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The Defense Department on Monday released an updated version of the software that officials use to estimate costs and compare bids in public-private job contests.

The latest version is more user-friendly and automates calculations to minimize the potential for errors, said Annie Andrews, assistant director of housing and competitive sourcing at the Office of the Secretary of Defense. It incorporates terminology from the May 2003 revisions of Circular A-76, the Office of Management and Budget's competitive sourcing rulebook, she said.

The update, announced in Monday's Federal Register, also is designed to help competitive sourcing officials calculate the baseline cost of performing work "as is," Andrews said. This estimate later allows agencies to say how much money they expect the contractor or in-house team that wins the competition to save them.

The baseline cost estimate tool is optional for civilian agencies, but will be mandatory for the Defense Department, Andrews said. The Pentagon is preparing to issue a policy on estimating baseline costs and would like all of its branches to use a standard method for calculating them, she noted.

The updated software will ensure that agencies are using a consistent method of estimating contract administration costs as well, because the calculation will be fully automated. The update takes a lot of the human error out of a process that--in the days before spreadsheet software--was completed by hand, Andrews said.

The latest version of COMPARE, as the software is called, has been in the works for a while but had to go through testing before it could be published, Andrews added. It is the first major update since the release of May 2003 revisions to Circular A-76.

The circular instructs agency officials to use COMPARE when analyzing the cost of proposals submitted in both standard and streamlined job contests. The Defense Department maintains the program and requires agencies to use the most recent version.

The update can be downloaded from the COMPARE Web site.

COMMENTS

• I’m very skeptical of this software after reading more about it. For example, overseas defense contractors don’t pay any personal income taxes whereas federal and military workers do. This gives a huge competitive advantage to a company making an A-76 bid. Yet, the designers of COMPARE software don’t see any problem with this and other numbers games. The software considers the following a "savings": Joe Contractor normally makes $80k and pays $12k in income tax. Now he goes overseas where the defense contractor pays him $70k. Since he doesn’t pay taxes his take home pay actually increases. Joe makes $2k more and the company saves $10k in salary costs. A federal worker doing the job still costs the government $80k. So the company says, “We can do the same work for $10k less per seat!” A DoD manager plugs these numbers into the COMPARE software and sees a huge “savings” Yet, the reality is that the government has just lost $12k in tax revenue per seat. Even the ancient Chinese could do better accounting using only an abacus. GovExec.com reader Posted August 3, 2005 12:55 PM