Agencies, industry slow to embrace commercial practices

More than a decade ago, a commission headed by David Packard came up with a novel idea: The federal government should adopt commercial procurement practices. But the Packard Commission's bold notion took a while to ferment. After 10 years of increasingly aggressive legislative and regulatory change

More than a decade ago, a commission headed by David Packard came up with a novel idea: The federal government should adopt commercial procurement practices. But the Packard Commission's bold notion took a while to ferment. After 10 years of increasingly aggressive legislative and regulatory changes, the dawning of the commercial age of government procurement has arrived.

The road to procurement reform and commercial buying practices began in the late 1980s, but the shift was minimal and was not embraced by the procurement community. Then, in 1991, came Operation Desert Storm, which created an immediate need by the government for commercial, state-of-the-art products. Such urgent operational requirements could not be met through the government's noncommercial buying practices. Instead, the military found itself battling its own procedures. For example, one Air Force supplier of radios would not provide these products because of federal contracting certification requirements. The Air Force instead was forced to buy radios from a foreign company.

The frustrating procurement problems raised during Desert Storm required change, which came initially with the passage of the Federal Acquisition Streamlining Act in 1995 and the Clinger-Cohen Act in 1996.

The regulatory implementation of these new laws, however, has taken time. Only now are such changes finally becoming more visible, as commercial terms replace pre-FASA terms in requests for proposals and in prime contracts and subcontracts.

The transition from the "old" procurement ways to the "new age" of FASA, has been pain-fully slow. At first, it seemed that no change had occurred at all. Neither government procurement authorities nor federal systems integrators were interested in the concept of a commercial procurement model for the federal government.

During contract negotiations six months after the FASA-implementing regulations were published, a contracting official told me his agency could not apply FASA because the agency had not received the Federal Acquisition Circular containing the regulations "through channels." My company was required to negotiate using pre-FASA contract clauses or risk losing the deal.

Frustration over the time it has taken to implement FASA has been particularly high among technology companies, which often sell their products to the government through prime systems integrators or resellers.

The primes seemed as reluctant as government buying offices to revise their procurement processes and subcontract terms to reflect the statutory and regulatory changes. Asking a prime to shorten its 12-page list of Federal Acquisition Regulation flow-downs to the few required by FASA seemed like suggesting to the Spanish Inquisition that the world was round.

While the dawning of this new commercial age of government procurement has been slow, it is here. Establishment of agency chief information officers, pressure from Congress and oversight upon agencies to control their information technology budgets— as well as the speed of technological change— have contributed to the awareness and implementation of FASA. But like those who didn't believe the sound barrier could be broken, there are still those government agencies and contractors who continue to resist the law by demanding that commercial companies disclose confidential pricing information or by insisting upon unnecessary audits, inspections or compliance reports.

Failure to comply will continue to impede agencies' ability to procure the commercial products and services they need as they enter the 21st century, and it imposes unnecessary costs and burdens on commercial companies. Ultimately the loser is the taxpayer, as changes in technology continue to outpace the changes agencies implement in procurement procedures.

However, each day there are new converts, and we applaud those agencies and government contractors savvy enough to recognize the value of investing in this change and moving forward with FASA.

-- Michels is managing attorney for the Americas at Cisco Systems Inc. He has more than 10 years of experience in federal government procurement and has management responsibility for the delivery of legal services to all of the Americas, including Cisco's federal operations.

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