The Death of Alliant?

I once considered myself part of the acquisition community. And, I was proud to claim the association. I spent eight years at the Naval Air Systems Command conducting competitions, negotiating contracts and writing contract clearances and acquisition plans. I considered it a profession worthy of hard work and it gave me satisfaction.

When I look at acquisition today, I no longer do it with the pride I once did.

I do not believe that “competitions” conducted with a broad and deliberately vague statement of work and resulting in a ten- or twenty-year “hunting license” are how the Federal Government should procure goods and services. Debacles like the Alliant program are the result. A few large hardware programs notwithstanding, no one seems to be willing to conduct a competition for real work. Everything is theoretical and the actual work will be procured later on a delivery order against a GWAC or a MAC or a GSA Schedule contract or an IDIQ. This is what passes for competitive acquisition today. Apologists for the process blame the situation on a shortage of seasoned acquisition professionals. I’m sorry, but that’s just no excuse.

And, while I’m on the subject, the coming changes in the acquisition workforce do NOT constitute a crisis. A crisis happens as a result of a sudden and unexpected occurrence. This situation is neither. It’s been coming for 20 years and patently obvious for at least 10.

Whatever it is today and however worse it becomes, it no excuse for the shortcuts taken today and the shoddy contracts that result. The Alliant program is a terrible and sadly representative example, but I’m not talking about the Alliant protests. I’m talking about the contract GSA entered into with Calyptus Consulting Group to conduct evaluations of the prior performance of the Alliant offerors. There are so many things wrong with that contract it’s hard to know where to start, but I’ll try.

First, evaluation of any part of an offeror’s proposal in a competitive acquisition is an inherently governmental function and NOT TO BE CONTRACTED OUT. I apologize for shouting, but the emphasis appears to be necessary. The FAR section on such functions does permit contractors to serve as technical advisors to source selection boards, but it cautions that such activities may rise to the level of an inherently governmental function if the contractor acts with autonomy or actually executes decisions on behalf of the source selection authority. That’s exactly what this contract did. This contract should never have been let no matter how minor the role seemed. It was simply not a contractor’s role to perform.

Second, no one monitored the contract to assure that the work was performed correctly. In his ruling upholding the Alliant protests on March 5th, Judge Francis Allegra wrote that Calyptus failed to treat the bidders fairly when asking questions and evaluating responses because GSA didn’t give the firm enough guidance.

Finally, on the front page of yesterday’s Federal Times, Elise Castelli broke a story in which she reveals that Calyptus had contracts with two of the same companies that it evaluated under the GSA contract. Both firms, by the way, were awarded Alliant contracts. There are no allegations of any impropriety on the part of either of the companies – or Calyptus for that matter. This isn’t about what anyone did or didn’t do. It’s about the integrity of the acquisition process and the responsibility for this chaos rests squarely on GSA.

Situations of this type are precisely what Organizational Conflict of Interest (OCI) is all about. A spokesman for one of the companies named in the story is quoted as saying “There is no conflict of interest. Calyptus was not part of our Alliant team nor did they help or support us in any way on our preparation of the Alliant proposal.” I’m sorry, but that’s not the point. Organizational conflict of interest is about the appearance of conflicting motivations in an organization, not what an individual or a team did or didn’t do. GSA had a responsibility to assure that there were no organizational conflicts and they didn’t do that.

Of course, Calyptus doesn’t walk away from this completely clean. If memory serves me, a certification of the absence of any OCI is part of the representation and certifications package in services contracts – like the one Calyptus signed with GSA. If they signed such a certification, in my opinion it was defective. If GSA never even asked for one, shame on them. It’s not like the relationship between Calyptus and the Alliant offerors was a secret. The Federal Times article includes descriptions of their contracts with the Alliant offerors from the Calyptus web site!

Judge Allegra’s ruling seemed to leave the door open for GSA to move forward with the Alliant contracts if they could work out the issues with the protestors. Given the new revelations, this acquisition may be so tainted that nothing can save it. Even if GSA decided to award contracts to all the protestors, how many of the other unsuccessful offerors would have – or should have – protested if they had known how the evaluations were really conducted, and by whom?

What a mess. And this program is being run by the Federal Government’s foremost acquisition organization? If we’re in this situation today, what will it be like when that crisis everyone is talking about in the acquisition workforce finally arrives?

Trouble At GSA

In an opinion released March 5, Judge Francis M. Allegra of the U.S. Federal Claims Court ordered the General Services Administration to stop all work on the $50 billion Alliant contracts, ruling that the agency failed to consistently apply its award criteria when assessing the bids of the 62 vendors. In his ruling, Allegra also held that eight plaintiffs protesting GSA's award of the contract are correct in their assertions that they were treated unfairly. The ruling enjoined GSA “from performing or allowing others to perform on the contract(s) awarded" under the Alliant solicitation.

While his ruling left the door open for the contract to go forward, the Judge also specifically enjoined GSA from using any of the [prior performance] survey data collected by a contractor (Calyptus) OR any of the combined Basic Contract Plan/Prior Performance [numerical] scores used in the first evaluation in any future award decisions. In other words, if they can fix all the deficiencies in the evaluation process without using any of the evaluation data, go ahead.

I’m not sure that’s possible.

One of the basic tenants of competitive Government solicitations is that evaluation criteria cannot be changed after proposals are submitted without reopening the competition and giving everyone a chance to revise their proposals. Without the data they collected the first time around, the criteria can’t be reevaluated. If they change anything, they’re back to square one.

The 29 Alliant contracts awarded last August and the contract subsequently awarded to Stanley Associates are probably dead. At a minimum I believe that GSA will have to conduct new evaluations and make new awards. If they change the criteria, reopening the solicitation, revising the proposals and reevaluating the revised submissions will take at least 6 to 9 months, more likely a year.

Federal Agencies who were waiting for Alliant vehicles to become available have hit the wall. Look for a flurry of hastily assembled competitive solicitations to hit the street as billions in IT funding seek an outlet.

Because the Alliant Small Business solicitation evaluation criteria and methodology were identical, all 62 awards made under that program on December 17th, 2007, have now been called into question. Normally the protest window would be closed after this long, but this ruling reveals information not previously available to the unsuccessful offerors and that will almost certainly restart the clock. If no one takes advantage of that opening, I will be shocked. GSA may even preemptively cancel the contracts. There has been open speculation as to why no orders have been placed on the Alliant SB contracts in the three months that have passed since award. I think we now know why.

Having the Alliant awards overturned is a body blow for GSA’s reputation. The text of Judge Allegra’s ruling is pointedly critical of the methods GSA used in the Alliant evaluation and GSA has held from the beginning that everything they did was standard procedure for the agency. If this is true, Alliant may not be the only program affected.

GSA has been characterized as “troubled” for several years and their business was flat in FY07 despite growth across the rest of the acquisition world. I think it’s safe to say they have now moved well past troubled. Add this development to the new restrictions on interagency acquisition, the new restrictions on T&M contracting (a high percentage of GSA’s schedule orders are T&M), and the loss of immunity from protest of orders, and procuring through GSA suddenly isn’t a very attractive proposition.

In early December, 2007, GSA transferred 250 acquisition professionals out of their Assisted Acquisition Services (outsourced acquisition) branch into the newly formed Federal Acquisition Services (multiple award schedules administration). The reason given was lack of work. The FY08 Defense Appropriations Act included a provision that would have transferred 600 acquisition professionals from GSA to DOD. The provision did not make into the final version of the bill, but it may very well reappear in new bills for FY2009.

This does not bode well for GSA. This could be a “perfect storm” of forces that, in combination, will materially alter the acquisition landscape at GSA for the foreseeable future. In fact, GSA after Alliant may look a little like FEMA after Katrina. From a reputation perspective, this is that caliber of disaster.

I wonder where all that IT money will go?

Preparing for the FY2009 Federal Budget Battle

Brace yourself, folks, it’s started already!

Budget Director Jim Nussle at OMB fired a shot across Congress’ bow Monday in what officials are billing as a first of its kind pre-emptive letter to the Budget and Appropriations committees. The letter threatens vetoes over Democratic spending and tax policies before their budgets have even been unveiled! Nussle's letter threatens vetoes of any fiscal 2009 appropriations bills that exceed the President’s overall spending target and do not meet his mandate to cut earmarks. Do I even need to mention tax increases?

Of course, that presumes that any of the bills will reach his desk while he’s still in office!

Conventional wisdom among those who watch these things carefully is that Congress will delay any ’09 spending bills until there is a new President. Of course, a new Republican president could be an even tougher sell than Mr. Bush. But, I see a different scenario developing.

I think the Democratic leadership will pull out all the stops to send budget bills to the White House that they know will draw a veto. Election years seem to encourage that sort of thing and Nussle’s letter has made it easy. If they send “dead on arrival” budget bills and he doesn’t veto them, he’s caving to the Democratic Congress. If he does, he’s a lame duck obstructionist. For the Democrats, it would be much like stepping into a pitch to load the bases. It’ll sting for a while, but it might be worth it to set up the Grand Slam. If the next batter can pull it off…

Whether no bills get to the President’s desk or they arrive with a veto waiting for them, it’s very likely that the Federal Agencies will muddle through the first quarter of next Fiscal Year on a continuing resolution. And, maybe a good part of the second quarter.

I work for a company that has more than 2,500 Government contractors as clients. I get to see the effect of continuing resolutions up close and personal. Programs are put on hold, decisions are put on hold and lives are put on hold. It’s no way to run a Government.

From this side of the river, the view of the process that creates situations like this is a dim one – and it’s getting dimmer.

We can live through another appropriation season without budgets. We’ve done it before, repeatedly, but it’s sure not what the economy needs right now.

Has anyone over there given that any thought?