Industry opposes acquisition changes recommended by advisory group

A coalition of industry associations on Tuesday was highly critical of a federal advisory group's preliminary recommendations on revising certain government acquisition procedures.

The advisory group's recommendations were released in December 2005 and addressed commercial practices, which are those relating to goods and services that are available in commercial markets as opposed to those developed specifically to meet government needs.

Its suggestions, which are not yet finalized, included changes to the definitions for commercial items and services, standardization of contract terms and adjustments to how pricing is determined in certain cases.

On Tuesday, the Services Acquisition Reform Act Advisory Committee, a group created by the 2004 Defense Authorization Act, heard industry groups' objections to the proposed recommendations. The association of groups representing contractors - made up of the Professional Services Council, the Information Technology Association of America, the Contract Services Association, the Aerospace Industries Association, the National Defense Industrial Association and the Government Electronics and Information Technology Association -- took issue with virtually every recommendation proposed by the working group.

The industry association said the recommendations were counterproductive, and "would reverse progress agencies have made in the last 10 years" on competition-friendly procurement reform. Where the recommendations would result in acquisitions being reclassified as noncommercial, procurement procedures would be subject to increased oversight and audits, as well as rules on government intellectual property rights, the association said.

The private sector groups especially opposed several measures that would have linked the definition of commercial items more closely to their pricing, altered the way pricing is reviewed by government contracting agents or changed the classification of commercial items with minor, government-specific modifications.

They strongly opposed a suggestion to tie the definition of commercial items to price by revising it to be "items for which the commercial market establishes prices," arguing that the change would unnecessarily confuse questions of pricing reasonableness with the definition of commercial items.

They also objected to defining commercial services separately from commercial items, arguing that a breakdown of commercial services into three categories would create layers of unnecessary distinction and make commercial services subject to procurement provisions different from those for commercial items.

Based on the industry groups' presentation of their objections, members of the federal advisory group asked for additional data and explanations. The industry and working groups plan to meet in an upcoming closed session to discuss the issues before the panel resolves how to proceed.

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