Statement by Chief Procurement Officer Stephen Carberry before the
June 5, 1998
House Government Reform and Oversight
Subcommittee on Human Resources
Good Morning, Mr. Chairman and members of House Subcommittee on Government Reform and Oversight. I am V. Stephen
Carberry, Chief Procurement Officer (CPO), of the Department of Housing and Urban Development (HUD).
On behalf of Secretary Cuomo and the Department, I appreciate the opportunity to come before you on HUD's procurement
I recently came to HUD from the Navy where I worked for 34 years in contracts. I have been assigned to all three of the
Navy's major systems acquisition commands, and for the last ten years, I was the Executive Director for Contracts with the
Naval Air Systems Command and responsible for annual obligations from $9 to $12 billion. The position of HUD Chief
Procurement Officer, for which I have been selected, was recently created by Secretary Cuomo to lead the efforts on HUD
Secretary Cuomo has taken an intense and personal interest in procurement reform at HUD. In the HUD 2020 Management
Reform Plan, he directed that the Department engage in a top to bottom redesign of the HUD procurement system with an
emphasis on safeguarding taxpayer dollars with a system that ensures quality and value. In addition, Congress gave its support
to HUD by authorizing the agency to retain National Academy of Public Administration (NAPA) to assist with the
Our review of the HUD procurement system indicates two fundamental weaknesses. First, the Department has done a poor
job of needs assessment and procurement planning. Second, contract oversight and monitoring do not receive sufficient
allocation of resources or attention. The GAO and IG reviews confirm these findings. To address these weaknesses, the
Secretary directed that the Department take a number of concrete steps to improve accountability and performance. A more
detailed conclusion of our Action Plan has been included with my written testimony. I'd like to briefly describe the main points
of the plan.
First, the Department identified procurement as a material weakness of Departmental management. This step tells Department
managers that procurement reform is a top priority and deserves the highest level of attention.
Second, the establishment of a Chief Procurement Officer, responsible directly to the Deputy Secretary and the Secretary, is a
strong signal of the importance of procurement management and creates accountability for procurement activities at the highest
levels of the agency.
Third, the Department has established a Contract Management Review Board (CMRB) to improve needs determination,
planning and monitoring. The CMRB examines program offices' strategic procurement and staffing plans to assure that they
encompass the critical needs of the Department and are not duplicative of other proposed, ongoing or completed work. The
CMRB reviews all plans for contracts that will exceed $5 million, including legal review. New programs will be approved only
after detailed cost, schedule and performance parameters have been reviewed and justified. For capital asset acquisition, HUD
will follow the capital programming principles in OMB's capital programming guide. For service contracting, we will use
performance-based service contracting, as appropriate, to reduce costs (including contract administration costs) and increase
satisfaction with contractor performance. These same parameters will then be used to evaluate annual performance of the
programs and for measuring the success of programs when completed. As the chair of this committee I am currently leading
the Board in the review of planned FY 98 procurements. This summer, we will review planned procurements for FY 99.
Fourth, for the first time in HUD's history, contract management will be a full time job. Until now, contract management was
minor ancillary duty for staff already overburdened with too many conflicting responsibilities. By creating a core group of full
time contract managers in each program area whose only responsibility is contract management, the critical function of contract
oversight and management will finally get the attention and resources it deserves. Full-time personnel will manage the cost,
schedule and performance parameters of critical HUD programs using earned value management system reporting for capital
assets and formal quality assurance plans for our large service contracts. For critical, complex HUD programs, Integrated
Project Teams (IPT) are being established. The IPT is comprised of personnel from the program office, Office of General
Counsel and contract specialists, along with other functional specialists, as appropriate. This concept has been used in private
industry and other government agencies with great success.
Fifth, the Department is establishing --again for the first time in its history-- mandatory training and certification for these
contract managers. This includes both program managers and contracting officers. Our goal is to create the best trained and
most professional contract management workforce in the federal government.
Sixth, the Department is well on its way to establishing an integrated financial payments data system to provide contract
managers with the information they need through the enhancement of our information systems.
Finally, and perhaps most important, there is a culture change taking place across the board at HUD in which protecting the
public trust is seen as a key mission for all employees; with zero tolerance for waste, fraud or abuse of HUD programs.
As the IG audit report indicates, contract problems at HUD are long-standing. In fact, of the $1.5 billion in contracts identified
in the audit, $1.1 billion involve contractors with whom the Department contracted prior to 1993. In spite of the fact that these
contracts stretch as far back as 1984, the Department is committed to taking aggressive action now to fundamentally
restructure its procurement system.
Mr. Chairman, Ranking Member Towns, I have been a contracting professional for over 30 years. I am confident that the
changes the Department is making in its procurement systems will transform HUD from what Secretary Cuomo has called the
"poster child" for how not to contract, into a model for federal government procurement activities. Independent objective
reviewers including the General Accounting Office, the National Academy of Public Administration, and Booz-Allen all agree
that these are the right steps. And implementation is well underway. I am excited about being a part of HUD's management
team and I plan to ensure that we succeed.
Management Improvements in the Contracting Process
Needs Determination, Planning and Periodic Assessments.
The Department will establish a Contract Management Review Board (CMRB) chaired by the Chief Procurement Officer and comprised of senior officials from the Office of the Secretary, the Chief Financial Officer, the Office of General Counsel and the Assistant Secretary for Administration the Office of Policy Development and Research. The CMRB will perform the following functions:
- Review and approve each program offices procurement strategic plan for all new procurements and interagency agreements estimated to exceed $5 Million.
- Conduct periodic reviews of each program offices progress in implementing their approved strategic plans.
Proposed Implementation Schedule:
Appoint CMRB members:
Hold initial CMRB meeting to adopt rules:
Hold first business meeting:
Complete review of procurement components of FY 1999 Business Operating Plans:
By September 1, 1998
Contract Oversight and Monitoring.
The Department will improve contract oversight and monitoring by:
- Appointing a Chief Procurement Officer (CPO) who will chair the CMRB, review new contracts and interagency agreements over $5 Million and supervise an ongoing program to improve GTR monitoring performance.
- Implementing a Government Technical Representative (GTR) Certification Program which would:
- Assure that all GTRs have received basic training (the current GTR course or equivalent) in their responsibilities prior to their assignment;
- Require advanced GTR training for individuals charged with monitoring large and/or complex contracts; and,
- Require annual contracting-related training to maintain active certification.
- Placing the GTR course on HUDWEB to make it more accessible.
- Developing a performance element to be included in the EPPES of all GTRs.
Proposed Implementation Schedule:
Hire Chief Procurement Officer:
Develop proposals for GTR training,certification and EPPES element:
Place GTR training course on HUDWEB:
Issue memorandum to Principal Staff establishing GTR training
and certification requirements:
Major program offices establish full-time monitoring staffs:
By September 1, 1998
Provide basic classroom training to full-time monitoring staff:
By September 30, 1998
To sensitize staff to concerns related to "personal services" and "governmental functions," the Department will take the following steps:
- Program and contracting staff will be reminded of the prohibitions related to "personal services" and "governmental functions."
- The GTR training course will be revised to incorporate a module with appropriate case studies concerning these areas.
- All new contracting requirements for services will be reviewed by OGC staff to assure their legality.
Issue memorandum to program and contracting staff concerning these areas:
Revise GTR training to incorporate a module concerning "personal
services" and "governmental functions":
Timely closeout of contracts.
To simplify the method by which the procurement office initiates audit requests which are subsequently transmitted to the Defense Contract Audit Agency (DCAA). By consolidating audit requests on a contractor basis (this includes contracts which are under the $500,000 audit threshold) we have requested 104 audits representing $379,463,933.
To assure that backlogs do not develop in the future, we will take the following steps:
- OPC's Policy and Evaluation Division will generate a monthly list of cost-reimbursement contracts which have been completed and follow-up with the operating divisions to assure that audit requests are generated.
- Closeout of cost-reimbursement contracts requiring audits will be reassigned to the Administrative Service Centers after submission of the request.
OPC's Policy and Evaluation Division generates monthly list of completed cost-reimbursement contracts and follows-up with operating divisions regarding audit requests:
By June 30, 1998
Procedures are established for assigning contracts with requestedaudits to the Field:
Improve and Integrate Procurement and Financial Systems
We will continue to work with FSI team to create interfaces between the HUD Procurement System (HPS) and the accounting system. In addition, we will modify HPS to produce reports which will assist GTRs and contract specialists in their contract monitoring and administration responsibilities.
Complete new release of HPS which includes improved edits for data integrity:
Complete coding for HPS/HUDCAPS interfaces for reservation and obligation:
By July 17, 1998
By October 1, 1998
Modify HPS to incorporate improved monitoring reports:
By December 15, 1998
GTR CERTIFICATION PROGRAM
As the Contracting Officer's authorized technical representatives, the Government Technical Representative (GTR) and Government Technical Monitor (GTM) play critical roles in the success of Departmental contracting.
In the pre-award phase of a procurement, the GTR helps the Contracting Officer ensure that HUD accurately portrays its needs to potential contractors and accurately estimates the cost of the ensuing contract to the Department. The GTR may also assist in the selection of the contractor and in negotiating the final terms of the contract.
Once a contract has been awarded, the GTR is the Contracting Officer's technical "eyes and ears." The GTR monitors contractor progress and the quality of work performed, and guides contractors in using the most efficient, cost-effective methods of performing the contract. When contractor performance is deficient or when problems associated with the technical requirements of the contract arise, the GTR is expected to be the first to know and to quickly alert the Contracting Officer. The GTR is also expected to help the Contracting Officer determine the best remedial action for deficient contracts and contractors. (See Handbook 2210.3, Procurement Policies and Procedures, Chapters 4, 5, 11 and 12.)
Given the critical nature of the GTR's role in the procurement process, HUD staff serving as GTRs must: (1) be thoroughly knowledgeable of the technical areas covered by the contract; and, (2) possess a solid fundamental understanding of the Federal contracting process as implemented by HUD.
Therefore, this certification program is designed to ensure that all otherwise technically qualified GTRs receive appropriate procurement instruction sufficient to prepare them to perform their duties.
Basic Curriculum. Prior to their assignment, all GTRs must complete the following courses of instruction, or an acceptable substitution (see below):
Government Technical Representative
1 course (40 hours) covering the GTR's role in the entire contracting process, including: contract planning and request; proposal solicitation and evaluation; contractor selection and award; contractor performance monitoring, (including record keeping and technical guidance) and contract administration (including modifications, disputes and terminations); or
1 course (20 hours) covering the GTR's role from planning through contract award; and,
1 course (20 hours) covering all aspects of contract administration.
Advanced curriculum. GTRs who monitor large (exceeding $5 million) and/or highly complex contracts (or significant portions of such contracts, e.g., task orders over $5 million) are required to complete training in advanced topics such as:
Writing Performance Work Statements, (24 hours) (Note: Courses in writing work statement other than performance work statements will be considered on a case by case basis.)
Cost Estimating for Technical Personnel (24 hours)
Evaluating Contractor Performance (24 hours)
GTRs assigned to monitor multiple contracts may also be required to meet the advanced training requirements.
Substitution of other training. The Chief Procurement Officer (CPO) may on a case by case basis, approve the substitution of substantially similar instruction for the requirements listed above. The following are provided as examples of potentially acceptable substitutions for the basic courses. The CPO may approve other courses based upon an individual's expertise and experience.
Introductory course in Federal Procurement with an emphasis on types of contracting most frequently used in HUD (e.g., services vs. supply)
Basic Federal contract administration with an emphasis on services contracts (vs. supply)
Completion of HUD's intranet (HUDweb)-based self-instructional GTR course
Provisional certification. The CPO may provisionally certify a GTR nominee who has not completed the basic training requirements prior to appointment. The provisional certification will specify the period in which the nominee must meet the requirements. All provisionally certified GTRs shall complete intranet-based self-instructional GTR course. GTRs with provisional certification shall be given priority for placement in the next available formal GTR course.
Experience in lieu of training. As approved by the CPO, relevant experience may be substituted for formal training requirements (either basic or advanced) on a case by case basis.
Management Training. Departmental management personnel with programmatic oversight for contracts are advised to complete a course providing a basic overview of the contracting process and the role of the program office, e.g.,
Procurement for Executives and Managers (1 day)
To maintain an active status, GTRs must renew their certification every two years. Recertification requirements include:
Continuing education. This may be met by completing ** hours of procurement and contract-monitoring related training. Such training may include:
GTR refresher courses (HUD-sponsored or external)
HUDs intranet-based self-instructional GTR course (Note: the HCA may deny the repeated use of this course if it used as the sole means of meeting this requirement.)
Other procurement-related courses as approved by the HCA; and,
Satisfactory performance of GTR or GTM duties assigned during the two-year period.
Lapsed certifications. GTRs whose certification have expired (i.e., not been renewed), will have to complete the requirements for new certification.
Certifying GTRs. The CPO shall certify GTRs who have completed all requirements for certification. The cognizant Primary Organizational Head in Headquarters or the cognizant field program office head shall be responsible for the accuracy of information reported to the cognizant HCA concerning training and past performance of GTRs and GTR nominees.
Maintenance of GTR training records. The CPO will maintain a list of all certified GTRs. The list will be available on the Department's HUDweb Contracting homepages. It shall be the responsibility of personnel appointed as GTRs to provide the CPO with information needed to update and maintain their status (e.g., evidence of courses completed).