Madsen: Acquisition debate is welcome, but let’s stick to the facts

Acquisition Advisory Panel

The Acquisition Advisory Panel welcomes debate and expects that reasonable people will disagree on its recommendations. But a debate based on the facts will best serve the taxpayers and government contractors.

Once again, a representative of the Information Technology Association of America has mischaracterized the panel’s recommendations, this time at a National Contract Management Association (NCMA) conference in early December. An ITAA official claimed that one of the panel’s recommendations would have the effect of eliminating the use of time-and-materials contracts. This would be alarming indeed -- if it were accurate.

This is not the first time such a claim has been made. In a September comment piece in Federal Computer Week, another ITAA official asserted that the panel was recommending that all existing time-and-materials contracts be converted. The panel’s response, also published Oct. 2 in FCW, should have put that claim to rest.

We encourage anyone interested in what the panel actually recommends to read those recommendations firsthand at our Web site, which can be found at The preliminary recommendations of the various working groups can be read in their entirety.

So what has the panel said about time-and-materials contracts?

  1. Current policies limiting the use of time-and-materials contracts and providing for the competitive award of such contracts should be enforced.
  2. Whenever practicable, procedures should be established to convert work being done on a time-and-materials basis to a performance-based effort.
  3. The government should not award a time-and-materials contract unless the overall scope of the effort, including the objectives, has been sufficiently described to allow efficient use of the time-and-materials resources and to provide for effective government oversight of the effort.

The panel, equally balanced between industry and government with one member of academia, voted unanimously for adoption of this recommendation.

What the panel did not embrace was the recommendation ITAA submitted that would repeal Section 1432 of the Services Acquisition Reform Act (SARA), which requires competition when using time-and-materials contracts for commercial services.

Also at the NCMA conference, the ITAA said that the panel’s recommendation to restore the statutory definition of commercial service would prevent purchasing anything that did not exactly match what was provided in the commercial market.

Clearly, this would be a recommendation that none of the panel members would have supported.

In fact, by restoring the statutory definition of commercial service the panel believes services that at their core are commercially offered and sold will continue to enjoy the benefits of a less onerous government pricing regime -- one derived from the confidence that prices and terms are established in an efficient and competitive marketplace. Those services that do not derive their pricing and terms in the commercial marketplace may be purchased, but under Federal Acquisition Regulation Part 15, allowing the government the tools to establish fair and reasonable prices to meet the American taxpayers’ expectation.

The panel’s charter instructed it to improve the government’s commercial buying practices. Commercial buyers repeatedly told the panel that they rely heavily on competition to establish fair and reasonable prices. But the panel found that the government spent nearly one-third of taxpayers’ procurement money in 2004 on noncompetitive procurements. The government should be encouraged to compete more not less. And when competition is not feasible, the government owes it to taxpayers to use available tools to establish a fair and reasonable price.

Vigorous discourse on these issues is healthy. But let’s not waste time debating about recommendations that don’t exist.

Madsen, a partner at Mayer Brown Rowe and Maw, is chairwoman of the Acquisition Advisory Panel.


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