DOD rule stirs concern

DOD proposed rule

A proposed Defense Department rule that would enforce competition on multiple-award services contracts must be crafted carefully or it could undermine procurement reform, according to vendors and government officials.

The comments were made during an April 29 hearing on DOD's proposed rule for implementing Section 803 of the 2002 Defense Authorization Act. Section 803 requires DOD contracting officers to seek bids from at least three eligible vendors on task orders of $50,000 or more.

The rule, published in the Federal Register last month, was criticized as overly bureaucratic. Officials say that it could drive government purchases away from General Services Administration schedules without increasing competition.

Ed Nara, Northrop Grumman Corp.'s contracts specialist, recommended that DOD use a rule that mirrors a performance-based contract: List the desired result at the top and then detail the guidelines. As published, the DOD rule focuses on what is not allowed, he said.

Rulemakers must craft wording that encourages competition. GSA's approach is to require agencies to open competition among three vendors. But Deidre Lee, director of DOD procurement, said the perception is that agencies choose the vendor they want to hire and then find two other companies to "make it look good."

Most vendors argued that that perception is not accurate.

Bruce Leinster, director of contracts and negotiation for IBM Global Services Inc., argued that Section 803 is based on the supposition that agencies don't want competition and that vendors get most of their business from sole-source contracts, neither of which is true.

The underlying concern about the rule is whether it would allow streamlined buying procedures to continue.