Procurement officials explain new normal to contractors

illustration dollar sign in vise

Just as civilian agencies have been doing, the Defense Department is assuming the already tight purse strings for acquisition budgets are likely to be pulled even tighter, and procurement staff is digging in to adjust to the "new normal."

"It's not the best of times," Frank Kendall, undersecretary of defense for acquisition, technology and logistics, said at the Coalition for Government Procurement's fall conference in Fairfax, Va., on Oct. 30. "We don't know when this will end, lurching from budget crisis to budget crisis."

He said he was preparing for a long siege by cutting back on new research and development contracts, stretching out existing R&D contracts, and expecting a decrease in force readiness. The budget sequestration and the recent government shutdown, he said, had his department "in damage limitation mode."

Among the other cost-saving options DOD is employing are shared services agreements with fellow government agencies for everyday operations such as payroll, to squeeze the most out of their IT operations.

With Congress' inability to come to a spending agreement, Kendall said he was happy to have a previously dreaded continuing resolution funding his operations into fiscal 2014. Despite the pessimism, however, he remained "reasonably hopeful that the [government shutdown] convinced people it wasn't a good thing to do" and wouldn't be repeated come the next deadline in January.

Still, he predicted the budgetary woes will continue through fiscal 2016, producing three more years of uncertainty.

Kathleen Turco, chief financial officer at the Veterans Affairs Department, said operating with no official budget is the "new normal" for civilian agencies, and suggested everybody needs to move on "You shouldn't stop planning to be ready," she said. "You have to impress on your acquisition staff that this is the way it is now."

Maj. Gen. Wendy Masiello, director of contracting for the Air Force, noted that the "way it is now" has cost her 30 contracting officers in the last two years. The personnel have left in the wake of furloughs, the shutdown and uncertain budgets. Their leaving, she said, was the equivalent of losing 700 years of collective contracting experience that can't be immediately replaced.

Masiello said she has had to explain the rules of the road to new acquisition officers.

Less experienced contractors, especially those away from the Washington, haven't grasped what "no" means, according to Masiello. She said those officers might not fully get that the open spigots they had become accustomed to have become a trickle. "We had to have adult conversations to explain our situation," she said.

Both Masiello and Kendall said they were working to implement new ways to buy goods and services. Masiello said the Air Force has implemented a program to bring selected field contracting officers into the Washington area to have them see how the budgeting and acquisition process works first-hand.

The Air Force is also working to virtualize its contracting environment and unveiled on Oct. 1 a new contracting agency -- the Air Force Installation Contracting Agency, based at Wright Patterson Air Force Base in Ohio. It redesignated its Enterprise Sourcing Group and most major command Contracting Directorates and Divisions as AFICA -- a new headquarters-level field operating agency, which reports to the Office of the Assistant Secretary of the Air Force for Acquisition.

About the Author

Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.

Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.

Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.

Click here for previous articles by Rockwell. Contact him at mrockwell@fcw.com or follow him on Twitter at @MRockwell4.

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Reader comments

Wed, Nov 6, 2013

You're using LPTA source selections way too much! This means the inexperienced acquisition staff are unable to identify what technically acceptable is which drives the procurement to lowest price without adequate quality. This no way to buy complex products or services. It should stop now!

Fri, Nov 1, 2013 RonW

I hope that the new changes also go toward improving our new system data acquisition. All too often we get a product that has no data on the system but when we try to get it, the data often costs as much or more than the system. Thus we are dependent on the vendor for service and in this day of swap-a-tronics, we send many good items back, which costs money in both time and cash.

If we had enough system data like we did in the 70's and 80's then we could have the system checked and possibly repaired without resorting to shipping good/simple issue items back to a vendor to sit in a repair queue for some time only to be told, “No Fault Found” and having to shell out one repair from the limited number per month in the repair contract – for nothing.

We are doing some reverse engineering to get data, but that is expensive and with the use of COTS (Commercial Off The Shelf) equipment, a lot of proprietary parts that can not be defined.

Thu, Oct 31, 2013

As the tax base gets smaller and the president and parts of congress keep pushing spending increases, it will be interesting to see if we have a viable country in the future or if we will be speaking a language other than English.

Thu, Oct 31, 2013 DC Fed Washington DC

30 CO's = 700 years collective experience? 23.33 years on average per person sounds like a bunch of folks who were already at or near retirement anyway. I would imagine quite a few of them had one foot out the door already and should have been accounted for in a succession plan. The General's team should have had plenty of time to see the change in the CO experience level coming and planned accordingly. If her command has been caught unawares, that might be worth noting in the staff efficiency reviews.

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