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A fair and reasonable approach to contract reform

Feb. 10, 2014 - 06:00AM   |  
By MICHAEL FISCHETTI   |   Comments
Michael Fischetti
Michael Fischetti (Jenifer Morris)

For all its significance, you would expect to hear it mentioned more often. However, the term “fair and reasonable” is sprinkled throughout the Federal Acquisition Regulation and dramatically affects government outcomes. Its interpretation ultimately affect how billions are spent, jobs are created, stock prices are valued, products or services are delivered, disputes are settled, and other laws and regulations work together to meet government mission.

Government contracting can create various forms of dispute, litigation, and protests, but this occurs after the contracting officer makes a determination as to whether, for example, supplies and services are coming from responsible sources at fair and reasonable prices. Source selection officials, attorneys, auditors, program managers, agency senior executives, and others all play important roles, but the beauty of the process is in shielding contract decision-makers from external influence, either irrelevant or political. A “fair and reasonable” determination is not made in a vacuum and involves far more than arriving at the cheapest price. Instead it should be in writing and includes other “factors” that together comprise a proper assessment of the propriety of a contract award. Despite much guidance, nothing obviates the need for an independent, fair and reasonable determination based on the totality of information and expertise available.

What’s the point of this lesson from Contracting 101? Our government today manages the most complex activities in the history of the world. Most of these government programs are dependent upon a contract management process designed to encourage careful analysis and decision-making, documenting the decision process and its ultimate conclusion. There were more wartime contractors in Iraq than U.S. military or federal employees. Government dependence upon contracting has raised the stakes for properly executed and managed contracts and excellence in the professionals that manage and perform against them. One is able to follow a written decision-making process within the contract file that represents each step in the duration of the contract, from award to close-out.

Specific contractual issues are often a visible symptom of wider issues within an agency or company. Thus it’s important to learn the underlying issues behind today’s concerns before arriving at solutions. Let’s apply this “fair and reasonable” against today’s contracting process. All stakeholders, especially those offering opinions and suggestions for change, must have a common understanding so that a fair and reasonable conversation about today’s acquisition problems and their solution can occur. Let’s be fair and reasonable in our total understanding of government programs and the significant, but not total, role that contracting plays in program success. Assessing how acquisition timelines might shrink or outcomes improve must include activities starting well before the formal contracting process. Within contracting, developing the most professional workforce possible and working together with all involved communities will provide longer lasting solutions than a piecemeal approach based on additional statute or regulation.

The acquisition process has evolved and “reformed” several times over the years—not always with everyone’s input—resulting in what exists today. There are several new conversations and initiatives underway to once again improve the process. Let’s clearly understand the problem first and then take an inclusive, fair, and reasonable path toward its solution. Let’s not break anything in our rush for repair.

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