Wednesday, February 6, 2019

More Recommendations for Contract Reform

Yesterday we alerted you to a recently published report from POGO (Project on Government Oversight) entitled "Baker's Dozen: 13 Policy Areas that Require Congressional Action". One of the 13 areas involve contract reform. Within the area of contract reform, POGO made six recommendations, one of which we discussed yesterday; the idea of creating a Federal Contract Audit Agency to replace the myriad of organizations - both public and private - now tasked with contract audit oversight.

Today we will briefly describe the other five recommendations that fall under POGO's contract reform initiative. Recommendation No. 3 below seems to run counter to current trends in Government contracting where the Government is pushing commercial item acquisition to the extent that justification is often required when an acquisition is not a commercial item.

1. Need for more information on service contracts. Congress should commission a study of the federal government's use of service contracts and the performance results achieved through them. Service contracting information must be used to inform budgeting and manpower decisions as well as mission and readiness capabilities.

2. Limit the definition of non-traditional contractors. Congress needs to restore the original intent of bringing innovation to the public from non-traditional government contractors, rather than throwing billions of dollars with no oversight controls to the government's top vendors. The definition of non-traditional contractors should be revised and the rules should be changed to prohibit any contractor who has accepted a FAR contract from being eligible to receive on OTA (Other Transaction Agreement).

3. Limit when agencies can use the "commercial item" acquisition process. Congress should redefine a "commercial item" to mean goods or services that are actually sold to the general public in like quantities. Congress should also require manufacturers to share certified cost or pricing data with the government when the government is acquiring commercial goods or services on a sole-source basis, even if the awarded contract contains no flexible pricing provisions. Without such data, there is no assurance that prices are fair and reasonable.

4. Require better preparation for responding to the new normal in disasters. Congress needs to oversee improved inter-agency coordination and more realistic budgeting that allows for expanded pre-established supply stockpiles and properly vetted contracts for rapid effective disaster response. Congress should also strengthen the federal suspension and debarment system so taxpayer money is not wasted on awards to poorly performing or corrupt vendors. Finally, Congress must engage in ongoing oversight of disaster-related spending to ensure timely and effective spending and to safeguard the money from fraud and improper diversion.

5. Improve federal spending data on Congress should work with the Department of the Treasury and the Office of Management and Budget to ensure the agencies have the authority , resources, and guidance necessary to improve USASpending. Congress should also closely review the data quality and level of detail for awards reported into USASpending and demand that agencies meet higher standards for critical information around data points such as award descriptions, place of performance, and sub-recipient awards.

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