GAO's Walker says OMB should follow panel's A-76 guidance

Comptroller General David Walker is raising concerns that procedures for "phased evaluations" under the revised A-76 circular might stifle innovation because vendors could fear release of sensitive information to competitors.

Walker, in a letter released yesterday, called on the Office of Management and Budget to more closely adhere to the recommendations of the Commercial Activities Panel in its revised Circular A-76, which outlines procedures for conducting public-private competitions. Walker was the panel's chairman.

In his letter to OMB Director Mitchell Daniels, Walker called for the revised circular to link sourcing policy and agency missions, simplify source selection procedures, lengthen some time frames for conducting public-private competitions and provide agency employees better guidance in calculating the savings realized through A-76 competitions.

Walker expressed concern about procedures for conducting a "phased evaluation," one of two methods for conducting public-private competitions under the revised circular. He said it might stifle innovation because vendors could fear the release of sensitive information to competitors.

In a phased evaluation, an agency would evaluate the technical merit of proposals in the first phase, adjust its required performance standards as needed, and select the lowest-cost provider in the second phase.

But if a vendor offered a new performance standard the agency wanted to adopt, it would have to advise all competitors of its revised requirements and allow the submission of revised proposals.

"This process could serve as a disincentive to innovation should offerers become reluctant to propose improved ways to enhance contract performance out of fear that their proposed approaches will be shared with their competitors," Walker said. "We recommend that the phased evaluation approach be revised to simplify the process and ensure the protection of certain proprietary and highly competition-sensitive information."

Walker was chairman of the Commercial Activities Panel, a group of public- and private-sector experts who spent a year studying the A-76 process for public-private competition of federal work. The group's recommendations for improving the process, criticized as too costly and lengthy, were published April 30, 2002.

The Commercial Activities Panel made 10 unanimous recommendations, including:

  • Sourcing decisions should support agency missions and goals

  • Incentives should be made to foster high-performing, efficient organizations throughout government

  • Competitions should be conducted as fairly and efficiently as possible

  • Competitions should consider both cost and quality

  • "The proposed revision in many ways is consistent with the sourcing principles and recommendations adopted by the Commercial Activities Panel," Walker wrote. "In particular, the proposal stresses the use of competition in making sourcing decisions and, through reliance on procedures contained in the Federal Acquisition Regulation, should result in a more transparent, expeditious, fair and consistently applied competitive process."

    Walker criticized the draft circular, however, for not encouraging agencies to consider sourcing options such as high-performing organizations and public-private partnerships in fulfilling agency missions.

    He also said agencies will need more guidance on what constitutes a "quantifiable rationale," which the circular said is necessary for justifying decisions to select other than the lowest-cost provider.

    Click here to read Walker's letter.


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