April 2 2004 Copyright 2004 Business Research Services Inc. 202-364-6473 All rights reserved.

Features:
Web Watch
Procurement Watch
Issues
Teaming Opportunities
Recently Certified WBEs
Recently Certified 8(a)s
Recent 8(a) Contract Awards
Washington Insider
Calendar of Events
Return to Front Page

Five-Year Limit Imposed on Some DOD Contracts

The Defense Department’s task and delivery order contracts are limited to no more than five years, including all options or modifications, under an interim rule effective March 23.

The amendment to the Defense Federal Acquisition Regulation Supplement implements Section 843 of the 2004 Defense Authorization Act.

In the past, DOD typically awarded five-year contracts with options for an additional five.

“I hate to see us lose that good contracting tool, which allowed us to award those (extensions) to those of you who performed exceptionally,” Deidre Lee, director of defense procurement and acquisition policy, told a group of contractors. She said the department will urge Congress to allow the additional options.

But she agrees that some limit on the length of contracts is needed. “If it were removed tomorrow, I would regulate it to a reasonable period,” she said.

Lee said Congress enacted the restriction after members learned of one DOD task order contract that included 19 one-year options. She called it “a perfect example” of how the department’s missteps have incited congressional reaction.

In wide-ranging remarks at Computer Marketing Associates’ executive forum in Vienna, VA, March 25, she said she will try to head off future congressional intervention by monitoring contracting practices more closely. “I’m going to be a little bit more heavy-handed in the future,” she warned. “Because I have not, in some cases we have gotten some legislation.”

She said she is working with GSA to identify defense offices that are violating rules requiring competition on GSA schedule purchases. Congress mandated in 2002 that DOD contracting officers seek multiple bids on services orders worth more than $100,000. (SAA, 11/1/02)

Lee’s office is also preparing regulations to satisfy another congressional mandate: any services contract through a governmentwide acquisition contract or other vehicle outside DOD must be approved. She said the provision will apply to purchases through GSA schedules. She intends to allow a contracting officer to approve a schedule buy; that would mean program officers could not buy directly off the schedules.

Lee said Congress found that the department had spent more than $120 million in a year on fees for contract vehicles run by other agencies.

The interim rule is FR Doc 04-6289 in the March 23 Federal Register. Comments are due by May 24.


*For more information about Set-Aside Alert, the leading newsletter
about Federal contracting for small, minority and woman-owned businesses,
contact the publisher Business Research Services in Washington DC at 800-845-8420