Can recouping costs be bizarre?

Jeffrey Zients, the deputy director for management at the Office of Management and Budget, says agencies should not be charging each other to use their services, such as assisted acquisition services.

More on this topic from FCW:

Senators skeptical about Obama's acquisition reforms

“It is bizarre and it should not be happening,” Zients said Oct. 28 at a contracting oversight hearing. “It’s bizarre — at best, bizarre.”

Sen. Claire McCaskill (D-Mo.), chairwoman of the Senate Homeland Security and Governmental Affairs Contracting Oversight Subcommittee, told Zients at the hearing that agencies should not market their products or services to another agency and then charge a fee for the service. Essentially, they’re on the same team and shouldn’t be making money off of each other, she added.

“One agency was advertising, ‘Buy your stuff here,’ to another federal agency because they were getting a cut because of the contract they had,” McCaskill said. “Well, there’s something very wrong about that — just fundamentally wrong.”

Zients agreed.

Assisted acquisition services, which include a fee, help agencies with the different phases of the procurement process—from developing requirements to awarding the contract. Many agencies with enough procurement experts that sell their services, such as the General Services Administration, add a fee for the service as a way to recoup their costs for which Congress gives no appropriations.

According to her staff, McCaskill was referring specifically to the Interior Department’s Acquisition Services Directorate, formerly known as GovWorks, and FedSource, which was run by the Treasury Department until the fund was closed permanently in March.

If Zients disagrees with agencies charging other agencies for products or services, he will have to look at how GSA structures its Multiple Award Schedules Program — particularly its $16 billion Schedule 70 for IT products and services. Then there are the numerous governmentwide information technology contracts hosted by GSA, NASA and the National Institutes of Health. They all charge agencies fees to use the contracts.

Posted by Matthew Weigelt on Oct 29, 2009 at 1:58 PM