Analysis of Department of Army versus New Dynamics Corporation - Case Study Example

a. Sta y, Congress Directed by Statute Cases Three cases which came to GAO were of CRAssociates (2006), U.S. Transportation Command/ Defense Department versus 2B Brokers (2006) and Department of Army versus New Dynamics Corporation (2009). All were statutory cases. In CRA (2006) case, protest was dismissed as SSB had no conflict of interest, it came under FAR 2.101 and it was presumed that latest policy could have modified the judgment. In 2B Brokers versus Defense Department (2006), government executed the strategy and transportation was not an IGF. The rules followed were FAR 7.5 and 2.101. In Department of Army versus New Dynamics Corporation, government did not employ the strategy and OMB Circular A-76 was used. i. 1. Case 4: CRAssociates, Inc. vs. Department of Health & Human Services, (2006) (Statutory) Under the Office of Management and Budget Circular A‑76, at May 29, 2003, the agency was required to embrace technically obnoxious private sector in preliminary competitive range within solicitation issued under cost comparison study, Circular A-76. Protest was dismissed stating agency can hold thoughtful meetings only with competitive range offerors (Government Accountability Office, 2006c). Upon refutation of proposal and dismissal from competitive range, CRAssociates Inc. (CRA) protested. Their solicitation occurred on August 5, 2005, pursuant through Circular A-76 of OMB at May 29, 2003, to discover either to carry on in-house services through Division of Immigration Health Services (DIHS), HHS’s Health Resources and Service Administration (HRSA) workers giving support and medical facilities to captives in Immigration Customs Enforcement (ICE), Homeland Security Department, or contract out. CRA claimed that agency members have outlawed conflicts of interest thus, HHS never gave a chance to resolve the insufficiencies (Government Accountability Office, 2006c). The insufficiencies and flaws in CRA’s proposal were evident from record ascribed to which they received undesirable scores under 8 out of 10 assessment criteria and as a whole. This caused dismissal from competitive range. Court’s verdict and our analysis both considered their proposal unacceptable with no need of review (Government Accountability Office, 2006c). CRA’s issue of conflict of interest arouse as two out of four inspectors on Cost Evaluation Review Board and three out of seven inspectors in Agency’s Technical and Past Performance Review Board were working for DIHS which might have prohibited their involvement in assessment. HHS answered that posts of accused evaluators as being inherently governmental which is not a discretion of A-76 assessment. These personnel were included in SSB as well. The inquiry in this case must be; “whether the workers were inherently governmental or not?” Positions may be distinguished under IAW’s Fair Act Inventory and agency must circulate list of Fair Act. GAO’s verdict was according to FAR 2.101 definition clarifying inherently governmental as a task so closely associated with public’s benefit, it asks for high performance from Federal Government’s workers. This solicitation was thoroughly examined so those individuals appeared adequate for their SSB roles which were for professionals required to properly assess proposals. The court’s verdict was according to definition in this case (Government Accountability Office, 2006c). Current case is imperative for numerous reasons. Since initiation of New Publication of OFPP Policy Letter 11-01 about Performance of Inherently Governmental and Critical Functions, results must be different. IAW as policy letter suggests that participating members of SSB must be federal workers. The latest OFPP Policy now supports that one cannot work on SSB, and whether IGF can act as a defense of outsourcing roles or in the procedure of assessing IGFs. An interesting argument is presented in this case regarding determination of IGFs. This case will influence the latest policy and contractors will have the capacity to question future verdicts. ii. 2. CASE 5: 2B Brokers (2006) (Statutory) The protest from 2B Brokers stated that solicitation of Defense Transportation Coordination Initiative that amalgamated freight transport services and transport coordination lacked competition plus there was forbidden hustling of prerequisites under Small Business Act. Protest was dismissed and agency found that it can lead to substantial cost effectiveness and was imperative to meet agency demands. 2B brokers criticized that there was no competition in RFP and supported services being inherently governmental (Government Accountability Office, 2006a). They also protested that performance of IGFs violated FAR Part 7.5 and 10 U.S.C. sect. 2383 (Supp. IV 2004). Particularly, they argued that DTCI contractor is needed to choose carriers; negotiate, implement and look after contracts; assure acquiescence of contractors with federal policies about cargo liability insurance and public liability; expedite resolution of governmental claims of damage or impairment to cargo with inference and implementation of cargo liability clauses (Government Accountability Office, 2006a). Contractor proceeds as government representative and enquiry is about how much authority the government and chief contractor has? GAO while appraising this case and protest legitimacy, gave its verdict following Title 10’s Section 2383 in U.S. Code and FAR 2.101 which illustrates; (a) Restriction – the agency head can only enter a contract about acquisition functions’ performance, closely connected with IGFs if it is assured by contracting officer (This clause asks for Agency head’s discretion) (1) Suitable civilian or military personnel belonging to Defense Department cannot be pressurized for performing functions (This clause is imperative when only manpower available is contractors). (2) Suitable civilian or military personnel belonging to Defense Department include those who can monitor performance of contractors, and those who perform IGFs related to functions required performance in a contract. It is found from inspection that DTC fulfilled the criteria, but this case is evident that only the agency chief can take judgements concerning outsourcing or insourcing tasks. After examination of OFPP Policy Letter 92-1 issued on September 23, 1992, it is found that FAR restricts agencies to award for contract performance on IGFs and encompasses instances of IGFs in federal purchase activities associated with main contracts, awarding, managing or/and dismissing contracts under IAW FAR section 7.503(a), (c) (12). As per FAR, IGF is defined as a rule that binds performance of the government workers and is highly concerned for public’s benefit. It is divided in two parts; the act of governing, such as, the discretionary implementation of government authority, and monetary entitlements and transactions. Here, the contractor shall be monitored by DoD individuals performing “all IGFs linked with functions that needs to be undertaken as per contract”. It will also deal with any type of conflict of interest, a contractor may face (Government Accountability Office, 2006a). As per our evaluation, the contractor shall perform diverse roles closely associated with IGFs, but monitoring and supervision will be done by governmental workers. The court comprehended from their overview about solicitation that RFP themselves lacked provisions for acquisition function’s performance closely connected with IGFs or for IGFs performance as per Section 2383 of Title 10 of U.S. Code and IAW FAR sect. 2.101. The three services offered by RFP; management, coordination and transport are commonly executed in 3PL firms like GENCO. DTCI contract lacked provision of IGF including inherent implementation of government’s discretionary powers or mandatory governmental finances. In our analysis, the contracting responsibilities can be argued such as managing, selecting and awarding subcontracts demonstrate usual administration requisites and few areas are adjacent to inherently governmental roles. As the contract demands from DTCI contractor to simplify solutions of claims about cargo damage or impairment and wants that contractor must cover it in subcontract agreement that third party beneficiary will be government and government is entitled to execute cargo liability clauses. Such clauses do not ask contractors to perform IGFs as it continues to be governments’ liability of formulating a final solution about government’s claim if cargo damages or impairs, whereas the DTCI contractor is responsible to government for subcontractors’ activities. Protest was dismissed and IAW FAR description on inherently governmental verdict was according to policy. Although, we believe that latest OFPP policy can make amendments in elucidation of contractor’s authority (Government Accountability Office, 2006a). iii. 3. CASE 6: New Dynamics (2009) (Statutory) Agency’s choice to continue custodial facilities in-house following the outcomes from customary public-private competition was protested by New Dynamics Corporation; conducted pursuant by Circular No. A-76 from OMB. This protest was vindicated as agency was unable to realize the practicality of its tender’s supply costs. Army held an A-76 competition at West Point in 2000 for custodial services and resultantly, the requisition continued to be in-house and services to be given by government’s Most Efficient Organization (MEO). The theme of this protest is the pronouncement by Army on September 27, 2006 of new A-76 assessment about custodial facilities at West Point. This evaluation to be accomplished in 30 months and performance deadline is March 26, 2009. In second A-76 assessment, Army issued RFP on December 16, 2008 to look for fixed price proposal to perform custodial support facilities for 9 months’ base period, followed by 90 days phase in period, preceded by 4 one year periods, from Ability One Offeror and agency tender for in-house proposal. The work statement on performance established a particular explanation for provision of custodial facilities, which encompasses routine and periodic custodial services at various structures, facilities, buildings, emergency custodial facilities when required and specifically event cleaning also known as VIP cleaning facilities (Department of the Army versus New Dynamics Corporation, 2009). RFP stated that proposals will be analyzed under two aspects: minimum price and mission ability (technically acceptable). The mission ability has four sub-aspects: staffing, management, quality control plan and phase-in. Army conducted first phase of deliberations with both offerors referring to flaws in their technical and cost proposals. The Army queried regarding various aspects as it was linked with protests and they enquired agency tender official (ATO) about MEO’s quality control plan and hiring employees. They asked ATO to describe labor hours via work breakdown structure, illustrate categorization abilities according to levels of custodians, a matrix should who and which activities a member performs, elucidate the dissimilarities among proposed things and actual staffing need, distinguishes how the staffing logic is used per facility and explains whether the leaders and authorizes move around and how much (Department of the Army versus New Dynamics Corporation, 2009). After various meetings with New Dynamics Corporations and after the technical/ cost evaluation by Army, both were found to be technically acceptable. The pricing of New Dynamic was increased using a software named COMPARE and is used by government to assess costs while outsourcing tasks. The price of MEO was lower with approximate difference of 1 million dollar (Department of the Army versus New Dynamics Corporation, 2009). The agency carried out a cost comparison in this case under OMB Circular A-76, they utilized procurement system The GAO questioned the manner of assessing proposals and suggested that agency must review the purchases and take suitable steps to resolve the flaws. The suggestion for Army is to execute a method to appropriately evaluate the ATO’s proposed line 2 for practicality and record outcomes consisting reopening debates. If the New Dynamics Corporation’s price is found minimum after evaluation after being technically suitable offeror; agency must award it to New Dynamics. During this whole case, agency supported insourcing rather than being unbiased in the purchase process (Department of the Army versus New Dynamics Corporation, 2009). Although this case was not really about IGFs, however, it is linked to OFPP policy in terms of cost comparison practice prerequisite in A-76. As per the Defense Education Department’s Activity, program A-76 is administered by Circular A-76 from OMB, Commercial Activities Performance. The key objective of A-76 is to perform functions proficiently and cost effectively either with contractual personnel or government workers. According to OMB Circular A-76, a competition is to be held amongst private and government contractors for this purpose. The government failed to follow steps in this case, hence GAO suggested government to deal with its inability to follow policy. The cost factor deliberated in OFPP’s Policy makes this case significant as government is bound to conduct a full examination of cost performance by each sector to ensure that insourcing can preserve money. b. c. Use of Force Cases The case Department of Army versus Brian X. Scott came in 2006, is about use of force in combat. GAO stated that OFPP policy was implemented but award never meant for security roles which are inherently governmental. The authority was DoDI No. 3020.41 and DFARS parts 221, 225, 252 and Act was OMB A-76. It was according to OFPP’s IGFs and is closely connected. i. 1. Case 7: Brian X. Scott: (2006) (Use of Force in a Combat Environment) The plaintiff debated that solicitations about security facilities, cargo transport, and base security facilities in Iraq did not gave an outcome in form of award which infringes Defense Department’s regulations or Anti-Pinkerton Act concerning contractor individuals as the services needed by the ultimate contract are protective and guarded services not just “quasi-military armed forces”. This is evident because in 1890s, the nascent labor was involved in aggressive fights with factories management over wok environment and income. If the owner failed to use legal ways and domestic police is conducted protest, then they enforced Pinkerton. Agency provided huge number of Armed forced to deal with protestors and maintain peace. An example of aggressive and bloody fight happened at Homestead, Pennsylvania, when Amalgamated Organization if Iron and Steel workers blocked a Carnegie Steel Mill. 300 armed men/ Pinkertons were deployed to safeguard the mill. The moment Pinkertons reached the mill, by floating on barges via Monongahela River, there was a firefight among them and protestors. Various injuries and deaths were caused. The Homestead event triggered congressional inspections on how to stop workers dependence on Pinkertons for resolving conflicts (Government Accountability Office, 2006b). Proposal invitations were announced on May 14, 2006 whereas, the government projected numerous awards with indefinite-delivery/indefinite-quantity (ID/IQ) contracts of fixed-price consignments for cargo transport services in Jordan, Iraq and Kuwait Offerors were asked to suggest individuals, vehicles and relevant tools needed for contract execution. Statement of Work (SOW) asked contractors for provision of security companions for cargo processions and consists at least 3 vehicle escorts with weapons and radios for every 10 transport trucks along with 5 tons trucks, i.e. 2 trucks of ½ tons. For sensitive cargo convoys, at least 2 ex-pat security escort vehicles to be provided by contractors (Government Accountability Office, 2006b). Firstly, this arrangement portrays that governments is asking for armed security escorts. However, government requested this so as to maintain high security at chosen entry areas and perimeter security actions. This would be attained by continuing in-house security operations at entrance points, safeguarding perimeter towers, protecting chosen facilities, allotting armed bodyguards for domestic laborers and by retaining a contact cell at Base Defense Operations Center (BDOC) and Area Defense Operations Centers (ADOC). Additionally, contractors should offer managerial oversight of nominated (current SOW) security purposes and employees and shall resist and control any illegal or disparaging action focused headed for VCB” (Government Accountability Office, 2006b). Agency illustrates that contracts demanding armed personnel comes under DoD Instruction (DoDI) No. 3020.41, called “Contractor Personnel Authorized to Accompany the U.S. Armed Forces” as projected by two solicitations. The DoDI No. 3020.41 executes strategies and supervision, assign tasks and works as a broad-spectrum cause for DoD strategy and technique regarding DoD act. DoDI classifies the contractor personnel permissible to escort U.S. Armed Forces as exigency contract workers. As per Geneva Convention, these personnel are civilians (Government Accountability Office, 2006b). Court’s verdict was to terminate protest and GAO endorsed this decision. DoDI 3021.41 para 4.4.2 illustrates security facilities’ contracts will be used prudently in emergency operations when chief combat actions are impending or continuing. Deployment and discretion of contractors giving private security facilities shall be decided later in the contract. The court stated that potential solicitations or award holding provisions must perform in combat position. The government never wanted the security contractors to get involved in position requiring attack or provision of surveillance so as to accomplish their task (Department of Army versus Scott, 2006). Present case is imperative for various reasons, following questions must be responded while assessing this position: 1. What is the dissimilarity among armed guards and quasi-military? 2. Are they in accordance with Law of War in Status of Forces Agreement? 3. Are the DoD Instructions permitted? In order to find out the inherently governmental functions, the enquiry should be; what were the government’s anticipated guidelines to be followed by the contractors? Were the contractors obeyed the Status of Forces Agreements and laws of War? When there is military involvement, the verdict of military commander must be taken about the possibility of operations turning into combats. Moreover, the Combatant commander must influence the government’s judgment regarding requisite supplies, to conduct a successful contract, abide by the parameters of strategies and explicitly states the probability of operations turning to combats. As referred by latest OFPP Policy, combat position is defined as an IGF, but in terms of policy, it means that this clause must not be inferred for impeding contractors, who take action while protecting others or themselves against the looming intimidation of critical injury or death. According to our assessment, it is highly effective for amendments in OFPP Policy and explicitly describes this area. c. d. Acquisition Cases This acquisition case is known as Energy Department versus Baron Services Inc., came in 2009 at GAO. GAO stated that supply job is not an IGF by subcontractor and the regulating authority for factors and relevant Act is FAR 2.101. Additionally, the subcontractors’ needs must be pre-planned. i. 1. Case 8 Barons (Acquisition) Current case is related to a government contractor, Battelle, who furnished RFP on June 24 at FedBizOpps website and was about granting a fixed price subcontract of two radars. This solicitation told offerors about submission of proposals to Battelle plus Battelle’s worker was appointed as the only source to be contacted for queries and communication concerning this acquisition. This is an intense event in which contractor performs usual inherent governmental functions, however, the whole situation is assessed (Government Accountability Office, 2009a). As per the Battelle’s contract, the property title procured by Battelle in lieu of DOE shall go straight to DOE by the seller, and cost of products will be repaid as a direct expense by DOE. To issue the RFP, Battelle got approval from contracting officer of DOE and approximate award price was $3.5 million. Consequently, the DOE raised Battelle’s inception for evaluating subcontract performance of DOE from $1 million to $5 million. Thus, Battelle got no additional approvals for radars acquisition from DOE under RFP (Government Accountability Office, 2009a). After receiving numerous proposals responding to RFP, including one by Baron, the evaluation panel (no DOE workers) set up by Battelle, a Battelle worker and source selection authority assessed the proposals. They chose Advanced Radar Corporation’s proposal (Government Accountability Office, 2009a). Baron acquiesced a protest with GAO subsequent to interrogation by Battelle; however DOE asks to terminate this protest as subcontract under consideration was granted by Battelle as chief contractor of DOE. This procurement was not handled by GAO, 2009a. In case of United States, 940 F.2d 622 versus U.S. West Commc’ns Servs., Inc. (Fed. Cir. 1991), appellate court interpreted the statutory language particularly similar to one used in our office as not conversing on General Services Administration’s Board of Contract Appeals prerogative about subcontract purchases conceded “for” a federal agency, while lacking evidence that chief contractor was procurement agent, as clarified by Supreme Court in New Mexico, 455 U.S. 720 versus United States (1982) and appellate court in Johnson Controls, Inc., 713 F.2d 1541 versus United States (Fed. Cir. 1983).Consequently, GAO finalized that they have general discretion and they cannot go through awards created by others “for” government. Additionally they said that without involvement of federal agency, they cannot issue verdicts over procurements (Government Accountability Office, 2009a). It is evident that Battelle carried all the procurement decisions by itself and hence, federal agency was DE, they never have problems with Battelle acting as procurement agents. Ascribed to which they dismissed IAW protest, the cases aforementioned were already dismissed in previous court verdicts. GAO will go on with making jurisdiction after knowing that the subcontract was basically given “by” government and to assess if the procurement was executed “by” government, the GAO will inspect the overall conditions, such as; which party prepared the solicitations, received and appraised the proposals, carried out debates, chose potential awardees and bared responsibility resolutions. The responsible party was contractor as per GAO. Only when the agency considerably dealt with valid essential characteristics, acquired the procurement where the chief contractor looks after the procedural characteristics such as, delivering the subcontractors’ claim and getting proposals; then GAO considered the subcontract procurement as “by” government. The chief contractor’s part in these cases is fundamentally ministerial, that is, it operated like a channel for government (Government Accountability Office, 2009a). Baron opposes that despite the fact the radars were purchased through Battelle’s chief contract with DOE, here, agency had a dominating position during purchase and it was principally carried out by DOE. Moreover, Baron debates that agency by its analysis and RFP approval RFP (encompassing allied assessment method) held full control on assessing proposals and contractors selection. The protestors claimed; solicitation was available on FedBizOpps website, government’s representative where agency officers are needed to summarize various actions and solicitations of contracts under FAR stating that purchase was done through DOE. Furthermore, the protestors supposed that DOE played a key role in procurement as this subcontract was financed by American Recovery and Reinvestment Act, and debates that various competition requisites must be fulfilled. Once more, the foundation of IGFs according to statutory description from Federal Activities Inventory Reform (FAIR) Act, 1998 proposes that IGF is a task so closely connected with public’s benefit, it asks for high performance by government’s workers. According to protestors, the contractors appeared to be acting for government (Government Accountability Office, 2009a). Additionally, Baron debates that disbursement of government finances, and which supplies and facilities must be procured along with their costs are IGFs and agency should perform them. The title of radars is given straight to government as per the protestor and Battelle agents carrying out procurement have .gov extensions for emails whereas the claim bears official seal of DOE. According to our assessment, contractors have a right to use .gov extensions but they must not be allowed to use letterheads or seals of government for public documents (Government Accountability Office, 2009a). As this case supports the proposition of DOE M&O carrying out purchases for products ultimately possessed by government, therefore it is significant. The queries and apprehensions arousing from current situation makes this case pertinent because; 1. Is the contractor using their specific method? Is the contractor/subcontractor performing as purchasing agent for government? 2. What is the type of agency association among chief contractor and government and was there any explicit contractual agreement? 3. According to contract, government is directly accountable to venders for buying rates. Is the contractor doing acquisition tasks? Furthermore, it is evident that Management and Operating Contracts, FAR under subpart 17.6, limitations under 17.603 and identifying management and operating contracts under 17.604; IGFs are not deliberated. Source Selection Boards (SSB) may not be outsourced following the recent OFPP Policy, however, few procurement functions may be outsourced. Now, the assessment of cans and cant’s of contractors’ performance. As per the OFPP Policy publication, the activities of sub-contractor can be questioned or should be defined clearly before performance similar to this case. According to latest OFPP Policy, government might not outsource various source selection board functions, however, they may outsource few procurement functions. The functions that could be outsourced are: (1) Backing acquisition plans by doing market survey, creating inputs for cost evaluations and writing SOW and pre-award papers. (2) Backing source selection by developing a technical assessment and connected documents, involving as technical guide to SSB or act as non-voting individual of source evaluation board and writing negotiation memorandum of price. (3) Backing contract supervision by assessing performance of contractors by gathering information, appraising it, or making suggestions for assumed rating and to back contract evaluation with termination settlement papers. The tasks mentioned below are inherently governmental as per the latest policy and should be carried out by Federal workers. (1) While strategizing acquisition, pre-requisites must be defined; contract plan, SOW, incentive programs, assessment techniques to be sanctioned and cost must be determined independently either from by outsourcing, insourcing or both. (2) When doing source selection, appropriate prices to be observed in proposals, taking part as voting member in SSB and how to award contracts must be determined. SSB tasks and FAR are discussed distinctly in latest OFPP policy, it particularly acknowledges that chief contractors can grant subcontracts to get services and supplies to complete the principal contract. The record shows absence of value in Baron’s opinions that current subcontract purchase was certainly by government ascribed to the specifications of American Recovery and Reinvestment Act and financial usage of this Act. Baron stated that section 1554 entails that contracts allotted through this Act must be fixed-price by employing competitive approach up to the maximum potential capacity. However, the role of Battelle’s was more than middle man and GAO established that this purchase was not done by government. Protest was discharged (Government Accountability Office, 2009a). THIS PAGE INTENTIONALLY LEFT BLANK VI. SUMMARY and CONCLUSION d. A. CONCLUSION The OFPP latest policy gives supplementary direction to agencies for decision making either to contract out or work in-house. Consequently to the aforementioned discussion, it reflects the courts’ judgments, but the role of statutory authorities is not comprehensively discussed in OFPP Policy like, radio broadcasting for Cuba, quasi-military forces or low frequency towers for air control. The OFPP policy lacks deliberation regarding contractor’s role as buyers either as procurement agents or else on government’s behalf as in Baron Services Inc. versus Energy Department B-402109 (2009). Principally, the permitted security services, particularly for emergency situations are not illustrated in OFPP Letter. Lastly, author’s objective to investigate whether the OFPP Policy Letter 11-01 (Performance of Inherently Governmental and Critical functions) matches the prevalent judicial standards regarding aspects pronounced by courts and GAO entails that although the policy letter matches the courts’ judgements but it is essential that congress should revisit all relevant functions which are included so contractor’s community can make well-informed verdicts. e. B. RECOMMENDATIONS The description of inherently governmental is extensive and ambiguous in case of actual verdicts. The latest policy acts as a guideline for federal government in right direction. The policy not only guarantees federal government agency missions’ integrity but also certifies effective spending of tax payer’s money. As deliberated earlier, this policy came after numerous year’s efforts; but it will face criticism as various firms will lose revenues, contracts and workers. We consider that reason behind present government situation concerning huge dependence on contractors is ascribed to vague description of inherently governmental. We also assume that present situation arose due to immediate requirement of service support contractors in Afghanistan and Iran for Global War of Terrorism (GWOT) as government lacked in-house resources back then. The soldiers who have been posted there from past 10 years will explain how many times they paraded along with contractors wearing identical uniforms, how they looked so analogous that it was impossible to differentiate among real armed forces soldier and contractors unless their name tags are closely watched. F. C. POTENTIAL RESEARCH AREAS: Various problems are deliberated in final OFPP Policy Letter 11-01 and it elucidates aspects included/ excluded from the IGFs. Conversely, the policy lacks explanation about various unresolved problems associated with key tasks of government and contractor’s role as buyers either as procurement agents or else on government’s behalf as in Department of Energy versus Baron Services, Inc. B-402109 (2009). The role of statutory authorities is not comprehensively discussed in OFPP Policy aforementioned like, radio broadcasting for Cuba, quasi-military forces or low frequency towers for air control. Primarily, the permitted security services, specifically for emergency situations are not expounded in OFPP Policy. OFPP must determine the response by Federal Government society on final policy, do they consider it effective than former regulations, either they accept it or completely ignore it. The debate regarding IGFs will be endured providing government workers and contractors collaborate. Read More