The Federal Headlines is a daily compilation of the stories you hear discussed on  Federal Drive with Tom Temin.

• The Federal Acquisition Council published new rules aimed at increasing government subcontracting to small businesses. The new rules require federal prime contractors to make good faith efforts using small business contractors and change the way credit is assigned to agencies for meeting small business contracting goals. The rules take effect in November. (Law 360)

• The Government Accountability Office repeated its warnings over whether the Veterans Affairs and Defense departments have a solid plan for electronic health record interoperability. Auditors said the departments have failed to identify outcome-oriented goals, and that the effort lacks metrics. GAO pointed out, the VA can’t seem to finish a long-term effort to update its own records system. (GAO)

• There’s an alternative to the White House’s approach to modernizing technology. Rep. Will Hurd (R-Texas) proposed a different path to get rid of legacy IT systems. Hurd introduced the Modernizing Outdated and Vulnerable Equipment and IT Act or MOVE IT Act yesterday. The bill would create an IT working capital fund in each agency that would be populated from savings accrued from moving to new technologies. Hurd’s bill is dissimilar to the legislation supported by OMB, which would create a centralized IT modernization fund. Hurd said the biggest difference in the approaches was that his doesn’t require appropriations.

• NASA announced the winners for the 2016 Space Apps Challenge. The challenge identified six contestants with the best innovative thinking projects in categories such as Best Use of Data, Best Mission Concept, and Galactic Impact. The winners get to participate in an upcoming NASA launch in Florida.  More than 1,200 contestants submitted projects to the contest this year. (NASA)

• New employee accountability legislation for Veterans Affairs Department is picking up steam. Sen. Marco Rubio (R-Fla.) introduced a companion to a bill House VA Committee Chairman Jeff Miller (R-Fla.) introduced last week. It would fix a law speeding senior executive firings , which the Justice Department called unconstitutional. Rubio’s bill would set up a board to review SES appeals instead of the Merit Systems Protection Board. (Sen. Marco Rubio)

• The Pentagon implemented new hiring and pay authorities for civilian employees working in cyber jobs. Congress granted the new flexibilities as part of last year’s Defense authorization bill, and DoD will be able to use them within the next few weeks. They give the Defense secretary broad authority to move cyber jobs into the excepted service — letting DoD grant extra pay based on performance and to hire new workers outside of the usual competitive civil service system. The law doesn’t place any cap on how many positions DoD can move to the new system, but officials say they intend to use it mainly for jobs that require high-end cyber skills.

• Federal employees under the Civil Service Retirement System are in limbo as the House debates a complicated provision to change their Social Security benefits. A deal that would have eased the Social Security penalty that CSRS  employees and retirees get never made it out of committee. (Federal News Radio)

• The steps FDIC is taking to address cybersecurity weaknesses are called misguided. A whistelblower said they could make things worse and jeopardize the agency’s confidential data. He told a congressional technology committee that new technology set to be deployed by the agency’s CIO might render the FDIC’s current alert system ineffective. (Federal News Radio)

• Auditors found two new potential problems with the way the Treasury Department prepares the government’s financial statements. Treasury can’t prove the accuracy of data from inter-agency money transfers. And it lacks procedures for ensuring the uniqueness of user accounts for employees with access to federal financial systems. That’s according to the Government Accountability Office. Auditors said those two weaknesses, combined with three uncovered earlier, mean they can’t express an opinion on the government’s consolidated statements. (GAO)

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