agency does that when the legislators are calling for oversight and they don't even have the courtesy of sending somebody at least to provide some limited information i hope that that arises in the future we could huddle up a little bit before and talk about some steps we could take to make sure that doesn't happen again i'm sure they're going to send somebody next time but there's always somebody that they can send even if it's a limit that testimony i don't know that there's always a question is what is government supposed to be doing what's a private sector who's doing what i think it's about what sixty percent of the recruitment might be in services so there's a lot of questions but one of the things that we certainly like to see is implement help implement some of those recommendations because i know the g a o and the other folks do a lot of work some of those recommendations might not work but i know a lot of them are good recommendations and i hope we can have a follow up on some recommendations on that but otherwise chair appreciate all the work that you're doing i just want to explain to the members and the audience this is beginning of a series on hearing time competitiveness  it is broad spanned of information through all the agencies and departments of government this is just the beginning but we do hope to gather anough information where we can make recommendations to the full committee to set up a policy standards by which each department must follow and i can if a size anough this is just the beginning of a series of hearings will notify you in plenty of time when we have our next hearing and i do appreciate the members that are here if there are no additional opening statements i see no other members from either side the subcommittee will now we see testimony from the witnesses before us today we will now turn to our first panel and it is the policy of the committee on oversight and government reform to swear in all witnesses before they testify and i'd like to ask you both please stand and raise your right hand do you solemnly swear to tell the truth the whole truth and nothing but the truth ok let the record reflect that the witnesses answered in the affirmative will now introduce our panel mr sze assad is the acting deputy undersecretary of defense for acquisition and technology at the department of defense there he is responsible for all acquisition and procurement policy matters including acquisition and procurement strategies for all major weapon systems programs major automated information system programs and services acquisitions welcome mr david dr kim is the acting chief acquisition officer at the general services administration he is responsible for developing and reviewing acquisition policies procedures and related training for the g s a and fred because fission professionals through the federal acquisition institute civilian acquisition advisory committee federal acquisition regulation and acquisition materials and training program i asked that each of the witnesses now give a brief summary of your testimony and to keep this summary under five minutes in duration if possible your complete written statement will be included in the hearing record thank you very much for providing me the opportunity to participate in this hearing today in january of two thousand and seven i testified before the readiness and management support subcommittee of the senate armed services committee at that hearing i was asked to comment on the net and recently completed work of the of the sarah panel or the acquisition advisory panel authorized by section fourteen twenty three of the service acquisition reform act of two thousand and three at that time i testified that i agreed with most of the panel's recommendations and that we would be busy addressing the recommendations of their report today's hearing provides an excellent opportunity to provide an account of where we are with respect panel's recommendations and how we will move forward in light of the present circumstances in fact the congress is taking up many of the panel's recommendations adopted into law being the national defense authorization act of two thousand and nine the panel's thoughtful report continues to provide a framework for improvement and to inform ongoing initiatives related to commercial practices performance based acquisition small business utilization the acquisition workforce and the role of support contractors in the use of federal procurement data on april sixth two thousand and nine the secretary of defense and i'll just his attention to significantly improve the capability and capacity of the defense acquisition workforce by increasing the size of the workforce by twenty thousand employees through fiscal year two thousand fifteen this will restore the the organic acquisition workforce to its not proximate nine hundred ninety eight levels of one hundred forty seven thousand people and address long standing shot falls in the defense acquisition workforce is the first significant growth since the military buildup in the one nine hundred eighty s and the downsizing that occurred during the one nine hundred ninety s the secretary's initiative is the overarching human capital strategy to vita lot to revitalize the acquisition workforce the department's growth strategy directly supports the president's march fourth two thousand and nine memorandums objective to ensure that the acquisition workforce has the capacity and the ability to develop manage and oversee acquisitions appropriately the defense acquisition workforce is critical for improving acquisition outcomes for the nation's one point six trillion dollar investment in major weapon systems the objective is straightforward to ensure d has the right acquisition capability and capacity to produce the best value for the american taxpayer and for the soldiers sailors airmen and marines who depend on weapons and products and see services that we buy additionally as you all know the department is aggressively pursuing major reforms to our acquisition system these efforts have been given a high priority by president obama and secretary gates and have recently been complemented by the strong bipartisan commitment to reform registered by congress via the weapon system that was issued a reform act let me take a moment to mention some of the reforms that both the secretary and deputy secretary lynn have articulated for us to improve the discipline of the acquisition process each major program will be subject to a mandatory process entry point the material development decision pride a milestone a this will ensure that programs are based on approved requirements and a rigorous assessment of alternatives to reduce technical risk will refine program requirements and read and inform our cost estimates our practice will be to conduct competitive prototyping and complete predictive preliminary design reviews before we enter milestone be engineering management and develop we will employ independent technical reviews to certify the maturity of pro pro quo program technologies before we will permit a program to progress to the costly phases of development and finally we will complete independent cost estimates at each decision point in the acquisition process to ensure programs are adequately funded and to reduce the risk of cost spiraling out of control to align profitability with performance we have taken up several initiatives contract the structures will be tied to contractor performance we will eliminate the use of one price contractual actions whenever possible and we will ensure that the use of multi year contracts is limited to circumstances when real substantial savings are to the taxpayer to prevent programs for bologna and cost in stretching and schedule we will use more fixed price development contracts we will also institute new mechanisms to prevent and less requirements creep in which the desire for an perfect system can result in no system being delivered at all of course none of these reforms work unless we are prepared to reform or cancel weapons programs that are not on track to provide our was five days what they need when they need at a fair and reasonable price to our taxpayers those hard decisions are reflected in the proposed budget for next year in summary the department is in turn is determined to improve the effectiveness of our overall acquisition system as secretary gates and deputy secretary len have mentioned being tough minded on acquisition reform is part of being serious about a strong defense every dollar we save through acquisition reform is another dollar we can devote to the capabilities of our troops our troops need today and tomorrow this is what the taxpayers expect and what off war fighters deserve thank you madam chairwoman m i'll even turn it on again thank you madam chairwoman ranking member bilbray and members of the subcommittee since you put a smiley statement in the record i would like to address three issues in the five minutes that you've allotted me that i think merit your attention as they do mine every day those three issues deal with our acquisition workforce the tools available to that acquisition workforce and then three separate policy considerations that ought to guide everything we do in federal acquisition as far as g s a is acquisition workforce i'm pleased to report to the committee that we are working on a succession plan that will help us address exactly how many people we need to do the work that we're given each each year sure and to make sure that we recruit and retain those people through the life of a standard federal career currently we suffer from a deficit in the competencies and skills and insert your groups this is a principal result of the fact that during the one nine hundred ninety s we chose not to hire people as part of our attempt to reduce the size of the government workforce i'm not criticizing that decision but the result of that decision is now as we look for people between their tenth and twentieth year of service we don't have very many and as we look at the folks in between their twentieth and thirtieth years service  we're facing the possibility of almost fifty percent of our workforce retiring by the year two thousand and twelve the only thing that has kept our retirements down i believe is the current state of the economy our workforce is the key way we get jobs done i mean when you talk about oversight when you talk about writing good contracts when you talk about getting the best value for the taxpayer it's not done by a machine it's not done by a policy it's done by an individual who's trained and equipped to sit down at the table not only negotiate a contract that represents the best value to the government but then who has the time and ability to manage that contract to a successful conclusion today most of our contracting officers are measured on how many contracts they award and the soon as they award one they have to move on to awarding the next and don't have the time they would like to devote to making sure that the effort they put into negotiating a good contract results in a good result to the taxpayer when the contracts concluded we expect to complete our succession plan sometime by the end of this fiscal year and a core and swith the direction congress has given all federal agencies to address succession planning the second issue i think we need to talk about is tools  despite the fact that this is an i t rich environment despite the fact that we buy i t for everybody else the acquisition community lacks the kind of i t tools it needs to leverage the existing workforce and to help them avoid making some pl mistakes in a hearing i testified in before the full committee not terribly long ago on e p o last the question was why did you award contracts to individuals who were on the e p o less about thirty times over five years and the answer was somebody made a mistake but had they had the proper tool and place the opportunity to make that mistake to check automatically the e p l s would have been reduced not impossible that the mistake would have occurred but it would have reduced it and so we are looking in g s a dopping and acquiring a tool which may be a single solution or a system of systems that will allow us to automate the entire process thus leveraging the workforce we have and ensuring that mistakes that can be avoided by use of a trans parent tool will be avoided finally the issue of policy is important to look at the president has done something i think quite unusual in the last several months or the first several months of his presidency he's talked about acquisition a number of times including issuing on march fourth a guy in the guidance document to the federal government on acquisition and in that document he talked about two key principles competition and transparency these are not new principles these are not principles that we weren't to aware of and didn't work with before but it's essential that we understand competition in today's changing environment and that we spend our efforts and time making competition a reality and by the way madam chairman in your opening statement you said the competition had been reduced actually as a percentage of the whole our statistics show the competition has not been reduced it's about the same it was and has been over the last decade but because of the size of the dollars we're spending the day the gross number of dollars that have been awarded in a other than full and open competition have increased but the percentage of dollars has read stayed relatively the same transparency is important i would simply mention to the committee even though my time is up that the united states is the most transparent acquisition system in the world i just recently concluded a meeting with my colleagues from taiwan korea italy canada and they're amazed at the amount of information we provide the taxpayers and the citizens on government procurement you can literally find out every contract we award any time of the day or night and finally integrity which goes to mr bilbray is common to about oversight we would like to do more oversight but unfortunately as a result of a decision made many years ago all of our internal auditors which public companies have under sarbanes oxley have been taken away and made part of the i g s office so as a manager i have no internal audit function to assist me  providing oversight on a regular basis as any good manager would i can certainly talk for much longer but i appreciate the committee's indulgence and my exceeding my allotted time thank you ma'am thank you to both of the witnesses  he's given us a lot of food for thought and our members this morning will be raising the questions that will extend your time we are very concerned about the oversight and so what we are trying to do here is take a cursory look and so i will raise some questions i think both of you have probably answered them but in a format so we can really hear the changes on the recommendations that you make stated as a result of your statements i'm going to just go through them again because in leaked onto president obama's march two thousand and nine memo on directives for agencies to report back on improving the four and its agencies specific supplement supplement what type and you had mentioned some but let's get in the format of recommendations are changes that are your agency's making and would you repeat this decide i did hear several yes madam chair specifically some of the things that we're doing these days it was mentioned by one of the members that we're spending a tremendous amount of money on acquisition on services we now spend more money on services when the department than we do on major weapon systems and last year it exceeded two hundred billion dollars and what we are now doing is we have implemented a series of things called independent management review procurement over a billion dollars has given significant oversight not only prior to the ward of a contract but during the performance of that contract contract congress mandated that we do that every contract it respectable of what it's for goes through an independent management review and so we look at it before we issue the r p while the evaluation is going on to ensure that in fact we're having a proper evaluation and then lastly once the contract the city or the decision forward is made that in itself is examined and then every year we review that contract to see if in fact the tax payers are getting what they are what they paid for  that process was put into play about seven months ago we have reviewed over forty programs to date and are in process of reviewing them this is an ongoing thing it requires participation of senior executive service and or general officers and flag officers to participate in these reviews whenever we can it includes contracts managers engineers program managers or auditors as well as the general counsel's office and the whole idea here is to ensure that we are in fact utilizing best practices across the partner and secondly that we're   the we are working right now with o m b to discuss how we could in fact put parts of this information online many of these  means are competitive and i saw selection in nature so there are certain aspects of it that we can't put on line but certainly the results of it and the general findings we're process of doing that right now i think we were at next generation to come and those yet unborn and so on i think we have to in some way tie to weed out that information that might be classified and relate that the  information where people the taxpayers can see what we're doing it takes money in these conflicts and to protect our military and to when it's costly yes everyone has to sacrifice but we need to give them my reason for feeling they have to sacrifice in just say we've instituted a primitive management review process actually we instituted that process over five years ago now and in that process we we visit all of our major contracting facilities once a year we randomly select contracts we review those contracts and we provide feedback to our colleagues on the quality of the contract file the contracting act the acquisition plan and their management of the contract in addition just recently beginning last september we added the a one twenty three reviews which is the circular which primarily used to focus just on the financial side and now we have added an additional layer of review we've added individuals to our team to do those kinds of reviews in addition to the reviews themselves we bring in colleagues from other offices so that they can bring their experience to the review process and share their experience with their colleagues and so that they can also take lessons learned home to their own on offices things that they learned that were being done differently or uniquely somewhere else the result of this process we believe will be validated quite shortly when the d o d i g completes its review of g s a next year we believe that i think right into the  we believe that that review i think someone turned down the sound so it would get the feedback we believe that review will validate the fact that we not only have we been getting it right but we continue to get it right every day  my time is up but i have one more question now to give myself an additional minute and are in a specific changes suggesting the use of multi award schedules going to be included in your submissions and both of you like it is fine madam chair we are we are moving forward to reduce the number of multiple award contracts that we have these can be terrific tools for our people to use but one of the things that we want to make sure of is that they are in fact promoting competition and that they're not used as a mechanism to simply obligate funds and so we are looking very hard at the practices that we're using to ensure that we provide fair opportunity we're specifically looking at where we have small businesses who have been who have been awarded multiple award contracts and who are capable of doing the work that that work is properly set aside for small businesses to compete on and so what what you'll see is a number of actions being taken by the department to improve our competitive posture last year we we've actually set a record within the in terms of the most dollars and the largest single percentage that we've ever competed having said that it's not anywhere near enough and we know that we need to improve and one of the areas that we can in fact improve upon is in the is in award of delivery in task orders under multiple award contracts and you'll be seeing a number of policy statements come out as well as changes in our policy guidance in information of the day farce with regard to improving competitive opportunities in multiple award contracts madam chairwoman i first like to make a distinction between schedules which is a program run by the administrator of g s a and multiple award id i q contracts which we all have authority to r schedules program has always required competition our customers compliance with that rule has on occasion been a little spotty as you probably are aware almost five years ago we developed a program called eva an electronic method so that all members all contractors holding a schedule can be selected d o d in fact is required to use e by when they use our schedules program and the number of bids or r f q our quotes that they've received has increased to an average of between three and six per per capita titian but it but they solicit from all schedule holders on id i q contracts there's always been a requirement for fair opportunity it's a question of administration of that requirement that has been put in issue but i think the real issue is what shape touched on madam chairman and that is also what we addressed i served as a member of the sour panel and later you'll hear from our chairperson marshall matt madsen is that we probably have a way to men id i q contracts in the government it costs us money to award those contracts and administer them it cost and history money to compete for them and i'm not sure it contributes to competition or better pricing overall in the last congress there was direction to o m b to begin a process to manage the point out i think when we get into this we've got to look at our successes and we are the most transparent system in the world we just forget that outside of mexico where the only place where we don't follow the british god for sake and parliamentary system to where winner takes all and that the administration is nothing but an arm of the lower house so i think as americans we always talk about other countries and think they're in our system we have a very unique system and it works and that's why this relationship between the executive branch and the the legislative branch in the process of oversight is so important and needs to be not just cooperate with what embraced i guess gentlem what i first want to talk about is we really are in crisis on this issue and what i worry about and cry when you look at how much of the budget cannot be accounted for in so many ways at a time that we now are looking at almost another trillion dollars that we don't know how we're going to account for there is this crisis and the problem is with crisis is that we always look talk about tactical all issues during crisis and we ignore the opportunity in terms that come in and participate in a training program basically don't we what percentage of those in terms do we actually end up hiring  after they've gone through the the intern system we we actually do very well in terms of hiring the interns the real question is can we retain and and i would say that it's not unusual in  our intern programs to see turnover thirty to forty percent now the question is well where are they going well to some degree they go to my brothers and sisters in the rest of the federal government and while we hate to lose them out of the department of defense that of itself is not a bad thing but in fact we do lose a number of them to industry because we happen to have the finest training system in the world in terms of training people in acquisition particular at the defense acquisition university that it's without peer and so folks know that when they get somebody a especially an intern through our training program that they have been well trained and so what we're doing is is that we are taking a number of steps and into a certain degree mr congressman this all about leadership it's where we're getting our leaders actively engaged in ensuring that they communicate with the workforce on an ongoing basis in terms of their value and i think the secretary and deputy secretary of state has stood well and basically said we're going to make a significant change in the size and capacity of our workforce and that has gone a tremendous way in terms of almost overnight in significantly improving the morale of the workforce because i see help on the way so basically we've basically absorbed all our interns and then it's this revolving door they come in they get a job and then they end up getting a better offer either another department or outside to say about thirty thirty five percent of them do yes you're already very mind about that we've come in about two thirds what percentage never get a job do you think a very small number you know we do there are some folks who just either they decide that this isn't for me or we decide they just never going to hack it that's a very small percentage  this and i know that the gentleman from fairfax county may get concerned about this but it's too bad we don't have the type of contract arrangement with our civilian employees that we have with our military basically saying if we're going to spend this much time training you as a we expect you to sign on for this long and you know that that kind of arrangement somewhere down the line may be a radical concept now but i think as we get in these challenges we will we should be looking a lot i guess the issue comes down to recounts in the what it was a lot of the the the institutional mindset i think this administration ran a campaign that really should be setting an example of maybe how this administration should be looking  at the modification of the federal bureaucracy and that is this ministration captured young people and captured the potential for not only the young people but the technology that they are so comfortable with and i guess the issue there of retaining more of these these young bright stars is how we can change our internal law aeration the you know section by section to not only allow these young stars to use their new tools that they have but to embrace it and be brave enough i know all of us here that are on the front row here may be less than comfortable with the technology and approaches that that th people will find behind you or behind us you know not only are comfortable with but embrace it and integrate into their day to day life and my question to you is how can we modify the system to be more open to the junior members who are coming up with their mindset and their new their new savvy and drek them to be the next generation of of oversight is to congressmen were when making a number of changes and never god and frankly it's not just the the the younger those less experience so those more more comfortable and the information technology age the fact of the matter is we need to do a much better job within the department and across federal government in sharing information and knowledge about the business deals that we have how do we do business with different contractors it is not unusual to have certain products being bought from organizations who in the army navy air force and having never had them talk to one another about doing business with the very same company that sells to all three so what we're doing is we're about to make a remarkable change in in how we collect in disseminate especially business information d c m a is going to become a cost analysis center for us and so that our of our young employees will be able to log on immediately go in a web based tool into that d c m a database get the information they quickly and then be able to process that so that they can understand what the terms of the business feel that they're getting the fact of the matter is is that we are we are not as as capable as as a number of organizations in terms of being able to share that information but we are getting there and i think you'll see a significant change over the next couple of years especially in the way we share business steal information is there when i might my biggest concern is that there are those of us that are in the position to make decisions at almost as if they know i grew up along the border and the one thing i've learned very quickly is no matter how much you learn a language it's not the same as growing up with it you think certain ways and i think our generation if i may expand our the relationship will always have a blind spot that we need to do translation to understand what these kids are up to when with their technology and their approach only because they grew up with it this is their primary way of thinking how do we figure out how to tap into that sum was like man's first experiment with fire or with nuclear power we may you know first of all it intimidates us to some degree and we may not understand it but boy the potential is huge how to us all guys able to develop a system and actually embrace these kids and their technology while still directing it even though we may not speak the language as our primary source actually i'm very lucky to be a genius because at g s a we have a culture that has adopted and continues to adopt the changes in the in the i t world and in the way we approach our business we are able to attract folks right out of college we and we use collaborative tools we're in the cloud computing we're we're on the edge we have our people have the most current and up to date electronic devices and access to them we have a process because of the problem of hiring in the ninety's we were advancing people now that would never be being advanced at this stage in their career we don't have a choice we've got to have people to do the work and so somebody who has between five and ten years experience is now getting a chance to do things that they never would have gotten the chance to do if we had had a complete people with the kind of experience a kind of reminds me of what the army was like when i came in in one thousand nine hundred seventy eight at the end of the vietnam war as a young captain who never tried a case in my life i showed up and was made the chief of military justice i mean those kinds of opportunities exist today and we're able to take advantage of those and leverage those and just say we're much smaller agency than d o d but i think you'll find if you talk to any of our young people who come in the in turn program that we have that they will tell you that g s a is taking advantage and knows how to talk to them we using the social web sites and the social and all these other tools not only to attract people to come and work with us but to keep them interested while they are working with us ms like to point out the silver and the yield yes you said in your opening statement that one of the problems you suffered from was the lack of being able to hire well trained well scaled well educated people do we see within your budget the opportunity  bring on that the people with the skill sets that are needed and i'm listening very carefully because i know there has been much debate in our house about our budget deficit and in danger in obama he used technology to its highest level and that's how he surprised a nation and one there's a lot of talent up there out there are we going to be able to capture that  have the budget leave be able to bring on the kinds of people that you know can advance the agency well first of all in in our career field in the acquisition career field there are very few people in the private sector who we can hire and put to work immediately because of the very nature of government perturbing meant all of our rules all of our processes which are unique you don't find them in the private sector even the county of fairfax or doesn't have the same level of used to be a resident of the county doesn't have the same level of regulation and process that we provide in the federal government so when we hire somebody typically we have got to train them you know and that training process takes somewhere between one and a half to two years before we can even put them out on their own to begin doing the kind of work that are we in that process we are in the processes of hiring them in g s a which and we're different from other agencies because as you know congress appropriates very little no money for the operation of our federal acquisition service and very little money for the operation of our public building service we earned through revenue through sales other agencies the money we then used to reinvest in our workforce and our tools we and g s a have the flexibility to acquire more people if you talk to my colleagues in the other civilian agencies i think you would hear a different story they require an appropriated budget in order to crease increase the number of f t e full time equivalents they need in the acquisition workforce but i'm not sure that the question is really increased the acquisition workforce so much well i'm sure you have to increase the acquisition workforce i don't know that the answer is that we have to increase the workforce as a whole and i can't speak for other people but i certainly think we ought to have a business process that looks at where are the co skills that we need to have in house to do our work and those people we should hire and where are the competencies and skills that we can buy from the private sector to get our work done and are not essential to the government's performance of it mission and those we can buy and those are the kinds of decisions that i know are difficult i know that this committee and others will be discussing i realize they also have issues relevant to political party  platforms i'm a career civil servant i don't get in those discussions what i'm concerned about is making sure that we have enough people to manage the five hundred fifty six billion dollars worth of contracts we awarded last year by the way hundred one we had thirty three thousand seven hundred eleven zero tos in the whole federal government and eleven o two is a contract specialists that's a person we hire and train to award contracts last year we had twenty eight thousand seven hundred eleven o two and nine hundred ninety we awarded one hundred fifty billion dollars worth of contracts last year we awarded five hundred fifty six billion dollars worth of contracts do the math mr job in other words what happened was we did and all of us were participating except for the gentleman from fairfax that reduction during the ninety's and then we hit the crisis of nine eleven along once we saw a huge ratcheting up of contracting the the the question i really get to is that where approaching occur you know we're in a crisis mode now and there's opportunity obviously in a crisis situation right now elise indications from coming out of the universities is that you now have people that especially in i t that normally would not be available for government service now are looking to government service for that stability that never was considered for a long time since you know going back to i guess the seventy nine i guess is the closest time we've seen even then it may not be so right now the word is that as these kids are coming out in june they're looking to come to washington they're looking to work for government now and now is that opportunity for us to go do the cherry picking and be very aggressive at grabbing these kids while we can and get them into the system and hopefully will be able to lock them into a career before they start you know the economy starts recovering and they start seeing opportunities other places you can see i'm going to go to our next member mr connelly and then if you want to respond to mr bilbray his comment you can do it along with answering his questions i think securely and i want to invite my colleague my friend from california i'm so glad he began by asking about the internship program because it's a concern i've got  systematize a internship program and looking at reporting in terms of outcomes so we have a better handle on that and certain elements mentoring rotation evaluation streamlining so we make it easier if you are an intern it's easier to get into the federal service as we move out to the future so i would welcome sharing that draft legislation with my colleagues just to get their reaction but i do think we have to do something to encourage model programs of internship because we've heard both the good in the bad about internship programs of seems to me that or somebody it wants to be an intern with the federal government they ought to leave highly motivated to want to continue to serve in the federal service there may be a lot of reasons why not to but i would hope it is one of those reasons is never because it was a negative experience and we have heard stories where in some agencies that is unfortunately the case let me go back to acquisition because i think  you were given some great numbers there and i think clearly what you showed was while the value of large acquisition contracts were going up the number of qualified contract officers the federal government were going down  so when you as you said do the math you know we actually saw a significant loss of skill sets in the federal government in just sheer numbers but even if you go behind those numbers what i'm concerned about having watched it from the other side is that it's not just the actual number it's also the skill set we increasingly face a challenge in the federal government of do we have the requisite skill set to manage  large calm plex technological contracts that are multi year that's number one and i'd like both of you to address that secondly what about our own internal processes i mean we talk about cost overruns but frankly sometimes we  the federal government where responsible for those cost overruns because we change in effect the scope of the original work i can think of one contract i'm familiar with where over the life of the two or three year contract we had this particular contractor had fourteen federal cop project managers contract managers each of whom formally or informally had his her own view of the scope or what could or should be added and by the end of the contract it looked a lot different unfortunately than what originally was agree to and the contractor was a tough spot in trying to deal with the client and so is the rotational system we've got within the federal government part of the problem can and should be changed let me first talk to the workforce itself mr congressman we went through and i know some of the other federal agencies have done some competency modeling but we've gone through what we consider to be the most comprehensive competency modeling of the contracting workforce frankly not only within the federal government but probably across industry we had approximately eighteen thousand employees participate voluntarily in a competency modeling that examined the companies whose and a very detailed and specific way so we understand not only by every particular organization but across each department army navy air force as well as the other defense agencies what our capability gaps are and we understand what it is we have to do about it in terms of our growth in our  workforce we're specifically going to hire about fifty three hundred contracting officers about twenty five hundred defense contract management agency personnel seven hundred auditor's eight hundred pricing people itself i think that that's a tool that everybody needs to use i know g s a has dave and his team have a very good system that they use over at g s a and but we really do need to institute that across the department in a very significant way so we can understand our capabilities to cross the workforce in terms of rotations rotations can be a positive thing because you get  a specific degree of experience across a wide variety of resources but having said that one of the things that we're doing now is we're requiring our program managers to sign term agreements to say that they're going to stay on for a specific period of time because as you know given your past experience when you have major weapon systems it's not unusual for that takes seven eight nine years from initiation to absolute fielding and you might have two or three major program managers participating in a program along the way and and sometimes a program manager inherits decisions that were in his to make and so we're looking very serious seriously about that about extending the terms of program managers especially in our major programs and i think that with our term agreements with our program managers it's going to go a long way to do that me i think one of the last things you talked about but which is the most important thing for any acquisition and that is the requirement and i believe you're absolutely correct that in many cases when you look at a contract changed over time or why a program changed changed over time you will find that at least in part it was attributable to requirements creep we call it the requirement started out as being an automobile and before you finished it's a jet aircraft and by the way if you start out to buy an automobile you're going to get a lousy jet act aircraft when you're done but our community day acquisition community does not really control the requirements side of the house we respond to it and the second most important thing is what we do once we get that requirement and that is the acquisition planning process which has been codified and institutionalized for many many years but which still today because of a lack of time because of a lack of people and because of a lack of management direction or over or interest the acquisition planning process in many cases across the government gets left out but that's that during that process where you look at the requirements again you make sure you redefine the quick wire and you do your best to make sure it's nailed down and all the changes you can anticipate are taken care of and then how you decide to satisfy those requirements through the acquisition process including justifying what kind of contract you're going to write based upon the nature of those requirements or how you're going to define the competition because all requirements don't compete equally in the marketplace and you get to rotation assignments i do agree that there is a problem with the fact that we have both contracting officers and project managers who during the course of their career change jobs and g s a we don't have the ability to direct someone not to go somewhere else we can avoid internal management reassignments but if they get an opportunity to work for another department if they decided they've had enough and don't want to work for the federal government anymore we have no ability to keep them in one place although we are looking at ways to retain them things that we can do to incentivize them to stay in one place and complete a project till its very end although some of our projects are quite long not as long as those my colleague has in the department of defense but when you're building a major courthouse you don't do it in twelve months and making sure you hold a team together to get that courthouse done and g s a builds a lot of courthouses is something we're looking at finally the level of competency and difficulty has changed in what we buy and it's different than what most state and local governments do in terms of buying in the federal government we decided back in the hundred ninety s we would buy best value we would stop buying low price it was secretary perry who was in the secretary of defense who came to this body and said and reported to this body that it was costing the department of defense a fortune to buy a low price because you'd buy something that was the lowest price and it would wear out sooner than something else and you'd have to go out and re buy it and there were costs associated with all of that in addition we were buying from companies that weren't performing well and so we went to best value and best value requires a level of competency and skill which is different than picking the low price and judgment that's part of the co and the ability not only to figure out what best value is but then because of our system and because of our requiring of transparency to be able to describe what that best value is so that my grandmother in northwest alabama will understand what best value means and believe me that's hard to do and that that requirement has changed and has made it more difficult for our workforce and if you don't mind i'd like to address just a couple other things that mr bilbray said first of all we don't need people to come to washington they can work from other places and one of the great things about g s a is we can hire people all over the country and they can work for us from wherever they are and we are looking at those kinds of opportunities because  i take your points about rotation certainly there is a positive aspect to that and keeping somebody fresh wanting new challenges you don't want people get stale and you certainly want one for a while a fresh look at a  contract no question about that but on the other hand if you have say not a an eight or ten or twenty year project but you've got a two or three year project that has a clear beginning and a clear and with i hope a clear mission clear objectives there is something not only satisfying but desirable it seems to me for someone to take that on as his or her project i'm going to see it through to the end and it's incumbent it seems to me on federal managers to create an environment and a system of incentives that allows for that i think both of you would agree that if you're looking at a say a three or four year contract with fourteen project managers that's a recipe for discontinuity and frankly dysfunction i agree with the most congressmen and that is a function of in most cases capacity and people and that's why we're increasing out that twenty thousand folks approximately ten thousand of them will be program manager systems engineers logistics managers because we realized that not only do we have to increase the capability of that particular side of the workforce but there's got to be a steadying capacity to deal with our programs  with this i want to conclude at the testimonies for this panel and i thank you very very much we will be back with you i think that your statements have given this as i said a lot of food for thought so you may and i do have follow up questions but we'll probably get them to you in writing and so with that you may be excused and thank you so much for your testimony and you're on the speed so that's great raise your right hand i'll now take a moment to introduce our distinguished panelists first we have mr william gormley who serves as the chairman of the coalition for government  president and chief executive officer of the washington man and a management group prior to his current post he served as the assistant commissioner for the office of acquisition federal supply service at the general services administration next we have mr philip bond the president of tech america mr bond is also president of the world information technology and services alliance a network of industry associates and associations representing seven high tech trade groups around the world and previously mr bond served as the undersecretary of the s department of commerce for technology and from two thousand and two to two thousand and three he served concurrently as chief of staff to commerce secretary don no e mcnerney served as a general console for the mechanical contractors association of america there he works a numerous labor management relations is a partner with the law firm wiley rein l l p and there she focuses on litigation matters relating to government contracts and has represented government contracts clients in both protest claims litigation prime contractor disputes and trade secret misappropriation litigation is a partner with a law firm myer brown lp there she focuses on multiple issues associated with government contracts and litigation she also served as the chair of the acquisition and finally mr scott amy is the general counsel for the project on government oversight where he directs pogos contract oversight investigations including the views spending on goods and services the responsibility of top federal contractors and conflicts of interests and six concerns that have led to questionable contract awards and i will ask that each one of the witnesses just give a very very brief introduction of yourself on what you do and we're going to cut the time maybe we could talk about what it takes to stay in during the course or as we have more time today but have my my experience will be of value to the committee of the coalition for government determines its members represent the i think we would view it as the commercial sector of services and supplies and they interact with the federal government i had a pair of five minute remarks i will honor the request a short net and come back to it as we have time thank you thank you that's a tough act to follow madam chair and i was very brief and ranking member bilbray pleasure to be here and congratulations on launching what i think is a vitally important series of hearings on behalf of the technology industry i'll try to summarize quickly and give you our view i think one is that  understand and appreciate the fact that this congress and this administration get technology all you have to look at the stimulus bill to see that we are concerned that we don't in the name of reform have some unintended consequences that would end up chasing away small medium or even large companies from the government marketplace and thereby undermine competition innovation and small business contracts and fortunately there are some some proposals that may have that impact the stimulus dollars do come with strings  reporting requirements they apply the rules even to commercial off the shelf contract items which we think is perhaps counterproductive contractors will be required to report on sub contracts which may chase away some sub contractors they require public disclosure of information that goes beyond freedom of information act or other requirements and they grant g a o the authority to interview individual employees without as far as we can see any  rules around the rights of those individual employees so all this makes companies stop pause and rethink whether they want to be in this marketplace and obviously we embrace competition i represent  fifteen hundred companies hundreds of which sell to the government and so we we certainly embrace competition the president's memorandum on contracting also has some rhetoric that sometimes raises eyebrows in our community however it targets and identifies very laudable things including eliminating wasteful inefficient contracts on while it shows a clear preference for fixed price contracts which i'll talk about a minute they also talk about the appropriate times for government to outsource services in the industry embraces that we would benefit from a clear definition of when to outsource and and some clarity around the fixed price contracts versus others however we do believe that sometimes national security or the ability for a national industrial base in some critical area may call for some flexibility in contracting and not always always fixed price we do believe did ministration those right to look at these and we just ask that they do so with an eye toward flexibility again in the name of national security and industrial base issues and we hope that congress will let the administration move along this path a little bit before changing the rules and i want to rattle off a few others very quickly madam chair on the in sourcing issue fundamentally we believe in a blended workforce that is going to take advantage of the skill sets in government the best of the public sector with the best of the private sector the workforce that mr connelly and mr bilbray raised there are too few professionals with too little experience writing contracts that are very big and complex and with billions coming in recovery funds that problem potentially is going to get a whole lot worse transparencies been referenced especially the great examples that were shown by the obama campaign for president we we certainly embrace that and we think that for instance o p m has to write some rules that rick that will will tell employees what they can and cannot use in terms of some of the new social networking capabilities and want to make sure that as we pursue transparency we don't require companies to file information that would unfairly give advantage to their competitors overseas or would go beyond the freedom of information act in conclusion the committee has launched an important series of hearings the goals the administration has laid out for participatory democracy greater access openness transparency all of those will demand modernization and we hope that the committee will consider ways to reform the policies remove barriers and encourage more innovation and we remain confident that together the best of the public sector the best of the private sector that we can meet the mission for both the government and the taxpayers thank you thank you m chairman i'm representing here today five construction trade associations the mechanical contractors association sheet metal an air conditioning contractors national association the association of union constructors international council of employers a bricklayer's in the light craft workers and the finishing contractors association and i'm sure on we have our committees have come up with ten construction current recommendations that respond in one way or another to the various aspects of the discussion today and in the interest of time i'm just going to rattle them off by name our number one priority as we think the committee even though this is a fiscal committee matter that this committee we would respectfully submit should take cognisance of this new three percent withholding tax which is going to affect public contracts in two thousand and twelve but the agencies are going to have to start spending their predicament resources to gear up for this probably next fiscal year d o d is estimated it will cost their procurement budget seventeen billion dollars over five years to change their payment programming systems personnel and to add the financing cost in their contracts  a problem for public contractors then we think the rapid deployment of the contractor legal compliance database is a better way to keep tax the link once out of that pyramid programs we would also submit that because this raises payment issues and if the tax goes into effect extending the federal prom payment law to federally assisted contracts would become all the more important if there is going to be added withholding then we certainly want to ensure that the payment of the amounts of the invoices do is is given more rapidly we also would submit that the regulators are going to have to be very very careful that that three percent withholding tax doesn't go down the contracting chain to subcontractors we've heard a lot of talk here today about negotiated selection and other aspects of the contractor selection procedure we think a close look at the trends in particular moment methods probably warrants now reconsideration of the idea that prime contractors ought to ought to list their major subcontractors on low bit awards we think you'd improve the quality of con both the level and quality of comp competition in the federal market if you did  that were supporters of the obama administration's initiative on allowing consideration by agencies both direct federal and federally assisted of the use of project labor agreements on major construction projects there's a lot of flexibility in that order even now own him be and deal well are considering ways to shape that and we would urge this committee to take some cognizance of that and see if you can help the agency find the ways to use the benefits we represent union signatory especially contractors we have an interest in project labor agreements and we also know that they work very well and the taxpayers would are well served by them when they're used and finally back to the low bid we would like this committee to consider enacting again proposing again to outlaw a reverse auction internet reverse auction for construction permits well that's a bad idea when it was proposed s army corps of engineers roundly condemned it and we would hope congress would enact the corps recommendation and legislate against it in federal procurement some agencies still do it and finally we would like you to consider and protect especially the construction industry the federal government and over the next twenty years is going to make all its facilities and building stock net zero energy carbon neutral over twenty years that's going to require a tremendous amount of building operations maintenance commissioning energy service contracting energy audit ing and we think we would like to suggest that we protect that and continue to outsource that of the committee thank you very much for the opportunity to appear before you and i applaud your efforts in launching this in launching this important series of hearings i'm here both in my personal capacity and is representing the national defense industrial association i've been practicing in this area for twenty eight years since i graduated from the air force academy and i hope i offer a balanced perspective i spent fourteen years on active duty in the air force is a contract negotiator and then a judge advocate it for the last fourteen years i have represented mostly major defense contractors my entire professional life has been spent in the area of government contracting and i have a deep and abiding personal and professional interest in it i think if we step back so and look at it what we've done since the beginning with the reagan administrate and then taking up greater steam during the clinton administration which is the there was this bipartisan effort to to kind of unwind federal procurement and get rid of a lot of the what had grown up over the years it was like barnacles and it just made it very very expensive to do anything unfortunately is a part of the quid pro quo for doing that we also cut the acquisition workforce dramatically i think in hindsight that was the mistake but i'm concerned that congress by reacting to things made a layer on additional regulation layers of statutes and regulations that just add to the burdens that we had in the past and if you think back to president clinton's signing statement when he signed the federal exhibition streamlining act and he mentioned the fact that during desert storm we couldn't buy the motorola two way radios that we needed for our troops and we had to turn to the japanese to buy them for us and to give them to us we wrap ourselves up into knots and there's a cost in doing that and i'm concerned that if you if you don't have that perspective when we react to the crisis of the day or the the scandal of the day and we just add these layers that it's really misguided oversight in what i've highlighted in my written testimony are three areas where i think that there are sort of intractable problems from my perspective the first is the defense contract audit agency which i think is has completely lost its path it's lost its understanding of a congress directed to do the statutes that it's directed to do and it's focusing on areas that really just  with no good end it's adding cost but it's not really bringing any value to the taxpayer the second is the acquisition workforce which is a huge problem the acquisition you need to have trained motivated contracting officers in order to make the acquisition process work unfortunately we've lost that balance we've lost the training they're not motivated they're certainly not appreciated and now it's french contracted agency we have them intimidating them and then the final area is the contract disputes process which is was intended by congress with the an act in the contract disputes act to be in a quick effective way of of resolving disputes and it's turned out not to be that at all it's a very laborious time consuming process that's not good for the government's not good for on thank you very much for this opportunity of around two or two if you can thank you very much for this opportunity to present my testimony here today as you mentioned chairwoman watson i am a attorney in private practice but i'm also an adjunct professor of government contracts law george mason university school of law my written testimony details my views and in the interests of keeping it short i'll try to do so this morning we heard about instead of additional regulation what we need is a renewed focus on execution of existing regulations and oversight mechanisms that are in place and whether our existing regulatory system can respond to the policy challenges that are being identified today one two that come to mind are cost reimbursement contracting and sole source contracting that were mentioned in president obama's memorandum on government contracting today we have an existing regulatory scheme in place that counsels when to use cost reimbursement contracts and fixed price contracts there's a place for both in our particular mint system and one size does not fit all likewise there are also tools in our existing federal regulation system for promoting full and open competition and requiring justification when full and open competition is not used and also addressing those exits in circumstances that the president identified in his memorandum when full and open competition might not be what what serves the interests of the government best so i would one recommendation is to focus our attention on executing better execution of our existing regulations which  entirely consistent with the testimony we heard today about increasing our acquisition workforce so that we can better apply our regulations better defined requirements and therefore exercise oversight in that matter manner my second recommendation is simply as if additional regulation is recommended that we do so in a coordinated fashion so that we maintain to the extent possible and practical uniformity in our regulatory system  and not proceed down various different paths or continually by death of a thousand cuts add to the regulatory system coordinated regulation uniformity are hallmarks that scholars recognize of a procurement system lastly my final point is is somewhat related to my first in that as this committee goes through and tries to gather information about what is and is effective for strengthening our system one of the data points that that will be very valuable is experience under the recently enacted regulatory and legislative reform initiatives many of those initiatives have just been passed into law some of them have only recently been put into regulation some have not even been put into regulation yet none of them really has the kind of track record that we can see whether or not they have been effective and the cost and benefits have have worked out positively so as as congress can and this subcommittee thinks about ways to improve our system it should wait and let the efforts that it has already initiated see if they bear fruit before determining implementing the recommendations of the acquisition advisory panel it's terrific to be on the side of this effort and my dad the panel's objective as it was described in in our report was to provide meaningful improvements to the acquisition system that would allow agencies to obtain the benefit of commercial practices to better achieve their mission and with recognition that a balance is necessary to achieve transparency and accountability necessary for the expenditure of public funds t panel's report was focused on giving the government and its acquisition workforce improved capability to make wise decisions about expenditure of the taxpayers money many of the panel's recommendations have now been adopted in legislation o regulations about thirty seven i think depending on how you count to the bits and pieces and i should note that the panel at tempted to provide recommendations that could principally be implemented through regulation although congress has picked up a number of those and put them in legislation well i just want to talk about a couple of key areas and maybe a couple of gaps the panel really put an emphasis on the importance of  competition there was some discussion earlier about with mr gradgrind about whether the federal government actually is doing less competition than it was i agree with him based on the research that we did the percentage of competition has has has been relatively consistent however the panel looked at what best commercial practice was for competition and determined that the government's competitive practices didn't didn't really measure up we didn't have any good data on orders under large i multiple work contracts and about a third of the contracts awarded to the data we did have were awarded non competitively the private sector does much better particularly in services and i t procurements than that and we still don't today have good data on the amount of competition that is actually used in warding order center task and delivery order contracts and that's something that needs to be corrected very soon now to our panel expressed very strong views on the need for greater emphasis on requirements development and acquisition planning and i think i still believe that's the gap you see this strad in the presidential memorandum in the discussion of cost reimbursement contracting about maybe for strictures on cost reimbursement contracting that in order to make the system work to reduce costs whether you use in cost type contracts or whether to make it possible to use more fixed price contracts the bottom of that is requirements development and that's what the private sector spends their money on and it's what the government needs to do a better job on the least we made some suggestions about putting teeth in the requirements process and those suggestions actually haven't been picked up yet and i'd be happy to talk to the com more about them and as i said a number of our competition suggestions have been enacted in there in my testimony and i won't go through them something else we proposed was much better management of inner agency contracts in section eight sixty five of the two thousand and nine n d a picks up on that with respect to the workforce again we recognize that there was a significant mismatch between the demands on the and this the skills and competencies of the workforce i was struck i was looking at the same executive order i think mismanage was looking at the implementation of fast just last week and i was struck by the president's emphasis in that president clinton's emphasis in that memo of cutting two hundred seventy five thousand federal federal jobs and obviously there's recovery here so that needs to take place with respect to the workforce it's not just numbers and i won't go through them but if you look at the panel's report one of the things that you'll see and i think this is a gap is that we recommended a consistent definition of the federal workforce and consistent measurement and also a a single database for the federal work acquisition workforce so we can tell what the federal acquisition workforce is there's at least three different counts that are used today and they produce wildly varying numbers so it's not only numbers it's gets a definition it's also getting the skills and the competencies correct as mr assad testified i'd be happy to respond also regarding blended workforce issues the panel i think was the first to point out some of the complications associated there and i would like to make one final observation to this to the committee i said our panel is focused on giving the the government the bit tools to do a better job make wise decisions but there appears to have been developing in the last two years what may be piling on to an axle a sort of investigative  provision and many of these are overlapping they're burdensome and they really intrude on the ability of the government to manage its business and i'd like to encourage the subcommittee to undertake a review of these provisions and to assess where there is duplication and what the collective burden is that these provisions impose on the work force do we really need three new whistleblower provisions that do the same thing should contractors to make a mandatory disclosure under the mandatory disclosure of so be sue for making that disclosure a lot of overlap here and i think it would be worth looking at whether whether it's in need needed to check that and make some rationalization just keep in mind the p work in progress that we have all of your written statements and we will look at your recommendations in a very sincere way miss a need to make b c thank you for inviting me to testify and i hope to meet your deadline here i am the general counsel of the project on government oversight also known as pogo throughout its twenty or twenty eight year history pogo as work to remedy waste fraud and abuse in government spending in order to achieve a more effective accountable open ethical federal government program has a keen interest in government contracting matters and i'm pleased to share my brigade and thoughts with you this morning many contracting experts and government officials have blame the inadequate size and training of the acquisition workforce for today's contracting problems the worst workforce reductions or or major problem but we believe additional problems deserve equal attention and these problems are inadequate competition deficient accountability lack of transparency and risky contracting vehicles including some that have already been mentioned  a sole source contracts commercial item contracts cost reimbursement contracts and time and material labor contracts in his abbreviated as i can i just want to provide you with one example that kind of hits all four of those subject areas  in my full testimony i provide twenty two recommendations that we think can be implemented to help improve the contracting process but this is a two thousand and six i g report from the department of defense on a commercial contract for noncompetitive spare parts it was a eight  hundred sixty million dollars contract and this is just the abbreviated results section of the earth force negotiating team use questionable promotional item determination that exempted the contractor i won't name them because i don't you know call them out on this it's a internal problem but from the requirement of submitting koester pricing data on a eight hundred sixty million dollars commercial item contract for noncompetitive spare parts used by the departments was weapon system as a result the air force negotiating team classified basically all contractors noncompetitive spare parts as exempt items it goes on to conclude that contractor refused to negotiate catalog prices for commercial items based on price analyses of previous cost base prices refused to provide d l a contracting officers with an certified cost or pricing data for commercial catalog items and terminated government access to the contractor's cost history system when opened the opening remarks and using it using the term an adversarial system i think it goes past what's going on necessarily between offices and offices within the federal government but this is also a problem with a government the government doesn't have the tools necessary to get fair and reasonable prices in certain circumstances thank you again for having and allowing me to testify more than happy to work with the subcommittee in the full committee as we proceed i want to thank all of you for your testimony and will now move to the question  through my mind but resources is the key here i listen to dave drapped in we interface with the g s a quite often to the association coalition and they have a tremendous number of vacancies there for some reason the  acquisition academy it's a three year program there was about twenty seven in turns and this program and i thought that that i think the committee would be would do well by taking a trip up there or getting a chance to go over that committee it would be a very good opportunity for you all to see some of the excitement in the acquisition field the v a as a leader in that spun yes i want to i think to draw attention to one of the subcommittee members and that was mr connelly who brings really unique combination of experience as a leader in both government and at a leading contracting company and i would hope that the subcommittee of the committee indeed all of congress would use him as a valuable sounding board and secondly mr bilbray really i think hit a key point that there's a lot of thought and that is how to attract retain younger workers making sure they have the modern tools government wrestled for a long time with how to deal with email how can you communicate with people outside the government is a personal is a business we need the same thing for the social networking other web two point zero technologies that i was a construction user round table meeting the other day and a lot of the big design engineering procurement companies are having a lot of layoffs these days and that's all of the current guy that was there from d o d and recruited a lot of people for his workforce there for their construction project management programs so there's some there's some workforce availability and training people transferring over the government now in terms of broader issues we think some of our contracting reforms would raise the level of competition and the type of performers that come into your construction programs and we thank you all terminally that would help the agenc manager i would like to to suggest that one thing that could do a much better job of mr sze mention for example using the defense contract management agency is their cost analysis group i think it would send a much stronger message currently gone from having a three star  show that you really do care about government contracting and the defense contract management agency is exactly where we really bright people to be working  two aspects of the of the testimony this morning struck me obviously the need to augment the acquisition workforce that is that is whatever tools whatever regulations you have in place you cannot replace people with regulation and so that is a key requirement that definitely needs emphasis and then the second was mr dr going to and mr assad both mentioned the need to adhere rigorously to requirements and that whether you have a cost reimbursement contract or a fixed price contract getting the requirements development process right is critical to that and so there are efforts in on in way to to ensure that that is done and those are efforts that should continue thank you two things one i'd like to echo requirements i think those of us who worked in the syria for a long time realize that there's a lot of talk about it but there is a real skill set that's involved in doing it right and it may need some encouragement from the committee and on the subcommittee and some help to the agencies to understand that that's a priority and they need to put resources technical resources that issue the second one is we didn't get a chance to talk about inherently governmental there's going to be an effort underway per section three twenty one nine and in the president's memorandum to define what's inherently governmental and if you look at the panel's report i think we were concerned that not be a one size fits all endeavor but rather the agencies be allowed to define what is their core mission and where they need people and to make reasonable discretionary choices about where to contract and where to bring bring work in house thank you a green with my panelists i would also say as far as increasing competition we would look at should look at the bundling contracts these multiple services and multiple goods all compounded into one contract is problematic that will know not only increase competition but also remove this layer of sub contracting that we're seeing where we're down the three layers four layers in the concept contracting world i'd also like to see better tools in acquisition work forces hands as far as cost or pricing data to make better pria word and post war decisions and also enhancing usa spending i know there was some talk with mr droppin this bout databases that are out there but we hear we're starting to see congress create databases in program was behind one for the responsibility and performance database but we now we have an exclusive parties list we have usa spending that we need to somehow consolidate those into like a one stop shop for federal contracting where you can get all information for members of the acquisition workforce as well as a public thank you i'd like now to yield to our ranking member mr chair you know sort of reflect your last comment about the contract work and it in the you know that that's something we'll have to look into and i guess mr bonior appreciate you identifying some of the challenges we have i remember getting here in ninety five a coming from local government in california and we're both californians so we're trying not to flaunt this too much specially at the state or our state is in right now but i was just blown out that you couldn't e mail between congressional offices at a time that buckets of ice were being delivered to our offices you know fifty years after the invention of refrigeration and we were burning coal to generate the power for this facility i mean in california or prison for burning coal but that was a whole culture shock  i guess one of the things i want to get identify is some of these challenges that that we arrange in our our procedures the parts issue is one of those least most the time and the challenge we had was how do you competitively negotiate with a company that you know has a monopoly on the parts that you need to operate and i guess the innovative way we did in government was that we ordered so many cars took a look at the parts and basically a lot of times the sales of the hardware is a loss leader and the parts department is where these guys make their their money we end up doing is figuring out we're going to order more cars and we needed and then ask them how much assembly cost aston d v d talk the duck the cost of assembly and just send us the cars unassembled now that's the kind of thing that you got do when you've got a monopoly but how often does a guy we're mature ocracy able to do that and so that the challenge there is i would ask you is that when we talk about these things like the parts what kind of innovative approaches can we go when we we look at that or can we look at the fact that when we buy the units and we go out to a bit and let me clarify there was a comment about local government doesn't have to operate at a certain level i  in california we're required to take the lowest responsible bid and so there is a preference given to the lowest bidder but then you disqualify those who are not responsible betters and then move up the chain at least as a process you follow there rather than a wish list of well this guy's got it so as we go these challenges how do we integrate into our system and i guess this is where the new young hotshots can pull up i t information to be able to look at not just the unit price but also the law the life expectancy maintenance cost because parts are then included into that lifecycle cost do we have the technology and do we have the process to be able integrate that in when a bid comes in regardless of the age of the contracting officer there is someone does need time to understand the government's needs what the lifecycle is a need to understand the industry they're buying from in so it's not a point click and buy here and i think the i think the the need to have a growing work force and for congress to continue to support the acquisition community such as today's fan casting the government needs this kind of oversight in action to come out of this committee on the other hand the government has barriers up in the persian o p m to bring these people in but to your point it's a life cycle costing the government back in the eighty's was very high on life cycle crossing and in some cases gotten away from it to your point i  implicit in your question too is whether or not we have the ability to tap all these different databases and pull them together in an intelligent way so you can make a decision the answer to that is yes with a caviar that is the federal government is the largest enterprise that we know of in terms of business function larger than any private company and so the task would be would be vast if you were going to try to encompass the entire federal government in every aspect of it in that but pulling multiple databases together into it  usually called a business intelligence module at the top so you can see what's going on and compare roll up costs and so forth that that is done in private and public sector settings today well it's done in the you know i guess i shouldn't say this but the fact is is  one of the big determining factors of the success of toyota was the it has been at least a perception that the lifecycle costs of owning this vehicle is much lower than the a holes that people have been the motor with basically much lower cost much longer lifespan and everything else so the initial cost was not the issue that we had before used to be that imports were cheaper to buy upfront but overall and what happened was toyota totally destroyed that perception and all once it became the deal here's a car you buy you drive until you know till your grandma and pass it on your grandchildren that that is it may not be reality but it's perception that is really driven the success of the toyota model and that's one of those formulas that consumers make all the time but this is the be the bureaucracy have the well we do that and do we have the incentive the doing that's always the tough part about when we talk about the comparison between the private sector and its inherent efficiency as opposed to the public sector is that vested interest in the decision making if i might so toiled in that case is create real value and so on the government contracting setting i think the fact that you can look for the best value is somewhat corresponding to that concern i think that you talked about whether or not we have the incentive and i think there that the subcommittee might think about some creative approaches and we'd love to engage with staff and members on that but one one disincentive that you have right now is kind of the use it or lose it spending pattern with the the annual appropriations and so forth there is no real incentive to to save some money on a really high value so that you might then use that for something  else maybe a cross cutting initiative for instance one idea would suggest that if you really save some money on something because you went the extra mile and got the best value you can use that saved money it doesn't die you can use it on cross cutting federal agency initiatives or it perhaps could go into extraordinary compensation for really good contracting officers a really good contracting officer in the private sector if they executed a multi billion dollar successful contract would get a much larger bonus than anybody in the public sector would realize you know it's funny you say that was monica's that my father passed away when i was the sophomore in high school but i always or my he was a life a life or mustang in the navy and he always says communism would never work eventual it would fail but his explanation was because countries don't have fantail so throw the hands overboard as you come into port and have based on the the concept that if it was it was in your inventory when you got into port you didn't you didn't get that the next time out and i guess you really hit on there as that's inherently a challenge we have in the public sector that we've got to figure out how to address and i and i appreciate that and i think it's one of those things that we need to go back to your back and i'm sure because of time i want to thank all the witnesses we have your statements but we're going to mail out to you a series of questions and we'll try to categorize  with your background of experience in mine and we would appreciate the answer is frak if you can within ten days we will be suggesting to the full committee certain policy changes and i think the kind of testimony that you have offered today will be very very helpful so if you will answer we have a series of questions that would keep us here to three o'clock this afternoon but we can't do that so i would appreciate you responding