Readers of the blog and Friday Flash know that the Coalition recently released its white paper, “Overview of Approaches to Acquisition Management Reform and Digital Transformation.” Recognizing that we face a new year with transitions of all kinds, the Coalition believes now to be the opportune time to articulate new thoughts about the acquisition environment and how the government could use its existing authority to improve the system.
Briefly, our overview identifies the reality that the nation faces multidimensional, asynchronous threats. Adversaries targeting companies, individuals, and government agencies and their partner organizations are waging their battle in Cyberspace, in private companies, and in our financial institutions. China, the locus of many of these assaults on our systems, represents the most challenging national security threat to the United States. China is a significant source of supply for critical resources; it is the source of rare earth metals needed for our nation’s advanced technology; and it is improving its capacity to increase its speed of innovation. Thus, with China emerging as an adversary/competitor/supplier and the unprecedented speed of global technological development, the overview recognizes that improving acquisition improves national security and, ultimately, allows the United States to maintain the technological edge needed to secure the nation.
Based on the foregoing, we have concluded that the United States may no longer view acquisition reform as an isolated exercise to improve the way it procures. Rather, the US needs to evolve the system to incorporate the flexibility necessary to facilitate access to innovation. Part of this effort involves better leveraging market incentives to enhance the attractiveness of the government market thereby fostering needed growth in the capabilities of the domestic industrial base.
To address current and emerging government challenges, the overview proposes three areas of opportunity that can be achieved effectively without legislative effort. Specifically, the government can now:
- Improve the data upon which acquisition decisions are made, and leverage data to measure the effectiveness of systems and the programs supported by it;
- Continue the evolution of the acquisition system from a Cold War bureaucratic process to a system that is nimble and adaptable to embrace change, that tolerates risk, and that delivers scalable capabilities quickly; and
- Empower the acquisition workforce with meaningful support, development, and resources.
Utilization of data can assist government in managing programs. Specifically, government can identify performance benchmarks, such as:
- Expected processing time
- Total Cost of Acquisition (TCA) to include all direct and indirect costs (solutions, alternatives, impacts) for the approach taken
Through the use of transparency mechanisms, all stakeholders can remain engaged in active management of a given program, identifying problems early on, and executing value-based remediation or termination where warranted. So too, digitization of the government’s supply chain provides the government data to understand, manage, and enhance its supply chain.
Our overview recognizes that evolving government acquisition is not susceptible to a “flash-cut” from old ways of purchasing and management to new ones. In the same way that an organism might repair itself while carrying on the processes of life, the government must continue to operate. The government could start by culling duplicative regulations and instituting rigorous control around the process of generating regulations. It also could impose on itself the discipline to review the utility of regulations periodically and improve the conduct of necessary audits.
Finally, the overview proposes reinvigorating support for the acquisition workforce. In addition to providing the full resources necessary for contracting officials to conduct their work, the government should revisit efforts to support education on a continuing basis, evolving it as the needs of the agencies and the offerings in the market evolve. This process should identify needed critical skills coupled with developing a strategy to recruit and educating employees on a continuing basis in areas where specialization is needed.
We intend the overview to be a starting point for discussion. We are seeking to promote ideas for reform and innovation that build on the studies undertaken and are susceptible to quick implementation. To that end, we have suggested the appointment of a leader to execute the ideas articulated. The Coalition, of course, stands at the ready to assist in such an effort, and hopes the overview sparks additional ideas for improvements that support the missions of agencies served by our members.
One Week CR Awaits Senate Vote to Avoid Shutdown
The General Services Administration (GSA) has announced on Interact that they plan to implement the Verified Products Portal (VPP) into the Multiple Award Schedule (MAS) in April 2021. This week, GSA provided a demonstration of the VPP to the Coalition’s members. Click here for the slides. According to GSA, “the VPP will be a manufacturer and wholesaler-facing portal containing authoritative product content, including standardized manufacturer names; part numbers; and specifications, including images, product videos, and pdf documents for commercial off-the-shelf (COTS) products.” The VPP will also collect supplier authorization information so that some authorized resellers do not have to provide letters of supply. By doing so, the tool is expected to also reduce the risk to buyers of purchasing counterfeit or grey market products.
According to GSA, the implementation of the VPP will allow the Federal Acquisition Service (FAS) to quickly and easily identify unauthorized products both pre- and post-award. Once fully implemented VPP will have the following benefits:
- Ensure Original Equipment Manufacturer (OEM) products are accurately represented in GSA ecommerce platforms.
- Eliminate variability among identical products through standardized catalog data coming directly from the manufacturer or a trusted source.
- Improve the customer’s buying experience by providing rich syndicated product content such as videos and product manuals.
- Allow manufacturers and wholesalers to authorize and deauthorize products and resellers in near-real time to protect against supply chain risks and ensure product and reseller authenticity.
- Reduce the burden on resellers to provide letters of supply and product specifications (potentially automating the letter of supply in the future).
- Facilitate Supply Chain Risk Management (SCRM) activities to enhance the security of GSA’s supply chain, to include verifying that products are compliant with Section 889 and Trade Agreement Act requirements.
GSA is accepting comments on the VPP concept at VPP@gsa.gov. See the full GSA Interact post here.
The General Services Administration (GSA) posted a notice on Interact highlighting the Office of Management Budget (OMB) announcement that 36 Best-In-Class (BIC) solutions, including HCaTS, OASIS, and GSA SmartPay, have successfully completed their annual reviews and will retain their BIC designations.
Agencies are encouraged to purchase from BIC contracts to meet their Spend Under Management (SUM) goals set by OMB. The BIC designation means that the solution has a commitment to sustain the category management principles that help agencies operate more efficiently, maximize savings and reduce contract duplication. According to GSA, BIC solutions share management practices that help agencies meet small business goals, achieve sustainability goals, and realize cost avoidance.
OMB and the Government-wide Category Management Program Management Office (GWCM PMO) review BIC designations annually. One page summaries of how each solution supports category management principles can be found here.
House Passes 2021 NDAA
Earlier this week, the House passed the 2021 National Defense Authorization Act (NDAA) by a vote of 335 to 78. Politico reported that the Senate is also expected to the pass the NDAA. The President has threatened to veto the bill, but Congressional leaders believe a strong vote would reduce the chance of a veto. The NDAA authorizes more than $741 billion for defense spending in fiscal year 2021.
CMMC Rule Takes Effect
FedScoop reported that on December 1, the Cybersecurity Maturity Model Certification (CMMC) final rule took effect after a 60-day comment period. This allows CMMC to be implemented into Department of Defense (DoD) contracts. As such, contractors will be required to be certified on the CMMC five-level scale of cybersecurity maturity rather than through self-certification.
DoD will release the requirements into Defense contracts over the next five years, which will give contractors time to be assessed and become certified. There are some requirements that will take effect sooner. For example, contractors who work with controlled unclassified information, will have to submit a self-assessment on their current cybersecurity posture. DoD has said that the Enterprise Mission Assurance Support Services (eMASS) will store all information on contractors’ assessments.
This week, the Biden transition announced plans to nominate retired General Lloyd Austin as Secretary of Defense and Denis McDonough for the Secretary of Veterans Affairs.
On December 7, Politico reported that retired General Lloyd Austin was selected to serve as Secretary of Defense by President-elect Joe Biden. Austin ran U.S. Central Command, responsible for all U.S military operations in the Middle East, before retiring in 2016 after 41 years of service. Austin also previously served as Vice Chief of Staff of the Army. Austin was serving as the last commanding General of U.S. forces in Iraq during this time. Since Austin has not been out of the military for the required seven years, he will need a waiver from Congress in order to become the Secretary of Defense.
Politico also reported that President-elect Joe Biden will nominate Denis McDonough for Secretary of Veterans Affairs. McDonough previously served as former President Barack Obama’s Chief of Staff from 2013 to 2017. Before joining the Obama administration in 2008, McDonough was a longtime Capitol Hill staffer. In the White House, he served in many foreign policy roles before becoming Chief of Staff. Recently, he has been teaching at the Keough School of Global Affairs at the University of Notre Dame.
President Signs “America First” Vaccine Executive Order
This week, the President signed an Executive Order (EO), “Ensuring Access to United States Government COVID-19 Vaccines.” The EO states that American citizens will receive priority for COVID-19 vaccines procured by the Federal Government. After ensuring American citizens have access to the vaccine, the Department of Health and Human Services and the Department of State, in coordination with other agencies, will facilitate international access to the vaccine.
Legal Corner: Medicare Links Part B Payment Rates to International Prices: Most Favored Nation Model
By Alice Valder Curran, Beth Halpern, Stuart Langbein, Beth Roberts, Christopher H. Schott, Kathleen A.Peterson, Samantha D. Marshall, James Huang, James M. Deal, and Boyd Jackson with Hogan Lovells, LLC.
The Healthcare Corner provides the healthcare community with an opportunity to share insights and comments on healthcare issues of the day. The comments herein do not necessarily reflect the views of The Coalition for Government Procurement.
On November 20, 2020, the U.S. Centers for Medicare & Medicaid Services (CMS) issued an interim final rule (IFR) with comment period implementing a mandatory “Most Favored Nation” demonstration model (MFN Model) to test Medicare reimbursement based on international reference prices. Comments are due no later than January 26, 2021. Initially, the Model will focus on approximately 50 Medicare Part B drugs or biologicals (collectively, drugs) with the highest spending during the preceding year, with additional drugs potentially added in subsequent years without removing a commensurate number of drugs. Part B payment will be made for such drugs based on an “MFN Price” that reflects the lowest per capita Gross Domestic Product (GDP) adjusted price of any non-US member country of the Organisation for Economic Co-Operation and Development (OECD) with a GDP per capita of at least 60 percent of the United States. CMS estimates that the Model will reduce Medicare fee-for-service spending by approximately $85.5 billion over the demonstration period.
Click here to read the full article.
Healthcare Spotlight: Senate Hearing on Vaccine Distribution to Veterans
On Wednesday, the Senate Committee on Veterans’ Affairs held a hearing on the VA’s COVID-19 response and plans to distribute the vaccine to veterans nationwide. To date, the VA has ordered approximately 73,000 doses of the vaccine to ship to 37 medical facilities in the coming days. Given that the current vaccine from Pfizer is provided in 2 doses, the current order is expected for approximately 36,500 of an estimated 7 million veterans.
This week, the VA released a list of FAQs about the vaccine for veterans. However, the VA has not released detailed plans yet about how it will distribute the vaccine over the coming months. Dr. Richard Stone, Executive In Charge at the Veterans Health Administration, explained in his testimony that those plans are forthcoming and have been submitted to the CDC for approval. However, the VA will first need for the FDA to approve one or more COVID-19 vaccines, and the CDC’s Advisory Committee on Immunization Practices (ACIP) will need to issue their recommendations for how to give vaccines to specific groups of people.
In his testimony, Dr. Stone also acknowledged the logistical challenges that the VA has in distributing the vaccine, especially to rural areas. According to the Military Times, he described it as a “Herculean effort” and said that, “This will be a long process for us to reach all 7 million veterans who we believe will want vaccination from us, as well as all 400,000 employees of the agency… We anticipate weekly distribution, and it remains to be seen how robust that weekly distribution will be.”
Centers of Excellence Now Law
On December 3, President Trump signed the IT Modernization Centers of Excellence (CoE) Program Act into law. The Act requires GSA to establish an “Information Technology Modernization Centers of Excellence Program” to facilitate the adoption of modern technology by executive agencies on a reimbursable basis. It also The use of commercial items for the CoE program are encouraged. In addition, GSA will work with the Department of Homeland Security to ensure that the technologies facilitated by the program provide sufficient cybersecurityalso expected to give the federal government the opportunity to see the impact it has as technology continues to change and advance. Read more from FedScoop here.
On December 8, Federal News Network reported on how the Air Force is taking new innovative approaches in acquisition. Maj. Gen. Cameron Holt, Deputy Assistant Secretary for Contracting, Office of the Assistant Secretary of the Air Force for Acquisition, Technology and Logistics, is worried that acquisition processes will be adversely affected by increased oversight and compliance requirements. Holt and other Defense Department acquisition experts see these increased regulations as a step backwards from when Congress gave the Air Force and other Defense agencies more flexibilities through other transaction authorities (OTAs), Commercial Service Offerings, and mid-tier acquisition provisions. Holt said that there must be a drive in “unity of effort rather than just unity of command.” He added that there has been recent progress in driving unity of effort across functions and organizations.
The Air Force is taking an innovative approach through their focus on digital acquisition, in which open systems architecture, digital engineering, and agile software development are utilized. The agency is looking to create an environment using high speed tools where the prime and subcontractors operate. This environment would leverage data and technology to drastically reduce the time that current acquisition processes take.
The Air Force is also rethinking current regulations, including funding for operations and maintenance of systems. Will Roper, Assistant Secretary of the Air Force for Acquisition, Technology and Logistics, is writing a new memo alongside the Air Force General Counsel and Financial Management Offices to bring more flexibility to one-year O&M funding, known as 3400 money. Leaders from other agencies, including the Army, agree that eliminating single-year funding is a needed change. The Air Force and other agencies are continuing to look for ways to innovate the system and eliminate inflexibility.
Congress Concerned about VA SES Moving to Civilian Leadership
A number of Senators are worried about the “burrowing” of some of the political appointees at the Department of Veterans Affairs (VA). Burrowing is when a political appointee, who does not have a previous civil service career, seeks conversion to a civil service career after the political appointment has ended. Senators have requested a list of political appointees at the VA who have converted to career positions in the past few years. This request was made last week to 61 agency heads by the chairmen of 24 House committees and subcommittees.
Senators in the VA Committee initially became concerned with the transition of Dan Sitterly from his position as VA’s assistant secretary for human resources and administration/operations, security and preparedness to joining the VA’s Office of Accountability and Whistleblower Protection. While Sitterly spent 11 years as a member of the Senior Executive Service (SES) before taking political appointment at the VA, Senators are concerned about burrowing in this case and others. However, there is a statute that allows former career members of the Senior Executive Service, who take a presidential appointment, to be reinstated back to the SES, so long as they do not leave political appointment for reasons of “misconduct, neglect of duty or malfeasance.” Read the full Federal News Network article here.
DISA Publishes Three-Year Strategic Plan
According to Federal Computer Week, the Defense Information Systems Agency (DISA) has refreshed its three-year strategic plan, which emphasizes cyber defense, the role of cloud, and enterprise services. The strategic plan, which was released on November 30, is designed to provide a framework for how DISA will acquire products and services in the coming years. Technology solutions that were formed for pandemic response, including the cloud-based internet isolation (CBII) browser, are foundational to DISA’s strategy. CBII was DISA’s first successful other transaction authority (OTA) acquisition that moved to production this year. The browser helps to protect the Defense Department’s network from cyber vulnerabilities due to web browsing.
The strategic plan also stresses the need for modernized infrastructure. In fiscal year 2021, the agency plans to create a capability to improve end point security through user activity monitoring for Fourth Estate organizations. DISA also plans to make strides in its work to become a single service IT provider for defense agencies and field activities through its Fourth Estate Network Modernization initiative during 2021. The Fourth Estate initiative combines increased cybersecurity and cloud needs. The strategic plan states that DISA intends to improve daily IT operations by 2025. According to the strategy, 800 IT government personnel will be onboarded over the next six years. The full plan can be found here.
Off the Shelf: The Future of Sustainable Procurement
Schooner’s recent October 2020 NCMA Contract Management article, “Warming up to Sustainable Procurement,” highlights the opportunities and implementation considerations around sustainable procurement.
He makes the case for the acquisition workforce embracing sustainable procurement as a cost effective, long term investment for government. Schooner explains how evaluations can be structured to account for sustainability in the services and products acquired by the government.
In addition, Schooner highlights the variations in procurement policy across the political spectrum and how those difference may manifest post-election.
Click here to listen to the interview.
Proposed Rule on Reverse Auctions
The Federal Acquisition Regulation (FAR) Council released a proposed rule which establishes guidance for agencies using reverse auctions. The proposed rule includes:
- Guidance on when reverse auctions are appropriate
- When reverse auctions should not be used
- A requirement for contracting officers to document that the reverse auction is cost effective
- A requirement for contracting officers to document the reverse auction for future reference
- Guidance for contracting officers when a reverse auction receives one bid
The Coalition plans to submit comments in response to the proposed rule which are due on February 5, 2021. Please contact firstname.lastname@example.org close of business on Friday, January 15th if you have any comments that you would like included in the Coalition’s submission.