparent to taxpayers."

Contractors will be affected by requirements to report data as a recipient of federal funds.  Also, opportunities will likely arise to assist with implementation of the act in the way of technology solutions for data entry, storage, retrieval, analysis and display.

 

Raising the Stakes of Contractor Past Performance Information

Contractor past performance information is one tool federal agencies are being pressed to use more effectively to guard against acquisition risk and recent White House acquisition policy and a Government Accountability Office (GAO) assessment signals that the pressure in this area will only continue to grow. Some efforts are fairly standard government approaches, but others expand into new areas and have implications for both agencies and their contracting companies.

The Office of Federal Procurement Policy (OFPP) has issued numerous reporting compliance guidelines and recommendations over the last half-decade or more to move agencies to improve their reporting of contractor past performance. Further, Congress has included past performance reporting mandates in the last several National Defense Authorization Acts (NDAA). In typical fashion, GAO is looking for continued signs that these efforts are materializing so that agencies have this information available to make informed acquisition decisions.

Most Agencies Fall Short of Contractor Past Performance Reporting Compliance Targets

In August, the GAO released an assessment of how federal agencies were doing with regard to improving their reporting of contractor past performance information. According to OFPP’s annual reporting performance targets, agencies should have been at least 65 percent compliant by the end of fiscal year 2013. GAO found that agencies generally have improved their level of compliance with past performance reporting requirements issued by OFPP. However, the rate of compliance varies widely by agency and most have not met OFPP targets. As of April 2014, for the top 10 agencies, based on the number of contracts requiring an evaluation, the compliance rate ranged from 13 to 83 percent and only two of the top 10 agencies were above 65 percent compliance. (See chart below.)


 

OFPP Expanding Scope of Contractor Past Performance Information

In July, the OFPP directed agencies to research past performance more deeply before awarding complex IT development, systems and services contracts greater than $500 thousand in value. Further, OFPP directed agencies to expand the scope of the research processes used to collect contractors’ past performance information during source selection.

In order to have the most relevant, recent, and meaningful information about potential contracting partners considered in the pre-award phase of the acquisition process agencies were instructed to have their acquisition officials perform the following steps:

  • Recent Contracts - Contact contracting officers (COs) and/or Program Managers (PMs) on at least 2 of contractors’ largest, most recent contracts to review work history.
  • News Searches – a Review articles and publications (include. GAO and IG reports) on contractor performance and business integrity.
  • Commercial Sources - Review public sources and databases for business reviews, customer evaluations, contractor management reports, etc.
  • References – a Request 3-5 references from public and commercial customers, partners, subcontractors, etc. for work done in past 3-5 years.
  • Teaming Partners – Request past performance information on subcontractors and team arrangements.

Implications

The impacts on agencies and contractors alike include greater time and effort (i.e. expense) in collecting and providing this performance information. This will stretch an already-overly-tasked federal acquisitions workforce even further and will require that contractors pay broader attention to their performance reputations and those of their teaming partners.

The new OFPP directives and others like them will also likely extend the time it takes to complete the source selection process on applicable acquisitions, at least until all sides of the acquisition process build some repeatable processes and efficiencies into their systems.

What we can hope for in the end is more transparency, better managed acquisitions with fewer protests, and overall better performing contracts that meet the government’s goals with economy and efficiency and provide business growth opportunities along the way.

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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @GovWinSlye.

OMB Proposes Changes to A-11 to Accommodate DATA Act Implementation

The DATA Act warrants major changes to the way agencies prepare and submit their annual budget documents to OMB.  OMB drafted changes to circular A-11, the federal instructions for agency budget submissions, which will support DATA Act implementation over the next several years.

Federal News Radio recently obtained this draft document detailing proposed changes and a timeline for implementation.

Agencies are expected to implement the complex requirements of the DATA Act with no new funding.  However, Congress is giving civilian agencies three years for implementation and DOD five years.

Overall major agency DATA Act requirements include:

  • Expansion of data posted on USAspending.gov 
  • Establishment of data standards for USAspending.gov 
  • Recommendations for streamlining recipient reporting 
  • Establishment of a Data Analysis Center  
  • Reporting of non-tax debt

The proposed changes to the A-11 address the DATA Act requirement for agencies to report obligations and outlays in three different ways:  program activity, object class, and program activity by object class. 

OMB has named their SF 133 Report on Budget Execution and Budgetary Resources as a common starting point for data to be used to fulfill requirements of the DATA Act.  OMB’s proposed A-11 changes state, “The SF 133 provides a solid foundation to respond to two requirements in the DATA Act: (1) reporting all data, government-wide, and (2) reporting accurate data.”

The DATA Act calls for agencies to report obligations outlays by program activity, however these program activities do not necessarily track directly to the detailed data in agency financial systems.  OMB’s response to Congress requests that agencies be able to characterize “program activity,” as one of the following, not the current definition of program activity used in the president’s budget:

  • An entire Treasury Appropriation Fund Symbol (TAFS), e.g. DOT’s Surface Transportation Priorities (69-0538 /X) 
  • A single Category B project in a given TAFS 
  • Each of several Category B projects in a given TAFS 
  • A Category B project from each of two TAFSs, e.g. ED’s Career, Technical, and Adult Education account has a program, Regional Education Labs, funded in two TAFSs (91-1100 14\15 and 91-1100 13\14) 
  • A program reporting category (used on the apportionment and typically housed as an allotment or sub-allotment in the agency system) used in one TAFS or two or more TAFSs.

OMB would like to be able to refer to any of the above as a “DATA Act program” and use them to fulfill the requirement for reporting outlays and obligations by program activity.

Additionally, OMB recommends not to immediately implement the requirement for reporting program spending by object class.  Object classes categorize federal spending into specific product and service categories.  Major object classes include personnel compensation and benefits; contractual services and supplies; acquisition of assets; grants and fixed charges; and other.

According to OMB, past efforts to capture program spending by object class have failed.  OMB is concerned about the infrastructure necessary to support accurate and consistent reporting of object class data by program.  However, OMB believes agencies will be able to supply outlays and obligations by overall object class to USAspending.gov in the nearer term. 

In the long run, DATA Act requirements should make federal spending data more transparent, but due to the lack of funding to support this effort, implementation will be a challenge and will take a number of years. 

 

Shared Services to Ease DATA Act Implementation

Dick Gregg, Fiscal Assistant Secretary of The Treasury and the executive assigned to implementing the DATA Act, expressed concern about the quick three year implementation timeline for the DATA Act at a recent Federal Financial Management Conference.  However, he believes that moving agencies to shared financial management services is a “force multiplier.”

Gregg believes outsourcing financial management functions to one of the four recently approved federal financial management shared service providers could streamline the compliance process.  “The sooner we can move more agencies into shared services, the easier it’s going to be to implement the DATA Act,” he stated.

The Digital Accountability and Transparency Act creates standards for agency reporting of financial data and makes it publically available.  The Act specifies a three year implementation timeline to begin with Treasury’s establishment of a data analytics center modelled after the Recovery Accountability and Transparency Board’s Recovery Operations Center for the Stimulus.  The center will work with OMB to establish agency financial reporting standards.  OMB will also set up a two-year pilot program for use by contractors and grantees.  Gregg wants to move quickly with demonstration programs to see what will work. 

The Act provides no funding for implementation.  This may explain the less than enthusiastic reception from some agency financial managers.  They fear reporting may cast more of a burden on already strained resources.  According to Mary Peterman, president of the Association of Government Accountants, “…generally, they all believe in the essence [of the Act], except that whether the legislating transparency is a value proposition for the citizenry is somewhat the question.”    

Ultimately, the new financial reporting will be available via USASpending.gov which is now managed by Treasury.  After implementation, the federal spending data available via the site will provide a deeper view into federal spending.  Not only will the additional data provide transparency to the public, it should help agency executives gain more insight into their operations, leading to improvements in efficiency and effectiveness. 

 

White House Cyber Czar Walks a Thin Line on Cybersecurity Info Sharing

If the federal government knew about the Heartbleed security bug before it became public, would they have said anything? The answer, according to Michael Daniel, the White House Cybersecurity Coordinator, is an unequivocal . . . “maybe.”  

In a recent White House Blog post, Daniel reiterated the NSA assertion that they had no prior knowledge of the existence of Heartbleed, the recently discovered vulnerability in OpenSSL that could expose online passwords and encrypted Internet traffic to hackers. Daniel used the occasion to wade into the murky waters of when the federal government would, and would not, withhold knowledge of a computer vulnerability from the public.  He affirmed the administration’s “commitment to an open and interoperable, secure and reliable Internet, and in the majority of cases, responsibly disclosing a newly discovered vulnerability is clearly in the national interest.”

But he also noted that a major reason they would delay disclosure is if the opportunity for critical intelligence gathering was deemed to outweigh the cost of the delay. At odds are the extremes of saying nothing and maintaining and exploiting a collection of undisclosed vulnerabilities while leaving users vulnerable . . . and saying everything and completely forgoing this knowledge as a way to conduct intelligence gathering.

In an effort to balance the trade-offs between transparency and secrecy with a strong leaning toward disclosure, Daniel outlined a list of question he wants agency officials to address whenever they are proposing to withhold their knowledge of vulnerability:

  • How much is the vulnerable system used in the core internet infrastructure, in other critical infrastructure systems, in the U.S. economy, and/or in national security systems?
  • Does the vulnerability, if left unpatched, impose significant risk?
  • How much harm could an adversary nation or criminal group do with knowledge of this vulnerability?
  • How likely is it that we would know if someone else was exploiting it?
  • How badly do we need the intelligence we think we can get from exploiting the vulnerability?
  • Are there other ways we can get it?
  • Could we utilize the vulnerability for a short period of time before we disclose it?
  • How likely is it that someone else will discover the vulnerability?
  • Can the vulnerability be patched or otherwise mitigated?

The impact of the answers to these questions on the share/don’t share decision is unclear, since by his own admission “there are no hard and fast rules.”

In a previous blog post that ran about the same time that Heartbleed was coming to light, Daniel emphasized the importance of information sharing to improve the nation’s overall cybersecurity posture. In that blog he said “reducing barriers to information sharing is a key element of this Administration’s strategy to improve the nation’s cybersecurity,” and that they would ”continue to work to address the concerns our private sector partners have raised that the government should share more of its own information, so that companies could better protect themselves.” “Our goal is for the government to be a reliable information sharing partner, but only one of many.” 

In an era where government transparency and secrecy issues have become high-profile in the public mind, the above guidelines show the tightrope the White House is attempting to walk.

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Originally published in the GovWin FIA Analysts Perspectives Blog. Follow me on Twitter @GovWinSlye.

Another Win for Transparency: The DATA Act Passes

President Obama is expected to sign legislation this week that will mandate standard coding and reporting of federal spending data.  Last week the House passed the Senate version of the DATA Act.  The Senate passed the legislation earlier in April.

The Digital Accountability and Transparency Act’s leading sponsors include Rep. Darrell Issa (R-CA) and Sens. Mark Warner (D-VA) and Rob Portman (R-OH).  The purpose of the act is to

  • Disclose direct federal agency expenditures and link federal contract, loan, and grant spending information to federal programs to enable taxpayers and policy makers to track federal spending more effectively.
  • Establish government-wide data standards for financial data and provide consistent, reliable, and searchable government-wide spending data that is displayed accurately for taxpayers and policy makers on USASpending.gov.
  • Simplify reporting for entities receiving federal funds by streamlining reporting requirements and reducing compliance costs while improving transparency.
  • Improve the quality of data submitted to USASpending.gov by holding federal agencies accountable for the completeness and accuracy of the data submitted.
  • Apply approaches developed by the Recovery Accountability and Transparency Board to spending across the federal government.

Modelled after federal spending and reporting for the 2009 Stimulus, the DATA Act will give contractors and grant holders a central portal to log receipt and spending of federal funds.  The law purports to save the federal government billions by reducing waste and fraud, and increasing performance.  Less than 1% of Stimulus spending was lost to fraud.

“The DATA Act is but the first shot of a technology revolution that will transform the way we govern,” according to House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA).  Other industry groups also praised the passage of the act including the Professional Services Council, the Center for Data Innovation, TechAmerica and the IT Alliance for Public Sector.

Rep. Issa would like to see a DATA Act “champion” to move the implementation process along and avoid delays.  Treasury will also play a vital role in implementation due to its oversight and management of USASpending.gov.  Execution of the act will not be easy.  For example, the community of federal grants recipients has identified 1,100 data elements that could potentially be included in standard reporting.

However, many elements of the act fall in line with transparency efforts already underway in agencies.  For instance, work to standardize CAGE Codes to show ownership relationships between corporate entities is already taking place.   Efforts are also in process to standardize the designation of contract numbers.

Contractors will be affected by requirements to report data as a recipient of federal funds.  Also, opportunities will  likely arise to assist with implementation of the act in the way of technology solutions for data entry, storage, retrieval, analysis and display. 

“The DATA Act gives policymakers in Congress and in the executive branch better data to make better decisions,” Rep. Issa stated. 

 

Deltek Pulse: General Government Services Recap December 2013

Deltek Pulse: General Government Services Recap, December 2013

Along with snow and sleet, the end of 2013 brought a flurry of procurement activity from state and local governments, with 1,226 general government solicitations with IT listed as the primary requirement released across the nation.

As the above word cloud of solicitation titles demonstrates, this month’s batch of bids has a decidedly professional services flavor, with “services,” “management,” “maintenance” and “support” all featured prominently.

Nearly one-quarter of the total bids released came out of four states: California, Texas, New York and North Carolina. Meanwhile, 10 states were responsible for more than half (700) of the total bids released in December. Six of those states (New York, North Carolina, Virginia, Florida, Massachusetts and Maryland) are located on the Eastern seaboard of the United States, which is typically where procurement activity is the heaviest.

Nearly 300 of the 1,200 solicitations released in December were tagged primarily or partially with the general government vertical designation, while the K-12 and higher education verticals both churned out nearly 200 solicitations each. More than 200 of the bids released under the general government vertical had justice/public safety components, while another 126 had transportation-related requirements.

Tracked Opportunity Coverage

Massachusetts is seeking to establish a new contract for IT professional services for both solution providers and technical specialists. Previously, these services were split up into two separate contracts, but high-level state IT policymakers have decided on a consolidated approach for this iteration. The state estimates the total value of this contract will approach $100 million.

The Massachusetts Executive Office of Environmental Affairs is also purchasing an enterprise information system that will promote online collaboration and information sharing among EEA agencies, regulated businesses and individuals, environmental stakeholders, and the public.

Vendors involved in ERP saw some solicitation releases from major government entities this month. Harris County, Texas, released a solicitation for a needs assessment to replace its current ERP solution for finance, human resources, payroll and procurement. The incumbent vendor is SunGard Public Sector. The Illinois State Toll Highway Authority is looking for a vendor to install and implement an ERP system as well as provide independent verification and validation services.

The telecommunications field also saw some significant activity. The Texas Department of Information Resources released a major solicitation for data communications and networking equipment and related services. Given the size and scope of the project, Deltek believes this may wind up having an eight-figure contract value, with the current estimated value of $400 million over the lifetime of the contract. Additionally, North Carolina is setting up the latest iteration of its contract for telephony premise equipment and maintenance. The state currently has nine incumbent vendors under contract for these services: Avaya, NWN Corporation, Nu-Vision Technologies, CenturyLink, Siemens AG, Toshiba Corporation, Brightstar Partners, Centrex and Bunn Communications.  

Procurement News and Analysis

New Mexico passed a law requiring all state and local governments to proactively provide contact information for their chief procurement officers by January 2014. In addition, the law requires all procurement officials to undergo state certification and training by 2015.  

In a move that caught many by surprise, the chief information officer for Cook County, Ill., resigned on December 19, citing personal reasons. The post remains vacant and county officials are scrambling to find a replacement candidate to oversee IT policy for 2014.  

New York State Governor Andrew Cuomo liked New York City Mayor Michael Bloomberg’s top technology aide so much, he hired her to his own staff. Rachel Haot will serve as Governor Cuomo’s deputy secretary of technology and will help oversee the newly created Office of Information Technology Services, which has been undergoing a large-scale IT transformation effort over the past three years. On a related note, the Office of Information Technology Services appointed Mahesh Nattanmai as executive deputy chief information officer. Nattanmai starts his post on January 23 and will oversee operations for major IT services and strategic planning initiatives.  

Anyone who has picked up a copy of the Washington Post or New York Times over the past few months is likely familiar with the scandal that has enveloped Governor Chris Christie and the New York/New Jersey Port Authority as details have emerged regarding the intentional closing of bridge lanes as a form of political payback. I posted a blog in December discussing the authority’s history of transparency scandals and my attempts to get the authority to release information related to an award made for a transparency website.

GovWin IQ subscribers can read further about these projects in the provided links. Non-subscribers can gain access with a GovWin IQ free trial.

 

 

Defense Business System Improvements Carry Contractor Opportunities

In recent years, increases in requested funding for defense information technology has been attributed to modernization efforts and improving transparency through expanding IT reporting. Unclassified business systems accounts for approximately $7 billion in requested funding annually. Although spending for some of business system efforts is declining, like enterprise resource planning (ERP) implementation, these investment continue to hold significant strategic value.

The Defense Department Inspector General identified six ERP systems as key to achieving auditability goals for 2014 and 2017. Review of changes to the lifecycle costs and schedules for these systems found that delays and cost overruns continue to pose risks to DoD’s ability achieve these auditability goals. 

In particular the Defense Agencies Initiate (DAI) program from the Defense Logistics Agency aims to improve the accuracy and reliability of financial data across the Defense agencies by overhauling budget, finance, and accounting operations and deploying a standardized system solution. To date, DLA has awarded 46 contracts and/or task orders for DAI. Nearly half of these were task orders that were primarily awarded through Encore II. A quarter of the contract awards were through IT Schedule 70 competitions. The remainder of the awards was through standalone contracts. Half a dozen of these incumbent contracts are due to expire by the end of September 2016. Several of the opportunities identified during the first half of FY2014 are linked to support services. 

Major efforts like DAI often encounter numerous challenges throughout development. In a report released in April 2013, the Defense Department’s Inspector General found that, “the Defense Agencies Initiative Program Office spent $193 million from FY 2007 to FY 2012 without ensuring that the system fulfilled capabilities needed to generate reliable financial data.”  Essentially, the program was funded for several years without making sure the major goal of the effort would be met.

Performance pitfalls linked to schedule delays, cost overruns, and other issues have fuelled efforts to improve program oversight and transparency. As increased auditability and transparency support greater scrutiny, these completing these improvements will fuel pockets of opportunity for contractors down the road. Following implementation of its major ERP systems, DoD is likely to target additional efficiencies across business systems through possible cloud migration and analytics. In the meantime, however, budget pressure and oversight requirements continue to stretch program timelines further into the future.
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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWinIQ. Follow me on twitter @FIAGovWin.

 

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