DOD and DOE Falling Short… Change is Coming

I noticed that the long-awaited was finally released to the public and couldn’t help but to take a browse through the information it has started to provide.  I have been a long-time fan of transparency from sites similar to also, but this site is showing some key initiatives and how agencies are responding.  I am a sucker for acquisition.

I scrolled to the bottom of the above and found a wonderful, easy to understand, table that shows who is doing what.  Or not, for that matter.

“Every agency was charged with reducing by 10 percent the share of dollars obligated through new contracts in FY 2010 that were (1) noncompetitively awarded, (2) awarded after a competition that received only one bid, (3) awarded as a cost-reimbursement contract, and (4) awarded as a time-and-materials/labor-hour (T&M/LH) contract. The chart … shows the performance in meeting those targets made by agencies covered by the Chief Financial Officers Act (CFO Act) … The Administration is working with those agencies that did not meet the targets to identify ways to make further progress.”

The glaring reality is that the largest of those agencies (DOD and DOE) have no checkmarks showing the 10% improvement.  So what, right? 

Well, this indicates a key change in the works in the way contracts are made with these agencies.  I have personally seen the switch to FFP contracts that places key risk on contractors.  I have also seen the push from contractors to try to deflect into T&M contracts for services.  What this chart shows, though, is the government looking to place a large amount of risk on the contractor – giong away from flexibly priced contracts in general (including the T&M/LH contracts).  Therefore the contractors will need to have more and more control – over processes, over efficiencies, and over effectiveness.

So, how can that happen?  I have already said that contractors are being forced to do the same work with less dollars.  Now I am saying that contracts are being asked to take on more risk with the same dollars.  In my opinion, this is where a significant effort and focus by contractors must be on increasing efficiency (reducing costs) by using the right tools.

Compliance and contract management are one of the areas of government contracting that are near and dear to my heart because of my background.  This area also represents “solely an administrative function” to many contractors.  This is one of those areas that is ripe for efficiency also, but is rarely thought about for cost-cutting.  Think about the time and energy spent on contract management across numerous contracts.  Think about the hours tracking and reporting compliance with regulations.  There is a lot of time spent, and some of it, honestly, can be streamlined.

Ok, I have to admit this part of this particular blog entry is a shameless plug for one of the banner ads on the front page.  I encourage you to click the little ad on the front page and see what one of the WK L&B government contracts compliance tools can do for you – the Expanded FAR Matrix.

About Marty Herbert

With 13 years of government contract administration, analysis, finance, and audit experience, I have established a firm baseline in ethics and a specialization in government contracts that has prepared me to become a subject matter expert in my field. I am currently working on enhancing government contracts management and compliance through workflow tools and product offerings - attempting to make the process proactive as opposed to reactive.
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