Procurement Policy

8 acquisition provisions in the defense bill

US Capitol

The fiscal 2013 National Defense Authorization Act, a major piece of legislation affecting many aspects of how the government deals with costs and contracts, contains some noteworthy provisions. Here are eight of the most important:

1. Better pricing data. Congress wants employees in the Defense Department’s acquisition offices to have access to information that will tell them if a price for a good or service is the same as what the government has paid in the past, or help determine a fair price. The department must also ensure employees understand their power to require companies to provide data on sales and prices, and form a cadre of experts to advise acquisition offices about their authority.

2. Easier analysis of pricing trends. The bill would set up a database as a pilot project to track trends in prices, aid officials in analyzing costs and help agencies challenge unjustified price increases.

3. Faster access to past-performance data. Lawmakers are pushing top acquisition officials at civilian and defense agencies to set deadlines for employees to enter companies’ past-performance information in the appropriate databases. In addition, the bill would give companies two weeks to submit their comments, which would become part of the database.

4. A review of the contractor pay cap. The bill does not set a specific cap on how much an agency may reimburse contractors for executive compensation. Instead, the Government Accountability Office would be asked to delve into the issue and report back. In the past year, many lawmakers wanted to lower the amount the government will reimburse, with some recommending the president’s $400,000 salary or the vice president’s $230,700 salary. Currently, the government reimburses a contractor no more than $750,000 a year in executive pay, benefits and bonuses.

5. Workforce decisions left to DOD. Congress would give defense officials the ability to determine the most appropriate and cost-effective mix of civilian and contractor employees and military personnel to carry out DOD’s operations.

6. A limit on cost-type contracts. Lawmakers want to limit DOD’s use of cost-type contracts, which lack a fixed price and can have incentives or award fees attached to them. If officials choose a cost-type contract for a major acquisition program, they must submit a written explanation to Congress saying why that approach was the only suitable choice. Furthermore, officials would have to limit the cost-type pricing to the necessary items or portions of the contract.

7. Critical acquisition jobs reserved for feds. Congress wants critical acquisition jobs filled by full-time federal employees. The conference report lists 13 positions that include program executive officers, chief development testers, lead contracting officers and the program leads for IT. The provision would apply to major defense acquisition programs and major automated information systems.

8. Status quo for small-business contracting goal. Small-business advocates in Congress have sought to increase the annual small-business contracting goal from 23 percent to 25 percent of overall contracting dollars. However, the bill would keep the governmentwide goal at 23 percent.

The act must pass the full House and Senate and be signed by President Barack Obama before it becomes law.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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Reader comments

Fri, Dec 21, 2012 M

As a 20+ year Sr. Acq. professional, not seeing how these initiatives will result in actual improvements.

Thu, Dec 20, 2012

Limiting cost-type contracts so they can only be awarded with Congressional notification is ridiculous! There's a time & place where a cost-type contract is actually MORE COST EFFICIENT than a fixed price contract. Obviously, folks in Congress don't understand that. Instead of effectively banning all cost-type contracts, try to understand the scenarios where they make sense (e.g., development) and spell out criteria where cost-type is allowed WITHOUT special review/approval or notification. Currently, at my Navy command, we already have to justify awarding a cost-type contract by completing a "Determinations & Findings" letter. The D&F is created by the PM's staff (which includes an Asst PM - the real manager of the program/contract) in conjunction with our internal contracts expert & acquisition expert (me). Then, it's reviewed by the PM staff (consisting of a division head and a Deputy PM) prior to PM concurrence to submit the D&F letter to Legal & Contracts for review/approval, which might involve 1-3 people, depending on dollar value. After legal review, it goes to Contracts, where it's reviewed by the Contracts specialist, PCO, and the PCO's boss. Then, depending on the dollar amount, it might have to go to the PEO (Flag level & 4-5 of his staff), and/or Head of Contracting (SES level & 1-2 of his staff). And if it exceeds an even higher dollar amount, it has to go outside our command to the next echelon level up for review/approval by their legal & acquisition departments (consisting of another 3-6 people)! Now, they want to add in a Congressional notification for all ... tell me, aren't there enough people in the review/approval process already? Rather than just adding another layer of "notification", why not try to actually FIX the problem instead? And people wonder why it's so expensive & time consuming to get anything done in the Government!

Thu, Dec 20, 2012 SPMayor Summit Point, WV

See #6 : limit cost type contracts by legislation, minimize use of T&M by policy ... do it all by fixed price and preferably by lowest fixed price. We only want what is best for the warfighter and taxpayer- so let's set some high hurdles, tell contractors we want more information that we will post for the sake of transparency : where do they think up this stuff ... in the school of "duh"?

Thu, Dec 20, 2012

Prior to what is called "acquisition reform" in the 80s and 90s, major acquisition program at the various ALCs went through four (4) levels of review before award. Post-reform procedures INCREASED the levels of review to eleven (11)! Many people were promoted and new kingdoms established. Reversing this is impossible without devine intervention.

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