Agencies need more input on contracts from industry, Sade says

If Mike Sade has his way at the Commerce Department, and probably for that matter all of government, no contract would be awarded without discussion between the vendors and the agency.

In fact, Sade, Commerce's procurement executive and the chairman of the Procurement Executive Council, which is changing its name to the Federal Acquisition Council, said he is looking into adding a clause to his agency's procurement regulations prohibiting an award without discussions.

This issue and the lack of upfront market research were the two areas Sade pointed out yesterday during his keynote address at the FOSE 2003 Conference that agencies need to improve upon to develop better contracts.

"We are so intent on rushing to award that we end up using time and materials contracts because the agency doesn't know what they want," Sade said. "We also need to do a better job of looking at what is out there before we put together a contract. I would say any contract worth more than $5 million, we need to do more market research on."

Many of these pitfalls program managers fall into come from an over reliance on the General Services Administration's Federal Supply Service schedules, Sade said. He pointed to a recent analysis by Federal Sources Inc. of McLean, Va. that found about 50 percent of all agency purchases over $5 million go through FSS.

"We need to justify through a business case when to use GSA and when to do full and open," Sade said. "Sometimes full and open can be just as fast, especially with commercial items."

Sade also said agencies are making progress in using performance based contracting. But he questioned whether industry is ready to bid on those types of contracts and whether program managers are ready to manage in a performance based way.

"There is large part of industry built on a model that is not conducive to performance based contracting," he said. "And contracting officers are not trained to write or manage these types of contracts."

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