Acquisition Advisory Panel Pushes Competition The watchword is “competition” in the federal Acquisition Advisory Panel’s report. The Panel, which was chartered by Congress to review procurement laws and regulations, issued more than eighty recommendations for change, emphasizing the need for competition and acquisition planning. Leading industry groups have denounced some of the recommendations as overly burdensome on government buyers and contractors. Most of the recommendations had been reported previously during the Panel’s 18 months of public meetings. Although it described the report as a “draft,” the Panel said its findings and recommendations will not be changed in the final version that is due later this month. Perhaps the most far-reaching proposal is aimed at increasing competition on GSA schedules and other multiple award contracts. The Panel said all task and delivery orders above $100,000 should be advertised to all qualified contractors, such as by posting them on GSA’s e-Buy, or should be circulated to enough contractors to get three bids. The recommendation would extend the Defense Department’s Section 803 rule to cover all civilian agencies and would expand the rule to cover orders for products as well as services. The Panel said about one-fourth of federal contract dollars were awarded without competition in fiscal 2005. In contrast, corporate buyers told the Panel “the bedrock principle of current commercial practice is competition.” In the small business arena, the Panel recommended: *Contracting officers should be given discretion to use the various preference programs, based on what the agency needs to meet its socioeconomic goals. As a practical matter, that would boost opportunities for service-disabled veterans and HUBZone companies, because most agencies have not reached their statutory 3% goals for contracting with those firms. *Buyers should be permitted to reserve task orders for small businesses on GSA schedules and other multiple award contracts. The panel said many contracting officers are already doing this, although there is no legal authorization for it. *Agencies should be authorized to reserve some awards under multiple award contracts for small businesses. The panel said this, too, is a common practice with no sanction in current law or regulation. However, the Panel said such contracts could not be reserved for 8(a) firms because of provisions in the law governing the 8(a) program. *Cascading, or tiered, set-asides should be prohibited. The panel said cascades force companies to spend money on proposals that may never even be considered. *Acquisition personnel should receive additional training on the use of small business programs and on rules governing contract bundling. The recommendations did not address small business size standards, which many industry officials believe need to be raised. Panel members have said they left that issue alone because SBA is already considering a revision in the standards. Three recommendations drew the loudest objections from industry: *The Panel called for narrowing the definition of commercial services (but not commercial items) that can be purchased under streamlined procedures of Part 12 of the Federal Acquisition Regulation. The current rule says services can be considered commercial if they are “of a type” sold in the commercial marketplace. The Panel said commercial services should be limited to those services that actually are sold commercially in substantial quantities. A coalition of industry groups said that restriction would make it more difficult for the government to acquire cutting-edge services. *The Panel recommended permitting protests on orders above $5 million on GSA schedules and other multiple award contracts. The contractor groups said that would slow down procurements on those vehicles and increase the government’s costs. *The Panel recommended strict limits on the use of time-and-materials contracts. Under such contracts, it said, “the contractor does not have to complete the work successfully in order to obtain payment; rather, the contractor is paid for the hours devoted to the task regardless of the outcome. Therefore, substantial oversight is necessary for T&M contracts.” The Panel’s recommendations will be submitted to Congress and the Office of Management and Budget. Some of the proposed changes would require legislation; others could be done by regulation. The Advisory Panel was created under the Services Acquisition Reform Act. Its membership included seven government officials and seven procurement experts from the private sector, mostly lawyers. Its chair was Washington lawyer Marcia Madsen. Among its other recommendations: *GSA should establish a new schedule for IT services, with prices determined by competition rather than posted rates. *To increase transparency, agencies should publish a notice on FedBizOpps of all sole-source orders over $100,000 on multiple award contracts and blanket purchase agreements. *Provide a debriefing for losing bidders on all orders over $5 million on multiple award contracts. *The Office of Federal Procurement Policy should publish new guidance and a best practices guide for the use of performance-based contracts and acquisition personnel should be trained on how to use them. *Agencies should improve training, recruiting and retention of acquisition personnel. The full report is available at http://acquisition.gov/comp/aap/draftfinalreport.html.