Federal contract law: Bush should go to market in his second term

Joseph J. Petrillo

Let the power of the marketplace bring taxpayers the best procurement deals available

As President George W. Bush looks forward to a second term with Republican majorities in both houses of Congress, he is in a good position to reshape the procurement system. Unlike Social Security, changes to acquisition laws are unlikely to arouse widespread opposition.

If he chooses to take this opportunity, what type of changes should he reach for? The first 'W' administration pushed only one contracting objective: contracting out government activities through 'competitive sourcing.' However, civil-service unions have opposed this initiative, and it has had limited success.

In his second term, President Bush should expand competitive sourcing beyond its current narrow scope. He should pursue an agenda of market-based acquisition. In other words, bringing the power of the marketplace to bear to get the best deal for the taxpayer.

Such an initiative would be consistent with other administration policies. Market-based solutions are near and dear to Republican hearts. The Soviet Union's demise disproved the notion that bureaucrats, sitting in their offices, ought to set prices. Why not have market forces set the prices and terms for the goods and services the government needs?

The procurement 'reforms' of the 1990s focused on making acquisition easier and more convenient for bureaucrats. Sure, this may have saved some administrative costs, but that's no big deal. The real dollars are in the contracts themselves.

Market-based acquisition can produce better prices and terms for federal contracts. This could help stretch budget dollars in a time of severe deficits. A relatively small investment in competition could pay big dividends. And better contracts would improve the case for more outsourcing.

Also, America needs to set a better example for emerging democracies. The occasional contracting scandal here may grab headlines, but they aren't common enough to undermine our reputation. After all, there is no perfect procurement system, one that is immune to all forms of corruption. Of greater concern to our image abroad is the perception of cronyism, which only real competition can dispel.

Using market forces in acquisition could mean a revival of traditional competitive procurement processes. It could also mean innovative approaches. For instance, one of the main reasons for the popularity of task and delivery contracts and GSA schedules seems to be that they are on an invitation-only basis. If steps are taken to ensure a reasonable number of qualified concerns, this would be an improvement over all-too-common sole-source ordering. One method is to have a quick screening, open to all comers, to choose those invited to compete.

So the Bush administration, second edition, should consider implementing market-based acquisition as its contribution to better government. It even has a catchy acronym: MBA.

The other main objective of the new administration should be to improve the quality and quantity of the procurement workforce. Everyone who is familiar with the system agrees that a better-trained workforce is crucial. And most observers think that the reductions in contracting personnel have gone too far. Contract administration in particular is suffering.

Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee, recently said, 'You need more [procurement] officers and auditors and everything else, if you do it the right way.' So there is broad agreement here.

By its very nature, building a better cadre of contract staff might not produce meaningful results in a year or two. But an administration that doesn't need to seek re-election has the luxury of planning for the future. Will it?

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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