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2 octobre 2018 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

Facing industry pressure, Pentagon backs off contract payment changes

By: and

WASHINGTON – Following a wave of criticism from the defense industry and members of Congress, the Pentagon on Monday backed off proposed changes to how companies receive cash flow on their contracts.

In a statement released at the unusual time of 7:19 PM, Deputy Secretary of Defense Patrick Shanahan said the decision to withdraw the proposed acquisition changes stemmed from a lack of “coordination” inside the department.

“Recently, proposed amendments to the Defense Federal Acquisition Regulation Supplement (DFARS) were prematurely released, absent full coordination,” Shanahan's statement read. “As a result, the Department will rescind the proposed amendments. In coordination with industry, the Department will create a revised rule to implement section 831 of the FY2017 NDAA.”

"The department will continue to partner closely with Congress and industry to examine all reform opportunities, ensuring we provide the best value to taxpayers and critical capabilities to military personnel who defend this great Nation,” Shanahan said.

Unsaid in the statement: that since word of the proposed changes got out, the defense industry has been loud and unanimous in its opposition, and has enlisted its supporters on the Hill to help fight against the plan, put forth by Undersecretary of Defense for Acquisition and Sustainment Ellen Lord.

As part of a broader set of changes to the acquisition rules, Lord hoped to change how companies receive their cash flow based on performance measurements, to act as an incentive for good behavior.

In a Sept. 5 interview with Defense News, she laid out the rationale, saying “I believe the lifeblood of most industry is cash flow, so what we will do is regulate the percentage of payments or the amount of profit that can be achieved through what type of performance they demonstrate by the numbers.”

However, three major trade groups — The National Defense Industrial Association, Professional Services Council and the Aerospace Industries Association — objected to the proposal, which would slash the payments on work to be performed from 80 percent to 50 percent, with incremental increases for maintaining quality or on-time delivery — and decreases for companies that have committed fraud.

Rep. Mac Thornberry, R-Texas, and Sen. Jim Inhofe, R-Okla., the chairs of the House and Senate Armed Services Committees, sent a Sept. 21 letter to Shanahan calling the proposal “fundamentally flawed" and asking that it be rescinded and revisited.

“We should not make it harder to do business with the Department of Defense than it is to do business with other parts of government — and that's exactly what this regulation does,” Thornberry told reporters last Tuesday. “We try to streamline acquisition, we try to make it easier to do business with these small companies; and then something like this comes out.”

The Pentagon had hoped to implement the rule changes by the end of the year and had planned to hold a public meeting on Oct. 10, before the public comment period ended on Oct. 23. Whether that event will still happen is unclear.

https://www.defensenews.com/pentagon/2018/10/02/facing-industry-pressure-pentagon-backs-off-contract-payment-changes

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  • Contract Awards by US Department of Defense - December 10, 2019

    11 décembre 2019 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

    Contract Awards by US Department of Defense - December 10, 2019

    DEFENSE INFORMATION SYSTEMS AGENCY Leidos Inc., Reston, Virginia, was awarded a competitive single award, indefinite-delivery/indefinite-quantity contract with a ceiling of $6,520,000,000 that includes a mix of fixed price and cost contract type pricing arrangements for Global Solutions Management – Operations (GSM-O) II, which provides support services for the operation, defense, and sustainment of the Department of Defense Information Network/Defense Information System Network. The place of performance is predominantly within the continental U.S. (CONUS); however, support services are also required at multiple locations outside CONUS. Proposals were solicited via the Federal Business Opportunities website (www.fbo.gov), now known as beta.SAM.gov website. The solicitation (HC1028-18-R-0024) was issued as a full and open competitive action. Three proposals were received. The period of performance includes a base period of five years (Jan. 1, 2020 – Dec. 31, 2025), with two two-year option periods, and one one-year option period, for a total period of 10 years (Jan. 1, 2020 – Dec. 31, 2030). The Defense Information Technology Contracting Organization, Scott Air Force Base, Illinois, is the contracting activity (HC1028-20-D-0001). AIR FORCE Computers Sites Inc., Denver, Colorado (P00008, FA8217-16-D-0002); Eaton, Raleigh, North Carolina (P0006, FA8217-16-D-0003); and AllCom Global, Lake St. Louis, Missouri (P00008, FA8217-16-D-0004), have been awarded an estimated maximum increase modification of $197,000,000 for power converting and continuation interfacing equipment. This modification provides for the installation of uninterruptable power supply systems across every major command. Work will be performed at Air Force bases throughout all major commands and is expected to be completed by Dec. 10, 2021. The estimated maximum value for each contract is being increased from $99,990,500 to $197,984,500, for fiscal years 2016-2021. Other procurement funds are being used and no funds are being obligated at the time of the award. The Air Force Life Cycle Management Center, Hill Air Force Base, Utah, is the contracting activity. The Boeing Co., El Segundo, California, has been awarded a $21,260,075 modification (P00036) to previously awarded contract FA8819-15-C-0007 to exercise Option 5 for Space Based Space Surveillance Block 10 sustainment. This modification provides for the exercise of an option for the sustainment and required development necessary for Air Force operations and maintenance of the Space Based Space Surveillance System and Red Local Area Network. This effort includes systems engineering, operations, operations support, and contractor logistics support. Work will be performed at El Segundo, California; and Colorado Springs, Colorado, and is expected to be completed by June 20, 2022. The total cumulative face value of the contract is $129,825,811. Fiscal 2020 operations and maintenance funds in the amount of $2,000,000 are being obligated at the time of award. The Space and Missile Systems Center, Special Programs Directorate, Los Angeles Air Force Base, California, is the contracting activity. Raytheon Co., Aurora, Colorado, has been awarded a $13,543,046, bilaterally negotiated contract modification (P00310) to previously awarded contract FA8807-10-C-0001 to modify the technical baseline to fulfill the requirements of four requests for changes (RFC). The contract modification is for implementation of four RFCs (312, 343, 345, and 393) to the technical baseline. Work will be performed at Aurora, Colorado, and is expected to be completed by June 30, 2021. The total cumulative face value of the contract is $3,308,389,602. No additional funds are being obligated at the time of award as the contract is incrementally funded. The U.S. Air Force Space and Missile Systems Center, Los Angeles Air Force Base, California, is the contracting activity. ARMY Accenture Federal Services, Arlington, Virginia, was awarded a $75,820,763 hybrid (cost-no-fee, cost-plus-fixed-fee and firm-fixed-price) contract for unified enterprise resource planning capability support services. Bids were solicited via the internet with four received. Work will be performed in Aberdeen Proving Ground, Maryland, with an estimated completion date of Dec. 9, 2025. Fiscal 2020 Army working capital funds in the amount of $4,858,861 were obligated at the time of the award. U.S. Army Contracting Command, Rock Island Arsenal, Illinois, is the contracting activity (W52P1J-20-C-0005). Rigid Constructors LLC,* Opelousas, Louisiana, was awarded a $9,986,105 firm-fixed-price contract for excavation, placement of material for the construction of earthen retention dikes, installation of settlement plates, surveying, clearing, grubbing, steel culvert installation, painting and metalwork fabrication. Bids were solicited via the internet with eight received. Work will be performed in Calcasieu, Louisiana, with an estimated completion date of Dec. 5, 2020. Fiscal 2020 civil construction funds in the amount of $9,986,105 were obligated at the time of the award. U.S. Army Corps of Engineers, New Orleans, Louisiana, is the contracting activity (W912P8-20-C-0006). DEFENSE LOGISTICS AGENCY Raytheon Co., El Segundo, California, has been awarded a maximum $45,085,238 firm-fixed-priced delivery order (SPRPA1-20-F-C301) against a five-year basic ordering agreement (SPRPA1-17-G-C301) for APG-79 Radar System spare parts. 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NAVY Moonlite Construction,* Corona, California, is awarded a maximum $20,000,000 indefinite-delivery/indefinite-quantity contract for painting and wall coverings construction alterations, renovations and repair projects at Naval Bases Coronado, Point Loma and San Diego and Marine Corps Air Station, Miramar, California. Work will be performed in San Diego, California. The term of the contract is not to exceed 60 months with an expected completion date of December 2024. Fiscal 2020 operations and maintenance, Navy (O&M, N) contract funds in the amount of $5,000 are obligated on this award and will expire at the end of the current fiscal year. Future task orders will be primarily funded by O&M, N. This contract was competitively procured via the Navy Electronic Commerce Online website with five proposals received. The Naval Facilities Engineering Command Southwest, San Diego, California, is the contracting activity (N62473-20-D-0001). 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