SARA panel takes stand against T&M contracts

Acquisition Advisory Panel

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The final draft report of the Acquisition Advisory Panel, which proposes ways to streamline and improve how agencies buy technology services, comes down strongly against the use of time-and-material contracts.

The panel, mandated by a provision of the Services Acquisition Reform Act of 2003 and often known as the SARA panel, recommends weaning agencies off the use of such contracts, which are based on fixed hourly rates,  in favor of more performance-based acquisitions, which entail fixed price solutions.

The report, which was released late Thursday, notes that commercial buyers generally avoid time-and-material contracts, “viewing them as too resource-intensive to monitor.” Companies occasionally conduct time-and-material acquisitions, but in such cases, “they plan for and apply the necessary in-house resources to effectively monitor these contracts,” the report states. That is not the case in government, the panel found.

Still, the panel recognizes that the government could put a stop to time-and-material contracting without disrupting current programs. So panel members recommend “enforcing current policies limiting the use of time-and-material contracts” and “establishing procedures to convert such contracts to performance-based acquisitions,” the report states.

Finally, the panel notes that industry groups had lobbied for recommending the repeal of a SARA provision that required competition on time-and-material contracts for commercial items. But “the panel could not ultimately support this,” given its larger concerns about preserving competition in government contracting, the report notes.

The draft report was sent out late Thursday and the close of the comment period is Jan. 5.

Check back soon at FCW.com for more details on this report.

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