Time caps now in effect for DOD deals

Vendors looking to win long-term contracts from the Defense Department will perhaps be disappointed, as a provision of the Defense Authorization Act signed late last year went into effect earlier this week.

Section 843 of the Defense Authorization Act will limit the length of contracts awarded by the department to five years total, said Deidre Lee, DOD director of procurement and acquisition policy, speaking yesterday evening at the Computer Marketing Associates executive forum in Vienna, Va.

Lee said the mandate from Capitol Hill was enacted because contracting officers were often issuing contracts that contained multiple-year follow-on options.

Although Lee said she did not necessarily agree with the length of the limit, she said she was not going to try to persuade lawmakers to change the language. Nor is she likely to try to interpret the language for another meaning.

Lee said she asked DOD attorneys if the language pertained only to base-level contracts or if the language included the base contract and any potential options.

"I was told that total means total," she said.

Lee said she understands the frustration that this is likely to cause with companies looking to work with the department.

"It really can ruin the award term," she said. "Companies must now write a contract for three or four years to give themselves some head room" under the five-year cap.

Lee did admit that she hopes the provision will receive statutory correction in the fall. But in the meantime, she and the entire DOD procurement community must operate under the constraints Congress has laid out.

Lee said she would take full responsibility for not more strictly enforcing a term limit on DOD solicitations. She cited one contract that contained 19 one-year follow-on options.

"You will see this year a little change in myself," Lee said. "I will be more heavy-handed in the future, and we're going to regulate ourselves. My opinion is because I haven't been more heavy-handed, we have gotten these statutory regulations."

Although Lee may not have agreed with the five-year term of the limitations, she said she felt that term limits were a good idea.

"If the language [in Section 843] were to be removed tomorrow, I would regulate the terms," she said. "The limit may not be five years, but I would regulate the terms."

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