Agencies may face competition

Federal Register notice: Performance of Commercial Activities

Companies would have the opportunity to compete for support services contracts among agencies under a notice published by the Office of Management and Budget this week.

The Federal Register notice published July 2 from OMB's Office of Federal Procurement Policy proposes making the contracts, known formally as interservice support agreements, subject to competition.

Currently, such agreements created before 1997 are not subject to competition under OMB's Circular A-76, which lays out the process for conducting such competitions. The OFPP proposal would lift the grandfather clause so that all interservice support agreements would have to be subject to competition every three to five years.

Such interagency agreements have been a thorn for vendors who question whether it is appropriate for federal agencies to be providing commercially available information technology services to other agencies. Industry groups were incensed in 1997 when the Federal Aviation Administration selected the Agriculture Department for its Integrated Computing Environment-Mainframe and Networking outsourcing contract. The USDA beat out other agencies and large integrators for the contract.

Charles Cantus, vice president of government relations for the Professional Services Council, an Arlington, Va.-based industry group, said that the rule falls short in addressing the issue of whether the government should be competing with the private sector.

"That being said, I would characterize the proposed revision as a clear step in the right direction for which the administration should be commended, and I remain optimistic that this proposal is only the first step and that future proposals will address the overarching issues," Cantus said.

OFPP administrator Angela Styles, testifying before a House subcommittee June 28, had announced that the rule change would be published this week. The rule is available for comment until Aug. 16.

The proposal would change the Supplemental Handbook to OMB Circular A-76, last revised in 1998, to require competition for all interagency agreements.

The rule change will also require agencies to make changes to the way A-76 assesses cost comparisons. Typically in the interagency agreements, the customer agency must pay a reimbursable fee. Vendors have argued that this makes for an unfair comparison because a part of the costs are subsidized by taxpayers.

The rule change seeks to create a more level playing field, officials said.

About the Author

Christopher J. Dorobek is the co-anchor of Federal News Radio’s afternoon drive program, The Daily Debrief with Chris Dorobek and Amy Morris, and the founder, publisher and editor of the DorobekInsider.com, a leading blog for the Federal IT community.

Dorobek joined Federal News Radio in 2008 with 16 years of experience covering government issues with an emphasis on government information technology. Prior to joining Federal News Radio, Dorobek was editor-in-chief of Federal Computer Week, the leading news magazine for government IT decision-makers and the flagship of the 1105 Government Information Group portfolio of publications. As editor-in-chief, Dorobek served as a member of the senior leadership team at 1105 Government Information Group, providing daily editorial direction and management for FCW magazine, FCW.com, Government Health IT and its other editorial products.

Dorobek joined FCW in 2001 as a senior reporter and assumed increasing responsibilities, becoming managing editor and executive editor before being named editor-in-chief in 2006. Prior to joining FCW, Dorobek was a technology reporter at PlanetGov.com, one of the first online community centers for current and former government employees. He also spent five years at Government Computer News, another leading industry publication, covering a variety of federal IT-related issues.

Dorobek is a frequent speaker on issues involving the government IT industry, and has appeared as a frequent contributor to NewsChannel 8’s Federal News Today program. He began his career as a reporter at the Foster’s Daily Democrat, a daily newspaper in Dover, N.H. He is a graduate of the University of Southern California. He lives in Washington, DC.


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