1 / 33

Gregory L. Davies ACC-APG, Chief of Staff 27 June 2012 NCMA Luncheon

UNCLASSIFIED. Trends In Contracting. Gregory L. Davies ACC-APG, Chief of Staff 27 June 2012 NCMA Luncheon. Overview. Look Back ( in Order to Look Forward) Recent NDAA Acquisition Impacts & Other Contracting Policies Future Budgets CPARS Service Contracting EO 13495

rumer
Download Presentation

Gregory L. Davies ACC-APG, Chief of Staff 27 June 2012 NCMA Luncheon

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. UNCLASSIFIED Trends In Contracting Gregory L. Davies ACC-APG, Chief of Staff 27 June 2012 NCMA Luncheon

  2. Overview • Look Back ( in Order to Look Forward) • Recent NDAA Acquisition Impacts & Other Contracting Policies • Future Budgets • CPARS • Service Contracting • EO 13495 • OSD Better Buying Power • Summary/Way Ahead

  3. Background UNCLASSIFIED

  4. UNCLASSIFIED ACC-APG Legal Legal HCA C4ISR MG Ferrell HCA SCRT Mr. Ormond Sm Bus Executive Director/PARCMr. Bryon J. Young Sm Bus Comp Adv Comp Adv Strategic Initiatives Civilian Deputy to the Executive Director Mr. Steven R. Bryant Military Deputy to the Executive Director TBD PARC Authority - TAO HCA ACC (Former NCR-CC) Dr. Lowman Chief of Staff Gregory L. Davies Associate Director C4ISR Associate Director SCRT Contracting Operations Division DIVISIONS (APG D, Installation, Edgewood, Adelphi, Durham, Natick, Denver) DIVISIONS (APG A, B, C, E, Ft. Belvoir, Tobyhanna, Ft. Huachuca) Enterprise Resources Division Technology, Logistics, and Security Division ACC-APG

  5. 2008 National Defense Authorization Act • Addresses Gansler Findings: • Changed the way DOD drafts requirements definition • Contingency program management • contingency contracting • Training for personnel outside the acquisition workforce (CORs) • Joint training for acquisition professionals • Also: • Rewrite of DODI 500.02

  6. UNCLASSIFIED Gansler Recommendations • Increase the stature, quantity, and career development of the Army’s contracting personnel • Restructure organization and restore responsibility • Provide training and tools for contracting workforce • Obtain legislative, regulatory, and policy assistance • “Contracting, from requirements definition to contract management, is not an Army Core Competence. The Army has excellent, dedicated people; but they are understaffed, overworked, under-trained, under-supported and, most important, under-valued.” • Jacques S. Gansler ... Catalyst for change, blue print for action

  7. 2009-10 National Defense Authorization Act M • Allowed protests on task orders >$10M under IDIQ contracts • Required KOs to post sole source J&As on FBO • OMB contract reviews: (1) Maximizing the use of competition (2) Improving practices for selecting contract types (3) Strengthening the acquisition workforce (4) Clarifying when functions should be performed by federal employees and when contractors may be appropriately considered. Also: Weapon System Acquisition Reform Act 2009

  8. 2011 National Defense Authorization Act M • Required an assessment on service contracts • Continued the “Commission on Wartime Contracting” • Extended Protests of TO/DOs >$10M to 2016 • Requested a way to “Improve Contractor Business Systems” • Acct, Estimating, Purchasing, EVM, Property • Results in “new” DFARS Clause 252.242.7005 (Feb 2012)

  9. 2012 National Defense Authorization Act M • Requires contractor past performance info available on databases for source selections • CPARS • Attempts to hold labor rates & OHs for Contracts >$10M to FY10 levels • For both FY12 & 13 • Caps spending on services contracts at FY10 levels • Holds compensation expense to “senior executives” (To $693,951)

  10. Budget Overview UNCLASSIFIED

  11. Budgets: Deficits Do Matter • Sequestration: Everyone agrees it’s a bad idea! • Budget Control Act 2011 cuts $1 Trillion over next 10 yrs and • Created the Super Committee (Aug 2011) • DoD will trim $450B in next 10 years • Sequestration Plan would saddle DoD with additional $500B in cuts • Entire sequestration plan is $1.2 Trillion • “ …defense is going to have to bear their share of the burden” and “I don’t think there is the stomach over there to stop the sequester.” Sen. Harry Reid (D-NV) The Outcome is Uncertainty Unclassified

  12. Budgets: Deficit Do Matter (cont) • Presidential Budget (PB) request for FY13 = $525.5B • FY 12 was $554B, so FY 13 is a 5% decrease • Sequestration would cut add’l $1.2 Trillion over next 10 yrs • Sequestration Plan would saddle DoD w/ add’l $500B in cuts • Sequestration will cut $55B of “discretionary” DOD money in Jan 13 ! • Approx $54.7B per year for DOD next ten years "Our national debt is our biggest national security threat“ Admiral Mike Mullen Unclassified

  13. UNCLASSIFIED ACC-APG Actions/Obligations ACC-APG RDECOM/SCRT Actions $Obligated FY05 14,500 $3.4B FY06 15,100 $4B FY07 16,500 $6.1B FY08 23,500 $6.3B FY09 23,000 $6.9B FY10 22,000 $7.2B ACC-APG CECOM/C4ISR Actions $Obligated FY05 14,000 $8B FY06 16,000 $11.5B FY07 17,000 $12B FY08 25,000 $14.5B FY09 24,000 $15B FY10 22,000 $14B FY11 Combined Totals Approx. 48.5K Actions & >$18B Obligated 74% of Actions Competed 22% Awarded to Small Businesses (=$2.9B)

  14. CPARSContractor Performance Assessment Reporting System UNCLASSIFIED

  15. AcquisitionRegulation Supplements Federal Acquisition Regulation (FAR) Regulatory Requirements FAR 42.1502 & 42.1503: Agencies Shall Prepare an Evaluation of Contractor Performance and Submit to Past Performance Information Retrieval System (PPIRS) FAR 15.304: Past Performance Shall be Evaluated in All Source Selections for Negotiated Competitive Acquisitions CPARS Shall be Used to Prepare Contractor Performance Evaluations PPIRS Shall be Used as a Source of Past Performance Information in Source Selections UNCLASSIFIED

  16. Gov’t Source Selection Officials Gov’t Program Manager/Contracting Officer CPARS PPIRS Contractor Representative Contractor SeniorManagement Past Performance Process Overview

  17. CPAR Assessments • Pre-Decisional in Nature • Protected Throughout Life Cycle • Accessible By: • Government Personnel with Need to Know • Contractor who is Subject of Evaluation • May Not Be Transmitted Via Email • Retained for 3 Years After Contract Completion in PPIRS Treated as Source Selection Information IAW FAR 3.104

  18. ContractYear 1 Interim Report ContractYear 2 Interim Report ContractYear 3 Final Report ContractYear 3.5 Addendum Report Reporting Frequency Perform Accuracy Check UNCLASSIFIED

  19. CPARS Workflow ContractRegistration 1. Focal Point Assigns Users 2. Contract is registered Automated:Focal Point Manual:Focal PointContract Data EntryAssessing OfficialAssessing Official Rep Enter ProposedRatings Validate ProposedRatings ContractorComments Review ContractorComments Reviewing OfficialComments UNCLASSIFIED

  20. Service Contracting UNCLASSIFIED

  21. DoD’s procurement Spend is $400B • 51% of contracts are for services • Exponential growth in service contracts last ten years

  22. Optimization of Army Services Implementation Plan • Secretary of Army Signed off on Svcs Plan September 2011 • “Commands should treat services as programs, not contracts.” • Mandates DA savings on service contracts of $11.4B over 12-16 POM • Savings Breakdown: OCO = $6.75B and Base = $4.65B • Establishes a Portfolio Management Approach to service contracts • Est MFIPTs ( Multi Functional IPTs) like a JPM for Service Contracts • RA = Requiring Activity • Portfolio Managers • CA = Contracting Agency • PEOs must establish a Command Services Executive (CSE) • CSE must be designated in writing and must be a SES or GO • Established DASA(S) to monitor and manage Army service spend • DASA(S) will review & approve Service Acq Strategies >$250M <$500M • Courtesy copies of all other SAS (>$10M) are to be sent to DASA(S)

  23. UNCLASSIFIED

  24. How to Achieve Savings on Service Contracts • Reduce 1 bid contracts • FY 11 ACC-APG policy encourages 30 days to maximize quotes • If RFP out for less than 30 day and only receive one quote, it must be posted again for 30 days to maximize competition • Reduce/eliminate Time & Materials (T&M) and Labor Hour Contracts • Need a D&F signed by PARC for T&M/LH contracts • If T&M >$100M HCA must sign D&F • Reduce Contracting Fees/Ask for Discounts • Use Incentive Based Contracts • Limit Periods of Performance (POP) • ACC-APG policy limits service contracts to not more than 36 months • Contractors: Propose lower hours and tell us how you will be efficient

  25. Task Orders (TOs) Under IDIQs • TOs Under IDIQs Designed to be Faster Method of Awarding Orders • ECBC MSC • $485M Cap/20 Contractors • R2-3G • $16.4B cap/ Managed by a Program Office in Bldg. 6001/18 Contractors • S3 • $19B Cap/7 Contractors/Obligated $13B to date/ 2500 to 3000 actions/year • Multiple Award is Preferred • Single Awards IDIQs Required AAE to sign/Approve a D&F over $103M • Must Do Market Research • Best Business Practice: Better to establish 5 year order periods instead of base and options • Contractors: Above IDIQs will be consolidated & recompeted in FY 14 for a FY 15 award • New MAC IDIQ for Chem/Bio is active W911QY-12-R-0020 (Due 7/20/12) ($495M)

  26. Ashton Carter OSD Better Buying Power Initiatives UNCLASSIFIED

  27. UNCLASSIFIED OSD Better Buying Power Initiatives Five Key Initiatives Target Affordability and Control Cost Growth Incentivize Productivity & Innovation in Industry Promote Real Competition Improve Tradecraft in Acquisition of Services Reduce Non-Productive Processes and Bureaucracy OSD’s Implementation Directive for Better Buying Power (3 Nov 10)

  28. UNCLASSIFIED What This Means to You • More frequent and more thorough market research will be conducted; • We will be reaching out to the small business community on a more frequent basis, and our expectations of teaming with you will be greater; • Cost-type contracts are increasing, requiring businesses to have approved purchasing systems that can track costs; suggest creating a relationship with DCMA and DCAA; • What may have been business as usual is evolving into the need for greater efficiencies; highlight these in your proposals; • Government scrutiny of indirect costs will be greater; • Government oversight on service contracts will be enhanced. 30

  29. Trends in the Acquisition and Contracting Next 1-5 Years • DOD Cuts on the Horizon • Emphasis on “Affordability” and “Productivity” in Defense Spending – Driven by Dr. Carter • Consolidate Common Items (Both Supplies and Services) • Leverage Volume Discounts • Multiple Award IDIQ Contracts • “Fair Opportunity”/Best Value Awards • A Two Step Competition Process • Cut Service Contracts by 10% for “each of the next three yrs” Unclassified

  30. Trends in DOD Acquisition & Contracting Next 1-5 Years • Small Business Plans • Will be a Weighted Part of the Evaluation for Award • For Both Large and Small Businesses • Expect More/Better Oversight • Trying to Avoid Cost Over Runs • Fewer Time and Material (T&M) Contracts • More Firm-fixed Price, When They Make Sense • “Greater Consideration” for using FPIF/CPIF • More Emphasis On “Performance” Based Contracting • You Will See More PWS vs. SOW • Quality Assurance Surveillance Plans (QASPs) Incorporated Into PWS for Services

  31. Trends in the Acquisition & Contracting • We’ll be in a Post War Environment Soon • Deficit Spending is Out of Favor • No Appetite for Cost Growth • Latest Mantra: “Do More Without More” What’s Needed From Industry in This Environment: • Lower Cost Systems, esp. in Production and Sustainment • Demonstrate “Should Cost” in your Proposals • Share your cost lowering ideas with the PM • Provide both “Will Cost” and “Should Cost” in Proposals • Be Lean, Stress Quality and Efficiencies • Lower overheads

More Related