Recent
Regulatory matters that may be of interest since the last Update
include---
·
Unique Item Identification and Valuation continues in
the news! And, the “pronouncements” continue.
Acting Under
Secretary of Defense Michael Wynne issued several related
memoranda over the past months.
Ø
DoD is planning an UID workshop in March 2004 in
conjunction with its planned migration to the Defense Logistics
Management System (January 5, 2004 memo) and the elimination the
Military Standard Systems.
Ø
Finalized changes are expected (another January 5,
2004 memo) to limit source inspection for contracts valued under
$250K with greater reliance on the Wide Area Workflow (WAWF).
Separately, note also that “UID is currently scheduled to
be implemented in phases in WAWF with the first phase being piloted
with …(only two) vendors.”
Ø
His October 2, 2003, policy document on use of Radio
Frequency Identification (RFID).
A summit meeting with industry on 6-7 April 2004 is planned
and implementation of RFID begins in 2005.
Ø
And a January 2, 2004, memorandum on quick closeout
and expected revisions to FAR 42.708 and associated contract clauses
in order to incentivize the use of that “quick” process.
Comment:
“Must” reading is the Q/A with Honorable Michael Wynne in
the Jan-Feb 2004 issue of “Defense AT&L,” published by the
Defense Acquisition University, wherein he discusses the interplay,
and relationship, of these various initiatives.
With all these memos, did the public obtain appropriate
notice/comment opportunity? Also,
see prior Updates.
·
“The FY02 DoD Authorization Act, P.L. 107-107,
codified as 10 USC 2330, required certain approvals for the
acquisition of services that are not performance-based and for the
use of non-DoD service contracts. In addition, it also required DoD
to institute a management structure for the acquisition of services
similar to that in place for supplies.”
NAVAIR recently issued a memorandum on its approval
procedures for issuing nonperformance-based contracts for services.
Comment:
We continue to hear about contractors not “believing”
this change toward performance-based servicing contracting.
Do contractors expect their contracting officers to seek
approvals for nonperformance-based contracts?
Perhaps the “problem,” if there is one, is with the
statute and not the customer?
·
Dr. Marvin Sambur, Assistant Secretary of the Air
Force issued a memorandum on January 7, 2004, on “Revitalizing Air
Force and Industry Systems Engineering—Increment 2.”
Specifically, an online Systems Engineering (SE) guide is
expected to be published next month at http://cse.afit.edu
with “appropriate language” (samples will be in the guide) for
inclusion on the following:
Ø
Solicitations to “clearly convey the
scalability/expandability/variability requirement, require offerors
to adequately describe how their SE approach will achieve the
required endstate (‘delivers high-quality, best value products
(capabilities) that fully meet the operators’ needs, and are
designed to easily and inexpensively accommodate growth, i.e., with
consideration for scalability/expandability/variability of
capabilities in subsequent increments’) and elevate the importance
of SE when establishing source selection criteria.”
Ø
Award Fee Plan/Incentive Fee Contract to
specify how “technical performance should be weighted
appropriately towards achieving the endstate”—noted above.
Unawarded fee may be rolled forward for future periods.
Ø
Contracts “shall consider incorporating the
SE approach proposed by the offeror, appropriate leading
indicators, as well as traditional cost, schedule, and performance
indicators, should be used to measure contractor performance and as
a basis for incentives.” (emphasis
added)
Comment:
Is this a “fundamental” shift in SE, as advertised? Is this the “next” step in the “evolution” of SE,
i.e. from Total System Performance Requirement contracts (and FFP
contracts) as the Air Force portrays?
Stay tuned.
·
The FY 2004 Defense Authorization Act directed
establishment of a “Procurement Reform Panel” comprised of
government/industry representatives, under the chair of the OFPP
Administrator. The
focus of this Panel will be an examination of procurement
laws/regulations and removal of barriers for commercial firms.
David Safavian, chief of staff at the General Services
Administration, is expected to be nominated as OFPP Administrator
with an Administration agenda on competitive sourcing of government
requirements. And,
“information technology contractor Harris Corp. will join 2,700
Federal Aviation Administration workers in a public-private job
competition involving 58 flight service stations throughout the U.S….Under
the arrangement…Harris and FAA flight service specialists will vie
as a team against other companies in the competition.”
Comment:
How will the “Panel” affect the DoD Transformation
Initiative? Or, is this
(another) opportunity for industry to get on board? And, given the
purported “severe contracting problems at the Federal Technology
Services' Client Support Centers,” cited in a recent letter by
Sen. Charles Grassley to the GSA, will this “impact” the
appointment of a new OFPP Administrator from GSA and/or the
establishment/effectiveness of the “Panel?” Also, the Federal
Acquisition Council has posted a “Competitive Sourcing Management
Assessment Guide” at http://www.fac.gov.
·
The Base Realignment and Closure (BRAC)--2005 efforts
are “warming-up” with a reported excessive base infrastructure
of 20-25 percent. A
draft BRAC selection criteria was released on December 23, 2003.
·
“2003 PEO/SYSCOM Commanders Conference was held
December 3-5, 2003. One can view the website that includes the
(outstanding) agenda, special topic session presentations, and
biographies of speakers. In
addition, DAU is making available videos taken at the conference of
the Opening Remarks by the Michael W. Wynne, Acting under Secretary
of Defense (Acquisition, Technology, and Logistics) and a Keynote
address by LTGEN James E. Cartwright (USMC), Joint Staff (J8)
Director, Force Structure, Resources, and Assessment taken at the
conference. These are available under the new content section in the
AKSS Menu on the left side of the AKSS Home Page under "DAU
Video Library.” http://akss.dau.mil/jsp/default.jsp
Agenda/presentations
are available at
http://www.peosyscom.com/agenda.aspx.
·
On December 22, 2004, SBA announce that its “Pro-Net
and DOD's Central Contractor Registration (CCR) are being merged
into one portal for entering and searching for small business
sources. After Dec 31, CCR will assume all of Pro-Net's search
capabilities and functions and small businesses will no longer need
to manually register in both Pro-Net and CCR. To conduct
market research and confirm eligibility for SBA's procurement
preference programs, users will go to the CCR Web Site at
http://www.ccr.gov.”
Separately the SBA is in the process of
“revisiting/updating” its rules on size standards, e.g. on
December 23, 2003, they were published for testing laboratories
industry and information technology.
·
The January 15, 2004, Federal Register noticed
an updated FAR listing of laws “inapplicable” to commercial
off-the-shelf items. On
January 21, 2004, the Federal Register also noticed a
clarification on “what FAR definitions apply to FAR solicitation
provisions and contract clauses.”
Comment:
While the FAR listing of inapplicable statutes is
Congressionally mandated, contracts are inclusive documents.
Would it also be helpful to identify in the FAR which
statutes are applicable thereto for proper/fair pricing of
contracts?
·
“Department of Energy (DoE) Office of
Engineering and Construction Management issued a sample project
Acquisition Strategy guidance tool on October 21, 2003, for Federal
Project Directors. It provides a sample format,
situational scenarios and consolidated guidance that meet the
Department's intent for project Acquisition Strategies required
under DOE M 413.3-1 Project Management for the Acquisition of
Capital Assets. The Acquisition Strategy addresses alternatives
analyses, accounts for project risks and mitigation strategies, and
lays out anticipated funding as part of
Critical Decision - 1 Approve Alternatives Selection and Cost
Range. The tool is posted under References and Guides at http://oecm.energy.gov .”
·
“DoE Office of Procurement and Assistance Management
has posted a draft Model Contract for Demolition Contracts at http://professionals.pr.doe.gov/ma5/ma-5web.nsf/?Open.
… Over the last few months, DOE has been getting information
on various formats and contracts for a broader range of commercial
demolition contracts, obtaining information from the industry, and
identifying specific challenges to moving to a more commercial
model. The first solicitation was issued for work at
Savannah River site at http://doe-iips.pr.doe.gov,
RFP (DE-RP09-04SR22277).”
·
It is reported that a National Defense Authorization
Act Section on “Quality Control in Procurement of Aviation
Critical Safety Items” may be of concern and the implementation
phase is closely approaching.
For added background on this, see the earlier material from
the Joint Aeronautical Commanders’ Group at Wright Patterson and
in particular the August 28, 2002, memorandum issued by that
Group—which includes the military departments, NASA, FAA, etc..
Comment:
Critically of safety in aircraft parts (civilian/military) is
of paramount importance at this time.
Who is tracking this within your company?
See prior/current discussions on UIDs!
·
Finally, DFAS announced on January 20, 2004, that it
had “recently completed a Business Case Analysis for its
Disbursing function as part of its corporate transformation
process” and determined to become a “value-based
organization” rather than conducting an A-76 competition.
Future
Speaking Topics Include—
·
ISM San Fernando Valley
Affiliate and ISM Phoenix Affiliate, "How 'Baseball
Arbitration' will help in Negotiating Sole Source Procurements--or
how to get through Impasse."
·
California State Bar
Business Law Conference, “Drafting Critical Dispute Resolution
Clauses” and “Utilization of ADR in Franchise and Securities
Industries.”
·
NCMA Dayton Chapter,
“Hot Topics in ADR.”
·
ISM 89th Annual
International Purchasing Conference, Philadelphia, Pennsylvania,
“An Effective Dispute Resolution Process for Subcontractors” and
“Update on DoD Transformation Initiative."
·
NCMA World Congress,
Orlando, Florida, “Designing the Ultimate Dispute Resolution
Clause for Enhanced Subcontractor Relationships.”
Charles E. Rumbaugh
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