Procurement Reform - FEDERAL SECTOR REPORT - a newsletter for government agencies, contractors, and grantees

FEDERAL SECTOR REPORT

September1996
(c) P2C2 Group, Inc.

EARLY UPDATE ON PROCUREMENT REFORM

In the federal procurement arena, many observers have discussed the ACQUISITION REFORM MOVEMENT, but to me it looks more like a stampede. Congress, federal courts, and the executive branch have all gotten into the act. This column surveys some of the players and the changes that are occurring. Reform is significant not only to federal contractors but also to the many nonprofits and institutions of higher education who perform sponsored projects under federal contracts.

CONGRESS got the ball rolling with the Federal Acquisition Streamlining Act of 1994. FASA authorizes the new $100,000 Simplified Acquisition Threshold, states a clear preference for buying commercially available items, and establishes the Federal Acquisition Computer Network (FACNET). While federal acquisition professionals have spent many months working out the detailed rules and implementation procedures for FASA, Congress has been enacting additional legislation. Two of these acts were signed into law as provisions of the Fiscal Year 1996 Defense Authorization Act:

The Federal Acquisition Reform Act of 1996 (FARA), which revises the standard for "full and open competition" for procurement and further restricts sole source procurements of commercial items.

The Information Technology Reform Act of 1996 (ITMRA), which creates a Chief Information Officer (CIO) in the Office of Management and Budget and each executive agency and, in acquisition, directs agency heads to use "modular contracting" based on successive acquisitions of "interoperable increments," and repeals the Brooks Act (eliminating GSA's role in the oversight of IT acquisitions and its role in bid protests through GSBCA).

DEPARTMENT OF DEFENSE went into high gear by proclaiming May 31st as "Acquisition Reform Acceleration Day," seeking to speed implementation of procurement changes, promote broad understanding of the new acquisition rules, and communicate a new vision of procurement as a method for delivering "on a timely basis the best value product or service to the customer, while maintaining the public's trust " and viewing "best value from a broad perspective, balancing the many competing interests in the System." The nine binders of text and charts used for Acceleration Day are available for download from the Internet (http://bath.ncr.disa.mil:8889/~dau/accel.html).

I downloaded the 2 megabytes of compressed MS Word and PowerPoint files for the first binder (Acquisition Reform Legislation) and found that it was very well prepared and would be useful to any contractor or government representative who works with almost any part of the executive branch including civilian agencies.

THE SMALL BUSINESS ADMINISTRATION is revising its method of calculating revenues for small business size standards. Instead of using a firm's financial statement to determine revenues, the annual receipts reported for federal income tax purposes will be used.

THE DEPARTMENT OF JUSTICE published in the Federal Register (May 23) a lengthy proposal that seeks to overhaul affirmative action in federal procurement. The public may submit comments about the draft until July 22nd. It will then be revised to serve as a model for rewriting the affirmative action provisions of the Federal Acquisition Regulation (FAR). Attorneys at Justice hope the final document will ensure federal compliance with the Supreme Court's decision in Adarand v. Pena which rejects racial or ethnic criteria as a basis for decisionmaking in procurement. Several of the recommendations are as follows:

* Agencies should target outreach and technical assistance efforts, including mentor-protege initiatives, toward industries in which Small Disadvantaged Business (SDB) participation has been low.

* Agencies could give credits (evaluation rating points) to SDB prime contractors in open competitions, instead of setting aside contracts for minorities, thereby ensuring that all firms have an opportunity to compete.

* Non-minority prime contractors could receive credits for participation by SDB subcontractors.

* The SBA 8(a) program would continue as a sole-source contracting mechanism but on a more restricted basis.

STAFF AIDES TO REPRESENTATIVE JAN MEYERS (R-KS) have drafted a bill that would eliminate the 8(a) program, though the bill appears to be going nowhere.

The Federal Aviation Administration is implementing a new acquisition management system that was requested by Clinton and authorized by Congress, freeing the agency from its former dependence upon the Transportation Acquisition Regulations. Using a much more corporation-like approach, the new system emphasizes flexibility and time sensitivity. The new system:

* Uses Integrated Product Teams (IPTs) to make contracting decisions that give the agency the most advantageous solutions to its needs

* Reduces acquisition documents from 233 to less than 50

* Cuts time to award large contracts from 12 months to six months

* Reduces from 22 months to 11 months the period from an investment decision to contract production award

* Reduces by 50 percent the time from production award to commissioning of equipment in the field

This report covers just the tip of the iceberg. Stay tuned for more information in the next issue of IMPACT, the newsletter of the National Small Business Council, where Jim Kendrick has a column on procurement. Information contained here was first published in NSBC in the July 1996 IMPACT newsletter. For membership information, contact shows@nsbc.org or visit the web site: http://www.nsbc.org/