Budget

4 tips for sequestration savings

Charles Tiefer

Charles Tiefer, a law professor at the University of Baltimore, has some tips to save money during sequestration. (Photo: Darrell Issa/Flickr)

At least one procurement expert thinks agencies could save money under sequestration, especially if they avoid the rush to award task orders at the end of the fiscal year.

"It would be perverse if agencies, constrained by sequestration, furloughed their federal employees in March and April, only to spend some or all of the savings on the usual last-minute, capricious and nonessential task orders in July and August," wrote Charles Tiefer, a law professor at the University of Baltimore, in guidance provided to the American Federation of Government Employees. AFGE released the report Feb. 11.

Those indefinite-delivery, indefinite-quantity contracts are particularly popular for buying services and IT. But Tiefer said that instead, "agencies should plan right now to generate significant savings in their spending on service contracting through pausing or even eliminating task orders."

In addition, Tiefer recommended three other ways agencies could comply with cutbacks caused by sequestration, all by changing their approach to service contracts, where the Defense Department spent nearly $200 billion in fiscal 2011 and civilian agencies spent roughly $100 billion.

Consider partially terminating contracts and asking the contractors for ideas on how to perform the remaining work. "Managers, who might find it difficult to unilaterally devise new contract terms, could find it easier to simply revise schemes supplied by service contractors," he wrote.

Although companies will not want to see their contracts terminated in whole or in part, Tiefer wrote, they might appreciate the opportunity to provide input on how those contracts are handled.

Use deductive change orders to create more flexibility and protect agencies from lawsuits. A deductive change is used to modify certain specifications or end minor parts of a contract. It's less sweeping than a partial termination for convenience, which deletes major portions of the work and is more ripe for litigation.

Tiefer wrote that case law suggests reducing work by 10 percent may be considered a deductive change. "An agency which uses change orders to reduce work in a particular category of contracts by 10 percent would likely find its characterization of its reduction as a deductive change would be largely immune to service contractors’ litigation," Tiefer wrote.

Opt for bilateral modifications, which is when the agency and the contractor each agree to changes.

"Contracting officers and program managers have far more power than they realize," Tiefer wrote. "Most service contractors would voluntarily consent to bilateral modifications for reductions, particularly if they can help to plan new arrangements for performance of their service contracts."

The Professional Services Council, however, said Tiefer's report overlooks what is happening in the business community. Contractors are already losing revenue and laying off employees, not just furloughing them, said Alan Chvotkin, PSC’s executive vice president and counsel.

"While Mr. Tiefer laments the 'bad news' that service contractors, like any other business — or federal employee unions speaking out on behalf of their members, for that matter — are not eager to voluntarily give up revenue, he ignores the reality that significant reductions have already occurred in the federal services market," he said.

Chvotkin agreed that agencies and contractors need to communicate well to find ways to save money. But agency officials must first identify the core work they need to accomplish. When they understand the essentials, then they can determine how to save money.

In the meantime, Chvotkin said, federal employees and service contractors are crucial to the nation’s operations. Therefore, the government should not seek to put the financial burden on only one group. "This petty 'us versus them' debate must end," he said.

About the Author

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

The 2015 Federal 100

Meet 100 women and men who are doing great things in federal IT.

Featured

  • Shutterstock image (by venimo): e-learning concept image, digital content and online webinar icons.

    Can MOOCs make the grade for federal training?

    Massive open online courses can offer specialized IT instruction on a flexible schedule and on the cheap. That may not always mesh with government's preference for structure and certification, however.

  • Shutterstock image (by edel): graduation cap and diploma.

    Cybersecurity: 6 schools with the right stuff

    The federal government craves more cybersecurity professionals. These six schools are helping meet that demand.

  • Rick Holgate

    Holgate to depart ATF

    Former ACT president will take a job with Gartner, follow his spouse to Vienna, Austria.

  • Are VA techies slacking off on Yammer?

    A new IG report cites security and productivity concerns associated with employees' use of the popular online collaboration tool.

  • Shutterstock image: digital fingerprint, cyber crime.

    Exclusive: The OPM breach details you haven't seen

    An official timeline of the Office of Personnel Management breach obtained by FCW pinpoints the hackers’ calibrated extraction of data, and the government's step-by-step response.

  • Stephen Warren

    Deputy CIO Warren exits VA

    The onetime acting CIO at Veterans Affairs will be taking over CIO duties at the Office of the Comptroller of the Currency.

  • Shutterstock image: monitoring factors of healthcare.

    DOD awards massive health records contract

    Leidos, Accenture and Cerner pull off an unexpected win of the multi-billion-dollar Defense Healthcare Management System Modernization contract, beating out the presumptive health-records leader.

  • Sweating the OPM data breach -- Illustration by Dragutin Cvijanovic

    Sweating the stolen data

    Millions of background-check records were compromised, OPM now says. Here's the jaw-dropping range of personal data that was exposed.

  • FCW magazine

    Let's talk about Alliant 2

    The General Services Administration is going to great lengths to gather feedback on its IT services GWAC. Will it make for a better acquisition vehicle?

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above