Provisions in the House and Senate 2011 defense authorization bills could inadvertently increase government spending and limit competition for defense contracts, a coalition of eight trade associations warned lawmakers on Wednesday.

Of particular concern to industry are sections in the legislation that cover the transition of contracted work to federal employees, and restrictions on what criteria are used in contract awards.

In comments submitted to the House and Senate armed services committees, the Acquisition Reform Working Group (ARWG) said, among other things:

• The group supports language in the House bill that would prohibit the use of quotas to move contracted work in-house. However, the industry groups recommend that more cost analysis be built into "insourcing" decisions and that the impact on small businesses be carefully considered.

• Provisions in the House bill should be eliminated that require the Defense Department to assign equal importance to cost when awarding contracts. The provisions "arbitrarily restrict the ability to make the best decisions … when acquiring supplies and services," the ARWG wrote.

• A section of the Senate bill should be modified or eliminated that would restrict firms from competing for certain defense contracts unless they implement procedures to monitor and protect their supply chains. The working group said the provision doesn't give companies the opportunity to protest if they are excluded, and because the exclusions would be made public, they would be "tantamount to a de facto debarment without any due process." The working group said the provision could serve to squelch competition and hurt the industrial base.

"Adopting ARWG's recommendations would ensure Congress's proposed reforms do not have unintended consequences that could stifle industry innovation, delay programs and drive up the cost to government during this time of increasingly austere budgets," Alan Chvotkin, executive vice president of the Professional Services Council, said in a statement.

PSC is one of eight industry groups that make up ARWG. The others are Aerospace Industries Association, the American Council of Engineering Companies, the American Council of Independent Laboratories, the Associated General Contractors of America, the National Defense Industrial Association, TechAmerica, and the U.S. Chamber of Commerce.