Industry Briefing Update on Legislative/Regulatory & In-the-NEWS

1. Industry Briefing Update on Legislative/Regulatory & In-the-NEWS ITIGC 8/17/09

2. Highlights of Legislative Actions • HR 2647 FY10 National Defense Auth Act • Related to public-private competition • Sec 321 – requires DoD to conduct public-private competition when converting DoD positions to contractor positions • Sec 322 – restricts to 540 days the time from the beginning of a preliminary planning to when a final decision is made for any public-private A-76 competitions (includes any GAO protest time) • Sec 326/327 – stops any A-76 competition not awarded by 3/26/09; suspends A-76 competitions for 3 years

3. Regulations & Guidance • GSA Multiple Award Panel adopted its final report on 6/26/09 • Includes 20 recommendations to increase competition and transparency in GSA Schedules program • SOME OF THE KEY RECOMMENDATIONS • Solutions must be FFP • Elimination of the Price Reduction Clause • Possibility of a COST TYPE SIN • Now up to GSA to decide how to handle the recommendations • QUESTIONS: • How has this/will this influence/impact the GSAR re-write currently being conducted by GSA? • How has this influenced/impacted the GSA “Desk Top Guide for Contract Officers”?

4. Regulation and Guidance (Cont) • OMB unveiled a revamped site, USAspending.gov • Tracks over $70B in government IT spending on 781Major programs • A/O August 5 ALL CIO’s have provided a status of their programs • Features the IT Dashboard that is updated by Agency CIO’s • Major IT Investments based on OMB Exhibit 300 and Exhibit 53’s • Award value, prime contractor, status of project based on Cost, Schedule and CIO evaluation of overall program performance • GSA has 25 Major programs for $389.7Million with • 18 - GREEN or Normal, • 7 - YELLOW or Needs Attention • 0 - RED or Significant Concerns

5. Regulation and Guidance (Cont) • ARRA Stimulus Act • Every Opportunity must be announced via FED BIZ OPS • Mandate the use FFP contracts to the maximum extent practical • CO must post why an opportunity was not competed or awarded other than FFP • IT Schedule MOD FX75 that defined reporting requirements must be accepted to participate • As of 7/2/09 e-Buy modified such that a buyer can specify that only contractors who have accepted the ARRA clause will receive the RFQ.

6. Regulation and Guidance (Cont) • Final FAR Rule on PPIRS 7/1/09 • Mandates performance evaluations in the Past Performance Information Retrieval System (PPRS) for all awards under the GSA Federal Supply Schedules above the simplified acquisition threshold of $100,000 • Guidance to Agencies from Lesley Field (OFPP Deputy Director) • Agencies define roles and responsibilities for using and reporting information into PPIRS • Establish a process for regular compliance assessments • Develop a process for evaluating and validating the quality of contractor performance evaluations to include corrective action plans • All agencies must submit procedures to OFPP by 12-31-09 • Beginning 2-1-10 OFPP will conduct regular compliance assessments

7. Regulation and Guidance (Cont) • OMB Director Peter Orszag Memo: SUBJECT- Recent Government Accountability Office Decisions Concerning Small Business Programs dated 7/10/09 • Refers to recent GAO decisions on relationship among 8(a), SDVOB, and HUBZone programs • States “GAO’s decisions are not binding on Federal agencies and are contrary to regulations promulgated by the Small Business Administration (SBA) that provide for ‘parity’ among the three small business programs • Results of an Executive Branch review are expected this month • Pending results of the review, applicable SBA ‘parity’ regulations remain binding

8. Regulation and Guidance (Cont) • Another Peter Orszag memo: SUBJECT - Improvements to government acquisition. This memo provides guidance that requires heads of departments and agencies to: • (1) review existing contracts and acquisition practices and develop a plan to save 7% of baseline contract spending by FY 2011; • (2) agencies should aim reduce by 10% the share of dollars obligated in FY 2010 under new contract actions that are awarded with high-risk contracting authorities, high-risk contracting includes: • Noncompetitively and/or receive only one bid • Cost-reimbursement contracts • T&M/LH Contracts • Agencies are expected to save 3.5% in FY 2010 and another 3.5% in FY2011. • The problem with this concept is the market place drives the bidding and Contract Officers have no control on who or how many contractors offer bids. Why waste B&P???

9. In-the-NEWS • May 28th DoD sent a memo to Secretaries of the Military Departments -SUBJECT: In-sourcing Contracted Services-Implementation Guidance • On April 6, Secretary Gates announced that the Department would scale back the role of contractors in support services. • On April 8, the Comptroller signed Resource Management Decision (RMD) 802, which included the realigning of resources for FY2010-2014 to decrease funding for contract support and increase funding for approximately 33.4K new civilian manpower authorizations, 10,000 of which are for the Defense acquisition workforce. • Designated in-sourcing program officials must provide the Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)) their Component's in-sourcing plans by July 31, 2009, and submit quarterly progress reports beginning next January. • In-sourcing is a high priority of the Secretary of Defense. I would appreciate your support in ensuring that this effort is managed successfully.

10. In-the-NEWS • Ed O’Hare was quoted on June 24 saying that the agency would manage far fewer government wide acquisition contracts, or GWACs. Except for Alliant, Alliant SB, and a few GWACS geared to disadvantaged groups,  he said, “we’re going to let them all just expire naturally.”  • Vivek Kundra has stated that GSA is planning to set up a cloud-computing “Storefront” that federal agencies can use to procure IT services. GSA issued the first “Storefront” RFQ on 7-30-9 entitled “Infrastructure as a Service” • RFQ indicates that the contractor must have unit priced CLINS already on Schedule by the RFQ submission date. QUESTIONS: • Isn’t this contrary to the feedback we received @ the last ITIGC? • Does this mean that CLINS need to be added for ANY service offering/solution? • How does Industry propose UNIT PRICED CLINS for unique or ICB requirements. • WHY- June 30, Kundra said it can take 18 months to get new technology through the usual federal procurement processes.  • Counterfeit IT and impacts on Cyber Security and Information Security • Acquisition officials have been considering ways to tighten the controls on their IT contractors’ global supply chains to improve security and reduce the amount of counterfeit products.

11. Other Legislative/Regulatory InformationFYI

12. Highlights of Legislative Actions • Status of Congressional legislation • FY10 National Defense Authorization Bill • Passed House on 6/25/09 (see HR 2647 provisions next page) • Passed Senate on 7/23/09 (S1390); • FY10 Appropriations for civilian agencies • House passed FY10 Financial Services and General Government Appropriations Act on 7/16/09 (HR 3170) • Requires civilian agencies to make an annual inventory of services they’ve outsourced to the private sector and review whether to return the work to government employees • Senate version (S 1432) does not include the House provision on inventory of services

13. Highlights of Legislative Actions • HR 2647 FY10 National Defense Auth Act • Sec 802- requires an FFRDC study of DoD oversight of services contracting by 3/1/10 • Sec 804 – allows DoD to designate up to 10 IT programs annually for pilot demonstration of an alternative acquisition process. • Amendments: • Within 90 days, GAO to report on cost overruns in the performance of any DoD contract from FY06-FY09 • Grants congressional members (chairman and ranking member of relevant committees) access to database of information regarding integrity and performance of certain persons awarded federal contracts and grants. • Requires cost or price to the federal government be given at least equal importance as other criteria in evaluating competitive proposals for defense contracts • Committee directs Sec of Def to provide an outline of its insourcing plan by 10/1/09

14. Regulation and Guidance (Cont) • Interim DFAR Rules Effective 7/15/09 • Implement provisions from the FY08 NDAA • Comments due 9/14/09 • Rules: • Case 2006-D051 - Limits LSIs at DoD • Case 2008-D005 - Requires non-DoD agencies to apply DoD procurement rules to DoD purchases above the simplified acquisition threshold • Case 2008-D011 - Clarification on the use of T&M/labor hour contracts on commercial items: Criteria in this rule • (i) Services acquired for support of a commercial item. • (ii) Emergency repair services. • (iii) Any other commercial services only to the extent that the head of the agency concerned approves a written determination by the contracting officer that • (A) The services to be acquired are commercial; • (B) If the services to be acquired are subject to FAR 15.403- 1(c)(3)(ii), the offeror of the services has submitted sufficient information in accordance with that subsection; • (C) Such services are commonly sold to the general public through use of time-and-materials or labor-hour contracts; • (D) The use of a time-and-materials or labor-hour contract type is in the best interest of the Government.