The Office of Federal Procurement Policy recently took an idea from the national dialogue to improve the federal acquisition process and put it into reality, and it could save agencies and vendors hundreds of thousands of dollars or more.
OFPP quietly released a memo creating reciprocity for agencies to use a contractor’s earned value management systems (EVMS) once it’s been certified by one department.
“Depending on the rigor of the review and other variables, the cost of a certification can exceed $1 million. In addition, a contractor that achieves certification for its system at one agency may not be recognized by other agencies as having a compliant system and may be required to complete yet another costly certification process,” wrote administrator Anne Rung in the Oct. 23 memo. “Contractors have observed that certification processes used by some agencies are similar. Recognition of another agency’s certification, as appropriate, would eliminate duplicative compliance reviews and result in a cost savings for both the contractor and the taxpayer. Accordingly, agencies are encouraged to enter into reciprocal agreements with other agencies and to post their EVM processes and procedures on their public websites.”
This is simple yet significant change both from a cost savings perspective as well as a simplification of a growing complexity of the procurement process.
Gerard Ruiz, Deltek’s senior director of product strategy and management, said it reduces the need for additional compliance reviews of vendor EVMS.
“The impact of not sharing these experiences and information is that contractors are asked to repeat a very expensive exercise,” he said in an email to Federal News Radio. “It is true that they will be more prepared potentially but it is important to understand that the preparation time for a compliance review is a very labor intensive and expensive process. It takes the contractor away from focusing on project or program execution. The contractor has to form a team, train the team, review its own people, process and tools, conduct their own mock interviews, and repeat the whole process when the agency conducts the physical review. This all takes many months and lots of resources to prepare for and execute. It is important to note that the cost associated with these reviews is charged back to the contract so the cost of the project/program goes up.”
An earned value management system in simple terms combines people, processes and tools to measure cost, schedule and performance against a standard list of criteria to comply with the Federal Acquisition Regulations. The Office of Management and Budget has required agencies to measure EVM since June 2002 for all major IT programs.
The systems used to measure EVM must satisfy the American National Standards Institute (ANSI) and Electronics Industry Alliance (EIA) Standard 748.
Ruiz said each agency ends up with a compliance review team, whether industry provided or internal, to conduct an onsite compliance review, interviewing key members of the project team and company executives.
“The compliance team will attempt to ascertain whether or not the contractor understands the criteria, has adequately documented its business practice, that people are following the procedures and that the procedures are designed to satisfy the criteria,” he said. “Of course all of this requires a deep review of the people, process and tools that are used and make up the EVMS.”
By encouraging reciprocity, OFPP is taking the concept that has proven well with the cybersecurity for cloud services initiative called the Federal Risk Authorization and Management Program (FedRAMP) to trust but verify.
Ruiz said from the outside looking in, reciprocity of these systems makes perfect sense, but over the years, for whatever reason, agencies felt the need to do each one themselves.
Among the top suggestions so far is to increase the micropurchase threshold to $10,000 from $3,000, adopt common terms and conditions for research contracts or grants, and create a common federal proposal and award management system.