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Tuesday, June 6, 2017

Own up to those mistakes; don't put lipstick on that pig

Jason Miller is an astute federal procurement journalist with Federal News Radio, with a knack for making arcane and difficult matters interesting and graspable. I don't read him regularly, but when I do I wonder why not. (Not enough time in a day comes to mind.)

Jason wrote the following article, and his respect for action of the protagonist in the unfortunate circumstances of the story is palpable, and deserved. You may just want to click the link to the article and get it from the horse's mouth. Or you can stick around with me and my rendition, and be sorry.

What happened in a nutshell is that the Department of Homeland Security solicited, and then cancelled (after protests began), a solicitation for certain technical services, known as "Flexible Agile Support for the Homeland" ('FLASH'). It was framed as a small business set-aside procurement focused on agile development methodologies. (That's another story; read it, too.)

As Jason explained in a prior article, DHS' Procurement Innovation Lab (PIL) set out to get its arms around one of the problems of federal acquisition — the need to close out low-risk, low-dollar contracts. Too often these contracts are forgotten or under prioritized, and a backlog builds up. At DHS, for example, its backlog grew to more than 350,000, and 92 percent of the contracts had been completed more than a year ago. PIL took an innovation risk and re-engineered the business processes a simplified means for contract closeout. (Look, as I said he can explain better than I, so read that article, too.)

To re-engineer the business processes, DHS first created PIL, a cross-functional team of policy, finance, general counsel, contracting and industry and then had to identify the low-risk contracts. It was all about coordinating, good communications and making sure that all the people that could be involved and are looking at the process to collaboratively understand what to do and all the appropriate steps to do it. PIL completed nine projects and is working on others.

One of the PIL's biggest experiments was FLASH.   As Soraya Correa, the chief procurement officer at DHS, described it, FLASH was meant to take care of "contracts that are typically small dollar value, generally firm fixed price, no activity over the last 12-to-24 months, final goods and services have been delivered so we know they are probably ready for close out. What we are doing is a streamlined approach trying to close them in one fell swoop.”

Correa explained, “Everything we’ve done on FLASH has been very different from what we’ve done in the past. Start with our industry day where our communications were more of a discussion where we provided the ability to do speed teaming or speed dating, but also an opportunity for vendors to meet with government officials and ask questions,” she said. “We also had experts in various business areas like small business, digital services and others so industry could come up to speed on what we were doing in those areas. It was a very interactive day that focused a little more on the business processes around bidding as opposed to focusing on the requirements that would be contained in the solicitation.”

DHS evaluated contractors based on a technical challenge where the bidders had to present to the agency how they would go through an agile development process. Correa said the bidders then had 4-to-6 hours to actually complete and then did a presentation. DHS received 114 proposals.

Now, flash forward a bit to last month when Jason reported "DHS cancels $1.5B contract for agile services".
DHS has been working on the multiple award vehicle for the better part of a year. The goal of FLASH was to give department components access to innovative methods and industry best practices to acquire agile design and development support services. DHS said in the solicitation it was seeking to develop an acquisition contract that includes the concepts from the U.S. Digital Services Playbook such as user-centered design, dev/ops, automated testing and agile. DHS’s Procurement Innovation Lab (PIL) was running FLASH.

But since November when DHS awarded FLASH to 13 companies, it faced an uphill battle to get the contract off the ground. Eight vendors who didn’t make the cut submitted protests to GAO. DHS decided to take corrective action instead of letting GAO decide the protests and reopened bidding.

Then in early March, DHS announced 11 new winners under the FLASH contract, and 12 unsuccessful bidders protested to GAO again.

The decision to cancel FLASH comes as more and more agencies are developing contract vehicles to buy agile services. Along with the DHS, the General Services Administration’s 18F organization also struggled to award and ultimately cancelled the second and third contracts under its agile blanket purchase agreement. 18F awarded 16 vendors a spot in part one of its agile BPA in August 2015.

It’s unclear what comes next for FLASH — whether DHS will try again with a new procurement or give up entirely on a separate contract vehicle for agile services and rely on an existing one like EAGLE II.
So, now for the denouement:

DHS’ internal assessment of its $1.5B agile contract: ‘significant errors and missteps’
If the Homeland Security Department’s decision to cancel its $1.5 billion contract for agile services wasn’t shocking enough, the details of the missteps and problems the agency detailed in its “motion to dismiss” left long-time federal procurement attorneys and vendors with their collective mouths agape.

“DHS has determined that cancellation of the FLASH solicitation, HSHQDC-16-R-00118, is the only viable option to address the many issues that DHS has identified as problems with the requirement and the record,” DHS lawyers wrote to GAO in the document, which Federal News Radio obtained. “The integrity of the procurement process will be served by this cancellation.”

Barbara Kinosky, managing partner with Centre Law and Consulting LLC, said she was “floored” by DHS’s honesty and the level of detail it provided.

“They did everything but name names,” she said. “It is absolutely draconian to cancel the contract at this point. It means it is so flawed that they couldn’t tweak this, or conversely they decided not to let all the protestors on to the vehicle. I suspect the whole methodology was flawed and even if they tweaked the evaluation factors it was still susceptive (sic) to more protests.”

In the motion to dismiss, DHS said the problems with FLASH ranged from the evaluation criteria and adjectival ratings to the price evaluations and best value tradeoffs to lacking the expertise in agile software services to do a proper evaluation.

“DHS has also determined that the evaluation of the offerors may have resulted in unequal treatment of offerors’ weaknesses and risks. This is partially due to the adjectival ratings that were used, but also due to the evaluation process used to evaluate and assess offerors during the technical challenge exercises,” DHS stated in its motion.

“DHS has identified issues in the price evaluation report (PER) and best value tradeoff analysis (BVTA) which do not adequately support its award decisions. The methodology by which the price evaluation team evaluated price realism is not identified in the PER. Nor is it evident in the PER itself what DHS reviewed and evaluated to determine whether prices were reasonable and realistic.”

Christoph Mlinarchik, a government contracts expert and owner of Christoph LLC, a consulting firm, said DHS’s self-assessment of the FLASH procurement resulted in a firm vote of “no confidence” due to a “comedy of errors: poorly executed technical challenge evaluations, sparse price analysis, inadequate tradeoff analysis and more.”

“The most glaring admission by DHS is that critical documents were altered after award, like the technical evaluation report and best value tradeoff analysis. These critical documents were changed after submission to the GAO as part of the official record– a flagrant foul that undermines the bid protest system,” Mlinarchik said. “In summary, DHS rolled over, showed its belly, and provided ample reasons that the FLASH procurement was a total failure.

This does not look good for DHS, but it shows courage in admitting fault and starting from scratch instead of putting lipstick on a pig.”

The decision to cancel FLASH left vendors both relieved and in disbelief. One industry source, who requested anonymity for fear of retaliation from DHS, said it was a painful process from the beginning.

As Soraya Correa, DHS chief procurement officer, said in December in a NextGov article after the initial set of protests delayed FLASH:

“We’ve got to start getting rid of that fear,” Correa said. “We’ve got to start making it OK to sometimes make a mistake, as long as you’re making an intelligent mistake. It’s OK to take a few chances, and you know what? Every now and then, we’re going to stub our toe.”

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