Industry groups oppose acquisition panel recommendations

By Jenny Mandel

August 11, 2006

A coalition of industry groups has announced its opposition to some of the preliminary recommendations of a federal acquisition panel about changing the way companies do business with the federal government.

Earlier this week, the coalition -- composed 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 -- expressed dissatisfaction with a set of provisionally agreed upon recommendations to improve the "effective and appropriate use of commercial practices" in federal procurement.

Trey Hodgkins, director of defense programs with ITAA, said the group strongly opposes six of the Services Acquisition Reform Act Advisory Committee's 11 recommendations on commercial practices. Panelists approved 10 of the recommendations last month after hearing expert testimony and discussing the measures in public meetings.

The panel, now nearing the end of its charter, has the option of reopening recommendations that have already been adopted, but has only one more public meeting planned for Aug. 29. Panel chairwoman Marcia Madsen, a partner at law firm Mayer, Brown, Rowe & Maw LLP, said she expects that the provisions already adopted will be integrated into a report. The panel is planning to meet in October to make adjustments for clarity or consistency.

Madsen said the group probably will not address issues that have already been debated, but will consider the coalition's responses and make changes if needed. "It would have been helpful to have had [the industry coalition's comments] earlier," she said.

Madsen said it was disappointing that the group has not been more engaged in the process. She noted that the recommendations have been public since a July 21 panel meeting, but the coalition's position was not submitted until the day before the Aug. 10 meeting. She suggested that some of the comments were being aired for the record rather than out of a serious desire to influence the panel's report.

Hodgkins said representatives of the coalition or member companies were present at almost all the meetings in which the groups had an interest, despite the fact that audience members could not speak during the discussions. Both Madsen and Hodgkins said coalition members had testified several times earlier in the process.

When the panel was first formed critics were concerned that it might be too sympathetic to industry because it was created by Rep. Tom Davis, R-Va., a strong supporter of industry-friendly procurement reforms.

Among the recommendations the coalition opposes is one to alter the Federal Acquisition Regulation definition of commercial services, currently described as those "of a type offered and sold competitively," by deleting the phrase "of a type." Hodgkins said that change would significantly restrict industry's ability to offer the government the newest goods and services, by requiring that companies be able to show significant prior sales.

The coalition also opposes a recommendation to reduce the use of time and materials contracts, an approach that is frowned upon because it ties payments to effort expended rather than results. In addition, the groups criticized a recommendation to allow protests on task and delivery orders of more than $5 million, which they argued would be time-consuming and costly to taxpayers.

"These recommendations threaten to roll back a decade of procurement reforms that have considerably improved the federal government's ability to serve its citizens," the coalition wrote, adding, "Should the panel's recommendations stand as final, the coalition would oppose the panel's report on these matters."

By Jenny Mandel

August 11, 2006