DoDI Defense Acquisition of Services What's new? GAO and DoDIG Reports Say. Mr. Lawrence Floyd Dr. Adam Stroup. Services Acquisition

Transcription

1 DoDI Defense Acquisition of Services What's new? GAO and DoDIG Reports Say Mr. Lawrence Floyd Dr. Adam Stroup Services Acquisition

2 Agenda State of Services Acquisition DoDI Services Acquisition Policy DoDI Revisions (NDAA FY17) GAO and DoDIG Findings 2

3 Changing Landscape What was once performed by uniformed military may now be provided by contractors Contractors perform vital services in support of the entire DoD mission and team Maintain combat equipment Move forces to and from combat operations Provide life support at contingency bases Sustain facilities and test ranges Provide health care services Etc. 3

4 FY16 Spend - DoD as Contracting Dept Services = 50.3% of Obligations Services ($148.7B) 50.3% 49.7% S&E ($147.0B) Electronic & Comm Svcs ($16.1B) 11% Equip Related Svcs ($17.7B) 12% Medical Svcs ($13.3B) 9% Construction Svcs ($10.2B) 7% Transportation Svcs ($5.7B) 4% Logistics Mgmt Svcs ($4.8B) 3% Knowledge Based Svcs ($33.7B) 23% Facilities S&E ($10.4B) 7% Weapons & Ammo ($20.4B) 14% Sustainment S&E ($22.1B) 15% Clothing, Textiles & Subsistence S&E ($6.5B) 4% Miscellaneous S&E ($.05B) 0% Acft, Ships/Subs, Land Vehicles ($56.5B) 39% Research & Development ($23.2B) 15% Facility Related Svcs ($24.0B) 16% Electronic & Comm Equip ($31.2B) 21% Data from Business Intelligence Tool; all services obligations where DoD is contracting department, 19 Oct 16 Note: these numbers have not yet been certified

5 Historical Services Spend by MILDEP Billions $220 $200 $180 $160 $140 $120 $100 $80 DOD Total Army Navy AF 4th Estate $60 $40 $20 $- FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Data from Business Intelligence Tool; all services obligations where DoD is contracting department, 19 Oct 16 Note: FY16 numbers have not yet been certified

6 DoDI Purpose Establishes policy, assigns responsibilities, provides direction Implements management structure for acquisition of services Authorizes decision authorities to tailor procedures Mandates data collection to provide management information Incorporates and cancels Enclosure 9 of DoDI , (8 Dec, 2008)

7 DoDI applies to: DoD acquisition of services from private sector entities (total est.$ > simplified acquisition threshold) Acquisition of all advisory and assistance services in support of research and development or construction activities categorized within the knowledge-based services portfolio group

8 DoDI doesn t apply to Services: Managed and reviewed as part of defense acquisition programs and IT programs Meeting Major Automated Information Systems thresholds (including software as a service) Included in non-major programs whose primary purpose is to provide capabilities, goods, or systems in accordance with DODI Listed in FAR (personal service, below SAT, etc.)

9 DoDI doesn t apply to Services: (cont.) Included in classified, cryptologic, and intelligence projects (except to the extent practical at discretion of senior officials) From DoD Federally Funded Research and Development Centers In direct support of declared overseas contingency, humanitarian or peacekeeping operations as defined in FAR Required to respond/recover from an emergency or disaster (Presidential declaration)

10 DoDI Revision FY17 NDAA directs revision of DoDI DPAP SA working group formed (first met March 16 th ) Include Software as a Service, FFRDCs and UARCs More services dollars under management DoD CIO keep Enclosure 7, IT Services (due to the large number of questions that the CIO s office receives), requires extensive revisions (led by the DoD CIO) crosswalk or alignment between the Federal category management structure and the DoD SA taxonomy SAW required >$500 million as provided by the DAU or other DAU-approved provider before seeking acquisition strategy approval. 10

11 GAO and DoDIG Findings TRAINING AID FOR DOD AUDITORS IN PLANNING, EXECUTING, AND REPORTING FOR ACQUISITION AUDITS (2005-ATM-001) Acquisition and Technology Management Directorate Office of the Deputy Inspector General for Audit August 2005

12 Budgeting and Forecasting for Services GAO DoD Service Acquisition. Improved use of available data needed to better manage and forecast service contract requirements GAO Recommends: Congress should consider amending reporting requirements to include estimated spending on services beyond the budget Year. GAO recommends that the Secretary of Defense and military departments revise Program Objective Memorandum (POM) guidance, coordinate efforts to forecast services, and fully comply with budget reporting. DOD concurred with the budget reporting recommendation and partially concurred with the two others, citing challenges with estimating future spending, but did not address revised guidance or coordination. GAO believes such actions are needed. 12

13 GAO High Risk Report for 2017* DOD is, by far, the single largest contracting agency in the federal government, typically accounting for about two-thirds of all federal contracting activity. GAO (and others) identified challenges DOD faces within three segments of contract management: 1. the acquisition workforce, 2. service acquisitions, and 3. operational contract support (OCS). *See 13

14 DoDIG and Performance Assessment DoDIG Army...Assessing Contractor Performance July 25, 2016 Finding Contractor Performance Assessment Reports (CPARs) officials did not consistently comply with requirements for evaluating contractor past performance Late (not prepared within the 120 day required timeframe) Did not include sufficient written narratives to justify ratings This occurred because organization-specific procedures did not ensure timeliness assessors did not understand PAR rating of evaluation factor assessors did not take CPARS Quality and Narrative Writing Training organization-specific procedures did not require reviews of PARs DODIG Air Force Past Performance Information January 29, 2016 Timeliness, training and quality checks on the PAR DODIG Navy Past Performance Information May 1, 2015 Late and insufficient narratives 14

15 DoDIG and Performance Assessment Finding for King Abdullah Special Ops Training Center (KASOTC) Facilities Services U.S. Army Central (ARCENT) and U.S. Army Contracting Command Rock Island (ACC RI) officials did not effectively maintain facilities at KASOTC. As a result, U.S. military personnel at KASOTC may be at risk of illness, injury, or death. Also, DoD may not be getting the best value for its money for the base operations services. Upon being informed, the Director took immediate action to have the facilities inspected. 15

16 Guardians of the Galaxy TRAINING AID FOR DOD AUDITORS IN PLANNING, EXECUTING, AND REPORTING FOR ACQUISITION AUDITS (2005-ATM-001) Acquisition and Technology Management Directorate Office of the Deputy Inspector General for Audit August 2005

17 Competitive Sourcing Potential Risks: Failing to develop an implementation strategy Outsourcing highly technical jobs Performing inadequate/inaccurate cost comparisons Loss of institutional knowledge Failing to retain a residual in-house capability Creating what is essentially a sole-source environment Failure to track actual performance against cost comparison predictions Failing to maintain accurate contract performance information databases

18 Services Acquisition Management Potential Risks Not using best practices identified by other program managers Not employing acquisition reform techniques Not complying with mandatory requirements of acquisition instructions (DOD 5000 series) Acquisition strategy does not give adequate consideration to various essential elements, e.g., mission need, performance assessment, technology Subordinate strategies and plans are not developed in a timely manner or based on the acquisition strategy, e.g. source selection, risk management

19 Services Acquisition Management Potential Risks Proper mix (experience, skills, stability) of people not assigned to Program Management Office or to contractor team Failure to prepare a Risk Management Plan (for either the program office or the contractor) Effective risk assessments not performed or results not understood and acted upon Required program oversight is not provided at the proper level because the program is split to avoid funding thresholds or the wrong Services Acquisition Category is assigned

20 Performance Improvement Recommendations Contingency Contracting: A Framework for Reform 2015 Update DoD Inspector General for Audit DODIG

21 What Needs to Be Done to Improve Oversight and Surveillance Quality Assurance Surveillance Plans and surveillance logs are measurable and documented to show quality and quantity of surveillance performed Robust surveillance system is essential Consider the following when evaluating amount of surveillance: Contract type; Products versus services; Criticality of product and service (Risk) The contractor s history of contract performance Incentives and remedies Perform realistic and measurable reviews and ratings of contractor performance

22 Requirements What Needs to Be Done to Improve Ensure clear, complete, well-defined requirements exist Use a contract structure that allows development of well-defined requirements for segments of work, e.g. IDIQ or ordering agreements Property Accountability Policy is to rely upon the contractor Periodic government oversight required Review records Review contractor property control systems

23 What Needs to Be Done to Improve Financial Management Maintenance of complete, consistent, and accurate contract files and accounting records is necessary to reduce the potential for violations of the Antideficiency Act [bonafide need] and to minimize the number of problem disbursements. Ensure the COR maintains a copy of all invoices and vouchers and a payment register, indicating a balance of funds remaining. Source Selection Source selection criteria are well-defined and measurable. Selection decisions are well-documented and appropriately discuss price and technical tradeoffs for competitive procurements.

24 What Needs to Be Done to Improve Contract Pricing To the extent available, DCAA and DCMA should be brought into the process early and used throughout the life of the contract. For cost-type contracts, DCAA should review the accounting system of the proposed contractors. 1) Use competitive proposed prices or previous contract prices 2) Use Independent Government Cost Estimates (IGCE) comparison to proposed price as only basis for establishing price reasonableness if 1) is not available IGCE, when used, should be detailed and well documented as to the basis for the supporting documentation.

25 What Needs to Be Done to Improve Contract Documentation The contracting officer should make sure that a complete and welldocumented contracting file is maintained for the life of the contract. The file should include the basis of the acquisition and award of the contract, assignment of contract administration, the performance of contract administration responsibilities and duties, the basic contract, and all the modifications or task orders. Contract Type Consider the procurement history and, if applicable, evaluate prior work to support the contract type decision. Contract type is important to future surveillance considerations. If a contracting officer includes more cost-type work, then more surveillance assets are required.

26 Contractor Personnel What Needs to Be Done to Improve The contracting officer should not award personal services contracts unless specifically authorized by statute. A personal services contract is a contract that, by its express terms or as administered, makes the contractor personnel, in effect, to be Government employees.

27 Services Tools Updated March 28, 2017 SAM: Service Acquisition Mall Version 5.7 deployed Online resource for performance based services knowledge and tools ARRT Suite: the suite is a collection of tools that help you build strategic elements of your acquisition documents by walking you through structured processes ARRT Requirements Definition (ARRT-RD) is a tool used to write performancebased requirements following the Requirements Roadmap process. Using the tool, you can create Performance Work Statements (PWS), Quality Assurance Surveillance Plans (QASP), & Performance Requirement Summaries (PRS). Version 4.3 deployed. ARRT Evaluation Factors (ARRT-EF): provides a simple, structured approach for developing your contract source selection factors. It walks you through a step by step process to set your factors and subfactors, describe what will be evaluated, and set their relative importance. Version 2.3 deployed. PA Performance Assessment (V2.1) Monitor and track contractor performance based on PWS Supports incentives documentation Generate contractor performance reports (CPARS inputs) CE Cost Estimation (V2.1 released March 28, 2017 ) Develop your independent government estimate (IGE) Use interview approach and cost estimation assistance 27

28 Backup Slides 28

29 Post-Award Peer Reviews Completed 83 post-award execution reviews since Oct 2013 (still discovering programs not yet on the post-award review schedule) Best Practices Pain Points Holding Services Acquisition Workshops Incentivizing contractors to exceed (SAW) and using the Acquisition needed performance levels Requirements Roadmap Tool (ARRT) Use of Time & Materials TOs and CLINs for effective performance work statements Evaluations in Contractor Performance Carefully designed incentive structures Assessment Reporting System (CPARS) that reward truly value-added without proper justification and performance results narratives; grade inflation in CPARS To the extent possible, appointing CORs reports who are trained, serve full time, and are Vendor lock and sole-sourced TOs subject matter experts Insufficient numbers of contracting For multiple award contracts (MACs), officer s representatives (CORs) allowing for on- and off- ramping of overseeing large, complex contractors, and encouraging task order procurements (TO) competition by holding industry days and providing feedback on Unfocused incentives and award fee unsuccessful proposals criteria Contractors failure to meet their small Smallest possible minimum-award guarantees business subcontracting goals *Note: Peer Reviews required by Section 808, NDAA for Fiscal Year 2008, Public Law

30 GAO Bid Protest Annual report to Congress for FY Report to Congress on overall protest filing for FY16 22% [22.56%] of protests sustained Most prevalent grounds for sustaining protests: 1. Unreasonable technical evaluation 2. Unreasonable past performance evaluation 3. Unreasonable cost or price evaluation 4. Flawed selection decision Cases filed increased 6% over FY15 1 Competition in Contracting Act of 1984, 31 U.S.C. 3554(e)(2) (CICA) 30

31 GAO Bid Protest Annual report to Congress for FY

32 SERVICES ACQUISITION LEARNING ASSETS Foundational Learning ACQ165 Defense Acquisition of Services (8 hours online) ACQ255 Services Acquisition Management Tools (~20 hours online) ACQ265 Mission-Focused Services Acquisition (28 hours, case study, classroom) CON280 Source Selection & Administration of Services Contracts (76 hours, case study, classroom) CON121, 124, & 127 Contract Planning, Execution, & Management (35 total hours of online training) CLC222 Contracting Officers Representative (COR) (32 hours online) CLC004 Market Research (2 hours online) CLC011 Contracting for the Rest of Us (2 hours online) CLC013 Services Acquisition (3 hours online) CLC106 COR with a Mission Focus (8 hours online) CLC108 Strategic Sourcing Overview (4.5 hours online) = In Development, planned for 1QFY18 As of 1Q FY17 Workflow Learning Services Acquisition Mall (SAM) Online, on-demand, services categories-based templates, performance support tools, videos Contact hours: 12,368 Average monthly sessions: 4020 Average visit duration: 4 min Average pages per visit: 3.8 ARRT-RD v4.3 Guided process for developing PWS, QASP and PRS using standard templates ARRT-EF v2.3 Set factors and subfactors and relative importance ARRT-CE v2.1 and ARRT-PA v2.1 Performance Learning WSM012 Services Acquisition Workshop (SAW) Required for Service Category (S-CAT) I (Army required for SCAT II and above) and Strongly recommended S-CAT III and above Team-based, just-in-time, acquisition-specific facilitated multi-phase workshop FY13: 41 SAWs (15 SAWs valued >$1B) FY14: 42 SAWs (17 SAWs valued >$1B) FY15: 51 SAWs (15 SAWs valued >$1B) FY16: 67 SAWs (10 SAWs valued >$1B) FY17: 16 SAWs Completed of 29 Scheduled (2 >$1B) WSC005 Source Selection (2 days-client site) WSM002 Risk Management (2 days-client site) WSM008 Developing Performance Requirements for Services Acquisitions (1 day-client site) WSM009 SOW, SOO, PWS (4 days-client site) WSM014 Acquisition Strategy Dev (3.5 days-client site) WSL001 Performance Based Logistics (3 days-client site)