DOD troubles reshape GovWorks

DOD restriction forced acquisition agency to evaluate how it operates, follows rules

Agency had to move quickly

The Interior Department’s Acquisition Services Directorate, formerly GovWorks, had to spread its business to more civilian agencies because its biggest customer, the Defense Department, placed a tough restriction on the assisted acquisition service agency almost a year ago.

John Nyce, associate director of the Acquisition Services Directorate, said one of his goals before the restriction had been to expand the agency’s customer base. “You might say the restriction just helped us to implement that strategic plan. Not exactly the way I wanted to, but it did.”

Before the restriction, DOD represented about 60 percent of the agency’s business, Nyce said. The amount of DOD and civilian business is now about equal.

In May 2007, DOD officials restricted defense agencies from placing orders worth more than $100,000 with the directorate. DOD’s inspector general found major problems in how the agency handled DOD procurements and ordered it to stop working with the directorate.

That restriction “forced us to go out and talk to our civilian clients to see if we could get more business,” Nyce said.

Nyce said he and his staff members are meeting with potential customers to talk about the details of what happened as they try to regain trust.

The purchasing agency broke even in fiscal 2007, despite the restriction, Nyce said. The agency handled more than $1.5 billion worth of contracts that year, even though that amount was lower than in 2006.

— Matthew Weigelt

Nearly a year ago, John Nyce recognized a thin silver lining in a hard-hitting restriction placed by the Defense Department on GovWorks, the assisted acquisition services agency run by the Interior Department. The restrictions gave the agency an opportunity to reinvent itself.

Nyce now sees GovWorks, recently renamed Acquisition Services Directorate, as a stronger purchasing outfit that complies with DOD purchasing regulations and focuses on its primary areas of acquisition expertise.

“We have re-evaluated who we are and what we’ll do in the future,” said Nyce, the agency’s associate director. “And we’re not going to be everything to everybody.”

In May 2007, DOD officials slapped a $100,000 spending cap on GovWorks because DOD’s inspector general found that the services agency had not followed DOD purchasing policies. In fiscal 2005, contracting officials at GovWorks failed to adequately document that the prices DOD paid for goods and services were fair and reasonable.

GovWorks officials also used expired funds in violation of DOD’s bona fide needs rule, which prompted DOD to issue the restriction. In a separate report released in March of this year, Claude Kicklighter, DOD’s IG, documented similar problems involving expired funds and inappropriate competitions for the department’s contracts. Those problems occurred in fiscal 2006 and 2007.

However, in a third audit, auditors found the acquisition agency had made substantial improvements in meeting DOD procurement regulations, Kicklighter wrote.

In March, Shay Assad, DOD director of Defense procurement, acquisition policy and strategic sourcing, lifted the restriction on GovWorks. He cited improvements in the agency’s operations, including the proper use of the department’s funding.

“I have determined that it is necessary and in the interest of the Department of Defense to use” the directorate’s services, Assad wrote.

During the nine-month restriction, business dropped by 30 percent.

Nyce said agency officials are checking  funding documents monthly, particularly purchases using money from the previous year, to make sure purchases are tied to a bona fide need.

Many people are watching the agency’s work. Nyce said a team of officials is checking departments’ funding certifications. A contracting officer is reviewing the specificity of the transaction requirements and officials from other offices are doing additional quality checks. Nyce said he created a new position to make sure the agency stays on course.

DOD’s restriction forced the directorate to reconsider what’s important as it regains its footing and tries to win back customers. In the past, the agency would have tried to buy anything a department wanted, but Nyce said that philosophy has changed.

“In the future, we are going to concentrate on what we feel are our core competencies,” he said. The directorate knows how to buy information technology, supplies and equipment, and its experts can award research and development contracts.

“We are not in the business to buy airplanes and ships,” for example, Nyce added. 

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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