FTS stays in final defense spending bill

The Federal Technology Service isn't going to lose its best customer after all.

Two provisions in the National Defense Authorization Act for 2005 that would limit how the Defense Department buys goods and services from General Services Administration contracts were eliminated from the final legislation.

These provisions in H.R. 4200 would have kept defense agencies from procuring items from non-Defense Department contract vehicles if the vehicle included a service charge of more than 1 percent.

GSA's Federal Technology Service, from which defense agencies buy products and services, charges a 2 percent to 3 percent service fee. FTS does three-quarters of its business with the Defense Department.

The final legislation drops the provisions while mandating that the Defense Department and GSA inspectors general jointly review the policies, procedures and internal controls of each GSA Client Support Center and determine in writing, by March 15, if the center is compliant with defense procurement requirements.

If the IGs find that the centers are in violation of defense procurement requirements, they must do a second review by March 15, 2006. If problems persist, legislators will impose a $100,000 cap on the products or services that defense officials may purchase through the noncompliant GSA Client Support Center.

Contracting problems have plagued both GSA and the Defense Department this year, most recently with the misuse of contracting vehicles in Iraq. Earlier this year, GSA's inspector general found numerous FTS offices across the country guilty of violating procurement regulations. The IG said the offices used IT contracts to buy goods and services outside of the scope of the contracts.

In July, GSA and the Defense Department launched the Get it Right program to correct the contracting problems, said FTS Commissioner Sandra Bates. Under Get it Right, GSA managers will review and supervise the use of GSA contracting vehicles.

The spending plan sent for the president's signature also requires Defense Secretary Donald Rumsfeld to review the mechanisms in place for procuring commercial communications satellite services, and to provide guidance to the director of the Defense Information Systems Agency and military secretaries on how the procurements should be conducted.