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June 27, 2019 By AMK

Proposed FAR rule would broaden ‘commercial item’ status to products developed exclusively for and sold to friendly foreign governments

A little-heralded change to the statutory definition of “commercial item” has now made its way to a proposed FAR rule, which will open up regulatory relief to a whole new class of government contractors – companies, both domestic and foreign, that regularly sell products developed at private expense to friendly foreign governments.

With the December 12, 2017, passage of Section 847 of the National Defense Authorization Act of 2018, Pub. L. 115-91 (“2018 NDAA”), the statutory set of definitions for the term “commercial items” was amended. See 41 U.S.C. § 103. More specifically, Section 103(8), addressing “nondevelopmental items,” was broadened as follows:

(8) a nondevelopmental item if the procuring agency determines, in accordance with conditions in the Federal Acquisition Regulation, that the item was developed exclusively at private expense and has been sold in substantial quantities, on a competitive basis, to multiple State and local governments or to multiple foreign governments.

(Emphasis reflects new language). On May 10, 2019, the FAR Council promulgated a Proposed Rule amending and broadening the definition of “commercial item” in FAR 2.101 to include the statutory language.

A “nondevelopmental item” (“NDI”) is separately defined by FAR 2.101 as, in pertinent part:

(1) an already developed product “used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the United States has a mutual defense agreement”; (2) a product which meets the definition in (1) that requires minor modifications or modifications “of a type customarily available in the commercial marketplace;” or (3) a product which does not meet the definition in either (1) or (2) “solely because the item is not yet in use.”

Keep reading article at: https://www.jdsupra.com/legalnews/new-proposed-far-rule-makes-way-for-88083

Filed Under: Government Contracting News Tagged With: 2018 NDAA, commercial item, FAR, FAR Council, nondevelopmental item, proposed rule

June 4, 2019 By AMK

Can contracts be awarded without pricing?

Since the enactment of the Competition in Contracting Act in 1984, price has been an essential element of every contract awarded by the Federal Government under the Federal Acquisition Regulation, along with technical capability and (more recently) past performance. In addition, before making an award, every contracting officer must determine that the price offered by the winning offeror(s) is “fair and reasonable.” 

Agencies have wide discretion in establishing the value of the factors and subfactors under each of these three elements, and frequently price is identified as the least important of the factors to be evaluated.

But what if the price on a solicitation was not a factor to be evaluated at all? As part of the Professional Services Council’s long-standing acquisition reform advocacy agenda, we supported just such an experiment and it is now in effect for some agencies.

In Section 825 of the Fiscal Year 2017 National Defense Authorization Act (NDAA), Congress provided that, for multiple-award indefinite delivery/indefinite quantity (ID/IQ) contracts, DoD, NASA and Coast Guard buying activities are not required to evaluate cost or price during the evaluation of the formation of the ID/IQ contract, provided other conditions are met. If cost or price is not evaluated at formation, however, cost or price must be an evaluation factor in conjunction with the issuance of any task or delivery order under such awarded contract. The Professional Services Council strongly supported that legislative proposal.

What all of these ID/IQ solicitations and resulting contracts have in common is that there is actually no work associated with the formation of the base contract. All of the actual work is solicited under task or delivery orders issued once the base contract is in place.  As such, we argued that agencies were creating irrelevant price evaluation factors in order to comply with the then-existing statutory requirement to evaluate price at contract formation, and agencies were not making true comparative evaluations of offerors’ pricing since there was no factual basis for doing so. And it didn’t matter whether the ID/IQ contract provided for fixed prices, labor hour pricing, or hybrid pricing.

Keep reading article at: https://www.pscouncil.org/a/Content/2019/Can_Contracts_Be_Awarded_Without_Pricing.aspx

Filed Under: Government Contracting News Tagged With: acquisition reform, civilian agencies, Coast Guard, Congress, contracts, DFARS, DoD, FAR, government spending, IDIQ, NASA, NDAA, pricing, Professional Services Council, Section 825

April 23, 2019 By AMK

What’s your acquisition approach — FAR or non-FAR?

You’re a program or project manager facing myriad choices when it comes to the acquisition process. Should you use a traditional Federal Acquisition Regulation-based model?  Or perhaps an other transaction authority?

A rapid prototyping-rapid fielding approach? Which type of contracting strategy should you use—a task order/delivery order? A blanket purchase agreement?

Finding the best approach is now a little less murky thanks to a set of acquisition digital prototypes produced by the Office of the Undersecretary of Defense for Acquisition and Sustainment (OUSD(A&S)) and MITRE Corp. and hosted on the Defense Acquisition University (DAU) website.

The acquisition digital prototypes—the Adaptive Acquisition Framework and the Contracting Cone, as well as an Other Transactions (OT) Guide — were rolled out in late 2018, and are easy-to-use, interactive tools.

The Adaptive Acquisition Framework shows the many different paths an acquisition program can follow and lets users click through the details for each path. Additional pathways, tailored models and new content will be added over time.

The Contracting Cone outlines the full spectrum of Federal Acquisition Regulation (FAR) and non-FAR contract strategies, and supporting materials provide details about each strategy. The goal of the tool is to provide visibility into new or lesser-known strategies and ensure that the full range of contract strategies is considered. Eventually, “our hope is that every part of the cone will be clickable,” said Samuel N. Parks, communications and program analyst at DAU.

The Other Transactions (OT) Guide provides an overview of OTs — legal acquisition instruments other than contracts, grants or cooperative agreements that offer a streamlined method for carrying out prototype projects and transitioning successes into follow-on production—in addition to real-world examples. The guide also includes 10 “myth busters” that debunk some of the most common misconceptions about OTs.

Also available on the DAU website is a 10-episode “Other Transaction Mythbusting Video Series” by DAU Professor Diane Sidebottom, who came to DAU from the Defense Advanced Research Projects Agency (DARPA) and was involved in writing the OT Guide. Congress first authorized the use of OTs in 1958, with the legislation that created NASA.  Congress allowed DARPA to use OTs in 1989, and their use was extended to the military services in 1996.

Feedback on the prototypes has been “really positive,” said Parks. Nearly 20,000 users have visited the website since it went live in December, he said, and several users across DOD plan to incorporate the tools into contracting and acquisition training programs.

IT’S ALL ABOUT OPTIONS

The acquisition digital prototype was driven by Ben FitzGerald and others in the OUSD(A&S). (FitzGerald has since left the Pentagon for a private business opportunity.) FitzGerald is a former senior fellow at the Center for a New American Sec­urity and Senate Armed Services Committee staffer who was brought to the Pentagon in December 2017 by the Hon. Ellen M. Lord, the USD(A&S), to oversee the splitting of the Office of the Undersecretary of Defense for Acquisition, Technology and Logistics into the USD(A&S) and the USD for Research and Engineering. As a Senate staffer, FitzGerald helped write a requirement in the National Defense Authorization Act (NDAA) for Fiscal Year 2018 for “digitized acquisition policy.” The prototype on the DAU website is an outgrowth of that policy.

“One of the things that we are attempting to do as we implement acquisition reforms is to provide a more flexible acquisition framework, which is where we’ve come up with this concept of an adaptive acquisition framework that allows programs to apply the right tools, the right acquisition policy, the right contracting tool, to the program that they are running. Because we recognize that there’s a wide variety of programs and multiple valid ways to deliver those programs,” FitzGerald told Army AL&T in December. “So in seeking to do that in terms of seeking to provide more options, we needed to find ways to communicate those options in a way that is hopefully easily understood and easy to share and communicate.”

Spurred by acquisition reforms built into the NDAAs passed by Congress from FY16 through FY19 —“There is a historic quantity of acquisition reform in those NDAAs,” FitzGerald said — the USD(A&S) “wanted to focus on being a data-driven policy and governance organization. And we saw, as we shifted to that, we felt the need to have ways to communicate our policy in more flexible ways and in ways that allowed us to do easier analysis of the policy itself.”

More online tools are on the way, beginning with one on middle-tier acquisition, although the timing is uncertain.

The focus from the get-go was collaboration and simplification, FitzGerald said. “When we did the OT guide, we intentionally brought in representatives from DARPA, from the Defense Innovation Unit, from DASA(P) [Deputy Assistant Secretary of the Army for Procurement] within the Army, equivalent organizations in the Air Force and Navy, from DAU, to make sure that we were writing a product that was optimized for the users … you know, the people who were actually going to be agreements officers, or who were in industry trying to understand how the agreements will get put together, those types of things.”

DAU’s role as a “central hub for acquisition knowledge” was particularly important, FitzGerald said. “We want to make sure that they are involved in all of that policy development so that they can inform us, as the policy writers, on what they’re learning from students, what students are saying, and those types of things. And so that they understand from the outset how we were thinking about developing the policy, so they can communicate that back to their students, almost in real time.”

CONCLUSION

In the end, though, it’s the acquisition workforce that will decide the future of such prototyping efforts. “So what we’re seeking to learn over the course of this year is how much does the acquisition workforce value these types of tools?” FitzGerald said. “Because if we want to do that on an ongoing basis, it’s going to require a lot of effort to make sure that everything is up to date and consistent and internally linked and all of that.

“So we’re putting it out there as a prototype and if the acquisition workforce really values it, then we’ll be able to make an argument for further investment in it. But if the acquisition workforce is fine with PDFs, then we can keep doing that, too.”

For more information, go to the DAU website at https://www.dau.mil.


This article was written by Michael Bold who provides contract support to the U.S. Army Acquisition Support Center.  This article was published with the title “At Your Fingertips” in the Spring issue of Army AL&T magazine.

 

Filed Under: Uncategorized Tagged With: acquisition workforce, Adaptive Acquisition Framework, Contracting Cone, DAU, DoD, FAR, OTA, other transaction agreements, other transaction authorities, other transaction authority

April 5, 2019 By AMK

Other transactions: Do the rewards outweigh the risks?

In recent years, the federal government has made a large shift in how it expends taxpayer dollars on federal contracts.  Numerous laws have mandated new or expanded use of rapid procurement processes or other transaction agreements (OTA), which are now a preferred procurement vehicle.

OTAs, while not contracts governed by the Federal Acquisition Regulation (FAR), are legally binding contracts that were once considered tools of last resort because they put taxpayers and the government at risk.

The theory behind OTAs is that nontraditional vendors would be lured into the government contracting marketplace by streamlined procurement processes. The hope is that nontraditional contractors that were unable or unwilling to enter into traditional procurement contracts would come to the table and bring with them innovative solutions that traditional contractors were not offering. The reality, however, is that these speedy buying procedures are being leveraged by large traditional contractors that are looking to boost their bottom line by avoiding normal contract administration, oversight, and accountability protections.

“Other transactions” is a term commonly used to refer to the authority to enter into transactions other than contracts, grants, or cooperative agreements. Agencies have authority to award such agreements in limited circumstances — research, prototype, and now defense follow-on production projects.  Unlike a normal government contract, OTA is promoted as a more flexible agreement that can speed up the buying process and be better tailored based on changes in technology and the government’s needs.

Keep reading this article at: https://www.pogo.org/report/2019/03/other-transactions-do-the-rewards-outweigh-the-risks/

Filed Under: Government Contracting News Tagged With: FAR, flexibility, OTA, other transaction agreements, other transaction authorities, other transaction authority, other transactions, prototype, research, risk, technology

March 21, 2019 By AMK

In acquisition, standing still is the biggest risk

The biggest risk in federal acquisition today is not taking enough risks.

Not reckless risks, but deliberate risks consistent with Federal Acquisition Regulation Part 1 guidance.

The largest chunk of U.S. research and development spending, the most significant technological innovation, and its fastest evolution all reside in the private sector. And the private sector has little interest in slogging through the rule-burdened, prescriptive, intellectual-property-devouring federal procurement process. These facts are driving a tidal wave of change in government buying, especially in Defense organizations.

Here’s the January 2018 National Defense Strategy:

“We must not accept cumbersome approval chains, wasteful applications of resources in uncompetitive space, or overly risk-averse thinking that impedes change. Delivering performance means we will shed outdated management practices and structures while integrating insights from business innovation.”

Not only is the Pentagon challenged in attracting the most innovative companies in America’s most vibrant business sectors, but our adversaries—like Russia and China—have little acquisition oversight or regulation so they are beating us to the cutting edge.

Keep reading this article at: https://www.govexec.com/excellence/promising-practices/2019/03/acquisition-standing-still-biggest-risk/155397

Filed Under: Government Contracting News Tagged With: acquisition strategy, acquisition workforce, DoD, FAR, innovation, National Defense Strategy, OTA, other transaction authority, risk

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