Agencies must keep pace with latest buying rules
No one who knows the procurement process thinks it is easy to change. Vast and complicated, it is like the Titanic: It doesn't turn easily. That's why legislative and regulatory changes sometimes have unintended consequences or bizarre beginnings. For example, the requirement for certified cost data came about because of a concern that defense contractors were sandbagging targets in incentive contracts. This small issue sprouted into a major
No one who knows the procurement process thinks it is easy to change. Vast and Thats why legislative and regulatory changes sometimes have unintended Also, it doesnt help that training budgets havent kept pace with The boldest innovations are in commercial-item procurement. Contracting officers Agencies even fail to use the FARs abbreviated clauses for commercial items, One reason contracting officers do that could be that they are uncertain about what Market research could supply some answers, as the FAR suggests. But market research is A recent General Accounting Office decision illustrates the pitfalls of failing to The Defense Supply Center in Philadelphia solicited a five-year contract based on the When the contractor bought items from an affiliate, such as a subsidiary, the One bidder protested the solicitation, objecting to this provision as contrary to GAO held that mere silence wasnt enough because the challenged provision differed Ironically, GAOs ruling could constrain the very flexibility that reform was The current FAR clauses, with their pros and cons, are at least a known quantity. When agency buyers do learn about commercial clauses, they dont necessarily like For instance, commercial inspection, acceptance and warranty clauses tend to be written The enhanced rights the government receives under its own clauses may result in higher For instance, in the Smelkinson Sysco case, the agency was concerned that Procurement officials may also dislike the fact that the FAR standard clause for If an agency makes such a change, a contractor might be able to stop work. Otherwise, Joseph J. Petrillo is an attorney with the Washington law firm of Petrillo &
complicated, it is like the Titanic: It doesnt turn easily.
consequences or bizarre beginnings. For example, the requirement for certified cost data
came about because of a concern that defense contractors were sandbagging targets in
incentive contracts. This small issue sprouted into a major program.
accelerating change. Some people cling to old ways they know instead of using new ones for
which they are unprepared.
canare supposed toadopt clauses that reflect commercial practice. But too
often solicitations for commercial items contain the familiar old Federal Acquisition
Regulation clauses.
falling back on the more extensive traditional ones. Prime contractors compound the
problem by flowing down unneeded clauses in contracts for commercial items.
commercial clauses should replace the FAR ones. Too few buyers understand practices in
particular industries.
something of a stepchild in the acquisition process.
perform market research. The ruling was in the protest of Smelkinson Sysco Food Services.
That case, B-281631, involved a proposed contract for food distribution, but its lessons
apply to information technology procurement.
vendors cost plus a markup. The solicitation also had an unusual requirement.
affiliates price could not include profit unless the contractor disclosed it to the
agency.
customary practice in the industry. The government had an interesting defense: No one else
had complained, not even at trade conferences where the agency described the provision.
from the standard provisions for commercial item contracts in FAR 52.212-5. Instead,
before an agency can tailor a provision in the FARs standard terms for commercial
contracts, it should first engage in meaningful market research. Only then can it
demonstrate that the altered clause is consistent with customary commercial practice.
supposed to add to commercial-item acquisitions. If an agency sees the market research as
too burdensome, it will just go with the standard FAR clausescommercial or
notfor commercial items.
them.
by sellers for standard contracts. As such, they usually are slanted in the sellers
favor. In IT, though, government clauses usually give the buyer greater protection.
prices. Yet its difficult to quantify the added amount, or to decide whether the
rights added by special clauses are worth the extra cost.
intracorporate sales might lead to price gouging. It chose the wrong method to solve the
problem.
commercial-item contracts does not give the government the right to make unilateral
changes in the contract.
the clause requires contractors to continue work pending resolution of disputes.
Powell, PLLC. E-mail him at jpetrillo@counsel.com.