DOD to bring down the procurement hammer

Deirdre Lee, director of procurement for the Defense Department, yesterday promised to be more 'heavy handed' when it comes to agency regulatory issues.

Lee, speaking at FSI's Outlook Conference in Vienna, Va., said her office would institute two significant policy changes to the Defense Federal Acquisition Regulations.

DOD last month issued an interim rule with a request for comments limiting the total length of task and delivery order contracts to five years, including options and modifications. The rule implements Section 843 of the DOD Authorization Act of 2004. Lee said DOD is extending the regulation to task and delivery orders under blanket purchasing agreements and supply schedules.

But while Defense is moving forward with the required changes, Lee said DOD officials are hoping to tweak the new rules. She said the limitation 'kills' the department's use of award-term contracting, which rewards well-performing vendors with contract extensions.

To address such limitations, DOD has submitted a legislative proposal to Congress to amend the law and allow for longer contracting terms. Lee said she met with Hill staff members who admitted the limiting of contracts to a total term of five years was a mistake. The provision should have limited just the base term of a contract to five years, she said.

'We are in limbo until Congress fixes it,' Lee said. 'Hopefully it will be corrected in the fall. Even if Congress takes off the limitation, I still would regulate it. I'm not sure for how long, though.'

Lee said a final rule implementing Section 801 of the Defense Authorization Act of 2002 should be out soon. DOD published an interim rule last October requiring contracting officers to receive approval before using another agency's contracting vehicle.

DOD spent $120 million in fees paid to other agencies to use their contracting vehicles, such as the General Services Administration's Federal Supply Service schedules or the Federal Technology Service's governmentwide acquisition contracts, Lee said.

'This may have been money well spent, but the perception is DOD is not as diligent as it could be in using other agencies' vehicles,' Lee said. 'We are writing the regulation to delegate the approval to the contracting officer. What that means is the program officer will no longer make the transactions with the vehicles.'

Lee added that the final rule would apply to products as well as services.

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