DOD must get more than three bids on big service orders

A full-blown competition with "many more" than three contractors is the new way of doing business for Defense Department contracting officers for all service orders over $100,000, thanks to the final version of the 2002 National Defense Authorization Act which became effective today.

The rule (Case 2001-D017) was published today in the Federal Register and involves Section 803 of the act. It applies to all orders under multiple award contracts, according to Deidre A. Lee, director of Defense procurement.

The purpose of the rule is to prevent Defense Department officials from choosing a contractor without competition when they buy services from the General Services Administration's Federal Supply Service schedules.

For months, the DOD and the Office of Federal Procurement Policy have gone back and forth over what language to include in the final Section 803 rule.

Under the draft version of the Federal Acquisition Regulation rule, the DOD would have had to use only firm-fixed price contracts when buying commercial items through schedule contracts instead of preferred time and materials contracts (see story at

But OFPP decided to address the time and materials issue through a separate rule, officials said.

Current FSS policy requires contracting officers contact at least three schedule holder contractors, Lee said in a prepared statement. Section 803 requires that procurement officials contact as many as schedule holders that are capable of performing the work as practicable, she added.

"If a CO does not receive three responses, he/she must determine in writing that no additional qualified contractors were able to be identified despite reasonable efforts to do so," Lee said.

That review will be subject to review by auditors.


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