Provisions to strengthen oversight, transparency, competition, and accountability in the federal acquisition process proposed by Homeland Security and Governmental Affairs Committee Ranking Member Susan Collins, R-Me., and Chairman Joe Lieberman, ID-Conn., became law today when the President signed the National Defense Authorization Act for Fiscal Year 2009.
“The federal government’s prodigious purchasing creates abundant opportunities for waste, fraud, and abuse,” Collins said. “Whether the problem is purchases of unusable trailers for hurricane victims or shoddy construction of schools and clinics in Iraq or Afghanistan, we must do a better job of protecting taxpayer dollars and delivering better results.
“Federal contract purchases now exceed $440 billion a year, and the amount of waste that has been uncovered through the committee’s investigations is alarming. It was clear that our federal contracting process needed comprehensive reforms. More competition, fewer no-bid contracts, and tougher management of federal contracts were required. This law will strengthen competition in federal contracting, help rebuild the government’s long-neglected acquisition workforce, and increase accountability and transparency to protect taxpayer dollars.”
Lieberman said: “As current economic challenges make it all the more important that we scrutinize every government expenditure closely, it is appropriate that we pass these sweeping reforms that will help reduce wasteful spending on contracts. These reforms will restore competition as the cornerstone of federal contracting.”
The new law will:
• Create a Contingency Contracting Corps to ensure that emergency contracting to respond to disasters or to support military operations is performed swiftly, effectively, and economically both within and outside the United States. By putting experienced contracting professionals on the ground, the amendment will help ensure that procurements made under the stress and expediency of the moment do not fall prey to wasteful or fraudulent practices.
• Require greater competition for “task or delivery orders” which are orders placed under existing contracts. In recent years, these orders have reached into tens and sometimes hundreds of millions of dollars. Greater competition among contractors to fill these orders will save the taxpayers’ money.
• Limit to one year the length of certain noncompetitive contracts, such as those awarded for urgent and compelling circumstances.
• Regulate the use of cost-reimbursement contracts, which expose the government to increased financial risk unlike fixed-price contracts.
• Link award and incentive fees to acquisition outcomes so that contractors are not awarded fees for poor work.
• Prevent abuse of interagency contracts whereby one agency orders goods or services through another agency. The Government Accountability Office has identified numerous instances of lapses in accountability and unauthorized spending through these types of contracts.
• Limit tiering of subcontractors that allow contractors to charge the government while merely passing work along to additional layers of subcontractors. The bill will require new regulations to properly minimize tiering of subcontractors to ensure that every contract layer adds value or serves a legitimate purpose in response to a government requirement.
• Require the Office of Federal Procurement Policy (OFPP) and Federal Acquisition Institute (FAI) to prepare an Acquisition Workforce Development Strategic Plan including a specific and actionable five-year implementation plan to increase the size of the acquisition workforce and to operate a government-wide acquisition intern program.
• Require ethics safeguards related to contractor conflicts of interest. Mandates OFPP to develop a government-wide policy and a standard clause or set of clauses regarding personal conflicts of interest by contractor employees who are hired to assist agencies with their contracting processes. OFPP is also directed to conduct a comprehensive review of conflict of interest issues.
• Improve the federal procurement data system by requiring OMB to collect of complete, timely, and reliable data on interagency contracting actions and on other transactions providing Congress and the public with better visibility into federal contracting activities.
Last year, Sens. Collins and Lieberman introduced the comprehensive Accountability in Government Contracting Act (S. 680), which passed the Senate unanimously but stalled in the House. Several of the bill’s provisions were included in last year’s defense authorization bill. The remaining provisions from S. 680 were offered as an amendment to this year’s defense authorization bill by Senators Collins, Lieberman, Norm Coleman, R-Minn., Tom Carper, D-Del., Daniel Akaka, D-Hawaii, Jon Tester, D-Mont., and Claire McCaskill, D-Mo, and included in the final bill just signed by the President.