Chaedrol President Jason Bakke’s testimony on First Source to DC’s Committee on Labor and Workforce Development

June 20, 2018 Jason Bakke 0 Comments

Hon. Elissa Silverman, councilmember and chair of the Committee on Labor and Workforce Development, and other esteemed members of the committee:

One year ago I started Chaedrol LLC, a public-sector-focused acquisition and supply-chain consultancy. In that time, I’ve had the privilege of supporting both DC and federal agencies, as well as a number of small DC-based government contractors. In my work, I try to take a balanced view of acquisition grounded in statute and regulation principally; I help clients navigate the public-sector acquisition system to achieve their goals, whether those be providing or buying a service.

Seventeen years ago I moved to the District from Minneapolis, and walking down 13th Street NW today near U Street I was again reminded this is my home and community. I believe in the goals of the First Source program, and I believe those goals can be better achieved through a multipronged approach:

(1) clearly centering responsibility for First Source compliance on ordering contracting officers who know contractors and the work best—either at OCP, DGS, or elsewhere—who receive audit and other support from DOES;

(2) a contractor-facing (to large and small businesses) education campaign about First Source, its reporting requirements, and the enforcement process; and

(3) updating First Source clauses to provide clearer explanation of the program’s requirements, which enforcement mechanism is being used, and a requirement that this information be flowed down to subcontractors.

I believe many small business contractors are overwhelmed with core service delivery and business operations duties, which bring their own complicated requirements; businesses believe in First Source and want to comply, but struggle to integrate unclear regulations into their existing business operations.

Specifically the allowance at § 2–219.03(e)(1)(b) of the DC code that agreements may apply either cumulatively (across the entire team, inclusive of subcontractors) or at each individual subcontract tier covered by the contract leads to confusion. Does a subcontractor need to comply on a First Source-covered prime contract? It depends.

I believe allowing two different calculation methods needlessly complicates oversight and compliance. DC residents and small businesses who often work as subcontractors to large business are better served by one method, and I argue it is at the individual level.

By requiring First Source at each subcontract tier, primes would routinely incorporate First Source requirements as flowdowns in every subcontract. Subcontractors would know they must meet First Source goals on every subcontract they receive with DC as the end client. DOES and the contracting officer can more easily conduct oversight activity, including audits of contracts and subcontracts for First Source flowdowns, knowing each covered entity on a project must meet the same First Source goals.

Better, we build the broadest possible base of jobs for unemployed DC residents. On the other hand, by allowing cumulative applicability of First Source, a prime could satisfy all its requirements via a general subcontractor, not providing opportunity for electricians, for example. Worse, assessing compliance across the entire team is more complex, allowing for single points of failure (where a concentration of First Source staffing is to take place).

At a minimum, if DC continues to allow cumulative plans, primes should be required to report their progress against plan, both to DOES and the contracting officer monthly. As primes are granted wide latitude under a cumulative plan to satisfy First Source requirements, I’d expect 100% compliance as each contract is closed out. I would certainly evaluate whether to apply financial or other penalties to contractors who fail to meet First Source requirements generally, but cumulative requirements specifically.

I offer my support to investigate these issues as an interested citizen, and I am available to answer any questions you may have.

Thank you.

Chaedrol President Jason Bakke’s testimony on First Source to DC’s Committee on Labor and Workforce Development was last modified: June 28th, 2018 by Jason Bakke

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