Lee warns Defense procurement personnel GAO will be watching

Deirdre Lee, director of defense procurement and acquisition policy, Wednesday put the department's contracting officers on notice that the General Accounting Office and Congress will be watching how they are implementing the requirements of Section 803 of the 2002 National Defense Authorization Act.

"I have already had an inquiry from GAO, telling me they will be coming to see if we're properly implementing 803. So I would strongly suggest that we all really make sure you've done market research and the things you need to do, because we are going to get a little oversight on that," Lee told government contracting officers at the Professional Services Expo, a Washington conference sponsored by PostNewsweek Tech Media, publisher of Washington Technology.

The procurement rule implementing Section 803 went into effect Oct 25. The rule requires contracting officers to get at least three bids for each services acquisition job worth more than $100,000 that is made under a multiple-award contract. Contracting officers must notify all schedule holders about a job opportunity, or they must do adequate market research in order to notify enough vendors to ensure they will get those three competitive bids.

If less than three contractors respond, the contracting officer must detail in writing that no additional qualified contractors were identified despite reasonable efforts to do so.

Congress imposed Section 803 upon the Defense Department because contracting personnel were "doing Michael Jordan buying," not ensuring adequate competition, Lee said.

"You need a basketball player and you say 'I have to solicit three sources.' So you solicit Michael Jordan, me, and Donna [Bennett, commissioner of the General Services Administration Federal Supply Service]. Guess who won?" Lee said.

Time after time, the "Michael Jordan" contractor won, because the other two bidders were not competitive, Lee said.

"Even though we knew it and we were trying to self-correct, we weren't quick enough on the uptake. The Congress noticed as well, and they gave us Section 803," Lee said.

In addition to closely following the requirements of Section 803, Lee told contracting personnel they should make sure they allow adequate time for bidders to respond, or Congress might write a law to require it.

"If you are buying complicated services over $100,000, which is what Section 803 covers, it is unprofessional and unacceptable to put out a solicitation on a Friday night looking for a response on Monday morning. You're not going to get good proposals, and then consequently we're not going to support the war fighters like they deserve to be supported," she said.

"We better start self-regulating, or I predict that we will get regulated. The last thing we want to do is get statute that says every solicitation must be out there for two weeks," Lee said.

Lee told non-Defense contracting personnel that the Section 803 competition requirement is something they should think about, too.

"It's good business practice," she said. "It's probably something we should be thinking about across the board. It's not currently required [outside DoD], but you should be thinking: 'Am I really giving people an opportunity to compete?'"