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Army contract spending plummets

Goals include strategic sourcing

Apr. 14, 2014 - 06:00AM   |  
By ANDY MEDICI   |   Comments
The Army's Harry Hallock says times are tough and expects them to stay that way.
The Army's Harry Hallock says times are tough and expects them to stay that way. (Army)

The Army expects its total contract spending to fall $22 billion — about 25 percent — in fiscal 2014, according to a top procurement official.

Harry Hallock, the deputy assistant secretary for procurement at the Army, said the service is projecting its spending on contracts will drop from $87.3 billion in fiscal 2013 to $65 billion in 2014 as it continues to wrestle with congressional budget cuts.

The Army’s spending on contracts will probably remain low through fiscal 2019 before spending begins to increase again, Hallock said at the Coalition for Government Procurement 2014 Spring Training Conference on April 10 in Falls Church, Va.

“Times are tough, they are not going to get easier any time soon,” Hallock said.

Army contract spending has fallen for the last few years, dropping from $126 billion in 2011 to $108.5 billion in 2012.

Hallock said while Army spending drops the number of contract actions will fall more slowly because the service still needs to buy goods and services, but in smaller quantities.

“Sharpen your pencil and your skills, and I still think you can do great business with the Army,” he said.

As contract spending drops, the Army is working on reforming how it procures goods and services as well as how it manages its contracting workforce, according to Hallock.

The Army is finalizing its revisions to its federal acquisition regulations (FAR) supplement — a process that has taken more than three years.

The Army will release its new FAR supplement by December and has changed it to be more flexible and adaptive to changing conditions, according to Hallock. Right now the supplement has hundreds of interim notices that contracting specialists and contractors must review when crafting or responding to solicitations.

“It’s a crazy way to operate, so we are going to get better at that,” Hallock said.

One of the changes will be to delegate some contracting authorities to technical experts involved in the contracts in order to make better decisions about what the Army needs, according to Hallock.

The Army is also working with Congress on acquisition reform and is providing its input on future legislation.

“I think you are going to see some output on that some time down the road here,” Hallock said.

The primary goal of the Army in working with Congress on legislation is to limit quick reactions from Congress that impose more rules without any long-term benefit, he said.

The service is going to ramp up its strategic sourcing efforts and has created a governance board to examine ways the service can expand its efforts, Hallock said. He dubbed this year as the “year of strategic sourcing” for the Army.

“As far as the Army goes, we have not been doing a very good job,” Hallock said.

But the move to strategic sourcing will not hurt its relationships with small businesses, Hallock said, and smaller businesses will not be hurt by the transition to greater use of strategic sourcing.

The Army is also trying to consolidate its contracting operations to encourage collaboration among the seven commands with purchasing power. He said the Army was also able to consolidate its procurement chain of command from four two-star generals to one four-star general.

But the Army should not reduce its contracting workforce as it deals with budget cuts, according to Hallock. There are currently 7,672 civilian employees and 932 military personnel in the contracting workforce. Hallock’s goal is to try to and avoid cuts.

He is also working on increasing cooperationng between offices; , which too often, the Army contracting offices operate as “clans” that compete with one another, but the Army is working to instill greater cooperating within its workforce.

“It’s that kind of mentality that we are trying to counter,” Hallock said.

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