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Industry group pushes legislative goals to streamline federal purchasing.

Industry's Acquisition Reform Working Group was counting its blessings in June. A few of its 18 legislative proposals to streamline business processes and instill commercial best practices in government contracting had found their way into House and Senate versions of the Defense authorization for 2007.

Among the most notable inclusions were ARWG's proposal to let state and local governments use General Services Administration schedules for terrorism prevention and disaster recovery purchases in the House version, and a one-year extension of the Defense Department's closeout authority for certain contracts in the Senate version. Proposals to curb the proliferation of government-unique requirements, strengthen protections for trade secrets, clarify the definition of commercial items and modernize export controls didn't appeal to lawmakers on the Armed Services committees, but Cathy Garman, senior vice president of public policy with the Contract Services Association, wasn't owning up to any disappointment. "All in all, we're pretty satisfied," says Garman, also speaking for the working group.

Garman's association is the nation's oldest and largest of government service contractors. It and nine other ARWG member organizations represent the defense, aerospace, information technology, electronics and professional services industries. The working group's goals are to reduce costs, enhance efficiencies and promote quality management as the government expands its use of commercial practices and acquires more goods and services from the private sector.

"Every year [members of Congress] pick up one or two of our suggestions. We have some slightly farther-reaching and more controversial issues we keep talking about," Garman says. "One of these days, the climate will be right for them." A controversial proposal to permit sole-source awards of time and material and labor-hour contracts went nowhere.

One important objective in the working group's dealings with Congress this year was to limit Berry Amendment rules requiring Defense procurements to come from domestic sources. ARWG says some "Buy American" acquisition policies are unnecessary. Earlier this year, Defense changed its interpretation of the law and began expanding enforcement to fasteners and other tiny mass-produced items whose manufacturing origins are impossible to document. ARWG wants exemptions for commercial products and other items valued at less than $100,000. It also wants companies that use the same items in commercial and defense applications to be able to "commingle" supplies and merely prove they bought a sufficient percentage of American products under Berry Amendment rules.

"Shipments of items as large as aircraft have been delayed because of tiny components that cost less than $2," says Matt Grimison, a spokesman for the Aerospace Industries Association, an ARWG member. "We are in crisis mode." Specialty metals such as titanium and nickel are particularly at issue in the Defense authorization.

The Senate version would apply domestic resource requirements to them, but exhorts the Defense Department to stop insisting that "every nut, bolt, screw and wire were made in the United States out of domestic materials" because it is holding up the delivery of major weapons systems to warfighters. The House version would extend Berry restrictions to all specialty metals at any level of the supply chain, without commercial exemptions, and establish the Strategic Materials Protection Board to identify other items and services that must be American-made because of their importance to national security. The aerospace association leads another legislative reform group that was pleading with senators in June to "fix" the bill with an amendment.

In a May 11 statement, the Bush administration said provisions in the House version would restrict U.S. suppliers' access to foreign markets in allied and friendly countries, decrease competition, increase costs to U.S. taxpayers and add red tape to the procurement process. "Unwillingness to rely on such dependable foreign sources would undermine future efforts to build coalitions," the statement said, adding that if such a bill were sent to the White House, the president's advisers would recommend a veto.

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