Law requires new guidance on governmentwide contracts

Congress has passed a law demonstrating increasing concern with how agencies are using procurement vehicles that allow them to avoid full-blown competitions.

The 2000 Defense Authorization Act, enacted Oct. 5, targets governmentwide and multiagency task- and delivery-order contracts and the General Services Administration's Federal Supply Schedules for special attention in the Federal Acquisition Regulation. The law requires that the FAR be revised to provide specific guidance to agencies on the appropriate use of governmentwide contracts.

Guidance must include steps agencies should take while using the contracts to ensure proper capital planning, a fair opportunity for all vendors on the contract to compete for orders and clear delineation of all tasks to be performed or products to be delivered under each order. A year after the regulations are revised, the General Accounting Office will assess agencies' compliance with them.

Governmentwide and multiagency contracts are particularly popular ways to buy information technology equipment and services. Agencies sponsoring the contracts award places on them to a number of vendors for an indefinite quantity of services and products and then allow other agencies to use its contract for a fee, usually 1 percent to 3 percent of the total purchase amount.

The contracts have been criticized for allowing buyers to direct their task orders to preferred vendors without giving all the vendors a fair opportunity to compete. In March 1998, GAO and the Defense Department inspector general told a Senate Armed Services subcommittee panel about a number of cases of directed orders. The Office of Management and Budget already has amended the FAR to prohibit "methods such as allocation, or designation in any way of any preferred awardees, that would result in less than fair consideration being given to all awardees prior to placing each order."

Agencies sponsoring the contracts also have been criticized for failing to require buyers to follow IT purchasing practices and results-based acquisition guidelines when issuing orders. In January, OMB announced it had begun a two-year evaluation of the multiple-agency pacts and set operating standards for those seeking OMB designation as executive agents for governmentwide IT purchasing.

The DoD Authorization also directs OMB's Office of Federal Procurement Policy and GAO to assess the administration of the GSA schedules and the ordering practices of schedule users. The acquisition provisions signal legislators' "continuing scrutiny" of both multiple-agency contracts and the schedules, according to the September Update newsletter produced by Acquisition Solutions, Inc., a Virginia-based procurement consulting firm.

The schedules are another popular vehicle for buying IT products and services, especially since the advent of blanket purchasing agreements (BPAs), which operate like charge accounts with schedule vendors. Overall schedule sales have increased by nearly 100 percent in just the past four fiscal years, from $4 billion in 1995 to $7.7 billion in 1998, and are likely to best $10 billion for fiscal 1999. Critics contend that GSA exercises too little control over schedule users.