Federal Contract Law: Que SARA: What will be in acquisition reform?

Joseph J. Petrillo

Congressional agreement on the Services Acquisition Reform Act means that its innovations will soon be with us. Paradoxically, some of the most interesting parts of the act aren't limited just to services buys.

One neat idea is the Acquisition Workforce Training Fund. SARA finances the fund with a 5 percent levy on fees paid under Federal Supply Schedule buys and various governmentwide contracts. The Defense Department, which has its own work force program, is excluded.

The General Accounting Office opposed the new fund, saying that money for training should come 'through the normal budgeting process.' You might as well wait for the tooth fairy to show up.

Governmentwide contracting programs usually run healthy surpluses. The training fund would put some of that extra money to good use. Everyone agrees that acquisition officials need more training, and the fund will surely help. Paul Murphy of Eagle Eye Inc., a consulting firm in Fairfax, Va., estimates that this provision of SARA would yield at least $5 million per year for training.

SARA also creates a new chief acquisition officer in each civilian agency. (DOD already has a top contracting official. Indeed, it may have several.) This position is reserved for a non-career employee, in other words a political appointee. Soon, the president will have a dozen more offices to fill. Pity the next administration.

Chief acquisition officers are responsible for many things, including measuring the performance of acquisition activities, promoting performance-based contracting and increasing competition in procurement. Not to mention overcoming the unfortunate acronym CAO. If things get tough, though, they have a CAO Council in which to commiserate.

SARA also solves the T&M conundrum. In spite of shaky legal authority, many agencies have bought commercial services through time-and-materials contracts. Vigorous opposition stopped cold an effort by the Office of Federal Procurement Policy to curb this practice.

SARA takes a judicious middle ground between the anything-goes proponents of T&M buying and those who would deny such contracts commercial item status. Under the new rules, T&M purchases qualify as commercial items only if they are commonly sold to the general public on a time-and-materials basis and are bought competitively. In addition, T&M must be the only suitable contract type, and the services must either support a commercial item or else be in an approved category, as defined by OFPP regulations.

sara also continues the trend of loosening contracting rules for defense against or recovery from terrorist attacks or attacks with weapons of mass destruction. It permits all agencies to use other transactions for R&D contracts in these areas. (DOD and the Homeland Security Department already have such authority.) This authority exempts contracts from most of the normal procurement laws and regulations, at least theoretically.

In addition, SARA raises a number of dollar thresholds for such contracts and those in support of a contingency operation. These include the thresholds for micropurchase, simplified acquisition and special treatment under the rules for commercial item buys, most of which are doubled.

Finally, SARA establishes a new blue-ribbon panel to suggest changes in acquisition law and policy. The reports of past blue-ribbon panels molder in dusty libraries. It remains to be seen whether this new panel's suggestions will'or should'ever become law.

Joseph J. Petrillo is a lawyer with the Washington law firm of Petrillo & Powell. E-mail him at jp@petrillopowell.com.

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