Waxman bill sparks industry fears

Rep. Henry A. Waxman's (D-Calif.) latest government contracting legislation includes several provisions that are unnecessary and may be detrimental, according to the Information Technology Association of America and 10 other contracting organizations.

The groups wrote to Waxman on March 7 objecting to several provisions in his legislation, HR 1362, the Accountability in Contracting Act. The bill was introduced Tuesday and approved Thursday by the House Committee on Oversight and Government Reform, which Waxman chairs. It is tentatively scheduled for a House vote next week.

Under the legislation, which aims to reduce sole-source contracts and increase oversight, agencies must report to Congress all audits showing contractor overcharges. It also requires the agencies to disclose to the public, within 14 days of a noncompetitive procurement, documents that would justify the award of that contract, among other provisions.

In the letter sent to Waxman, ITAA and the other contracting groups assert that the legislation addresses problems that are primarily reflections of federal acquisition agencies' shortage of manpower, high turnover and lack of sufficient training. Without direct attention to those challenges, legislation is not likely to solve anything, the groups wrote.

"What's really needed is better application of existing regulations by a fully staffed, professional federal acquisition corps working with responsible government contractors," ITAA President Phil Bond wrote in a news release.

The ITAA and other groups protest the bill's provisions regarding disclosure of government contractor overcharges. Under the bill, agencies would be required to submit quarterly reports to Congress on any contract charges of more than $1 million that have been identified as "unjustified, unsupported, questioned or unreasonable" by an audit or other report.

The ITAA said the provision is unnecessary and would create a significant burden for government acquisition personnel. In the letter, the groups strongly recommend that only final audit findings are reported, not routine audit discussions.

Another provision raising concerns is Waxman's proposed restriction of cost-reimbursement-type contracts and preferences for fixed-price programs. The ITAA and other groups say the provision is unnecessary and potentially harmful, noting that a similar effort in the 1980s to restrict cost-reimbursement contracts caused negative effects on government and industry. "Fixed-price contracts are not appropriate in most development programs because contractors and the government cannot adequately estimate the risks involved," the groups wrote to Waxman.

In addition to the IAA, the groups signing the letter, who are collectively called the Acquisition Reform Working Group, are the Aerospace Industries Association; American Council of Engineering Companies; American Council of Independent Laboratories; American Shipbuilding Association; American Electronics Association; Contract Services Association; Electronic Industries Alliance; National Defense Industrial Association; Professional Services Council; and U.S. Chamber of Commerce.