Federal agencies do not, in fact, spend $200 billion annually through interagency contracts–they spend more like $50 billion, and most of that through General Services Administration schedule contracts, said Dan Gordon, administrator of the Office of Federal Procurement Policy. Gordon testified May 25 before the Senate Homeland Security and Governmental Affairs Committee.
The number of interagency contracts have been the subject of much hand wringing during the past few years, but the $200 billion figure often cited as annual volume in fact represents the amount agencies spend through indefinite delivery, indefinite quantity contracts, whether set up for interagency purchases or not, Gordon said.
Of the $50 billion that is spent through interagency contracts–whereby one agency places orders for goods or service through a contract vehicle managed by another agency, usually paying a transaction fee of less than 1 percent–slightly less than $40 billion goes through GSA schedule contracts, Gordon said. Several billion dollars are spent via governmentwide acquisition contracts, which are interagency vehicles for the purchase of information technology only. “What’s left over is a small number of contracts,” Gordon added.
One of the main arguments against interagency contracts is that they undermine the ability of the federal government to consolidate its purchasing power since it presents multiple access points to industry. (Advocates argue that technology procurement in pre-competition days was awful, since procurement officials in charge of monopolistic governmentwide contracting lacked incentive.) But, according to Gordon, the real challenge to purchasing power dispersal isn’t from interagency contracting, but from intraagency contracting.
“Far too often, separate and redundant contracts and BPA–blanket purchase agreements–are awarded by each agency component to serve a narrow customer base, which duplicates effort and denies us the benefit of the federal government being the world’s largest customer,” he added.
Whereas it’s possible to track down with exactitude the number of interagency contracting vehicles–via a private sector database, Gordon said–the number of BPAs remains a mystery. “If you asked me how many BPA exit under the [GSA] schedule, the answer is I don’t know,” he explained.
In response to a question during the hearing from the committee’s ranking member, Susan Collins (R-Maine) about a controversial draft executive order that would require potential federal contractors to disclose political contributions, including those to independent third parties, Gordon refused to comment directly. However, he said that the Obama administration “will protect our contracting system from any appearance of political influence.”
Collins said the draft order, if enacted, would do exactly that. “Businesses are going to decide that the system is stacked against them, and not bother to submit a bid. Because otherwise, why would this information be required?” she said.
Meanwhile, the House of Representatives attached on the evening of May 25 an amendment to the fiscal 2012 national defense authorization bill that would preclude the executive branch from ever implementing such an executive order. The amendment, sponsored by Rep. Tom Cole (R-Okla), gained 261 votes in favor, including from 26 Democrats. Only one Republican, Rep. Walter Jones (N.C.) voted against it.
— by David Perera – Fierce Government – May 25, 2011 at http://www.fiercegovernmentit.com/story/gordon-look-component-bpas-not-interagency-contracts-inefficiencies/2011-05-25?utm_medium=nl&utm_source=internal