High-level team to probe interagency contract vehicles

HERSHEY, PA.--The Office of Federal Procurement Policy is creating a working group to address congressional concerns that federal interagency procurement vehicles may offer duplicative services, the office's acting administrator said Monday. Interagency contracts are an Office of Management and Budget-favored way for agencies to buy products and services because they leverage the spending power of the government to get discounts.

But "Imagine if General Motors … found they had duplicative [cars]," said OFPP's Robert Burton, speaking Monday at the Executive Leadership Conference. "Of course, sometimes [duplication] is not necessarily bad," he added. "Sometimes it's very bad, especially when we're wasting government resources."

The Executive Leadership Conference is presented by the American Council for Technology and the Industry Advisory Council. Government Executive is a co-sponsor of the event.

The working group will coordinate with and implement the efforts of a congressionally mandated panel created earlier this year under the 2003 Services Acquisition Reform Act, Burton said. The group is scheduled to begin work by the end of 2005.

OFFP should avoid a knee-jerk reaction against duplication in contract vehicles, said Steve Kelman, former head of the office and now a professor at Harvard University. "It's almost like conventional wisdom in government that any time you see duplication or overlap, that's bad," he said. But in the free market, duplication drives competition and lowers prices. "There's duplication between Crest and Colgate on toothpaste….the opposite of duplication is monopoly," Kelman said.

OFFP also is preparing to issue guidance on federal use of share-in-savings contracts, under which agencies and contractors retain savings created by information technology efficiencies. Authorization for the share-in-savings approach, codified in the 2002 E-Government Act, expired Sept. 30.

Rep. Tom Davis, R-Va., introduced legislation in May that would reauthorize the contracts, but the bill still has not cleared the House Government Reform and House Armed Services committees.

"As soon as the authority is extended, we're hoping to issue that guidance," Burton said.

Agencies face a host of complicated policy issues in deciding how to spend funds generated under the share-in-savings approach. "Fiscal law considerations come in here, and budget considerations, and they're somewhat complex," Burton said. "That has been one of the reasons why the OMB guidance has been delayed"

Agencies' adoption of share-in-savings contracting has not gone as smoothly as hoped, he acknowledged. They must first determine a baseline cost against which savings can be measured, but data stored in the Federal Procurement Data System is notoriously inaccurate and incomplete. The contracts also require heightened contract management by acquisition officials. OFPP is working to improve acquisition workforce training, according to Burton.

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