Infotech and the Law: Planning can ensure success in revised A-76 process

William Crowley

The sheer bulk of the multibillion-dollar federal market for commercial services represents a significant opportunity for businesses interested in working with the government. Until now, however, the government's competitive-sourcing process for commercial activities under Office of Management and Budget Circular No. A-76 has been routinely criticized as counterproductive, discouraging many would-be participants from entering the market.

The complaints are well-founded. Activities that could be performed by the private sector are not being competed. For those activities that are, the consensus among industry, procurement professionals and employee representatives is that the procurement process is broken.

The proposed revisions to A-76, issued Nov. 14, 2002, by the Office of Federal Procurement Policy, aim to meet these criticisms aggressively. (The final version is expected in February.) The result will be a system overhaul that is likely to increase opportunities for businesses to go for work previously sheltered from competition.

Three proposed changes bear close attention. First, all agency activities will be presumed to be commercial in nature, and therefore subject to competition, unless otherwise stated in writing by the agency. This will greatly expand opportunities for business, as agencies will be forced to compete many activities previously performed in-house and insulated from competition.

Second, the unwieldy, unfamiliar competition process mandated by the current circular will be replaced by well-established FAR competition requirements, including limited use of best-value evaluation criteria. This should make competitions more reliable and easier for participants.

Third, in a shift that is likely to stress the capabilities of most agency procurement operations to their limits, the normal procurement cycle for competitive sourcing, from date of announcement to date of award, will not exceed 12 months.

Businesses should take these steps to meet the challenges and opportunities:

* Monitor reports for reclassification of activities the agencies must compete (www

.whitehouse.gov/OMB/procurement/index

.html) and new procurement announcements (www.fedbizopps.gov). Businesses that have been hampered or shut out of the federal marketplace because agencies insisted on performing certain work in-house should watch for work to be recast as commercial in nature or set for competition.


* Prepare for limited but increasing use of best-value criteria in competitions, and migrate FAR practices into commercial activity proposal preparation. "Low-cost, technically acceptable" criteria will no longer be an across-the-board rule in competitions for commercial activities. Also, if businesses have grown weary of the long, drawn-out A-76 process, prepare for a single round of competition among all offerers under the new circular.

* Anticipate protests from a new class of interested parties. Aside from the vagaries that undoubtedly will flow from implementing new procedures in a reduced procurement cycle, protests likely will increase, because the revised circular appears to give government employees -- for the first time -- a voice in the protest arena. Particularly for the initial series of procurements conducted using the revised circular, offerers should have a plan to defend against a wave of public-sector protest allegations.

If the Office of Federal Procurement Policy achieves its goal, the revised A-76 will be a milestone in the government's competitive-sourcing practices. For businesses, it will greatly enhance the volume and diversity of opportunities to participate in the federal marketplace. *

William Crowley is an associate in the Government Contracts practice of Piper Rudnick LLP in Washington. His e-mail address is william.crowley

@piperrudnick.com.

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