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Tuesday, March 26, 2013

Eureka! IT discovers competition!

There is essential information in this article that you will only get by reading the source at the link.

Feds Stoke IT Vendor Competition
the idea of promoting increased competition among IT vendors serving the federal market has resurfaced as a cost-cutting tool.

The reasons for the lack of diversification range from technical requirements to sheer inertia. MeriTalk reported that 65 percent of respondents said they specify a manufacturer to ensure compatibility with existing infrastructure, 17 percent contend it's what management wants, 11 percent said it saves time, and seven percent said "it's just what we always do."

In a recent survey of federal IT professionals, almost half believe that adding a competitor to IT infrastructure projects drives down acquisition costs. According to MeriTalk, an online community for both government and private sector IT professionals, results of the survey it conducted indicated that federal agencies could save 20 percent of their annual budgets by adding a competitor.

That equals about $15.8 billion per year, government-wide. Also, nearly half of the agencies that use multiple IT vendors contend that supplier diversification increases network performance.

Federal agencies still fall short of having adequate supplier diversification when it comes to IT infrastructure, according to the MeriTalk survey, which was conducted in January.

Federal law requires agencies to conduct "fair and open" competition in procurement. While the law does provide exceptions when certain circumstances come into play, such as technical requirements, obtaining such exceptions is not routine.

"The government has a substantial burden to demonstrate why the normal competitive requirements should be waived," Alan Chvotkin, vice president and counsel at the Professional Services Council, told the E-Commerce Times.

Despite the law, and the acknowledged advantages of vendor diversification, MeriTalk reported that 76 percent of survey respondents said their agency's IT infrastructure procurements specify a vendor at least some of the time. 77 percent reported that their agency's IT infrastructure acquisitions are contracted directly with suppliers, rather than with a reseller or integrator, at least some of the time.

Nearly two-thirds of the 208 respondents reported that they only have one or two vendors in several key areas: network operations, client operating systems, and data center operating systems. Supplier diversity for server and storage hardware is only slightly better, the survey showed.

"It is time to redesign the critical network infrastructure to accommodate current and future network bandwidth and security needs," Robbins said. "There is a tipping point where maintaining the old infrastructure becomes substantially more expensive than acquiring new. While it depends on the agency, the average refresh cycle is estimated at four to seven years for basic infrastructure lease or purchase."

Recent research from Gartner showed that adding a second vendor to an enterprise network infrastructure would reduce capital expenditures by at least 30 percent, while only minimally increasing operating expenditures.

The issue is important given the more rapid pace of change and improvement associated with IT infrastructure vs. highways and roads, which are replaced or upgraded perhaps every 20 years or even longer. "

About 70 percent of every IT dollar spent by the federal government goes to supporting legacy systems and infrastructure, according to the General Accounting Office. "The IT network infrastructure in the federal government was designed decades ago and has evolved over the last 20 years -- increasing complexity and driving up support costs along the way," said Robbins. "Agencies typically have been very slow to modernize their networks and this is costing them millions of dollars each year."

"It's a little tricky to define exactly what constitutes 'vendor lock-in.' It could come from agency preference, the way a contract is written, or what a particular vendor is offering. Sometimes agencies accept 'proprietary' services which reduce options," said Chvotkin.

That perception was borne out by MeriTalk, which reported that agencies consider 30 to 40 percent of their IT infrastructure locked up by current vendors in a reliance on standards, systems, or technologies that would be considered proprietary.

In a genuine pursuit of system integrity, agency IT specialists may close themselves off to potentially better pricing or better performance by writing specifications that are so technically detailed that they effectively eliminate competition.

In the acquisition process, agencies need "to be sure that the legal requirements for competition are followed," Gordon said, "and not allow 'wired' procurements, whether explicitly calling for a particular name brand, or disguised with the specifications written so as to favor one company."

Gordon was among several panelists who addressed the vendor competition issue at a February 27 hearing conducted by the House Committee on Oversight and Government Reform. The committee, headed by Rep. Darrell Issa (R-Calif.), is investigating federal IT contracting, and Issa is seeking feedback on his proposed bill to reform IT procurement.

During the hearing, Professional Services Council CEO Stan Soloway said that "competition is the single most effective means by which federal agencies can drive down their IT costs while also improving performance and efficiency."

Saturday, March 16, 2013

Can stand some improvement - Iowa, USA

State procurement chief concedes ‘lax’ enforcement of bid process rules
After cancelling three bid requests because of questions about the irregularities, the director of the Iowa Department of Administrative Services conceded to lawmakers Wednesday the process “can stand some improvement.”

Among the concerns prompting Carroll’s cancellation of the bid process were complaints from state legislators and law enforcement radio vendors that bid requests for communication radios for various state agencies have been intentionally uncompetitive with unusually exacting specifications.

Too often, he said, vendors approach employees in agencies in the process of buying goods or services in attempts to gain information that would improve their chances of winning bids. So he plans to enforce the prohibition against communication between vendors and any state employees other than the designated procurement officers.

The policy applies to communication from lobbyists, lawmakers and vendors to state employees, Carroll said. Even when the questions come from lawmakers, they can be traced back to vendors, he said.

At the same time, Carroll will institute a process to allow vendors to have anonymous communication with DAS internal auditors. That communication would be made public, but without the vendor’s identity attached.

Also, there will be a two-week protest period for vendors to raise questions about the vendor-neutrality of requests for proposals or the procurement process. That protest period will occur before the contract awarded, rather than after, Carroll said.

Chairwoman Sen. Janet Petersen, D-Des Moines, asked for more information about conflict of interest policies to prevent someone from leaving state employment to work for bidding on a state contract.

“I think Oversight would be interested in putting stronger fences around that,” she told Carroll.
I don't know. These seem like such basic matters that I suspect there would be quite a bit of more room for improvement.

Wednesday, March 13, 2013

Bribery suspect in sole sourcing legislation - New Mexico

Tougher anti-bribery bill passed
The state House of Representatives on Monday passed Senate Bill 182, which tightens the state’s procurement law and makes violating it a fourth-degree felony. The measure requires the state to keep all procurement records for at least three years, allows for protesting of sole-source bids and awards, and tightens the definition of who is eligible to receive sole-source contracts.

“We need to knock out any chance whatsoever of corruption, fraud and abuse in bidding for state work,” Rue said. “In the procurement code there needs to be more transparency so illegal activities can’t be hidden from the public. There should no longer be any chance of sweetheart deals of the past,” Rue said.

“We don’t want to have a mobster mentality in the state. If there is a violation, hit the offenders with stiffer penalties.”

According to the bill, all sole-source and emergency procurements must be posted on the state’s Sunshine Portal. In addition, the penalty for violating the procurement code in transactions of more than $50,000 would be a fourth-degree felony instead of a misdemeanor.

Protests: Rare and worth it

You will gain more by reading the linked articles than accepting this rendition at face value.

Steven Maser Authors Study on the Federal Bidding Process
Steven Maser, Professor of Public Management and Public Policy, recently authored a study funded by the Acquisition Research Program at the Naval Postgraduate School and distributed for practitioners through the IBM Center for the Business of Government. It evaluated the way government agencies manage the bidding process when they purchase products or services.

What Maser found was eye-opening. In the past few years the number of bid protests, where a rejected bidder complains to the Government Accountability Office, has been on the rise although the total number is small. Maser found that in most cases bid protests were not sustained.

However, bid protests aren’t necessarily bad. Maser argues that they provide an important benchmark. "In general, the system serves a very good purpose of helping the government actually police itself," he said during an interview with Federal News Radio. The study notes that the more transparency and disclosure that’s built into the process, the less likely a bid protest will occur. It recommends that agencies should simplify the requirements they create for the products and services they need and adequately train staff members who will evaluate proposals.


Bid Protests Are Worth Their Costs, Ex-Procurement Chief Says>
Contractors on the losing side of a competitive bidding who protest to the Government Accountability Office do not hurt or game the procurement system as some critics allege, says a forthcoming study.

The percentage of contracts that spark protests is also comparatively small, while the overall impact of the protest procedure is healthy, according to Dan Gordon, the former Obama administration head of the Office of Federal Procurement Policy and now associate dean for government procurement law studies at George Washington University Law School.

In an article set for publication this spring in the Public Contract Law Journal, a copy of which was provided to Government Executive, Gordon wrote that “there exist a number of misperceptions concerning bid protest statistics that deserve attention, because these misperceptions can taint judgments about the benefits and costs of protests. In particular, even people quite familiar with the federal acquisition system often believe that protests are more common than they really are, and they believe, inaccurately, that protesters use the protest process as a business tactic to obtain contracts from the government.”

Because of the difficulty of knowing precisely how many contracts the federal government awards each year, the reports of protest to GAO -- which reported 2,353 in fiscal 2011 -- are actually overstated, Gordon says. “Between approximately 99.3 percent and 99.5 percent of procurements were not protested,” even though the trend since the 1990s has been upward. That’s because of increases in procurement spending, the article says.

“It is, of course, true that very high-dollar procurements are much more likely to be protested: the higher the dollar value, the greater the likelihood of a protest,” he said. “For a company that loses the competition for a $100 million contract, with all the bid and proposal costs that competing entails, the additional cost of filing a protest may seem minimal, so that filing a protest can be very tempting.”

Of protests making it through the full GAO process in fiscal 2010, only a handful succeeded in winning the contract, according to Gordon’s calculations.

Overall, Gordon finds the bid protest process to be positive for the procurement system, citing several advantages:

>Protests introduce a relatively low-cost form of accountability into acquisition systems by providing disgruntled participants a forum for airing their complaints;
>They can increase potential bidders’ confidence in the integrity of the procurement process if the GAO is directly responsive to participants’ complaints, leading more players to participate;
>Protests can increase the public’s confidence in the integrity of the public procurement process; --The known availability of the protest avenue empowers those in contracting agencies who face pressure to act improperly;
>Protest decisions made public provide a high level of transparency into what is happening in the federal procurement system; and
>Protests provide guidance.
Bid protesting system helps agencies police themselves
It's nothing personal, but bid protests are one way of keeping the federal procurement system honest. Congress and the Government Accountability Office have been encouraging greater transparency in contracting. One way of doing that is giving the unsuccessful bidder the opportunity for a debriefing, in which the contracting agency describes how the bidder failed to secure the contract and how they could be more successful in the future.

"What the agencies have some fear of is the more they disclose, the more a company or an attorney for that company will find a basis for a bid protest."

According to Maser, if agencies were more open at the beginning of the bidding process, the likelihood of a bid protest could be reduced. "But again, there's some risk that's inherent in this that they'll never be completely eliminated," he said.

Sunday, March 10, 2013

Past performance as responsiveness issue

In many of the posts on this blog, I have referred to past performance as a measure of prospective contractor responsibility. It may at times be the case that past performance is a measure of responsiveness. Almost always, that should be when the subject of the test of past performance is the thing solicited (including when the "thing" is a particular service, such a one in which a particular license or other certificate of qualification is necessary), not the bidder or offeror. This article is one such example. It involves the solicitation of a light, armed aircraft, to be purchased by the US Air Force for an allied country's services. One bidder is from a state, Kansas, that offers a full court press of its "Hill" representatives. The other is to be produced in a state, Florida, but is based on the design and license of Brazil, a US ally. The standard to be selected here is "best value", not lowest cost.

As always, read the story at the link for the full enchilada. This rendition is just an appetizer.

Beechcraft Protests Light Air Support Award; Kansas Lawmakers On Warpath
Depending on how you count, this marks the second or third time the military has tried to buy Super Tucanos (from Florida) only to run afoul of Beechcraft and its backers (from Kansas).

The Air Force announced that Sierra Nevada would provide 20 aircraft plus spare parts, training, and other support for $427 million. Beechcraft's bid for its AT-6 Texan II was about 30 percent less, $297 million. Beechcraft and the AT-6 scored "excellent" in five of five criteria for "mission capability," criteria ranging from the technical performance of the aircraft to the kind of training programs the company could provide. The Super Tucano only got "excellent" on four of five.

But that's only part of the story and of the scoring system. It's entirely possible for Beechcraft to get more "excellent" marks and still lose overall.

the AT-6 aircraft is still in prototype: While Beechcraft has built thousands of T-6 trainers for the US and its allies, the specific variant on offer -- the armed ground-attack version, the AT-6 -- is significantly different and not entirely proven. Competitor Sierra Nevada is hardly risk-free either, because their Florida factory has yet to build a single aircraft, but they would be making the exact same plane already mass-produced in Brazil and in service with nine nations. So there are both business and technological reasons the Air Force might have rated the Beechcraft AT-6 as higher risk.

In fact, alongside "mission capability" and price, the Air Force applies a whole third set of criteria, "past performance." The Super Tucano boasts an extensive track record of service in countries from Colombia, where it's seen combat against drug traffickers, to Mauritania. The basic T-6 has an even longer track record as the standard trainer for both the US Air Force and Navy, but only two prototypes of the specific AT-6 combat variant even exist.

If the US were choosing an aircraft for itself, the AT-6 would be a slam dunk, because it's the big brother of something the American military knows and loves. But these planes are being bought on behalf of the fledging Afghan air force, and Afghanistan's capabilities are a lot more like Mauritania's than America's. So the Super Tucano's "past performance" track record looks both stronger and more relevant than the AT-6's.

Beechcraft backers argue that the administration is tilting the scales to appease Brazil, noting that Deputy Secretary of Defense Ash Carter called Brazil's defense minister to offer his congratulations within hours of the 2012 award. Beechcraft mobilized a massive "buy American" campaign in favor of its aircraft, even though Sierra Nevada insists it would build its Brazilian-designed airplane in its (yet to be completed) Florida factory.

So the Light Air Support contract has been a rolling, multi-year disaster, a microcosm of everything that's wrong with the military acquisitions system: meddling by politicians, incompetence by bureaucrats, and legal wrangling by the contractors. (Sierra Nevada filed suit itself at one point). Meanwhile US troops and their Afghan allies are without a lightweight, low-altitude air support plane that commanders first said was necessary in August 2009.