Welcome back, FAR 13.5

One of the products of the procurement reform efforts of the 1990's was regulatory changes to streamline procedures for smaller buys and contracts for commercial items. There were two basic philosophies behind these changes:

1)  to reduce requirements on the government in awarding these contracts, speeding up the notoriously slow government procurement process;

2)  to reduce government-unique requirements for contractors, mainly to encourage commercial companies, particularly smaller firms with cutting-edge technologies, to do business with the government.

The major regulatory products of this effort were changes to Part 12 of the Federal Acquisition Regulation (FAR) – rules for buying commercial items – and to Part 13 – rules for smaller purchases under $150,000 in value.

As part of all this, in 1994 a test program was established to allow the use of the simplified procedures for smaller purchases up to a $5 million buy (later raised to $6.5 million) if the government was buying a commercial item. The test program was regularly renewed by Congress, but never made permanent. Then, in 2011 it was not renewed (stories differ about whether this was an oversight or a conscious decision). However, in this year's DOD authorization bill, the test program has been reborn (though again extended for two years, not made permanent). So now agencies once again are able to use these simplified procedures.

This may sound like a lot of regulatory gobbledygook; why should anybody care? It is true that the procedures for commercial items in Part 12 of the FAR already streamline the procurement process compared to procurements for non-commercial items. (Government newbies who fret about procurement being too slow should be aware that things used to be much worse.)

However, the smaller-purchase procedures authorized by the test program do allow the process effectively to be speeded up – as DOD noted in its request to restore the authority, including in a contingency contracting environment where speed is particularly important. Relative weights for evaluation factors (such as price and past performance) do not need to be specified in the solicitation, and evaluation itself is simplified. Past performance judgments may be based on the contracting officer's own knowledge or based on customer surveys, rather than requiring a more formal process. Some agencies – although the FAR does not specify this – started refusing to use reverse auctions for contracts over $100,000 after the test program was stopped.

There has been controversy over the years about the second strand of these 1990's-era efforts, involving reduction of requirements for contractors, particularly regarding submission of cost data. (Critics worried that many military-like products supplied by defense contractors were being classified as commercial items and that the lack of cost data made it harder for the government to get a good deal on such items.) Whatever one's views on that debate, people should be able to agree, I think, that allowing the government to move quickly and with fewer administrative resources to buy the kinds of off-the-shelf products and services that are the backbone of this regulatory authority is a good thing.

I would love to hear views from frontline buyers in the government about the practical differences between standard commercial item buying using Part 12 and the more-simplified buying now re-authorized in the FAR 13.5 test program.