Legislation would undo years of procurement reform, experts say

A provision in the Senate version of the 2002 National Defense Authorization Act that would undo years of acquisition reform appears unlikely to survive conference committee, according to officials close to the debate. Section 803 of the act (S.1438) would require any Defense Department agency that wished to use a multiple-award contract or task order for a purchase greater than $50,000 to open the competition to every contract holder.

In some cases, that would require an agency to notify only a handful of vendors. But in the case of the General Services Administration's Federal Supply Service schedules, a series of pre-negotiated contracts on which any agency is free to bid, there are often more than 500 vendors on any given schedule contract. Senior procurement officials have said such a regulation would be disastrous for the Defense Department, the largest single user of GSA schedules, and would interfere with the agency's ability to quickly procure goods and services. Dr. Leamon Lee, director of the National Institutes of Health Information Technology Acquisition and Assessment Center, said the provision marked a move from "reform to restriction." It constrains the Defense Department he said, and marks a setback for the acquisition reform that took place in the 1990s. That reform was aimed at letting government buy commercial products and services more in the manner of the private sector, thus reducing procurement cycles that often lasted more than two years. David Sutfin, chief of GovWorks, the procurement arm of the Interior Department's Minerals Management Service, said Section 803 "would undo management and acquisition reforms of the past decade if enacted into law as currently written." Sources close to the negotiations in Congress say there is no chance that Section 803 will survive conference committee in its current form. One source, who knows the author of the provision, said the author "did get carried away." The source said the author is knowledgeable about acquisition and contracting nuances, but has "grave concerns" about whether or not competition is being fully utilized on multiple-award contracts and, particularly, on the GSA schedules. The source said the provision was meant to send a message to contracting and acquisition officials who haven't done enough to ensure appropriate competition. Another source close to the conference proceedings said that the language is being re-written to include a requirement whereby any agency that didn't secure at least three bids for a contract or task order would have to give a reason why. Steve Kelman, former administrator of the Office of Procurement Policy during the Clinton administration and now a professor of public management at Harvard University's Kennedy School of Government, confirmed that suspicion about sham competition on the GSA schedules for services is rampant in Washington. "There's a general feeling around town that if you're inclined to award IT services work noncompetitively, sort of in the dead of night, the way you do it is through the GSA schedules," he said. Kelman added that Section 803, as written now, "makes no sense at all," and that it would "end the GSA service schedules." The General Accounting Office is investigating the management of competition on all governmentwide contracts and multiple-award contracts. A staffer with the Senate Governmental Affairs Committee said that report should be issued later in the year. White House officials have expressed concern that the provision "will significantly reduce efficiency offered to the [Defense] Department by the multiple-award schedules program operated by the General Services Administration." A spokesman for the Defense Department had no comment on the provision, except to say that officials had seen it and were crafting a response.

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