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Saturday, October 26, 2013

The One Year Budget Cycle Must Go

                                                                     Photo Courtesy "Dabble With" dot com
 
 By
Ken Larson

Having  dealt with the funding process in the government contracting industry  (both large and small business) for over 40 years through many  administrations and much frustration, I can discuss with  some  credibility a major weakness in the huge machine we call the US  Federal  Government -- the one year budget cycle. Its tail end is whipping everybody this month and we have undergone another sanctimonious "Shutdown", with the promise of more to come.  

A huge reason for much of the largess in this entire area is the one year budget cycle in which the US Government is entrenched. 

About mid-summer every agency begins to get paranoid about whether or not they have spent all their money, worried about having to return some and be cut back the next year. They flood the market with sources sought notifications and open solicitations to get the money committed. Many of these projects are meaningless.


Then during the last fiscal month (September) proposals are stacked up all over the place and everything is bottle-necked. If you are a small business trying to get the paperwork processed and be under contract before the new fiscal year starts you are facing a major challenge.


Surely the one year cycle has become a ludicrous exercise we can no longer afford and our government is choking on it. It is a political monstrosity that occurs too frequently to be managed.


Government must lay out a formal baseline over multiple years (I suggest at least 2 fiscal years - ideally 4 - tied to a presidential election)  - then fund in accordance with it and hold some principals in the agencies funded accountable by controlling their spending incrementally - not once year in a panic mode.


Naturally exigencies can occur. A management reserve can be set aside if events mandate scope changes in the baseline due to unforeseen circumstances. Congress could approve such baseline changes as they arise.

 
There is a management technique for the above that DOD, NASA and the major agencies require by regulation in large government contracts.    It is called "Earned Value Management" and it came about as a result of some of the biggest White Elephant overruns in Defense Department History.

 
http://www.smalltofeds.com/2008/...

 
I contend we have one of the biggest White Elephants ever in front of us (a National Debt approaching $17 Trillion)


We need to get this mess under control, manage our finances and our debt or it will manage us into default.

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