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New rules seek to curb bad contracting practices

Jan. 5, 2012 - 06:00AM   |  
By SARAH CHACKO   |   Comments

Three new contracting rules unveiled this week seek to curb bad procurement habits, such as using risky contract types and requiring brand-name products.

The rules, which will take effect Feb. 2, require agencies to:

Limit the use of "time and materials" and "labor hour" contracts for commercial services.

These types of contracts are considered risky because the cost is not set in advance but determined by the amount of time and materials applied to a project. Agencies now have to explain why a fixed-price contract is not an option when purchasing commercial services using federal supply schedules contracts. Agencies previously had to provide this justification only when purchasing commercial supplies.

"The intent is to ensure that this contract type is used only when no other contract type is suitable and to instill discipline in the determination of contract type with a view toward managing the risk to the government," according to the rule.

Present a business case before using another agency's contract.

The aim here is to encourage the use of multiple-agency contracts to gain efficiencies and leverage the government's buying power, while also preventing duplication of existing contracts, said Richard Loeb, a former federal procurement executive and current adjunct professor of government contract law at the University of Baltimore School of Law.

Before an agency can procure something through another agency's contract, the requesting agency must report on the contract's small-business participation, the direct and indirect costs to the government in awarding and administering the contract, and the impact the contract will have on existing contracts for similar goods and services.

The report will ensure that agencies have considered existing contracts and that the scope of work that they're seeking is appropriate for the contract, Loeb said.

Justify requirements for brand-name products.

Justifications for the use of brand named products must be posted online with the solicitation when the agency determines it necessary. In the case of multiple award contracts, the justification must be posted online at the time of the order. Justifications must be posted to the e-Buy website when purchasing from a federal supply schedule contract or on the FedBizOpps website when purchases are from non-schedule contracts and task orders.

Another rule issued Tuesday and effective immediately gives contractors seven working days to object to the public release of information relating to their federal work.

Portions of the Federal Awardee Performance and Integrity Information System (FAPIIS), which contains records and data on contractor performance, were made public in April. Included in the database is information that would not otherwise be public under federal law. Contractors now can screen information before it is released on FAPIIS and alert officials if they believe the information is protected by federal disclosure exemptions.

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