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Industry Lauds New Contracting Rules

By Neil Munro

Staff Writer

Lobbyists for large and small companies cheered the latest 200-page draft of the Federal Acquisition Regulations - but then promptly urged they be revised to satisfy their remaining worries.

The new rules, dubbed FAR 15, will govern the award of contracts negotiated by an agency and a single company or those competed among several bidders. The rules are intended to ease agency procurement processes, promote government-contractor discussions and boost the use of commercial technology.

In 1996, federal agencies awarded roughly $200 billion on various types of contracts, including negotiated awards and competitive awards.

Industry's comments on the latest draft are due to the General Services Administration by July 14 and will be incorporated into the final regulation. The rules, which are likely to become effective in the fall, are an outgrowth of the 1995 federal acquisition reform law passed by Congress.

The new draft follows the publication by the GSA of a previous draft in September and July. Earlier versions generated such controversy, as well as more than 1,500 comments from industry, Congress and agencies, that the GSA combined the two drafts into a revised, 200-page document.

"I'd be hesitant to say it is a home run for small companies, but it is improving," said Bruce Hahn, the Arlington, Va.-based lobbyist for the Computer Technology Industry Association, which had argued that the previous draft of the regulations would unfairly exclude small contractors from contracts. Hahn's association represents 6,000 of the smaller companies that sell information technology equipment to systems integrators and other information technology companies.

Bert Concklin, president of the Vienna, Va.-based Professional Services Council which represents many of the larger systems integrators, cheered the new draft, saying it helps contractors strike a balance between quality and price.

"Quality, technical merit and problem-solving may be, and often are, more important than price," included in a contract bid, said Concklin, who lobbies on behalf of 140 large, medium and small companies. Among his members are the federal units of Lockheed Martin Corp., Bethesda, Md.; Computer Sciences Corp., El Segundo, Calif.; and GTE Corp., Stamford, Conn.

During the next few weeks, federal contractors and their associations, plus the small-business committees in the House and the Senate, will deliver their comments to the GSA.

"I'm looking for FAR 15 to be fair, fair from the beginning," said Glenn Baer, director of contracts for ARINC Inc., Annapolis, Md. "If you are not fair, [the General Accounting Office] will have [bid] protests up the ying-yang, and the government would not be able to do the job," said Baer, whose company took in $280 million in government contracts last year.

According to one congressional official, the Senate Committee on Small Business may hold hearings on the emerging rules, which he said are too hard on smaller companies. The committee is chaired by Sen. Christopher Bond, R-Mo.

But the new draft satisfies many of the concerns voiced by small-business lobbyists, said Hahn. For example, the draft relaxes a controversial section that allowed contract officers to summarily reject bids from suppliers deemed unqualified, said Hahn.

The new draft includes two sections weakening this provision; one section requires contract officers to carefully consider each companies' bid before deciding whether it should be rejected, and a second section allows the companies to continue bidding, even after they are deemed unlikely to be a viable candidate.

Also, the contracting officer must also explain to rejected companies why their bids were quickly rejected. This provision establishes an informal appeals process for companies that feel unfairly excluded, Hahn said.

Concklin urged the government to delete a contradictory section that requires contract officers to reject companies deemed unlikely to be a viable candidate. By eliminating this section, the government can satisfy the concern of small business and quickly begin using the new FAR 15 regulations, he said.

The new draft also allows government contract officers to consider a bidder's performance on previous commercial contracts, instead of only federal contracts. This change will help companies get credit for experience in the commercial sector and will help promote the entry of new companies into the federal sector, Hahn said.

Hahn also welcomed the new draft's demand that contract officers issue only one round of Best and Final Offers, where bidders are forced to resubmit bids, often with lower price tags attached. Without this provision, contract officers can demand several successive BAFOs from bidders, Hahn said.

However, Hahn cautioned that the impact of the regulations depends critically on how agency chiefs and contract officers choose to implement them. Thus, government personnel cuts might prompt overworked contract-officers to exclude too many bidders, unfairly hurting many smaller companies that can do the job, he warned.

Despite his caveats, the rewrite "is moving in the right direction," he said.

FAR 15 Rewrite Contents

Subpart 15.0 - Scope

Subpart 15.1 - Source Selection Processes and Techniques

Subpart 15.2 - Solicitation and Receipt of Proposals and Information

Subpart 15.3 - Unsolicited Proposals

Subpart 15.4 - Source Selection

Subpart 15.5 - Contract Pricing

Subpart 15.6 - Preaward, Award and Postaward Notifications, Protests and Mistakes