DEALING WITH THE CHALLENGES OF RECORD WORKFORCE ATTRITION

1. DEALING WITH THE CHALLENGES OF RECORD WORKFORCE ATTRITION RODNEY MATSUSHIMA, FELLOW BRIAN WALSH, CPCM

2. DISCLAIMER Information presented is entirely the personal views of the presenters based on over 60 years of combined experience and is not necessarily the view of the companies they represent

3. PRESENTERS • Rodney Matsushima • Exec V.P. C-Systems International Inc • Former Professor Naval Post Graduate School • Former Naval Officer holding Key Assignment across full spectrum of acquisition • Former SPS Systems Architect Team • Brian Walsh • Vice President, CACI, Acquisition and Contracting Programs • Former Professor Golden Gate University, LaVerne University • Former Director Contract Management, HQ Air Force Systems Command

4. AGENDA • Current Environment - What has Changed? • Future Environment - Where are we headed? • Alternatives for Action – What should we do? What must we do? What can we do?

5. CURRENT ENVIRONMENT – WHAT HAS CHANGED? • Workforce Attrition • Increased Workload • Workforce Shortfalls • Federal Buying is More Centralized • Services Acquisition Growth[“40% of Govt Workload Growth in Professional, Admin and Mgmt Support Services’’] • Automation • Complexity and Continuous Rule Changes Source: 12th Annual Govt. Contractor Survey, PSC and authors

6. Acquisition Workforce Attrition Contracting Series Data (1102) – Source: Annual Report of FAI YearWork ForceLosses 1992 31,794 1828 1999 26,775 1563 2005 27,589 2761 • 13% Decrease 1992 – 2005 • Not include decline in military staffing

7. Reasons for Declining Workforceand Attrition • Graying Workforce • The Congress of the United States – acquisition workforce budget cuts • Cuts in late 80s & 90s • Federal Acquisition Workforce Restructuring Act of 1994 took sledgehammer and wiped out 279K positions • Cuts in Military Strength and shift in Staffing Priorities

8. Increased Workload • Acquisition Advisory Panel identifies Procurement Spending as up 63% from $234B prior to Sept 11, 2001 to $382B in FY05 • Largest annual increase in workload occurred between 2004 & 2005 – procurement spending up $48B – House of Representatives Rpt. • Katrina, Iraq, • Congressional Acquisition Workforce Cuts of the 90s were made for budget not workload reasons • Automation has not reduced workforce requirements

9. COSTS OF INADEQUATE WORKFORCE • “DHS IG Finds Problems in FEMA Award” FCR Mar 6, 2007 • “DCAA Head Addresses Questionable Iraq Contract Costs Before House Oversight Panel” FCR 2/20/7 • Dept of Interior pulls all warrants at Arizona Center • “DoD Needs to Exert Management and Oversight to Better Control Acquisition of Services” GAO report 1/17/07 • The perceived need for the “Clean Contracting Act”, “Honest Leadership and Accountability in Contracting Act of 2007”etc., etc..

10. COSTS OF INADEQUATE WORKFORCE (CONTINUED) • 785 investigations of criminal activity being reviewed in connection with Hurricane Katrina response • Over 70 corruption investigations in Iraq • Over 50 corruption investigations in Kuwait Per US House of Representatives Committee on Govt Report – Minority Staff Report June 2006 and Report of Chief Contracting Official JCC-I&A in January 2007

11. COSTS OF INADEQUATE WORKFORCE (CONTINUED) # Successful Protests filed by Contractors YearSuccessful Protests 2002 193 (16% of 1,204 protests filed) 2003 230 2004 312 2005 312 2006 385 (29% of 1327 filed) Source: GAO

12. EXAMPLES THAT WE SEE EVERY DAY • Defense Agency puts out solicitation requiring contracting staff augmentees to be proficient on Dept of Commerce rules and automation systems for DoD work. Solicitation went through three levels of review and not caught. • Four solicitations of nine received in last two months in which contract type was not determinable or clauses didn’t match the listed contract type. • Corporate contract specialist with less than one year of experience accepted non-commercial, non-I.T. work on GSA IT schedule at insistence of equally untrained government contracting officer

13. COSTS OF WORKFORCE ATTRITION • Costs of Staffing – including recruiting, relocation • Costs of Training – overcoming knowledge loss • Corporate Knowledge • Inefficiencies

14. HOW ARE WE KEEPING UP? • Federal Government • Workforce Augmentation – Over 200 companies provide staff augmentation in US and overseas • Recent set aside solicitation by Corps of Engineers for staff support drew over 35 RFI responses – only two of which had any relevant past experience • GWACS and Interagency Contracting –To the benefit of tax payer???? • Poor Performance • Contractors • Similar problems – • Higher Operating Costs – Recruiting, Relo, Bonuses • Bottom-line: We are not!!!

15. Contracting Service Providers

16. FUTURE ENVIRONMENT - WHERE ARE WE HEADED? • More legislation (second guessing) • Competition for scarce resources • More complex (e.g. time-consuming) work • Poor/expensive sourcing decisions • Poor data integrity within the digital contracting environment • Frustration = continued attrition • Suboptimal Contracting Environment in government and industry

17. FUTURE ENVIRONMENT – WHERE ARE WE HEADED? • Acquisition Advisory Panel notes that not only has the magnitude of work grown but so has complexity of work – particularly services. • New Legislation this year will add to that complexity. • Elaine Duke at DHS has identified that she needs to hire 1800 more contracting specialists – presumably most in Washington Metropolitan Area. (Federal Times) • FAI statistics in 2005 for Washington Area 1102s showed only 5592. Impact of 32% hike would be “chaotic” on gov’t and industry

18. ALTERNATIVES FOR ACTION • What should we do? • What must we do? • What can we do? • Bottom-line – We need to take action.

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20. PROBLEMS TO SOLVE • It’s the people. • Workforce Stability • Workforce Knowledge for 2007 and beyond • It’s the environment. • Electronic Acquisition Tools • There are too many of them • Complicates the training and understanding of data requirements

21. WHAT WON’T WORK • Continuing to raid other government agencies and Industry without adding to the total workforce. • Failure to recognize that today’s workforce does not have the optimum skills for success in 2007 and beyond • Existing Knowledge/Certification Standards • Failing to recognize that contracting specialists in 2007 must know both contracting and the electronic acquisition tools they must use. For example, it makes little sense (except for financial reasons) for the SPS Program Office to have cut out classroom training on SPS. • Not Keeping up with Changing Rules and Operating Procedures

22. WHAT WILL WORK • Rebuilding Staffing • We must understand and define the Role of the Contracting Officer/Specialist in this new environment • Changing Training and Certification • to Recognize Acquisition Skills Survey • to Recognize Knowledge of Automated Systems • Knowledge Management Systems • Knowledge Sharing • Virtual Universities

23. ROLE OF THE CONTRACTING OFFICER/SPECIALIST • Contract. First and foremost – Must be able to put together the Contract Document that represents the agreement between the two parties. • Electronic Acquisition Tools. Must be able to properly use and understand the affects of the electronic acquisition tools that are in use today and in the future.

24. REBUILDING STAFFING • For Knowledge Management to Be Most Effective Must Have Stable Workforce • Need multiple Formal Intern Programs – perhaps patterned after Air Force Copper Cap Program (or similar) with commitments to education, training and multiple assignments • Utilizing Recent Retirees For Interim • Utilizing Professional Services Companies to Augment • Not just at “GS 12 Level”

25. PROCUREMENT SKILL SURVEY • Survey (Government and Contractor contracting professionals) • Impact on Learning Requirements • Impact on Learning Delivery & Achievement

26. FOR EXAMPLE: PROCUREMENT OF PROFESSIONAL & CMCL SERVICES • DAU has added ACQ365 Mission Focused Services because of growth of services procurement • Real Need May Be ACQ105 Acquisition Of Professional & Commercial Services

27. FOR EXAMPLE: PROCURMENT AUTOMATION • Contract Writing Tools – Integral to Procurement • Market Research Tools • Requirements Systems • Financial Systems • Payment Systems • Reporting Systems

28. LEARNING DELIVERY - KNOWLEDGE MANAGEMENT CONTRACTING • Traditional Training Sources • Virtual Universities • On-Demand Information/Knowledge

29. VIRTUAL UNIVERSITIES • Integrate Corporate, Government and Association Knowledge Bases into Virtual University that benefits all • Companies can not afford the 6-8 courses that we, as professionals, decide make up the qualifications for fully qualified professionals • This is overwhelmingly true of small companies. These courses should be made available for FREE. • DAU to Federal Acquisition University • Draw from Prototypes: For example, CACI Virtual University

30. CACI VIRTUAL UNIVERSITY AS EXAMPLE CACI Virtual University Features: • Distance Learning Course on IT systems/software including basic knowledge required by acquisition people and more sophisticated software such as report generation systems • Learning arrangement with Defense Acquisition University • Learning arrangements with prominent contracting course providers • Specialized applications – lean six sigma • Project Manager Certification Programs • Advanced Degree opportunities in relevant areas

31. CHANGING ROLES FOR ORGANIZATIONS LIKE DAU AND NAVY POST-GRADUATE SCHOOL AS EXAMPLES • Integrating DoD and Civilian Contracting Training • Federal Acquisition University • Revised Curriculums • “Level III” Certification Should be More than Just Age and a Few More Courses • Tradeoff Analysis • Some Courses are Best Taught in Traditional Classroom • Costs Drive More on-line courses – Distance Learning • On-Demand Knowledge

32. An Approach for Contracting Acquisition Automation Training in 2007-2010 • Contract Writing Systems • Market Research Systems • Requirements Systems • Financial Systems • Payment Systems • Reporting Systems

33. THE BOTTOMLINE • As the shortage of Contracting Officers/Specialists is solved by bringing in new people, the learning systems must meet the requirements of the changed acquisition environment. • The electronic acquisition tools must be a part of the core training. • The Contracting workforce of the future must have more uniform capabilities to work across both government (Defense and Civilian Agencies) and industry. • Education, Training and Certification programs must address the new role of the Contracting Officer/Specialist and the environment they must perform in.

34. SUMMARY • Intern Programs & Funding now • Integrated Approach to Federal Civilian Agency and Defense Workforce Training • Revising Certification Standards • Reflect Differing Skill needs • Significant Differences Levels I, II, III • Services Training 101 • New approach to electronic acquisition tools training and certification • Need fully integrated virtual university network & On-Demand Information