Addressing the Shortage of Contract Specialists: Too Little, Too Late for Success?

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Addressing the Shortage of Contract
SpecialistsToo Little, Too Late for Success?

• Andrew C. Obermeyer, Fellow, CPCM
• Presented at the Cape Canaveral Chapter
• Winter Education Conference
• March 3, 2011

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TMA Overview

• What is TRICARE
• A health care plan using military health care as
  the main delivery system
• Augmented by a civilian network of providers and
  facilities
• Serving our uniformed services, activated
  National Guard and Reserve, retired military, and
  their families worldwide

http//www.tricare.mil/tma/ams/default.aspx
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TMA Overview, Cont.

• Mission
• To provide optimal health services in support of
  our nations military mission anytime, anywhere
• Vision
• The provider of premier care for our warriors and
  their families
• An integrated team ready to go in harms way to
  meet our nations challenges at home or abroad
• A leader in health education, training, research,
  and technology
• A bridge to peace through humanitarian support
• A nationally recognized leader in prevention and
  health promotion

http//www.tricare.mil/tma/ams/default.aspx
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TMA Overview, Cont.

• 9.6 million beneficiaries
• 3.7 million TRICARE Prime enrollees Direct care
  system
• 1.6 million TRICARE Prime enrollees Contractor
  networks
• Remainder
• TRICARE Standard/Extra
• TRICARE for Life
• TRICARE Reserve Select
• Military Treatment Facilities (MTFs)
• 59 Hospitals Medical Centers
• 364 Health Clinics
• Over 380,000 network providers
• Over 60,000 retail pharmacies

http//www.tricare.mil/tma/ams/default.aspx
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TMA Overview, Cont.
A week in the life of TRICARE

• 2.5 million prescriptions
• 923,000 direct care
• 1.39 million retail pharmacies
• 202,000 home delivery
• 179,300 behavioral health outpatient services
• 46,100 direct care
• 133,200 purchased care

• 21,800 inpatient admissions
• 5,000 direct care
• 16,800 purchased care
• 1.6 million outpatient visits
• 737,000 direct care
• 876,400 purchased care
• 2,300 births
• 1,000 direct care
• 1,300 purchased care
• 3.5 million claims processed
• 12.6 million electronic health record messages

http//www.tricare.mil/tma/ams/default.aspx
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The Goal - Quadruple Aim

• Readiness
• Pre- and Post-deployment
• Family Health
• Behavioral Health
• Professional Competency/Currency
• Quality OutcomesHealthy service members,
  families, and retirees
• A Positive Patient ExperiencePatient and Family
  centered Care, Access, Satisfaction
• CostResponsibly Managed

http//www.tricare.mil/tma/ams/default.aspx
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Defense Health Program
Understanding Cost Drivers

• Private Sector Care contracts breakdown
• Domestic Health Care/Claims 10.8B
• Overseas 0.3B
• Pharmacy 2.0B
• Dental 0.1B
• Other (including Quality and
  1.4BFraud, waste abuse)
  
• Cost Drivers
• New users
• Utilization
• Expanded benefit
• Medical inflation
• Special populations
• Pharmacy

FY10 Defense Health Program Budget (Operations
and Maintenance)
5.8B 21
14.6B 54
6.9B 25
Data Source Defense Health Program FY10
Appropriation. Excludes all costs associated
with the Medicare Eligible Retiree Health Care
Fund e.g., 3.8B TRICARE Senior Pharmacy
http//www.tricare.mil/tma/ams/default.aspx
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AMS Organization

Acting Chief Functional Officer Mr. Michael
Fischetti
Office of Small Business Programs
Chief of Staff
Acquisition Efficiencies Manager
Acquisition Information Systems Manager
Property Manager
Acquisition Career Management
Contract Operations Division -Aurora

Contract Operations Division Falls Church
Acquisition Policy and Compliance
Division/Competition Advocate
Acquisition Oversight and Management/Deputy CAE
Acquisition Management Office A Branch
Acquisition Management Office B Branch
Contract Policy and Pricing Branch
Information Systems Branch
HQ Support Branch
Staff in Aurora, CO
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Workload Statistics

• Health Care Services Contracts
• 1535 contractual actions (FY10)
• 10.9 billion (FY10)
• Major contractors
• Healthnet, Inc.
• Humana, Inc.
• AEA International Holding
• Triwest Healthcare Alliance
• Express Scripts, Inc.
• Wisconsin Physician Services
• Meridian Resource
• Delta Dental

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Workload Statistics

• IT and Non-Health Care Services Contracts
• 1,655 contractual actions (FY10)
• 2.3 billion (FY10)
• Major contractors
• SAIC
• Deloitte, LLP
• Planned Systems International
• Axiom Resource Management
• Irving Burton Associates
• Veritas Capital
• Northrop Grumman

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A decade to remember

• 9/11
• Wars in Afghanistan and Iraq
• Department of Homeland Security
• Hurricane Katrina
• Financial Meltdown of 2008
• American Recovery and Reinvestment Act
• Southern Border crisis

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September 11, 2001

• 26,608 Federal Contract Specialist
• DoD 18,565
• Civilian Agencies 8,043
• 1991 31,436 Federal Contract Specialist
• 22, 722 at DoD
• 8,664 at Civilian Agencies
• Appropriate or not? Its what we had

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DoD Staffing and Workload

• 2001 DoD Workload
• 115,679 actions gt 100,000
• Total obligations of 144.6B
• Minimal post 9/11 impact in last 20 days of FY
• 2009 DoD Workload
• 211,345 actions gt 100,000
• Total obligations of 359.9B
• Specialist increase 1221 to 19,786

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Civilian Agencies Staffing and Workload

• EOY 2008 staffing at 9,921
• An increase of 1,878 or 23
• 56 Increase in spending
• From 80B to 138B
• FY2000 to FY2008
• Program Impacts
• Homeland Security
• TSA (originally a poorly managed contract
  issue??)
• Hurricane Katrina

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Are There Problems?

• As we approach the end of the first decade after
  the turn of the century, concerns about defense
  acquisition outcomes cost escalation, reports
  of improper payments to contractors, appeals
  filed over source-selection outcomes, schedule
  delays pervade the popular press as well as DoD
  audits and internal reports.
• -- Shining a Spotlight on the Defense
  Acquisition Workforce Again, 2009 RAND
  National Defense Research Institute Occasional
  Paper

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Insufficient Staffing?

• This lack of capacity requires the workforce to
  make trade-offs during the acquisition life cycle
  that may reduce the chance of successful
  outcomes
• -- Lesley Field, Deputy Administrator, OFPP

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Three factors

• As growth in workload outstrips growth in
  staffing, quality should be expected to fall
• As stress levels increase, retirement eligible
  workers are more inclined to retire
• Training newly hired workers places additional
  strains on the existing workforce
• -- Dont believe me? -- 2,600 new hires in
  FY2006 resulted in net gain of 350

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Money Talks

• GS5/7 starting salaries
• 31,315 to 38,790
• Median salary for new 2010 Bachelor of Business
  Administration graduates
• 45,000
• -- Do we really want the bottom half of the
  graduating class?

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How much is enough?

• 2001 in DoD
• 18,565 CSs, 115,679 actions greater than 100k
• 334 available staff hours per action
• 2008 in DoD
• 19,786 CSs, 211.345 actions greater than 100k
• 195 available staff hours per action
• --Anyone really believe weve achieved a
  sustained seven percent annual productivity
  improvement?

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The Retirement Drain

• 2008 1,283 GS7 Contract Specialist
• If the total number were promoted and replaced
  each year for the next eight years, it would only
  generate 10,264 new CSs
• That number is 5,000 short of the number of CSs
  eligibles for retirement in 2018
• -- Adding, say, 10,000 each with one years
  experience is different than adding 500 people
  with 20 years experience Norm Augustine

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Solutions

• Gansler Commission
• Five percent increase at civilian agencies
• Secretary Gates April 6, 2009 announced plans to
  add 9,000 acquisition billets, and insource
  11,000
• All are acquisition workforce and all are
  pre-election, pre-Tea Party commitments
• -- Do more without more
• Ashton Carter, April, 2011

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What can you do?

• Press leadership on commitments to hiring and
  developing interns
• Talk up the career field
• Talk to high schools and colleges
• Engage in your own productivity growth
• Participate in NCMA
• We do the nations business, everyday!

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