Federal Contract Law: Why doesn't new safety agency use its buying power?

Karen Powell

The 6-month-old Transportation Security Administration faces a daunting array of tasks. It has six more months to assume operational responsibility for screening all airport passengers and checked baggage, hire and train a new federal security work force, and deploy and manage the air marshals program and other on-board security measures.

John W. Magaw, the new undersecretary for Transportation Security, has been handed a nearly impossible task. He has a staff of no more than two dozen people on loan from the Federal Aviation Administration and the Treasury Department. So far, TSA's forced march to meet statutory deadlines has prevented it from building the necessary infrastructure to actually manage airport security. Instead, TSA must take over the existing dysfunctional system and hope nothing catastrophic happens before it can make improvements.

But even within the limits imposed by Congress, TSA's new statutory authority gives it some interesting options. Congress authorized TSA to use the FAA acquisition system'a system that is exempt from most procurement laws and regulations. TSA also has the authority to modify the FAA system to help it meet its unique mission.

TSA has yet to take advantage of this flexibility. In a March solicitation seeking bids to provide the facilities, equipment and personnel to screen checked luggage for explosives, TSA chose to follow the Federal Acquisition Regulation.

Not being tied to the FAR means TSA can innovate with contract terms and conditions, and even structure. If your goal is to write a clear and concise agreement, even something as simple as not having to use the Uniform Contract Format can be a real advantage.

Congress also authorized TSA to use the FAA's dispute resolution system or, again, develop its own version. FAA established the Office of Dispute Resolution to handle procurement disputes including protests and appeals of contractor claims. The office has worked relatively well, but it is not always easy to distinguish its procedures or its decisions from those of the General Accounting Office or the various boards of contract appeals.

Recently, members of Transportation's Board of Contract Appeals briefed TSA on the board's operations, including its alternative dispute resolution procedures. TSA might consider using the DOT board's judges in a more mediation-oriented system that could handle both dispute resolution and dispute avoidance.

Devoting more attention to resolving issues before they mature into contractor claims could be especially useful for an agency in a hurry.

TSA requires well-written contracts with clear standards of performance and an effective mechanism for correcting performance deficiencies. Given that the contractor will not always agree that its performance is deficient, TSA needs to develop a robust method for resolving these differences of opinion quickly and fairly. Otherwise, TSA risks its security mission.

TSA should also consider adopting some of the dispute avoidance techniques recently developed by the Air Force, including the early involvement of dispute resolution specialists to assist contracting officers. Using board judges with special training in mediation skills for this role, rather than agency lawyers, might help to reassure contractors regarding the fairness of the process.

Karen D. Powell is an attorney with the Washington law firm of Petrillo & Powell. E-mail her at kp@petrillopowell.com.

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