NAVAIR says it’s working to improve contracts process
Fiscal constraints tied to reduced Pentagon spending are making it difficult for some St. Mary’s contracting firms to remain competitive and provide the level of services that they have in years past. Navy officials here know that. And, they say, they’re working toward improvements.
The Naval Air Systems Command said through a statement this week that its top priority is to provide sailors and Marines with products and services on time, and as designed — and they need industry to make that happen.
But, “meeting this goal in the current environment of declining budgets presents a formidable challenge,” Jim Meade, assistant commander for contracts, said in an email, sent by the command communications team. “We are actively working initiatives to reduce the time it takes to award contracts, content required to be included in proposals, and complexity of our evaluation criteria.”
Meanwhile, some small businesses here are competing harder than ever, reinventing themselves, and taking their own costs to levels they’re unsure they can sustain.
“We’ve restructured to the max,” said Dorothy Hammond, CEO of Holmes-Tucker International Inc.. She sat down last month at her Lexington Park office to share concerns that have been echoed among other industry leaders and among some government workers. “My big concern as a representative of a small company,” Hammond said, “is the loss of talent.”
When businesses can’t retain people with experience and knowledge, she said, services to the warfighter may suffer. She’s seen young engineers, as well as some of her senior staffers, move to other cities to be compensated at a level they consider appropriate. Others, Hammond said, have voluntarily taken pay cuts. She’s still had to lay off some of her most seasoned workers.
“We have had a lot of pain,” said St. Mary’s County Commissioner Todd Morgan (R), who in 1985 was a partner in a small contracting business. He now works for a large defense industry firm and has long been a member of the Southern Maryland Navy Alliance. The Navy, he said, “has been emphatic” that low bids win contracts. “Low bids have been the driver of the day.”
NAVAIR, Meade said, is looking for “best value” as it awards contracts, and so the command examines technical capability, past performance and price. But “many local contractors have concluded they must present the lowest-priced offer to win service contracts.” The command, Meade said, will continue to seek best value solutions “by choosing the best overall proposal.”
What’s really happening here is the government “is holding the line,” said Bob Wirt, a defense industry consultant in St. Mary’s. They’re not willing to pay a premium for “a 20-year engineer,” so the client asks for a less expensive, and more junior, worker.
Some government clients later discover “they don’t necessarily all like that,” Wirt said. “They’re sort of saying that five-year engineers didn’t do the job for me that I’d hoped.” Then, contract requirements may have to be adjusted if it’s determined a more senior engineer is required.
“Clearly the government would like to have someone more experienced,” Wirt said. “Their dilemma is they can’t afford to pay for that experience” under contract and cost restraints.
In the past, more than 50 percent of the defense department budgets have gone to contract work. So, the department has worked to both reign spending and assume a more hands-on role in its own work.
Initiatives, including Better Buying Power programs, have increased oversight and scrutiny on contract awards — particularly in payment for services such as engineering and administration work, as opposed to manufacturing.
That oversight represents progress toward changing “our procurement culture,” wrote Meade, of the NAVAIR contracts office.
Concluding his email, Meade wrote, “we appreciate and rely upon the dedication and expertise of the local government contractor community.” Ultimately, “we share a common goal — delivering the best possible support to our warfighters.”
For help with Government Contracting: contact your nearest Procurement Technical Assistance Center (PTAC). Funded through Cooperative Agreements between the U.S. Department of Defense and state and local governments/institutions, PTACs provide free and low-cost assistance in virtually all areas of government contracting.