A newly proposed rule that would require contractors to more carefully track their employees’ potential conflicts of interest would be hard to administer because of the vague guidance in the rule, according to a new analysis.
For the first time, contractors providing agencies with acquisition advisory services would have to get detailed disclosures of financial and personal matters from their employees under the proposed rule. The company would then monitor which employees it assigns to a contract to avoid any personal conflicts.
But what information is necessary for contractors to gather? No one’s exactly sure.
“The proposed rule provides little guidance,” according to a legal analysis of the rule by the Venable law firm.
Venable's analysis, which digs into the possible effects of the conflicts rule, is filled with legalese, but several statements stand out:
- “The proposed rule illustrates the inherent complexities of efforts to more closely regulate government contractors.”
- “Many of the issues are unclear and potentially require government contractors to seek far more personal and private information from employees than is usual in the private sector.”
- “The noncompliance provisions of the proposed rule provide harsh sanctions that may cause such government contractors to compel their employees to provide otherwise unnecessary personal and private information.”
Venable notes that the Office of Government Ethics has a relatively clear description of the financial interest that a federal employee needs to have, which includes disclosures about employee’s spouse and any organization in which the employee serves as an officer.
“Depending on the perspective of the contractor interpreting the proposed rule, the contractor’s covered employees might be subject to a broader or narrower range of imputed interests than federal employees,” according the analysis.
Posted on Nov 19, 2009 at 11:38 AM0 comments
The hot topic these days is insourcing. Many observers have dubbed the Obama administration as one intent on insourcing government work, just as the Bush administration was known to outsource that work.
With the insourcing debate, Daniel Gordon, the nominee to be the administrator of the Office of Federal Procurement Policy, will have to wrestle with the Office of Management and Budget Circular A-76 and its public-private competitions for federal work.
The Senate Homeland Security and Governmental Affairs Committee's questionnaire for Gordon spanned competition for contracts, acquisition workforce issues, strategic sourcing and contingency contracting—a few of the issues he’ll face if the Senate confirms him.
When asked about A-76, here’s what Gordon had to say:
1. Under OMB’s Circular A-76, commercial-type functions are competed between public and private sources in a process commonly referred to as competitive sourcing. Under the last administration, OMB touted billions of dollars in savings achieved under the competitive-sourcing initiative, yet many have questioned the savings, and both federal workers and the private sector have complained about the fairness of the process.
a. In your view, how should the government decide which services should be provided by government employees and which would be appropriate to be potentially provided by contractors?
DANIEL GORDON: "Contractors perform very important functions for the government, and I expect the government to continue to benefit from their services. That said, we need to ensure first that all inherently governmental functions are performed only by federal employees; and second, that agencies not outsource critical functions needed to protect the agencies’ internal capabilities and capacity to maintain control of their operations. For functions that an agency determines could be performed by either the public or the private sector, we need processes that are transparent and fair to all sides, including both contractors and federal employees."
b. How do you intend to balance the requirements under Circular A-76 with current insourcing initiatives?
GORDON: "I believe that the two are compatible. The circular provides guidance on conducting public/private competitions, but it recognizes the government’s management authority to identify functions that need to be performed by federal employees. Moreover, the recent statutory direction on insourcing (which, of course, would override the Circular, if there were a conflict between them) reinforces the government’s authority to have work performed by federal employees when, as a management decision, agencies determine that that is necessary."
2. GAO has reported that federal agencies have not developed comprehensive cost estimates associated with public-private competitions under Circular A-76. For example, in a recent review of competitive-sourcing practices at the Department of Labor (DOL) (GAO-09-14), GAO found that DOL reports of savings from competitive sourcing were unreliable. In its estimates of savings, DOL excluded a number of substantial items, including the time in-house staff spent on competition activities, pre-competition planning, transaction costs, and post-competition oversight. GAO recommended that OMB require agencies to systematically report all costs associated with competitive sourcing.
a. Do you agree with GAO’s recommendation?
GORDON: The credibility of public-private competitions under Circular A-76 depends on, among other things, the reliability of the calculation of the cost of performance by each competing side and accurate reporting on costs and savings following a competition. In my work at GAO, including as counsel to the congressionally mandated Commercial Activities Panel, I learned of the challenges in calculating each side’s costs in a fair and defensible way. For these reasons, I think the GAO’s recommendations should be carefully considered.
b. What steps will you take to ensure that agencies keep track of time and expenses related to conducting cost comparisons in-house?
GORDON: "If confirmed, I would work to ensure that agencies have adequate guidance in this area."
c. What steps will you take to ensure that such costs are taken into account in projecting savings from the A-76 process?
GORDON: "As in response to the prior question, if confirmed, I would work to ensure that OMB has provided adequate guidance to agencies in this area."
3. Many A-76 competitions drag on for years, putting federal employees in limbo about their future and undermining agency morale. What will you do to ensure that A-76 competitions are completed in a timely manner?
GORDON: "The length of A-76 competitions is a subject of concern that I am very familiar with, from my work at GAO, including in connection with the Commercial Activities Panel. I would note that lengthy competitions – like doubts about the fairness of the A-76 process itself – have a negative impact on the private sector as well as on federal employees. If confirmed, I would work to ensure that this concern is adequately addressed."
4. Do you believe that there is new work or work currently performed by contractors that should be subject to public-private competition for possible insourcing? If public-private competitions result in the greatest efficiency for work traditionally performed by government workers, should OMB give federal employees the opportunity to win through competition work that they can perform more efficiently than contractors?
GORDON: "I recognize that the provision in Circular A-76 allowing work to go to the private sector, but not the public sector, without a competition if it is defined as “new” may raise concern, if for no reason other than that one would want to be sure that the “new” label is being used appropriately. As I hope is clear from my answers to other questions, I believe that the prior Administration may have gone too far in its reliance on contractors, and I support the President’s direction to clarify when outsourcing is and is not appropriate. With regard to the specific approach raised in this question (that is, conducting public/private competitions about new work), I would want to consult with others and reflect before reaching a recommendation."
Posted on Nov 12, 2009 at 1:27 PM0 comments
Everyone in or even remotely near the government acquisition community will quickly cite the size and skill (or lack thereof) of the acquisition workforce as a major factor contributing to problems in federal contracting. But one lawmaker has a different idea.
“We must also consider current staffing levels within in the [Office of Federal Procurement Policy] itself. In many ways, they mirror the problems of the overall acquisition workforce,” said Sen. Susan Collins (R-Maine), an acquisition workforce advocate and ranking member of the Senate Homeland Security and Governmental Affairs Committee.
“OFPP has broad responsibilities and a staff of roughly a dozen, which appears to me to be simply inadequate. This lack of staffing may explain why OFPP has become increasingly reactive to procurement failures instead of working proactively to prevent them from occurring in the first place,” Collins said at the Nov. 10 confirmation hearing of Daniel Gordon, President Obama's pick for the OFPP administrator job.
OFPP staff is housed on the seventh floor of the New Executive Office Building, across the street from the White House. Beyond a cramped waiting area, a few staff offices are lined along a short hallway. And it isn't unusual to see lights on late at night as staffers work well past normal business hours.
Collins warned Gordon that she doesn’t want a huge, new bureaucracy at the procurement policy shop. But she wants to make sure the OFPP staff can handle the work it's been given.
Government procurement spending has increased in large steps in recent years. Between fiscal 2000 and 2008, spending expanded by 163 percent, from $205 billion to $539 billion. Meanwhile, contracts are becoming more complicated, especially as the systems and technology the government is buying more of are more complex than ever.
Furthermore, contracting has the spotlight. Its reformation has grabbed the attention of higher ranking officials than in the past, including Obama, who issued a reform memo in March. And he wants to see a lot of reforms done quickly.
Those things have tossed al lot of work to the OFPP staff, beyond what was already there.
“It’s an issue that, if I am confirmed, I welcome the opportunity to look into," Gordon told Collins. "I will tell you, I am committed to ensure that OFPP has adequate staff with the right skill set.”
Gordon needs the committee’s approval and the vote of approval by the full Senate in order to get his own office—across the street from the OFPP staff, in the large Old Executive Office Building, next door to the White House.
Posted on Nov 10, 2009 at 8:02 AM0 comments
Down in humid Mississippi, state and local officials got some visitors from Washington who are making some of them feel uncomfortable: employees of the Government Accountability Office.
John Needham, director of acquisition and sourcing management at GAO, traveled recently to the Magnolia State to check out how it was spending $1.7 billion of the federal government’s American Recovery and Reinvestment Act stimulus funding.
Needham found that tension is thick -- so thick, in fact, that a state fiscal official was sweating during their first meeting, he said at the Coalition for Government Procurement's Fall Conference on Nov. 4.
In another meeting, Mississippi’s speaker of the House, William McCoy, walked into his meeting with Needham and asked whether he had any indictments from GAO.
McCoy was teasing, Needham said, but the joke calls attention to the pressure state officials feel in handling federal dollars.
Needham heard from many officials that they want to follow the rules and not go to jail.
But stimulus money has some issues that could trip up people who get it. They have to balance spending the money quickly — as is the point to stimulate the economy — and awarding it properly, Needham said.
“There’s tension and states are feeling it in a very big way,” he added.
Getting billions of dollars from the feds may be a dream come true to a struggling state but, Needham said, “Be careful what you wish for.”
There may be one thing that might be reassuring to the states: GAO can't prosecute. It's only an oversight agency.
Posted on Nov 06, 2009 at 9:05 AM0 comments