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SGTP eNews 03/23/06

“GSA, DOD and other Federal Agencies”

Download SGTP eNews 03/23/06 [doc]

SGTP’s EdCon’06, September 6-8
Hilton Alexandria Mark Center
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1. GSA Loses `Star Player` To FEMA

Federal Times
March 20, 2006
By Chris Gosier

Deidre Lee, General Services Administration, will leave after an eight-month stint and go to another besieged agency --- the Federal Emergency Management Agency, government and industry sources said.

Lee, considered one of the government’s top acquisition leaders, will become FEMA’s acting deputy director of operations in April, working closely with the chief procurement and financial officers, FEMA said in a March 16 statement.

The announcement was greeted as another blow for GSA, reeling from impending job cuts, plummeting information technology business, a lack of permanent leadership and a stalled reorganization.

At FEMA, Lee will work to reinvigorate disaster response and recovery, FEMA said in a statement.

(editor’s note: Dee is the highly praised recent SGTP keynoter. Our warmest best wishes to her.)

2. Crisis At GSA

Federal Times
March 13, 2006
By Chris Gosier

Agencies take their business elsewhere
After a decade-long stretch of red-hot IT sales at the General Services Administration, other federal agencies started looking elsewhere for IT procurements in 2004. In 2005, for the first time in years, GSA’s IT sales actually declined.

GSA’s information technology business is even more troubled than its chiefs initially let on. Revenues for its niche business of assisting agencies in buying highly customized systems and services --- known as IT solutions --- plummeted nearly $3 billion --- about 40 percent --- in the last two years.

The situation is so bad that leaders have imposed a hiring freeze and are seeking permission to slash 400 jobs.

The tale of how a runaway success story went sour so fast begins with a series of critical government audit reports that faulted GSA for numerous contracting violations. Delays on purchases for the Defense Department, GSA’s biggest customer, cost the Pentagon $2 billion because the authority for that spending expired before GSA could complete the purchases.

“It’s a perfect negative storm going on for GSA at this point,” said Neal Fox, who managed GSA’s $32 billion federal supply schedules program until early last summer. “GSA has picked the exact wrong time to create a crisis of confidence, while at the same time agencies are putting in place their own contracting vehicles.”

Trying to get it right
Today, it appears unclear when the agency will be able to right itself.

GSA’s top official, acting GSA Administrator David Bibb, acknowledges the troubles his agency has had with its biggest customer.

The Pentagon’s move to rely more on in-house contracts is one of the biggest factors behind GSA’s declining revenues.

GSA’s competitors, meanwhile, are seizing the opportunity to steal business away. The Interior Department’s Gov-Works program, for instance, boasts in its new advertising campaign, “We Follow the Rules.”

The Coalition for Government Procurement, which represents GSA vendors, said in a letter to GSA officials that “recapturing lost customers will be a long and sometimes difficult process. Some members believe it will take as long as five years to regain all of the business lost.” In its letter, the group called for a quick
end to “Get It Right.”

Further, the agency is lacking leadership. The top five management posts, including the administrator, are filled by acting managers until permanent replacements are found. And GSA managers are still trying to shake off perceptions that the agency has played fast and loose with procurement rules.

3. GSA Considers Staff Cuts after Drop in IT Sales

Federal Times
March 6, 2006
By Chris Gosier

Get It Right Campaign May Have Slowed Business

A steep drop in its information technology business is prompting the General Services Administration to freeze hiring and consider job cuts, agency officials confirmed.

GSA projects that its revenues this fiscal year from assisted procurements of information technology will amount to $4.3billion --- a 40 percent skid from the $7.2 billion in sales the agency had in 2004.

As a result, GSA has asked the Office of Management and Budget and the Office of Personnel Management for authority to offer employees buyouts or early retirement, in hopes of avoiding layoffs, said Marty Wagner, acting commissioner of GSA’s Federal Acquisition Service.

One union official said he was told in a February 22, 2006 meeting with GSA officials that 400 employees could be affected.

Employees have long been “confused, anxious and scared” about jobs disappearing, said the official, Jack Hanley, president of the National Federation of Federal Employees council of GSA locals.

GSA froze hiring in January for its Federal Technology Service and Federal Acquisition Service (FAS). GSA followed up with a hiring freeze for management and administrative staff at its central office and in the regions, according to an internal memorandum acting GSA Administrator David Bibb sent to staffers on February 24, 2006.

4. GSA To Trim Through Buyouts And Retirements

The Washington Post
March 6, 2006
By Stephen Barr

Faced with declining revenue, the General Services Administration plans to offer cash buyouts and early retirement packages to more than 400 employees.

The staffing reductions will come in Federal Supply Service and the Federal Technology Service, shrinking the workforce in those two bureaus by about 8 percent, said David Bibb, the acting general services administrator.

The GSA buys more than $30 billion of goods and services each year from the private sector and resells them to federal agencies. Much of its operating budget is based on the fees it charges agencies for procurement transactions.

The GSA also has been losing revenue because a number of non-defense agencies have less money to spend on goods and services, Bibb said.

5. GSA Audits Bring Work For Md. Firm

Washington Business Journal
February 17-23, 2006
By Ben Hammer
Staff Reporter

A sharp uptick in GSA audits of multiyear government contracts is driving many companies to hire accounting firms for advice.

The GSA has increased its review of contracts up for renewal, from 14 pre-award audits in fiscal 2003 to 40 in 2004 to a goal of about 70 in 2005. Rockville accounting firm Aronson & Co. saw its first client looking for help to prepare for GSA audit 18 months ago --- and has worked with 15 companies in a similar situation since then. The firm expects that number to double in 2006.

6. Senator: End Travel As Costly `Spring Break`

Federal Times
February 20, 2006

Spending on federal conferences increased 70 percent between fiscal 2000 and fiscal 2005, an astounding increase that shows agencies aren’t doing enough to rein in excess spending and take advantage of technology improvements, Sen. Tom Coburn, R-Okla., said.

During a February 7, 2006 subcommittee hearing, Coburn said agencies spent more than $1.4 billion since 2000 to either send employees to conferences or underwrite conferences. Most agencies were unable to fully report on their conference spending and participation, prompting Coburn to suggest that agencies post online their meeting and travel expenses.

(Editors observations: Since the Senator’s FY 2000 base period, the U.S. has had to organize and implement group efforts for 9/11, Afghanistan, Iraq, Katrina and many other programs. These can’t be considered as a ‘Spring Break’ by anyone.)

7. Government Smart-Card Project Hits Snags

The Washington Post
March 7, 2006
By Stephen Barr

The government’s smart-card project appears at risk of falling behind schedule.

Federal agencies are supposed to begin issuing government-wide identification cards that can vouch for the identity of federal employees and most contractors in October 2006, but the Government Accountability Office warns that setting up and testing new ID systems may not be completed within deadlines set by the Bush administration.

The GAO reviewed the progress of six agencies in developing smart-card systems and found differences in implementation plans, which could hamper efforts to create a government-wide ID card accepted by all agencies. The congressional watchdog agency also found a lack of reliable information about the costs of buying cards and equipment and modifying software systems.

8. QDR Lays Out Strategy, But Can We Afford It?

National Defense
March 2006
By Lawrence P. Farrell Jr.

At first glance, the fiscal year 2007 defense budget reflects the arduous challenges facing the administration in trying to balance long-term strategy and requirements against immediate priorities and fiscal pressures.

On the one hand, the $439.3 billion budget provides a healthy level of resources in key areas, such as personnel, procurement, research and development, and force readiness.

On the other, the spending plan leaves unanswered serious questions about how the Defense Department will fund the ambitious strategy laid out in the Quadrennial Defense Review, which the administration released as a companion document to the fiscal 2007 budget.

One key to understanding where this might go is to watch the supplemental appropriations process, Army and Marine Corps progress in resetting and recapitalizing their equipment, the Army modularity efforts, and the Air Force’s success with reducing its blue-suit force from 379,000 to 339,000. All this will play out over several years and will be instructive in assessing the success of QDR implementation.

9. BRAC Off, Man

Washington Business Journal
February 17-23, 2006
By Joe Coombs

Don’t call the moving vans just yet.

The seismic shift in military jobs associated with the Base Realignment and Closure process is supposed to start sometime this year. But the Pentagon still hasn’t nailed down the logistics, and some of the jobs slated to move --- including about 18,000 set to shuttle out of Arlington --- might be hanging around a little longer in their current locales.

One Department of Defense agency slotted for relocation just renewed a lease for five years and 300,000 square feet at the Presidential Tower office complex in Crystal City. The defense agency also negotiated a five-year option for renewal when the lease expires.

Since the BRAC moves became official in November, the Pentagon’s goal was to produce a comprehensive relocation plan by the end of this month, says Glen Flood, a DoD spoksman. But the sheer size of the realignment --- there are 241 implementation plans that will affect more than 800 bases and related operations around the country --- has stretched out the process. “Each branch of service is doing all they can do at this point to submit their plans,” Flood says.

Until then, commercial landlords can probably breath a little easier.

10. Defense Department Reconsiders Senior-Level Career Development

The Washington Post
March 15, 2006
By Stephen Barr

The Defense Department is taking a fresh look at its senior-level professionals to see how to reshape their career development for future challenges, including terrorism.

“One of my major goals right now is about creating a world-class leadership structure for the department,” said Patricia S. Bradshaw, the new deputy undersecretary of defense for civilian personnel policy.

SES stands for Senior Executive Service, the elite cadre of top civil service managers in the government. There are more than 6,200 career members of the SES, and about 1,300 of them have been allocated to the Defense Department. The department has an additional 176 senior-level professionals, technicians, scientists and engineers who bring special expertise to weapons and other national security programs.

11. How To Know When You’re In Too Deep With The Feds

Washington Business Journal
March 10-16, 2006
By John W. Chierichella

Organizational conflicts of interest (OCI) arise out of the confluence of corporate relationships and the performance of government contracts.

OCI can affect a firm’s eligibility for a wide range of contract awards, force you to outsource tasks under some contracts, affect your choice of teaming partners and limit your ability to allocate personnel within your organization. A failure to address OCI when evaluating takeover candidates can unexpectedly wreak havoc on your core business.

Back when the Armed Services Procurement Regulations governed the administration of military contracts, OCIs were much more manageable. Such conflicts were addressed there and the regulations made it clear that rules were not “self-executing.”

Contractors could never be “surprised” by an OCI that had been created by a prior contract. Unless that prior contract specifically advised you of the conflict and of your exclusion from future contracts, future contracts were “fair game.”

No more. Today, the burden is on the contractor to identify such conflicts and persuade the contracting officer that they can be adequately avoided and mitigated.

12. Volume, Visibility, Not Cash, Fuel Small Biz Lobbyists

Washington Business Journal
January 13-19, 2006
By Kent Hoover

New restrictions on lobbying are likely in the wake of the Jack Abramoff scandal, but small business lobbyists say these reforms won’t have much effect on what they do.

They don’t have the money to lavish gifts on lawmakers, like Abramoff’s golf
outings to historic St. Andrews course. or to wine and dine them in restaurants or arena skyboxes.

Instead, small businesses have something more powerful: numbers and visibility. Members of Congress know how important the nation’s 23 million small businesses are to the economy, and see small business owners daily when they’re back in their districts.

When politicians “get 1,000 letters from small business, you better believe they’re going to stand up and listen,” says Giovanni Coratolo, director of small business policy for the U.S. Chamber of Commerce. “You can’t hire somebody to be a substitute for that passion.”


SGTP eNews 03/21/06

“Federal Budget and Related Priorities”
(Welcome back after SGTP’s AnCon’06!)

Download SGTP eNews 03/21/06 [doc]

SGTP’s EdCon’06, September 6-8
Hilton Alexandria Mark Center
www.government-travel.org

1. Smallest Work Force Since ‘04

Federal Times February 13, 2006
By Mollie Ziegler
And Tim Kauffman

Fewer Feds
The Budget proposes the largest percentage increase in civilian staffing in 2007 for the Homeland Security Department, while overall civilian staffing throughout government would decline:

(Full-time equivalent Percent change
positions in thousands) from 2006
2007 estimate

Homeland Security 150.3 +2.5%
Commerce 38.2 2.1
Energy 15.9 1.3
Health and Human Services 62.0 1.1
Transportation 55.9 0.9
State 30.5 0.7
Labor 16.9 0.6
Veterans Affairs 223.3 0.2
Education 4.3 0.0
Defense 663.6 -0.5
Interior 69.8 -0.6
Justice 117.6 -0.8
Agriculture 99.1 -1.0
Treasury 110.3 -2.0
Housing and Urban Development 9.4 -4.1

Executive Branch total* 1,867.7 -0.3
*Totals may not add due to rounding
SOURCE: Office of Management

2. Ratings by Agency

Federal Times February 13, 2006

The top five agencies whose programs did not demonstrate results, were rated effective, or were rated ineffective: *

Agency (programs evaluated)
Effectiveness
National Science Foundation (10)
State (39)
Treasury (25)
Defense (32)
Energy (50)
100%
51
44
34
22
   
Ineffective Programs  
Housing and Urban Development (25)
Labor (28)
Environmental Protection Agency (43)
Education (74)
Health and Human Services (90)
16%
14
9
8
4
   
No Results Demonstrated  
Education (74)
General Services Administration (13)
Interior (63)
Homeland Security (45)
Housing and Urban Development (25)
55%
38
37
36
32

*Only agencies that had 10 or more programs rated are included.
SOURCE: Office of Management and Budget

Security First
President Bush’s 2007 budget projects increases in future discretionary spending
on homeland security and national security programs and cuts for other programs;

In billions

 
2005
2006
2007
2011
Change 2005-2011
Defense
$473
$510
$503
$499
+5%
Homeland Security
30
32
34
40
+33%
Other
465
490
492
455
-2%
Total
$968
$1,032
$1,029
$994
+3%

SOURCE: Office of Management and Budget

3. Agency Highlights

Federal Times
February 13, 2006

Agriculture
The Agriculture Department’s proposed $3 billion in spending cuts in fiscal 2007 reflect an era of fiscal belt-tightening, says secretary Mike Johanns.

“These proposals are made in the spirit that everybody needs to contribute to deficit reduction,” he said at a budget briefing February 6.

Commerce
The proposed $236 million cut in discretionary budget authority at the Commerce Department is reflected in cuts to several programs it says have outlived their usefulness.

For example, the administration is repeating its bid to eliminate the Advanced Technology Program, which provides grants to businesses to develop technologies for commercial use.

Defense
The Bush administration is seeking a 6.9 percent increase in the Defense Department’s discretionary budget in fiscal 2007. A key winner in the budget is the department’s Special Operations Command, an elite force designed to fight terrorism on a targeted and global scale. More than 2,000 Marines would be shifted to the command in fiscal 2007, in addition to thousands of new Rangers, Seals and other personnel with various specialties.

Defense plans to convert more than 10,000 military positions to civil service or contract positions in fiscal 2007, bringing the total number of converted military positions to more than 30,000 since 2004.

Education
The Education Department suffered some of the deepest cuts in the president’s fiscal 2007 budget proposal. Most of the savings would be satisfied by the elimination of 42 programs including: Alcohol Abuse Reduction, Arts in Education, Demonstration Projects for Students with Disabilities, Even Start and the National Writing Project.

Energy
The Energy Department plans to steer more funding to researching nuclear power and other renewable energy sources.

EPA
The Environmental Protection Agency proposes increased spending on homeland security and toward clean air and combating global warming.

GSA
The General Services Administration will try again to bolster its electronic government fund to a level that Congress turned down for fiscal 2006.

GSA is requesting $5 million in fiscal 2007 to improve online access to agency information, up from the $3 million appropriated this year.

In addition, GSA is again asking Congress for permission to use more GSA-generated revenues to fund e-government. The agency wants authority to use up to $40 million----once it meets operating costs----out of its Acquisition Services Fund, which would be created through the pending merger of its General Supply and Information Technology funds.

HHS
The budget proposal for the Health and Human Services Department increases funding $58 billion, or about 9 percent from fiscal 2006, to cover predicted increases in mandatory spending for entitlements like Medicare, Medicaid and state children’s health insurance.

Homeland Security
The White House’s proposed fiscal 2007 budget continues the Homeland Security Department’s emphases on border security. Customs and Border Protection would add 1,500 Border Patrol agents, a 12 percent increase over 2006.

HUD
The Housing and Urban Development Department’s $33.6 billion discretionary budget for fiscal 2007 is a decrease of 2 percent from fiscal 2006. Much of the decrease comes from a proposed overhaul of the Community Development Block Grant Program.

Interior
The Interior Department’s discretionary budget request is 6 percent below what Congress authorized for fiscal 2006.

Much of the savings is generated by delaying bureau construction projects. Construction budgets are cut 46 percent at the Bureau of Land Management, 56 percent at the Fish and Wildlife Service, 27 percent at the National Park Service and 21 percent at the Bureau of Indian Affairs.

Judiciary
The bulk of the requested $540 million funding increase for the Judiciary in fiscal 2007 is needed to maintain services it now provides. Of that amount, $462 million would pay for inflation, mandatory salary increases, rent and other unavoidable cost increases.

But in past years, Congress has frequently cut the Judiciary’s budget requests beyond what the courts say is the minimum needed to maintain services. Court officials say such under-funding hurts training and security, and jeopardizes public safety because probation officers and other employees are stretched too thin.

Justice
While past budgets proposed staffing increases, the Justice Department’s fiscal 2007 budget shows a focus on building an infrastructure for counterterrorism efforts. Justice proposes creating a new national security branch that will serve as the focal point for counterterrorism and counterintelligence efforts.

Overall discretionary budget authority decreases as does staffing---from 116,000 full-time equivalents in fiscal 2006 to 115,000 fulltime equivalents in 2007.

Labor
The proposed fiscal 2007 budget for the Labor Department includes additional funds to assist agencies charged with protecting workers’ health and safety.

The Mine Safety and Health Administration, which saw a decrease of $3 million from 2005 to 2006, would get a $10 million increase under the new budget proposal.

Legislative Branch
The 2007 budget for the Legislative Branch proposes increases in discretionary funding and no substantial cuts.

Senate office buildings would get the largest bump with $111 million, nearly double the amount appropriated this year, and the Architect of the Capitol’s budget would increase from $76 to $103 million.

The Government Accountability Office, Congressional Budget Office and Library of Congress would also see increases for fiscal 2007.

OPM
The 2007 budget for the Office of Personnel Management proposes $26.7 million for its retirement systems modernization project. The funding would go toward hiring contractors to convert the paper personnel records of more than 1 million active and former employees and installing new technology that will allow agencies and employees to access retirement records online.

SSA
The Social Security Administration seeks a 4 percent increase in its administrative budget for fiscal 2007 to cover increases in employee salaries, postage, rent, electricity and other fixed costs. The agency’s administrative expenses amount to less than 2 percent of the $626 billion in Social Security, supplemental security income and other financial assistance programs managed by the agency.

State
Many of the State Department’s budgetary priorities are guided by efforts to rebuild Iraq and Afghanistan, as well as the broader war on terrorism.

Transportation
Most of the additional funds in the Transportation Department’s discretionary budget for fiscal 2007 will go to the highway and aviation trust funds for highway construction and capital improvements to airports. Full-time equivalent positions for the department will increase by 451 over this year’s staffing levels to 55,885 full-time equivalents.

The Federal Aviation Administration budget includes $18 million to hire and train 1,136 air traffic controllers to replace those who are retiring, resulting in a net gain of 132 controllers.

Treasury
The Treasury Department aims to reduce staffing by 3,000 jobs in 2007 --- from 113,000 full-time equivalent positions this year to 110,000. While some offices are increasing staffing, the IRS and U.S. Mint will absorb most of the cuts. Realigning IRS offices will cut 1,000 FTEs while program efficiencies such as eliminating duplicative overhead costs, automating taxpayer assistance and centralized monitoring of cases, will cut 2,100 jobs. IRS’ overall budget of $10.6 billion is an increase of $18 million over fiscal 2006.

VA
Increases in the Veterans Affairs Department’s fiscal 2007 budget proposal are primarily targeted for health care and disability compensation, according to Secretary James Nicholson.

The 11 percent increase for health care --- the largest yearly increase ever requested by a president, according to Nicholson --- will enable VA to care for an estimated 5.3 million patients, including more than 100,000 veterans of Operation Iraqi Freedom and Operation Enduring Freedom in Afghanistan.

4. Budget Gets Chilly Reception on Hill

Federal Times
February 13, 2006
By Aimee Curl

The president’s budget isn’t usually greeted with widespread enthusiasm on Capital Hill, but the fiscal 2007 proposal is getting a frostier reception than usual.

And it’s not just the Democrats. Republicans are notably distancing themselves from the budget, released February 6. The majority party made no flashy announcements to tout the proposal, and individual members offered only lukewarm statements of support.

Finance Committee Chairman Sen. Charles Grassley, R-Iowa, began his reaction with the basics, a sort of backing-in approach.

“The president’s budget always sets off a good debate on Capitol Hill,” he said in a prepared statement. “I appreciate President Bush’s effort to outline his priorities.”

Grassley went on to offer support for making tax cuts permanent, while cautioning that it may not be the time for additional reductions in Medicare.

5. Budget Puts IT on New Course

Government Computer News
February 20, 2006
By Jason Miller

2007 proposal reflects OMB’s emphasis on blending tech into business processes
The message about IT the Bush administration sent with the fiscal 2007 budget request earlier this month reiterated its annual theme: Get results from the billions of dollars agencies spend on technology.

But the subtext, which also should become clear to agencies over the next year, is the importance of shifting from a focus on applications, systems or even technology to how IT is becoming a part of overall business process—just like acquisition, finance and human resources.

6. How Bush’s Budget Affects Your Taxes

The Wall Street Journal
February 7, 2006
By Tom Herman

President Bush’s new budget includes several proposals that would affect individual taxpayers and investors.

Applying a `patch` that would shield millions of Americans from paying the alternative minimum tax for one year.

Making permanent several existing tax cuts, including capital gains and dividends.

Permanently repealing the estate tax.

Creating simpler savings vehicles to replace the current hodgepodge of instruments.