How accurate are agencies’ procurement forecasts?

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Many federal agencies issue annual forecasts of procurement, what they plan to buy and when. For the second year now, members of the Professional Services Council have scored the quality of the forecasts according to a list of attributes. For how they did, Federal Drive with Tom Temin spoke with the president and CEO of the council, David Berteau.

Interview transcript:

David Berteau: So yesterday, PSC had our annual Federal Acquisition conference, very successful conference, but under COVID-19, it’s the first time that we’ve had to hold this conference in a virtual format. It was well attended, a lot of productive comments by government officials from DoD, from the Office of Federal Procurement Policy, from a number of federal agencies as well. one of the things that we did is we released our second annual business forecast scorecard. We started this a year ago, we developed 15 attributes that we evaluate agency forecasts because companies depend on what the agencies say is coming out, In terms of contracts, in terms of schedule, in terms of size, type of work, etc. And so we developed with our members about 15 attributes, we graded 48 agencies last year, we’re up to 60 this year, and we had a lot of signs of improvement, in fact. wE rank them according to good, fair or needs improvement, sort of like the good, the bad and the you know what.

Tom Temin: Who’s the best agency in terms of the forecast that puts out?

David Berteau: There are a couple that were top last year and are still top this year, and that’s USAID and the Education Department. But the most improvement was actually done, and one of the highest scores was done, by what used to be called SPAWAR, and is now the Navy information Warfare Systems Command, NAVWAR, and they made a literally 50% increase in their score on the attributes, and it was clearly a concerted effort on their part to do a better job. In fact, one of the things that we found as a result of our scorecard last year is a lot of agencies contacted us and says, hey we’d like to do better, right? Because it’s not just companies that benefit from this, the agencies benefit as well. They get better proposals, they get better results from their contracts, they get more competition.

Tom Temin: Which agency or agencies, would you say have the most opportunity yet for improvement?

David Berteau: Well, that’s a long list. Although I would say that this year, we did rise up — we actually had a couple agencies last year that scored negative, which means they lost more points than they gained from the attributes. And if you think about what these attributes are, right, a lot of it is how frequently do you update it? Is it something you can download? Or is it just a PDF file that you got to copy and paste and convert into your own, right? Or does it have the information that companies need to have to be able to make decisions? Can you search? Is there somebody to call if there’s a confusion or an error? So there’s a lot of things that are really just process as well as content. And I think the process areas are where every agency still has room for improvement. So there’s nobody yet who’s perfect.

Tom Temin: Who is the most imperfect? Just give us a couple.

David Berteau: Let’s look at our negative scores here. The Agriculture Department doesn’t do very well at all. Social Security Administration is in bad shape. There are elements of DoD that are in bad shape, and we don’t score a whole agency, we score the sub components of the agency. So you’ve got seven parts of DHS that are up in the good category, and you’ve got a couple of parts of DHS that are down in the not so good category.

Yeah some of these components are as big as other agencies all together. So you really have to kind of look at them in a fine grained way. And another big development expected this week is that ruling on what companies can buy and use from China. This is something you and I have talked about that the regulation pursuant to the 2019 NDAA has still not been issued, but maybe now we can see it.

David Berteau: Right. This has to do with with the law that says contractors cannot have or use equipment from certain banned Chinese companies, Huawei, ZTE, Hikvision etc. Part A of that law went into effect last year. Part B takes effect August 13 of this year, so less than a month away. And what we’ve heard last week is the Office of Information and Regulatory Affairs put on its website that they had cleared the rule from the Federal Acquisition Regulation that would implement part B which is the part that says you can’t sign a contract with a company that doesn’t certify that it’s not using and its subcontractors aren’t using this band equipment. It’s essentially an unexecutable law the way it stands right now. There is no list of what is banned, there’s companies that are banned right, but there’s no list, the closest we have is a Commerce Department list of banned equipment — but Commerce Department is happy to tell you this is neither comprehensive nor complete. You got to come up with it on your own, and companies are going to have to certify before they can be awarded contracts, that they’re not using it and that none of their subcontractors are using it anywhere in the world. Now there is a waiver in the law, but the waiver has to be done at the agency level, and in my experience Tom, such waivers are a big challenge. And this case particularly, how do you sign a waiver without looking like you’re being soft on China? All we’ve asked for is an extension of the time period necessary here so that companies can do the homework. You don’t even know what you’re supposed to do until the rule is out and we haven’t seen the rule.

Tom Twmin: Yeah, I was gonna say you can’t do anything till the rule is out, so at least that step looks like it’s about to fall into place.

David Berteau: So the real potential danger here is is contracting officers will either have to take a leap of faith, or they’re not going to sign any contracts after August 13, and this is a pretty scary proposition. So we’re continuing to work this, we were hoping to get a statutory extension, but that hasn’t happened yet and we expect this to be a big problem a month from now — PSC will be working on this every day.

Tom Temin: But it’s fair to say the issuance of the proposed rule from OIRA at least will take this process a significant step down the road.

David Berteau: Absolutely. You have to have the rule to be able to know what you’re analyzing, what you’re preparing for. Companies have been kind of in the dark, so how do you guess it what’s going to be needed? So the release of the rule will be important. There will be a comment period. OIRA said it would be an interim rule so it would take effect immediately, and it will be a major rule so it’d be a big deal — well we already knew it was a big deal.

Tom Temin: Okay. And in the minute we have left, we should discuss the fact that the COVID pandemic is continuing, but the appropriations to pay contractors through it is not continuing at this point — and that’s a big concern too.

David Berteau: It is a big concern. In DoD’s testimony back in June, they noted that while they have the flexibility to use available funds and the law clearly provides that, it’s under Section 3610 of the CARES Act that passed last March, they have the flexibility to use available funds, they may not have enough funds available. But for PSC a larger question even then the funding is the question of the expiration date of the statute. It’s designed to protect the workforce, the skilled workers and key personnel that can’t work on their jobs because it can’t get to the facility, and they can’t telework — but that law expires September 30, and unless you believe that there will be no COVID-19 impact after September 30, the law needs to be extended, and there’s precious little time and precious few legislative vehicles to do that — so PSC will be pushing hard on that this week.

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