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Operations within the Sector Franchise Fund were impacted by the June 20, 2018, AS-PTT Memorandum, Customer Approval Process for the Sector Business Center, directing AOD to divest external customers, as well as the review and denial of particular requests for assisted acquisition support from external customers including the planned divestiture of AOD’s 5 largest customers: TARCA, CARCA, TICOM, VCDo, and DOTS&R.
In response to the AS-PTT direction and review process, AOD did not conduct its usual business development efforts, existing customers were confused by the approval process and lost confidence in AOD’s ability to continue to perform assisted acquisition support for external customers, AOD’s hiring freeze led to 40 departures which have not been backfilled impacting the ability to seek and perform new work and certain existing customers did not send additional work to AOD.
Overall, FY 2018 AOD actions decreased 9% and obligations decreased 22.5% over FY 2017 and Quarter 3 and 4 revenue within the EFFL represented a $16.8M decrease in FY 2018 compared to FY 2017. Disapproval of requested acquisition support led to a direct loss of $5.1-$5.9M (Tab A) in revenue for AOD. Additional revenue was likely lost due to existing and potential customers not reaching out to AOD for support as rumors that AOD would no longer be servicing external customers circulated in the shared service community. As a result, AOD generated less revenue than projected, expenses slightly exceeded revenue, the EFFL Annual Reserve was funded below optimal levels and AOD did not generate enough revenue to contribute to the Sector Franchise Fund Capital Improvement Reserve.
- Average sentence length = 43 words
- Flesch Reading Ease Score = 0.0 (scale of 0-100 with 60 being “plain”)
- Flesch-Kincaid Grade Level = 24 (high school plus 12 years of education)