O'Keefe Gives Direction on Federal Contracting Policy

The Bush administration wants federal agencies to increase their use of performance-based contracts, expand online procurement and perform more accurate FAIR Act inventories, according to a memo from the Office of Management and Budget.

The memo from Sean O'Keefe, deputy director of OMB, also asks agencies to provide an outline of how each agency intends to meet the three goals.

In the area of performance-based contracts, OMB wants 20 percent of service contracts worth more than $25,000 to be awarded as performance-based contracts. A performance-based contract is one in which the contractor is paid based on meeting goals set forth in the contract.

OMB also wants agencies to post more solicitations on the government Web site, www.FedBizopps.gov. OMB is directing that agencies post synopses of all acquisitions valued at more than $25,000 that require widespread notice.

"The president's commitment is to shift procurement to the Internet at the same rate as the private sector and to increase competition and accessibility," O'Keefe wrote in his memo.

OMB also is directing that agencies complete competitions with the private sector during fiscal 2002 of at least 5 percent of the jobs identified by agencies in accordance with the Federal Activities Inventory Reform Act, known as the FAIR Act.

These jobs are activities agencies have identified as not inherently government, and therefore can be considered for outsourcing to the private sector.

President Bush wants to open at least half of the government positions listed in the FAIR Act inventories to competition with the private sector, O'Keefe wrote.