FPI: Overstepping procurement bounds?

I pose three questions:

Should a federal agency be required to get waivers from another federal agency when planning to acquire products from commercial sources? Should one agency put procedures in place that allow it to request cancellation of another agency's solicitation? Should one agency ever have the authority to determine if a product can meet another agency's needs?

If you answered "no" to one or more of these questions, you may want to comment on the Federal Prison Industries Inc.'s proposed regulations.

FPI, also known as UNICOR, is the Justice Department's work training program for inmates in the Bureau of Prisons. FPI offers more than 100 items and services to government agencies.

In January, FPI proposed in the Federal Register to codify (in 28 C.F.R. & Sect; 302) the "standards and procedures that facilitate FPI's ability to accomplish its mission." FPI's mission relates to its status as a "required source" for acquisition of products under Federal Acquisition Regulation 8.001. I argue not with the mission but the means, which strike me as heavy-handed oversight. FPI's actions appear to signal an intent for more aggressive action by the wholly owned government corporation to exercise its statutory preferences. To what extent will this result in a new level or degree of private/public competition?

FPI's proposed rules remind me of the "bad old days" when process seemed more important than results; when the service an agency provided depended on some mandate, rather than meeting a need with a high-quality product or service; and when the concept of a government marketing person was unimagined. Let's consider the proposed rule in terms of the three questions.

Question 1: Should a federal agency be required to get waivers from another federal agency when planning to acquire products from commercial sources?

According to FPI's proposed rule, "When a contracting office or activity believes a product on [FPI 's] schedule does not meet the customer's requirements but that similar products from a commercial source will, and the contracting activity wishes to purchase the product from a commercial source, it must submit a request for a waiver to FPI and obtain a waiver prior to purchasing the product from the commercial source." [Emphasis added.]

Furthermore, FPI says, class waivers are not usually issued except when the product is not available from FPI. Does this mean that agencies must seek a waiver for all product acquisitions, whether or not a similar product is available from FPI?

The waiver process is not just a burden; it may prove to be a high hurdle.

FPI does not plan to grant waivers "ordinarily" based on price, in cases where the price does not exceed current market price as determined by FPI; or based on delivery schedule, where FPI's schedule is consistent with comparable product delivery via the Federal Supply Schedule or commercial sources; or based on aesthetics. Assertions by agencies that FPI's products will not perform to standards, meet agency "specifications" or represent best value must be detailed in writing.

This kind of myopic review and oversight process seems dramatically out of sync with the acquisition reform initiatives of the last half decade. What comes next? A waiver process in support of the Javits-Wagner-O'Day Act to enforce procurement preferences for acquisition from nonprofit agencies employing people who are blind or severely disabled? What kind of empowerment are we contemplating?Question 2: Should one agency have the power to request the cancellation of another agency's solicitation?FPI apparently plans to review the Commerce Business Daily to police agencies' actions.

The rule states that "although solicitations for products manufactured by FPI should not appear in the CBD without first obtaining a waiver from FPI," such notices "through error" can "inadvertently" appear. In such cases, FPI cites the FAR 15-day waiting period and states that it will "exercise its mandatory source status by requesting cancellation of the solicitation."

This, at most, is an exceedingly rare situation. Even powerful organizations, such as the General Accounting Office, the Office of Management and Budget and the General Services Administration (in the delegation of procurement authority days), rarely, if ever, exercised such authority. Why should it be appropriate for FPI?

Question 3: Should one agency ever have the authority to determine whether a product can meet another agency's needs?

In a huge break with tradition, FPI announced in the proposed rule that in circumstances where it is not clear whether a particular product offered by FPI has the features required by the agency, "the contracting officer or activity should contact FPI, and FPI will determine whether a particular product is included in the [FPI] schedule and whether an agency's requirement can be met by FPI." [Emphasis added.]Does FPI really want to assume this risk? Should they be permitted to? Where would they get the expertise without building another bureaucracy?

-- Costello is a principal of Acquisition Solutions Inc. She can be contacted at (703) 378-3226 or at ann.costello@acqsolinc.com.