January 1, 1995
PROCUREMENT REFORM GUIDE
The government moves to create a more efficient and responsive procurement system.
ach year the federal government spends about $200 billion on products and services-the equivalent of $800 for every man, woman and child in the country. The process for procuring those goods and services has fallen into serious disrepair. Many federal contracts take at least twice as long to be awarded as their commercial counterparts, leaving agencies to settle in many cases for outdated equipment obtained at above-market prices. And contractor protests cost agencies money and staff resources that they can scarcely afford.
Ironically, previous reform measures such as the 1984 Competition in Contracting Act are responsible for some of the problems. In the eyes of many, legislation aimed at curbing corruption has made the federal procurement system over-regulated and excessively bureaucratic. Vendors selling to the federal government have faced more than 100 contract terms and conditions not found in the commercial world, such as cost and pricing data requirements and post-award price adjustments and audit rights.
"Burdensome requests have made selling to the government less attractive and have consequently deprived the nation of some of the latest and greatest products," says Judy Morehouse, a member of the Electronic Industries Association's government procurement relations council.
Aware of such problems, the Defense Department issued a multi-volume report in 1992 detailing changes that needed to be made to streamline federal acquisitions. That report, written by DoD's Section 800 Panel (named for section 800 of the 1991 Defense Authorization Act), served as the basis for procurement-reform recommendations made by Vice President Gore in the National Performance Review. By the time the NPR was published, the Senate Governmental Affairs Committee and the House Government Operations Committee were working on bills to improve the way the government buys goods and services.
Congress heard testimony from dozens of executives and trade associations representing industries from shipbuilding to information technology. Proposals were made by the White House, the General Services Administration and several other government organizations. Months of negotiations produced an agreement that melded provisions from S 1587, sponsored by Sen. John Glenn, D-Ohio, and HR 2238, sponsored by Rep. John Conyers Jr., D-Mich.
The resulting compromise legislation (P.L. 103-355) was the first major rewrite of federal procurement regulations in a decade. The new Federal Acquisition Streamlining Act, signed by the President last October, revises more than 225 statutory rules and encourages the use of several innovative procurement techniques.
The law provides a common-sense approach to procurement. In a nutshell, it encourages agencies to rely on commercial, off-the-shelf products-instead of those designed to government-unique specifications-and simplifies procedures for buying those items. It also reduces requirements for contractors to submit cost data and exempts purchases below $2,500 from certain procurement requirements.
In addition, the law establishes a simplified acquisition threshold of $100,000, waives certain laws for procurement pilot programs and makes more contracts accessible to small and disadvantaged businesses. It amends the process for resolving protests and contract disputes, and requires agencies to develop and implement a computer network architecture for conducting procurements electronically.
"NPR released a lot of energy for change, and the Federal Acquisition Streamlining Act provides a place for government executives to channel that energy," says Steven Kelman of the Office of Federal Procurement Policy. "While it won't solve all our procurement problems, the law certainly will make some visible and much-needed improvements."
January 1, 1995