Panel aims to increase competition for services contracts

By Jenny Mandel

July 25, 2006

A federal acquisition advisory panel has approved preliminary recommendations to establish a new General Services Administration professional services schedule, require public notification when agencies award large sole-source contracts and allow protests of large task orders under multiple award contracts.

The Services Acquisition Reform Act Advisory Committee, a group created by the 2004 Defense Authorization Act, provisionally agreed on the recommendations Monday and Tuesday. These and other suggestions will be included in a report the panel expects to release in October.

After discussing how GSA's supply schedules are geared more toward the acquisition of goods than of complex services, the group agreed to recommend that the agency establish a new information technology schedule for professional services. Under it, prices for each order would be based on competitions rather than posted rates.

The panel also agreed that GSA should develop market research capabilities that other agencies could use. GSA would monitor government and commercial services acquisitions using publicly available information, and develop and maintain a database on transactions.

The group suggested that a provision of the 2002 Defense Authorization Act that currently governs only Defense Department procurements should be applied to interagency contracts governmentwide. That provision, Section 803, requires that agencies obtain at least three bids for orders of $100,000 or more. The panel also recommended the provision be extended to all orders, not just those for services.

In a measure targeting transparency and openness, the panel voted to suggest that the Federal Acquisition Regulation be amended to require agencies to announce on the FedBizOpps Web site when a large, sole-source task or delivery order is placed against a multiple award contract or blanket purchase agreement. The recommendation would use the simplified acquisition threshold of $100,000 as the floor above which announcement would be mandated, and would require the announcement within 10 business days.

"Right now, with task and delivery orders there's very little, if any, transparency," said Scott Amey, general counsel to the Washington-based nonprofit watchdog group Project on Government Oversight. "This provision would allow us to see those, especially the sole-source ones, which cause us the most concern, and hopefully that will provide more confidence in government buying."

In a measure that has previously raised concern among industry representatives, the panel also agreed to recommend that opportunities to protest contract awards be extended to task and delivery orders that exceed a $5 million threshold.

Tom Luedtke, NASA's assistant administrator for procurement, spoke against the recommendation, arguing, "We're making a business process into a legal process." Drawing an analogy to the small number of medical procedures subjected to malpractice suits and the disproportionately large shadow the threat of malpractice casts across medicine, Luedtke said the measure would introduce friction into the procurement system that might not improve acquisitions but would increase costs.

Other panelists expressed reservations about the measure, but the group ultimately voted to approve it.

Panel chairwoman Marcia Madsen, a partner at law firm Mayer, Brown, Rowe & Maw LLP who specializes in government contract law, said the central focus of the recommendations adopted this week is increasing competition in federal procurement. "A lot of the recommendations that you see are directed at increasing the government's use of competition for services buys," she said.

By Jenny Mandel

July 25, 2006