The QDDR: The Gift of the State and USAID Magi

The State Department bestowed an early Christmas present on the international development community last week when it unwrapped the long-awaited Quadrennial Diplomacy and Development Review (QDDR). And like those slipper-socks from Aunt Minnie, the QDDR isn’t exactly what was hoped for, but contained some necessities.

Insourcing Implementation So Far Proves Not Smart Contracting

First, Defense Secretary Gates questioned insourcing at the Defense Department after he found that this initiative had not achieved the intended savings. Now a second administration official is questioning agency insourcing actions.

According to the Dec. 13 edition of Capital Business (the Washington Post’s business weekly), OFPP Administrator Dan Gordon indicated that agencies misunderstood OMB’s guidance and brought work in house to meet quotas, regardless of whether doing so saved money, increased efficiencies or improved internal management capabilities.

“We do not view insourcing as a goal,” Gordon said, according to the Post account of his Dec. 10 speech. “What we’re doing is rebalancing our relationship with contractors.” In this rebalancing effort, the administration wants to convert “targeted, limited numbers of positions” to public sector performance, the Post reported.

The Post quotes Gordon as saying:

“No corporation would agree to have somebody else running their entire operations…There are far too many situations where we have yielded control of our own missions…to contractors. That needs to be fixed, but it doesn’t require massive insourcing.”

Quadrennial Questions

Lost in all the coverage of the State Department cable leaks is the leak of another document that could have a far greater impact on the effectiveness of future U.S. diplomacy: a set of State Department briefing slides for Congress on the Quadrennial Diplomacy and Development Review.

Although this little reported document hints at some answers to critical questions about the long-awaited strategy for how State and the U.S. Agency for International Development (USAID) will partner to support development assistance missions around the world, it also raises new questions. Perhaps most critical: why the briefing repeats tired rhetoric about the role of for-profit and non-profit development organizations assisting the government in its mission.

Guest Blog: Non-profits’ Faustian Bargain with the Taliban

By Lawrence J. Halloran

Director of PSC's International Development Initiative

Yesterday’s Wall Street Journal story* about non-profit aid groups “distancing themselves from the U.S.-led coalition” and cutting separate safe-passage agreements with the Taliban in Afghanistan exposed a dangerous naiveté among some humanitarian actors there who are complicit in appeasing a lethal enemy. I wonder how fast those same aid workers would cover the distance between themselves and the nearest NATO military unit when some of Mullah Omar’s men who didn’t get the memo open fire.

To pretend the Taliban is just another benevolent community organization looking to “register” foreigners for their mutual peace of mind ignores the Taliban’s bloody past and their brutal plans for all they subjugate, especially women. Too many dedicated professionals from aid development and other firms have already suffered tragic losses of life to conclude that anyone’s safety lies in such dangerous delusions.

And if the Taliban’s safe passage registration is “free” in terms of money or tactical military intelligence, it surely comes at the price of an explicit endorsement of the group’s goals and the tacit acknowledgement of their illegitimate governing authority. Why else would the local Taliban bureaucrat quoted by the WSJ welcome “unaligned” aid groups into areas he controls while he feels free to shoot at others doing essentially the same work on behalf of the U.S.-led coalition and the Afghan government?

When a congressional subcommittee found that transport contractors were paying insurgent militias for convoy protection for supplies for U.S troops, the practice was roundly denounced. The widely publicized October 2010 Senate Armed Services Committee report concluded it was important to address those “who act contrary to our interests and contribute to the corruption that weakens the support of the Afghan people for their government.” Is it so different when a non-profit aid group pays the Taliban with its good name? Even when no money changes hands, letting the Taliban take tacit credit for the provision of medical supplies and other aid paid for by countries with soldiers in the field gives comfort to the enemy. Even the most expansive view of the humanitarian space between active combatants and innocent civilians does not have room for that indefensible double standard.

*Subscription required.

Government Acquisition Professionals See a “Great Divide”

There is a “Great Divide” in government. It runs wide and deep and affects government efficiency and effectiveness.

 

No, I’m not talking about the divide between Democrats and Republicans. I’m talking about the divide in the acquisition community between the operational managers primarily responsible for awarding and managing government contracts and the oversight managers primarily responsible for checking that contract management is effective.

 

Yesterday, PSC and our friends at member-company Grant Thornton released the results of our fifth biennial Acquisition Policy Survey of federal government personnel. We found the following divisions among operational and oversight respondents regarding the effects conflict of interest rules, acquisition workforce development and other procurement reform initiatives on the federal government.

Smart Contractors Congratulate Smart Contractors, and Smart Public-Sector Partners too!

While some say the big winners of 2010 were revealed on Tuesday, smart contractors know that the year’s biggest winners were announced Wednesday night at the much anticipated 2010 Government Contractor Awards!

Nearly 1,000 people turned out to celebrate the industry and learn which companies would claim the title of “Contractor of the Year” and which executives would be crowned “Executive of the Year.”

And the winners are…

How Smart Contractors Measure Up

Throughout the congressional campaign cycle there have been loud calls from both sides for the government to spend taxpayer dollars wisely. That’s why, regardless of the outcome of today’s elections, the Obama White House is unlikely to change its performance measurement agenda for federal agencies and programs.

And for good reason. In these tough economic times the government can’t afford to spend taxpayer dollars on failing or inefficient programs, projects or other activities.

In the September edition of Service Contractor, the Office of Management and Budget’s Shelley Metzenbaum, the associate director for performance and personnel management, explained how and why OMB is measuring program performance across federal agencies. She also explained what actions professional services firms can take to further these goals and improve their own work to help their government customers.

Haiti Recovery Spurred by Smart Contracting

Nine months after a devastating earthquake rocked Haiti, there are signs of recovery and a return to normalcy thanks to USAID-funded projects implemented by PSC member companies.

Denying Development Firms Security in Afghanistan: Not Smart Contracting

Hamid Karzai

Afghan President Hamid Karzai’s decision to deny international development organizations the right to protect their workers could jeopardize the U.S. counterinsurgency strategy and the political and economic stability of Afghanistan.

Why? The firms, many of which hire Afghans to fill more than 90 percent of their positions, are prohibited under the terms of their contracts, insurance policies and other agreements from operating in the combat zone without this protection. Further, development firms simply won’t risk the lives of their employees by sending them outside U.S. compounds without personal security. In short, the decision will throw thousands of Afghans out of work.

I Spy a Smart Contractor Securing Data After Reading This Post

A Chinese-born scientist steals the secrets of the American chemical company that employs him, smuggles chemicals out of the U.S. and delivers them to the Chinese government.

It sounds like the dream of a Hollywood scriptwriter, but it is just one of a growing number of real industrial espionage cases the U.S. Justice Department is investigating and prosecuting, according to an Oct. 17 New York Times article. The Times dubbed these cases of U.S. employees gone rogue to help rival nations make technological leaps the “new front in the battle for a global economic edge.”

PSC’s Soloway Testifies on “Defense Department Budget Initiatives”

Congress is probing the Defense Department’s plans to shutter commands and cut service contracts spending by 10 percent a year for the next three years, seeking the hitherto elusive strategic analysis proving those cuts are necessary because the work is unnecessary or better achieved through other means. PSC President and CEO Stan Soloway testified at a House Budget Committee hearing on Sept. 30 to shed light on the industry and economic impacts of what has so far been an opaque DoD budget exercise, particularly with regards to insourcing.

Redirecting Development Assistance Not Smart (and Certainly Not Smart Contracting)

President Obama unveiled key changes in how the U.S would distribute foreign assistance last week. Not least among the changes will be providing U.S. assistance directly to recipient-nation governments under the presumption such “direct assistance” will build that nation’s economic capabilities faster and better than the use of grants or contracts to development firms and non-profit organizations does today.

However well intentioned this effort may be, it does not account for some of the avoidable risks and obvious dangers attached with making cash transfers to nations that are receiving assistance precisely because they lack the governance structures required to effectively grow their economies, educate their populace and otherwise provide for the poorest of the poor in their nations. Nor is the presumption behind shifting toward direct assistance grounded in fact, as there is no evidence that implementing partners are not effective in achieving U.S. development goals through grants or contracts.

But, as they say on Reading Rainbow, “you don’t have to take my word for it.” Just pick up September’s edition of Service Contractor and you’ll find an in-depth explanation on the risks of direct assistance written by development professional Tonya Giannoni, chief operating officer of DevTech Systems and a tri-chair of PSC’s International Development Task Force.

Guest Blog: PDD on Global Development “Step in the Right Direction;” Sustained Leadership Needed to Ensure Success

By Stan Soloway

Professional Services Council President and CEO

Yesterday, President Obama signed a Presidential Decision Directive on Global Development (PDD) and described a new, unified policy approach to international development in a speech to the United Nations General Assembly High Level Summit on the Millennium Development Goals. PSC and its international development firm members support the elevation of development as a co-equal third pillar of national power, alongside diplomacy and defense. We believe the articulation of a U.S. Global Development Strategy will bring needed coherence and momentum to aid programs that are fragmented and duplicative. In discussions with Obama administration officials, we have supported plans to rebuild USAID as the nation’s leading voice in development issues and as the clear leader of a coordinated “whole of government” approach to foreign assistance.

PSC welcomes the president’s focus on economic growth as the fundamental force that will eventually transform the developing world and we support the president’s call to “use all the tools at our disposal” to achieve complex and difficult development goals. However, U.S. government support for greater “country ownership” should not be read as a code phrase for a wholesale shift away from the use of U.S development firms to direct assistance to foreign governments and organizations. Design and delivery modes for development projects must still be strategically tied to program goals and must reflect the political, social, economic and governance capabilities of the recipient nations and organizations.

Contractors who make the ultimate sacrifice go unnoticed, until now

Congressional overseers have long lamented that the Defense Department had no accurate accounting for the number of contractors on the battlefield. Unlamented, however, is the fact that the department fails to accurately account for the number of contractors killed or injured in the line of duty supporting those who are protecting our nation.

But perhaps that is because the facts represent an inconvenient truth, as procurement law expert Steven Schooner and Collin Swan report in this quarter’s edition of Service Contractor. In the first two quarters of 2010 alone, contractors accounted for 53 percent of all fatalities in both Iraq and Afghanistan, they found.

Guest Blog: Reaching the Millennium Development Goals: Use All the Tools of International Development

By Stan Soloway
Professional Services Council President and CEO

As the U.N. General Assembly gathers to measure progress toward the 2015 Millennium Development Goals, they can take pride in celebrating important accomplishments, but should also begin to consider what happens when many of those ambitious plans are not met. The global needle has moved in a positive direction to address global poverty, universal education, gender equality, child health, maternal health, HIV/AIDs, environmental sustainability and development partnerships, but U.N. officials have admitted that some goals in many places are already beyond reach. A weak global economy will get most of the blame, but how much money is spent does not alone account for the failure to meet key development targets. Policies on how international aid is delivered also need to be examined in light of new global realities.

One key policy debate deals with the role of the private sector in funding and delivering development assistance. Some decry the “privatization” of aid projects funded by foundations and corporations while others denounce the use of contractors from donor nations as high-cost colonialism. MDG gaps and failures will be offered as proof of insufficient “ownership” of aid projects and that only local buy-in, purchased through direct transfer of funds to recipient-nation governments and non-profits, guarantees development success.

These arguments overlook the vital role private sector donors and implementers already play in advancing developing nations from unproductive dependence to self-sustaining economic and governance capabilities. The Obama administration’s MDG strategy prudently looks to leverage innovation, deploy new technologies and introduce “new business models to make aid agencies and the international development architecture more effective.” That recognition that development is about doing business is a good first step toward a balanced, effective assistance strategy for the MDGs and beyond.

SmartContracting Blog Meets Smart Contracting Caucus, Learns about Cybersecurity Challenges

Speakers from two PSC member companies, SRA and Mircosoft, were on Capitol Hill Sept. 16 to explain the challenges facing the public-private partnership fighting cyber threats. They participated in a special meeting of the House Smart Contracting Caucus (LOVE the name!) hosted by caucus member Rep. Gerry Connolly, VA-11.

 

According to the Office of the Director of National Intelligence, cybersecurity is one of the top threats to our national security. Connolly and the panelists—Patrick Burke, senior vice president for offerings and products with SRA; Jerry Cochran, chief cybersecurity architect for Microsoft Public Sector Services; and Jessica Herrera-Flanigan, partner at Monument Policy Group and member of the CSIS Commission on Cyber Security for the 44th Presidency—were in general agreement that among the top hurdles facing both government and industry in tackling this threat are:

 

• Inadequate information sharing between the sectors to ensure threats are addressed in a timely manner;
• A shortage of public and private sector employees with the skills necessary to stay abreast of the ever-evolving, global threat;
• Undefined leadership roles and responsibilities among agencies and contractors; 
• A lack of a common lexicon regarding cybersecurity terminology and threats; and
• No broad policy for assessing and managing the risk to government and private sector systems.

All agreed that these challenges have long faced both the public and private sector. This Congress has attempted to address these matters through legislation, but none has passed to date. Some of the bills would take important steps to clarify leadership in the executive branch, define the roles and responsibilities of the public and private sectors, and establish compliance reporting structures. According to Connolly, it is unlikely that any of the bills will pass Congress before or after the election.

 

That means the government and private sector will have to start the entire process from scratch in the new Congress. Meanwhile, the cyber threat continues to evolve and the government and private sector continue to fight it as best they can.

PSC Members Honored as 2010 Government Contractor Award Finalists

The brightest lights of the government contracting world shined Tuesday night at the Ritz Carlton in Tysons Corner during the second most anticipated event of the year: the announcement of the finalists for the 8th Annual Greater Washington Government Contractor Awards (aka the GovCon Awards)! PSC member companies are in the running for six of the seven awards, thanks to some pretty smart contracting. The full list of finalists can be found here. The winners will be announced at the most anticipated event of the year: the Nov. 3 GovCon gala dinner!

While we all await the big event to hear who the industry winners are, we can applaud three honorees already named. They are the two public-sector partners honorees—Charlie Williams, the director of the Defense Contract Management Agency, and Soraya Correa, the director of the Office of Procurement Operations at the Homeland Security Department—and this year’s Greater Washington Government Contractor Hall of Fame inductee—Clifford Kendall, founder of Computer Data Systems, Inc.

Guest Blog: Washington Post’s "Political Bookworm" argument about development assistance is full of holes

By Lawrence J. Halloran

Director of PSC's International Development Initiative

The Washington Post’s "Political Bookworm," Steven Levingston, should have burrowed a bit deeper before he published the Sept. 2 commentary by Rachel McCleary, a senior research fellow at Harvard’s Kennedy School of Government and a visiting scholar at the American Enterprise Institute.

In her guest blog, McCleary claims U.S. humanitarian aid should be “reclaimed” from the pernicious influences of for-profit development firms. She argues that non-profit private voluntary organizations should deliver the bulk of U.S. development assistance because they are apolitical, impartial and transnational, “that is, not identified with national ideologies or driven by short-term policy agendas.” But she offers no proof to suggest for-profit firms are the opposite.

Nor does she address the more pertinent issue of performance. Nowhere in her piece does she argue that non-profits are more effective or cheaper at completing development projects than tax-paying U.S. development firms. In effect, McCleary demands a needless, ultimately counterproductive, choice between aid delivery actors based on a misreading of the facts and a misunderstanding of how indispensible both U.S. companies and non-profits are to achieving humanitarian and development goals under the most difficult conditions on earth. Her post is replete with inaccuracies and irrelevancies, like where an organization is headquartered and its headquarter's proximity to Congress, rather than where it does the work and what the work achieves.

Top Secret Contractor (and Other Government Contractor) Compensation Facts EXPOSED!

Holders of “top secret” clearances draw top salaries as demands for their credentials grow in the government contract marketplace. That’s one of the findings PSC’s Executive Vice President Alan Chvotkin presented today at the unveiling of the Human Resources Association of the National Capital Area 2010 Compensation Survey, which included a section on government contractor compensation.

Powerful Turnout for the Power IT Down Turn Off

By all accounts Power IT Down Day 2010 was a powerful success.

At close of business on Friday, Aug. 27, 17,639 people working for civilian agencies, defense agencies and industry pledged to turn off all of their electronic equipment before heading home for the weekend. That is more than three times the 5,600 people who participated in Power IT Down Day 2009!

The savings from this record turn off turnout generated a $60,000 donation to the Wounded Warrior Project from the event’s sponsors Citrix, GTSI, HP and Intel.

PSC was proud to be a partner in the event, alongside Boscobel, FedScoop, GovLoop and Knox County, Tenn. We’re looking forward to setting a new record in 2011.

We’ve Got the Power to Save Power

We like smart stuff here at the old PSC SmartContracting blog. That’s why, for the second year in a row, PSC is proud to be a partner in one of the most intelligent activities of the year: Power IT Down Day!

Power IT Down Day encourages civilian agencies, defense agencies and industry to turn off all computers, printers and other IT equipment at the end of the work day on Aug. 27 to reduce energy consumption.

This effort to encourage green habits can also save a lot of green. To demonstrate the power of the monetary savings generated by powering down electronics, the event’s smart sponsors– Citrix, Intel, GTSI and HP (a PSC member)—will once again make a donation to the Wounded Warrior Project.

Last year the event saved 73,000 kilowatt hours of power and raised $45,000 for the charity. (Now that’s what I call smart savings!) And this year, Power IT Down is poised to top that. As of 2 p.m. on Aug. 24 more than 5,200 people working for smart contractors and agencies have already pledged to save more than 288,500 kilowatt hours of power.

However, these pledges are still short of sponsors’ goal of having 6,100 participants saving 335,000 kilowatt hours of power this Friday. So be smart and take part in the third annual Power IT Down Day! Sign up today at http://www.poweritdown.org/.

Senate Insourcing Provision Could Accelerate Job Losses, Weaken State and Local Economies

At a time when our country’s unemployment rate hovers near 10 percent and Congress has to pass legislation to keep cops, firefighters and teachers employed, the Senate Appropriations Committee has penned a bill that includes language that could put thousands of people out of work and weaken local tax bases.

Section 741 of the Senate’s version of the 2011 Financial Services and General Government Appropriations Act (S. 3677) would require all government agencies to arbitrarily insource work currently being performed by contractors, even though current law and recent OMB guidance says the work is perfectly suitable for private-sector performance. In a letter to senators, PSC President and CEO Stan Soloway outlined the impact of such arbitrary insourcing actions have already had at the Defense Department:

“A number of DoD insourcing actions have already put contractor employees out of work because their jobs were physically moved to different locations, closed off by federal hiring requirements that prevent incumbent employees from continuing to perform the work, or both. It is illogical to implement this misguided policy, which only serves to set back economic recovery.”

Insourcing Not Smart Contracting, Gates Acknowledges

Defense Sec. Robert Gates’ Aug. 9 admission that “we weren’t seeing the savings we had hoped from insourcing” should come as no surprise to those who follow PSC’s advocacy on this issue.

For more than a year, we’ve warned that the Gates’ plan to insource critical management functions was devolving into a quota-driven, arbitrary budget exercise that would cost the government more than it would save. In letter after letter, we asked the department to show how it would achieve the 40 percent savings it claimed insourcing would bring, but PSC never received a response.

Now we know why. As we suspected, the “savings” were illusory. A budgetary sleight of hand.

More “Top Secret America” Myths Debunked: Contractor Costs Edition

In the July 20 installment of “Top Secret America,” The Washington Post unabashedly states:

"Through the federal budget process, the George W. Bush administration and Congress made it much easier for the CIA and other agencies involved in counterterrorism to hire more contractors than civil servants. They did this to limit the size of the permanent workforce, to hire employees more quickly than the sluggish federal process allows and because they thought - wrongly, it turned out -that contractors would be less expensive."

The Office of the Director of National Intelligence (ODNI) largely debunked this myth in its July 19 briefing paper, which states:

"It is true that core contract personnel are, on average, more expensive than their government counterparts. However, in some cases, contractor personnel are less costly, especially if the work is short-term in nature, easily available commercially, or requires unique expertise for immediate needs."

Fair enough. But even ODNI’s statement ignores the fact that no apples-to-apples comparison of contractor and federal employee costs has been conducted. Not for intelligence work. And not for other government work.

Post’s “Top Secret America” Miscasts Contractors as Profiteers

The July 20 Washington Post article questioning the intelligence community for tapping the vast array of private-sector talent to meet immediate intelligence needs after 9/11 glosses over the government’s most basic need: to respond with agility to changing threat environments.

But it does not gloss over less factual points. Namely, the second installment leads with the idea that government contractors, and the employees who work for them, are money grubbing profiteers only interested in serving their shareholders and with no interest in doing the public good.

Development contractors face danger in war too

On July 4 the Washington Post Magazine published “This is War,” a sobering profile of U.S. Agency for International Development professionals working to improve conditions in Afghanistan and Iraq under exceedingly treacherous circumstances.

As the piece highlights, the work these dedicated civilians perform is as critical to establishing security and stability in both nations as the higher profile military activities we usually read about. However, the piece failed to mention that those government employees work alongside thousands of equally dedicated private-sector implementing partners supporting the agency’s missions.

Contractors Help CDC Prevent Flu Contraction

Pres. Obama receives his H1N1 flu shot
during the height of the crisis.

The public spotlight on H1N1 may have faded, but the matter is still a spotlight issue for the Centers for Disease Control and Prevention (CDC).

The CDC hired PSC member Abt Associates last year to help the agency study the effectiveness of the H1N1 flu vaccine. Since December, Abt experts have worked closely with CDC officials to develop research protocols and operations procedures for these studies, which will track the effectiveness of this upcoming flu season’s combination H1N1 and seasonal flu vaccine in preventing flu in pregnant women, children, and health care providers.

The Irony of Freezing Financial Systems Modernization

There is no doubt the federal government’s budgetary climate is chilly. The national debt is growing at a rapid pace largely because of mandatory spending on Social Security, Medicaid and Medicare, the latter two programs suffering from high levels of improper payments.

The government’s need for sound financial systems to accurately account for every penny spent is crystal clear. However, in the name of sound financial management, the Office of Management and Budget has frozen approximately 30 financial system modernization projects worth $20 billion, regardless of the success of the projects to date, until it can review each and every one of them.

Call us crazy, but shouldn’t OMB have completed the reviews before those proverbial horses left the budgetary barn? And why halt the programs now, in medias res, just as the government is in dire need of modern financial systems? Isn’t that…ironic?

DoD Needs to maintain flexibility to deliver better outcomes to warfighters, taxpayers

The Defense Department plans to slice more than $100 billion from its budget over the next five years and, happily, it has decided to do so with the input of industry, the acquisition workforce and other stakeholders who would be affected by the trimmed back spending.

PSC was one of a handful of industry associations invited to a special meeting with Undersecretary of Defense for Acquisition, Technology and Logistics Ashton Carter on June 28. PSC’s Executive Vice President and Counsel Alan Chvotkin participated in the meeting where Carter presented proposed guidance that includes calls for acquisition professionals to buy competitively, choose the right contract for the job, include small businesses in multiple award contracts, and reward excellent contract performance.

“We share the goals that Undersecretary of Defense Carter has identified for the department and while many of the recommended guidelines—such as increasing competition and choosing the right kind of contract—are laudable, PSC is concerned about how the department proposes to implement them,” Chvotkin said after the meeting.

“Services covers a broad span of activities and no one size fits all. Yet some of his initial recommendations may unnecessarily limit flexibility,” Chvotkin said. “For example, the department is right to focus on choosing the right contract vehicle, but why take a tool out of the toolbox by eliminating time and material contracts?”

PSC will present its recommendations in meetings with department officials over the next few weeks. What DoD will do with this information remains to be seen. Carter said he will issue final guidelines by the end of the summer. But the fact that he asked industry for feedback is an encouraging sign that the forthcoming guidance could result in smart contracting.

Smart Contracting Outlook: FY 2011 NDAA is a Mix of Smart and Not-so-smart Contracting Policies

The Professional Services Council’s own Stan Soloway and Alan Chvotkin briefed the media on our take of the House and Senate versions of the fiscal 2011 National Defense Authorization Act.

Conclusion: some provisions are smart contracting, others…not so much.

Take the House provisions on insourcing. The provision that prevents agencies from setting insourcing quotas: Smart. Agencies should think strategically before insourcing to ensure what is brought in house truly needs to be performed by the government to provide the essential “organic” capabilities needed to keep the government in the driver’s seat.

However, a provision telling agencies to insource any work currently contracted out or any new work, thus encouraging insourcing of non-strategic functions found in any phone book: Not smart. Budgets are already tight and hiring authorities are limited. Agencies shouldn’t be wasting time and money insourcing work that is not mission critical and won’t save taxpayer dollars.

OFPP Proposed Workforce Policy Too Complex, Lacks Clarity

The Professional Services Council, through the Council of Defense and Space Industry Associations (CODSIA), made recommendations to the Office of Federal Procurement Policy on how it can improve its proposed policy letter “Work Reserved for Performance by Federal Employees” to avoid creating an environment that would promote arbitrary insourcing at federal agencies.

The proposed policy letter sought to clarify the definition of what constitutes “inherently governmental” work that must be performed by federal government employees and to provide guidance to agencies to help them identify functions “closely associated with inherently governmental” and “critical” functions that should also be reserved for federal employee performance.

But we felt that agencies could misinterpret the proposal as a mandate to insource work that is neither inherently governmental nor critical to government’s mission performance, such as base maintenance, information technology support or other tasks found in the yellow pages.

To avoid a final policy that results in wide-scale, non-strategic, quota-driven insourcing, we recommended OFPP:

• Provide a clear definition and examples of what constitutes inherently governmental work;
• Combine the categories of “closely associated with inherently governmental functions” and “critical functions” into one narrowly defined category to eliminate duplication and confusion;
• Require that agencies to submit and publicize a list of their inherently governmental and critical functions and define which critical functions must be reserved for performance by federal employees;
• Require agencies establish a comprehensive human capital plan and conduct in-depth cost comparisons before making insourcing determinations for work that could be performed by either the public or private sectors.

Abt CEO Flanagan: Company Mission is “Improving People’s Lives”

Two weeks ago, PSC testified at a hearing where the commitment of federal contractors and their employees to the government’s mission was questioned. Obviously those questioning that commitment haven’t talked to contractors the way the Boston Globe’s Beth Healy did in this May 23 profile of Kathleen Flanagan, the chief executive of Abt Associates, a PSC member company actively involved in our International Development Task Force. The entire piece is worth a read, but I’d like to highlight Flanagan’s response to Healy’s question of what drew her to the development field.

Flanagan said:

"I’m very passionate about making a difference, and Abt is a mission-oriented company. Abt is dedicated to improving people’s lives, to helping our clients improve programs, and going into fragile countries or underdeveloped countries and raising them up.”

That sounds a lot like dedication to mission and public service to me. And it serves as a good reminder to those who question the motives of for-profit contractors: it IS about the mission.

When it comes to insourcing, greater analysis is needed to avoid mission paralysis

Federal agencies, quite rightly, are determining where they may have gone overboard with outsourcing by contracting out work that should have been kept in-house to maintain government control over its mission. Where agencies find they’ve improperly outsourced jobs, they’re supposed to insource only the positions that will put the government back in the driver’s seat of mission control.

But so far, the government’s execution of insourcing has been a non-strategic, quota-driven exercise, which actually threatens the government’s ability to carry out its mission in an efficient and cost-effective manner, PSC Executive Vice President and Counsel Alan Chvotkin warned the Senate Homeland Security and Governmental Affairs Committee.

“Insourcing for the sake of insourcing is no more intelligent, no more effective, and no more defensible than outsourcing for the sake of outsourcing. Nor should government accept repeating the mistakes of past outsourcing efforts when implementing insourcing efforts,” Chvotkin said at a May 20 hearing of the Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia.

It’s IT Procurement Reform…and PSC Helped!

The Senate took a step toward smart information technology contracting on May 19, passing S. 920, the “Information Technology Investment Oversight Enhancement and Waste Prevention Act of 2009.” The bipartisan bill, which PSC helped the Senate Homeland Security and Governmental Affairs Committee craft, would improve agency and congressional processes to track the performance, cost and schedule of IT projects and prevent the requirements creep that often lead complex IT procurements into failure. The legislation, which was sponsored by Sens. Tom Coburn, D-Del. and Susan Collins, R-Maine, would also create an “IT SWAT Team” of government, industry and non-profit IT experts to provide skilled support to agencies managing complex IT projects. The SWAT Team would support government project managers from system development to execution to ensure it is successfully deployed. The bill now heads to the House for approval, as it travels on the School House Rock described path to becoming law.

Government contracts abroad spur jobs at home, save taxpayer dollars

What do government contracts for work removing landmines in former combat zones, protecting embassies globally and outfitting forward operating bases in Iraq and Afghanistan mean at home?

To the Tennessee towns of Lenoir City and Maryville, the more than $80 million in combined contracts two rival companies — EOD Technology of Lenoir City and Relyant of Maryville — hold with the government have created nearly 200 local jobs and generated substantial tax revenue.

To the troops in the combat zone, they have provided information technology and logistics support, as well as money-saving, climate-controlled for housing that allows for investment in other equipment.

To embassy staff around they world, they’ve provided safety through compound security contracts.

And to the communities they work in abroad, they provide roads and fields free of explosive devices and free of hazardous waste due to contracts for munitions and waste cleanup.

You can read more about the local and global impacts these firms have had in the Knoxville (Tenn.) News Sentinel.

While you read, keep in mind these are two firms with a small slice of the $500 billion government contracting pie. Given the successes of these firms, imagine what the entire government contracting community brings at home and abroad!

Shah’s Vision Offers Opportunities…and Pitfalls

U.S. Agency for International Development Administrator Rajiv Shah praised for-profit and non-profit development firms for their work at a town-hall meeting the Global Leadership Coalition sponsored in yesterday in Washington, D.C. That was right before he told those gathered he plans to insource much of the program design, monitoring and evaluation work many contractors have diligently completed for USAID for decades.

“Our current contracting systems exist for a reason. They enable our employees to get work done in an environment where they don’t always have the internal resources to do that work. And we depend greatly on many of our partners in this room to get that work done and to be a part of that system,” Shah said. “We have to insource program design, monitoring and evaluation. We simply can’t write contracts anymore that include and outsource all of that in a singular effort.”

PSC responded to Shah’s comments today with a letter urging him to keep industry in the loop during his strategic human capital planning. In the letter PSC President and CEO Stan Soloway also urged Shah to keep that strategic planning strategic.

Smart Contracting leads to Freedom from FAFSA Fear

The Free Application for Federal Student Aid (FAFSA) is a government form with a reputation for striking fear in the heart of every college student on an annual basis. Students and their parents know – or soon find out – that a student’s entire aid package (even the non-federal aid offered by educational institutions) hinges on how they answer the 107 questions required by the Education Department. And one mistake could cost more than a student loan.

So it’s no wonder that the Education Department’s Office of Federal Student Aid was one of the three winners in the Third Annual Citizen Services Awards for an online support tool to assist FAFSA applicants with their submissions in real time. The tool was implemented by Vangent, Inc. of Arlington, a Professional Services Council member and, as the award attests, one smart contractor.

PSC Supports Woman-Owned Small Business Rule

The Professional Services Council this week submitted comments to the Small Business Administration highlighting some necessary recommendations to strengthen its proposed Women-Owned Small Business (WOSB) Federal Contract Program.

While PSC generally supports the long-awaited program, which was first mandated by Congress in 2000, we believe the following will help SBA achieve the programs goals:

• Provide a level playing field for both economically disadvantaged WOSBs and other WOSBs to compete for set-aside contracts under the program.
• Swift action to identify third-party certifiers for WOSB status so businesses can readily take advantage of the program.
• Quickly establish a program repository that allows businesses to submit documents online regarding their eligibility for the program to avoid having to provide eligibility documents each time they submit a proposal for a set-aside solicitation.
• Set a clear timeline for when and how often the industry codes eligible for the set-aside program will be reviewed and updated. In addition, SBA should consider a petition process for organizations to provide information to SBA about market changes that may justify including new NAICS codes.
  

To read PSC’s comments, click here.

PSC to Gates: DoD’s Strategic Human Capital Initiative is Devolving into a Quota-Driven Process

Professional Services Council President and CEO Stan Soloway sent a letter to Defense Secretary Robert Gates today expressing concern that the Defense Department’s plan to insource critical functions is going off track. The president of the International Association of Machinists, R. Thomas Buffenbarger, sent a separate letter to the secretary with identical concerns. Read our press release and both letters here.

PSC Raises Concerns with DoD’s Safeguarding Unclassified Information Rule

The Professional Services Council today submitted comments that raise concerns to the Defense Department regarding an advanced notice of proposed rulemaking to govern how contractors protect controlled unclassified DoD information residing on contractor networks.

While PSC believes protecting this information is important to both national security and industry interests, the notice raised several concerns. Among PSC’s concerns are the broad scope of its application, its lack of clarity of a number of key terms and its potentially onerous reporting requirements.

The House passes the IMPROVE Acquisition Act

The House passed the IMPROVE Acquisition Act yesterday — to borrow a phrase — to improve DoD acquisition. Or at least that’s how the Hill sees it. And, for the most part, PSC agrees that the bill will make some needed improvements to the Defense Department’s acquisition processes. However, PSC has some serious reservations about amendments offered on the floor that take the bill off its intended track.

An amendment submitted by Rep. Alan Grayson, D-Fla., could require contracting officers to make cost at least half of the evaluation criteria on a contract unless a contracting officer justifies why cost shouldn’t be the primary consideration. How do you put cost above outcome on a research and development contract for new body armor or a new mine-resistant vehicle? Given the tremendous workloads staff-strapped contracting shops face, that’s what Grayson is doing since it is doubtful contracting officers have the time to provide written justifications on why best value should trump cost in such cases.

Rep. Phil Hare, D-Ill., offered another troubling amendment. Hare’s amendment would make it the “sense of Congress” that the government shouldn’t do business with any company that has violated a labor law. Excluding from further contracts any contractor that has a labor law violation against it doesn’t make “sense” to PSC. An acknowledged violation could be a signal that the company took responsibility for its action, proving it trustworthy. Further, a violation may be technical and that does not affect a contractors’ ability to fulfill its responsibilities to the government.

Gordon hears PSC, ABA concerns on multi-sector workforce policy memo

Office of Federal Procurement Policy Administrator Daniel Gordon took part in a question and answer session the Professional Services Council and the American Bar Association hosted on April 26. Gordon discussed his March 31 draft policy letter, “Work Reserved for Performance by Federal Government Employees.” Among the top concerns raised by attendees about the letter: a failure to offer clear guidance on conducting a cost comparison and a failure to address what to do when a job could be considered “government only” but the need is immediate or the job isn’t a long-term requirement. Gordon said he is in “listening mode” and welcomed written comments on these and other concerns raised during the town-hall style meeting. PSC is preparing comments to send to Gordon by the June 1 deadline.

Hiring rule would limit contractors

The Labor Department did a curious thing on March 19. It proposed a rule that appears to run afoul of basic labor laws and practices. The “Cliff’s Notes” version: Labor, at the order of the White House, proposes to force contractors that win government work from another firm to give the outgoing contractor’s wage-grad...e employees the right of first refusal for the jobs they’re vacating. However, the proposal fails to provide a meaningful way for the incoming contractor to assess the qualifications of those employees. Sound absurd? PSC President and CEO Stan Soloway thought so too. You can read his in-depth analysis of the rule in this Government Executive op-ed.

PSC Raises Concerns with DoD Proposed Rule on "Safeguarding Unclassified Information"

Alan Chvotkin, PSC's executive vice president and counsel, discussed another Defense Department proposal affecting contractors at a public hearing yesterday. The initiative would govern how contractors secure controlled unclassified Defense information on the contractors’ networks. You can read his presentation and PSC’s views on this rule here.