FAQs About The Implications of a Government Shutdown for Industry

There are no dumb questions, only smart contractors. This is especially true when it comes to questions about a potential government shutdown. The more questions you ask, and the sooner you ask them, the better. Below are some frequently asked questions, which we tried to answer at our recent event exploring the implications of a shutdown on government contractors.

Guest Blog: PSC on DCAA: Progress Made, More Improvements Needed

By Roger Jordan

Vice President, Government Relations

Recent coverage of the Defense Contract Audit Agency’s problems, including the recent HSGAC Contracting Oversight Subcommittee hearing on February 1, has focused on how the agency has improved its audit processes through risk-based audit strategies that prioritize high-risk contracts and related actions. In testimony and recent interviews with the media, DCAA director Patrick Fitzgerald touted that the changes he’s implemented, coupled with a new contractor business systems rule, will put the agency back on track, he believes.

Admittedly, Fitzgerald has more work to do, and from an industry perspective we encourage him to look at the effect of his reforms on contractors and what further steps must be taken to improve DCAA-industry collaboration. For example, DCAA is still not effectively communicating with industry about corrective action plans contractors implement in response to DCAA audit findings deeming contractors’ systems deficient. In addition, DCAA is taking an excruciatingly long period of time to give contractors’ systems a “clean bill of health” after corrective action plans have proven effective.

Unfortunately, the Senate hearing represented a missed opportunity to focus on these issues.

The Army Leads the Way on Insourcing

The Army is leading the charge toward smart insourcing.

In a bold action, Army Sec. John McHugh suspended all ongoing and future insourcing operations at the Army unless each proposal for insourcing is based on a comprehensive, analytical, approach and the sourcing decision is presented to him for approval.

In a Feb. 1 memo, McHugh wrote:

In an era of significantly constrained resources, the Army must approach the insourcing of functions currently performed by contract in a well-reasoned, analytically based and systemic manner, consistent with law and prevailing Presidential and Department of Defense guidance. Accordingly, effective the date of this directive, I reserve to myself the authority to approve any insourcing proposal, wherever generated across the Army. Any insourcing proposal presented for my consideration must be fully documented and justified. Any proposal will include, at minimum, a manpower requirements determination, an analysis of all potential alternatives to the establishment of permanent civilian authorizations to perform the contracted work, certification of fund availability and a comprehensive legal review.

PSC has called for such analytically rigorous reviews for some time and we’re pleased to see the Army drilling much needed discipline into what has been a disorderly process. The rest of the federal government should promptly follow the Army’s lead.

FACT: Communications Between Government and Industry IS Smart Contracting!

Smart contractors know open communications with their customers are the keys to success. And from the looks of this communication, the Office of Management and Budget is looking to adopt that best practice to the government contracting field.

The Feb. 2 document launches OMB’s “Myth Busters” educational campaign to inform agency acquisition officers about the policies and current flexibilities in the Federal Acquisition Regulation that allow them to tap industry expertise throughout the lifecycle of a procurement, including requirements development and other pre-award milestones. But I’ll let OMB do the communicating here:

“Access to current market information is critical for agency program managers as they define requirements and for contracting officers as they develop acquisition strategies, seek opportunities for small businesses, and negotiate contract terms. Our industry partners are often the best source of this information, so productive interactions between federal agencies and our industry partners should be encouraged to ensure that the government clearly understands the marketplace and can award a contract or order for an effective solution at a reasonable price. Early, frequent, and constructive engagement with industry is especially important for complex, high-risk procurements.”

 

OMB ordered federal agencies to develop a high-level vendor communication plan to reduce “unnecessary barriers, publicize communication opportunities and prioritize engagement opportunities for high-risk, complex programs or those that fail to attract new vendors during recompetitions.” Unless otherwise prohibited by law, regulation or ethics standards, all forms of communication should be on the table, OMB said.