Industry, Congress fear chilling effect from FAA pact to USDA

A recent $250 million award made by the Federal Aviation Administration to the Agriculture Department for data processing services has raised industry and congressional concerns about the fairness of public/private competition.

Earlier this month the FAA awarded its Integrated Computing Environment-Mainframe and Networking (ICEMAN) contract to the USDA which beat out other agencies and private-sector integrators [FCW May 12].

The Clinton administration has encouraged agencies to bid on contracts as a way to offset budget cuts and to offer savings to the taxpayer.

But members of Congress and industry are concerned the award could lead to more information technology business going to federal agencies which have an unfair competitive advantage because they are not held to the same contractual obligations as private companies. Also agencies do not have overhead costs built into their proposals do not pay taxes and do not have an incentive to make a profit.

"I don't know of any other situation we have bid where we were competing with the public sector " said Pat Ways group vice president for business development at Computer Sciences Corp.'s Systems Group. "I doubt we would do it again we would look very carefully at it."

'Disincentive for IT Companies'

Bert Concklin president of the Professional Services Council a trade association that represents professional and technical service contractors said the ICEMAN award has the potential to create a "disincentive for IT companies particular in the federal government if this spreads because good firms won't compete against a government organization."

Last week George Donohue associate administrator for research and acquisitions at the FAA suspended the contract until the FAA could determine if it violated any Office of Management and Budget rules that govern public/private competition.

Still the FAA stands behind its decision. It chose the USDA because the agency offered the best value to the government said Mary Powers-King integrated team leader for information technology acquisitions at the FAA's Office of Information Technology.

Powers-King said the bidders knew from the start that the competition for ICEMAN would involve bidding from public and private organizations.

Still Linda Berdine president of Berdine & Associates a subcontractor on the General Services Administration's Virtual Data Center Services contract is concerned that businesses will lose out to agencies. "What does this really mean to business?" Berdine said. "It's difficult to be cost-competitive against the government."

Congress has weighed in on public/private competition. The Freedom From Government Competition Act which maintains that the government should outsource noncore government functions to private industry was introduced in the House and the Senate this year.

An aide for Sen. Craig Thomas (R-Wyo.) who sponsored the bill in the Senate said "Thomas is concerned about this kind of thing happening. Data proc-essing is not a core function of the USDA. Thomas wants whoever can provide the best value to the taxpayer to do the work."

Bob Dornan senior vice president of Federal Sources Inc. said "This goes to the question of what the government is here to do and that issue has been raging for a long time. [But] it's not possible to compare a vendor with an agency. It's not an apples-to-apples comparison."

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