Last week’s Comment focused on the continuing challenge of contract duplication. The Comment recommended that, at a minimum, the FAR should be amended to require that when an agency conducts an open market commercial item procurement it must make a determination that it is the best procurement method to meet the agency’s needs. The recent interim FAR rule implementing Section 865 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 further highlights the need to amend the FAR to require a “best procurement method” determination for open market procurements.
On December 13, 2010, the FAR was amended to require that for Federal Supply Schedule (FSS) orders exceeding $500,000 the contracting officer must make a determination that issuing an order under the FSS program is the best procurement approach. See FAR 8.404(b)(2). In making the determination that a FSS order is the “best procurement approach” the contracting officer must consider: (1) the suitability of the contract vehicle; (2) the value of using the vehicle (e.g. administrative cost savings, lower prices, number of vendors and reasonable access fees); and (3) the expertise of the ordering or requesting agency in placing orders and administering them against the selected contract vehicle. A “best procurement approach” determination is also required for other interagency transactions including assisted acquisitions. See FAR 17.502.
This new FAR requirement, when combined with the lack of a corresponding determination requirement for open market commercial item procurements, essentially creates a presumption in favor of open market procurements. This could have significant consequences for the procurement system. It could increase contract duplication as agencies move to open market procurements. It could impact strategic sourcing and the executive branch’s current strategy of using the FSS program and other interagency contracts to meet many of its management goals. It could also lead to splitting of FSS orders to avoid exceeding the $500,000 threshold for a determination.
Moreover, the new determination requirement is at odds with FAR 8.002, Priorities for use of Government supply sources, which prioritizes the use of the FSS program over other commercial sources. To provide clarity and ensure a level playing field in the acquisition planning process, the FAR should be amended to require a “best procurement approach” determination for open market procurements as well as FSS orders and other interagency transactions. In a time of increased budgetary pressure, agencies should continue to look first to pre-existing contract vehicles like the FSS program to meet their needs.
The due date for comments on this interim rule is February 11, 2011. The Coalition will be submitting comments.
Last week’s Comment focused on the continuing challenge of contract duplication. The Comment recommended that, at a minimum, the FAR should be amended to require that when an agency conducts an open market commercial item procurement it must make a determination that it is the best procurement method to meet the agency’s needs. The recent interim FAR rule implementing Section 865 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 further highlights the need to amend the FAR to require a “best procurement method” determination for open market procurements.
On December 13, 2010, the FAR was amended to require that for Federal Supply Schedule (FSS) orders exceeding $500,000 the contracting officer must make a determination that issuing an order under the FSS program is the best procurement approach. See FAR 8.404(b)(2). In making the determination that a FSS order is the “best procurement approach” the contracting officer must consider: (1) the suitability of the contract vehicle; (2) the value of using the vehicle (e.g. administrative cost savings, lower prices, number of vendors and reasonable access fees); and (3) the expertise of the ordering or requesting agency in placing orders and administering them against the selected contract vehicle. A “best procurement approach” determination is also required for other interagency transactions including assisted acquisitions. See FAR 17.502.
This new FAR requirement, when combined with the lack of a corresponding determination requirement for open market commercial item procurements, essentially creates a presumption in favor of open market procurements. This could have significant consequences for the procurement system. It could increase contract duplication as agencies move to open market procurements. It could impact strategic sourcing and the executive branch’s current strategy of using the FSS program and other interagency contracts to meet many of its management goals. It could also lead to splitting of FSS orders to avoid exceeding the $500,000 threshold for a determination.
Moreover, the new determination requirement is at odds with FAR 8.002, Priorities for use of Government supply sources, which prioritizes the use of the FSS program over other commercial sources. To provide clarity and ensure a level playing field in the acquisition planning process, the FAR should be amended to require a “best procurement approach” determination for open market procurements as well as FSS orders and other interagency transactions. In a time of increased budgetary pressure, agencies should continue to look first to pre-existing contract vehicles like the FSS program to meet their needs.
