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CHAPTER 7

Legislative Action Recommendations

Chapter 3

The following list is a compilation of recommendations made throughout the report which call for legislative action. It also includes a few recommendations which could be accomplished by executive action, but where legislative action may be preferable, for example, because the recommendation is closely related to other recommendations requiring legislative action or because of the complexities involved in getting uniform implementation by the number of agencies involved. In such cases, the recommendation is designated as “legislative action preferred.”

The Statutory Framework

2. Enact legislation to eliminate inconsistencies in the two primary procurement statutes by consolidating the two statutes and thus provide a common statutory basis for procurement policies and procedures applicable to all executive agencies. Retain in the statutory base those provisions necessary to establish fundamental procurement policies and procedures. Provide in the statutory base for an Office of Federal Procurement Policy in the executive branch to implement basic procurement policies.

PART A

GENERAL PROCUREMENT CONSIDERATIONS

Chapter 2

3. (a) Require the use of formal advertising when the number of sources, existence of adequate specifications, and other conditions justify its use. (b) Authorize the use of competitive negotiation methods of contracting as an acceptable and efficient alternative to formal advertising. (c) Require that the procurement file disclose the reasons for using competitive methods other than formal advertising in procurements over $10,000, or such other figure as may be established for small purchase procedures. (d) Repeal statutory provisions inconsistent with the above.

Policy Development and implementation

1. Establish by law a central Office of Federal Procurement Policy in the Executive Office of the President, preferably in the Office of Management and Budget, with specialized competence to take the leadership in procurement policy and related matters. If not organizationally placed in OMB, the Office should be established in a manner to enable it to testify before committees of Congress. It should develop and persistently endeavor to improve ways and means through which executive agencies can cooperate with and be responsive to Congress.

4. Adjust the statutory provision on solicitations and discussions in competitive procurements other than formal advertising in the following manner: (a) Extend the provision to all agencies. (b) Provide for soliciting a competitive rather than a "maximum" number of sources, for the

Chapter 4
The Regulatory Framework

10. Establish a system of Government-wide coordinated, and to the extent feasible, uniform procurement regulations under the direction of the Office of Federal Procurement Policy, which will have the overall responsibility for development, coordination, and control of procurement regulations.

11. Establish criteria and procedures for an effective method of soliciting the viewpoints of interested parties in the development of procurement regulations.

public announcement of procurements, and for honoring the reasonable requests of other sources to compete. (c) Promulgate Government-wide regulations to facilitate the use of discussions in fixed-price competitions when necessary for a common understanding of the product specifications. (d) Require that evaluation criteria, including judgment factors to be weighed by the head of an agency when he is responsible for contractor selection, and their relative importance, be set forth in competitive solicitations in volving contracts which are not expected to be awarded primarily on the basis of the lowest cost.

5. When competitive procedures that do not involve formal advertising are utilized, establish that agencies shall, upon request of an unsuccessful proposer, effectively communicate the reasons for selecting a proposal other than his own.

6. Authorize sole-source procurements in those situations where formal advertising or other competitive procedures cannot be utilized, subject to appropriate documentation; and, in such classes of procurements as determined by the Office of Federal Procurement Policy, subject to the determination being approved at such level above the head of the procuring activity as is specified in agency regulations.

7. Increase the statutory ceiling on procurements for which simplified procedures are authorized to $10,000. Authorize the Office of Federal Procurement Policy to review the ceiling at least every three years and change it where an appropriate formula indicates the costs of labor and materials have changed by 10 percent or more.

8. Authorize all executive agencies to enter into multi-year contracts with annual appropriations. Such contracts shall be based on clearly specified firm requirements and shall

five-year duration unless authorized by another statute.

9. Repeal the current statutory requirement that the contractor provide the procuring agency with advance notification of cost-plus-afixed-fee subcontracts and subcontracts over $25,000 or five percent of the prime contract cost.

Chapter 5
The Procurement Work Force

17. (Legislative action preferred.) Establish a better balance between employee tenure and promotion rights and long-range needs of the agencies.

20. [Legislative action preferred.) Structure career development, promotion, and reductionin-force programs to reflect a longer-range viewpoint of what is best for the overall needs of the agency and of the Government.

21. [Legislative action preferred.] Establish a Federal Procurement Institute which would include undergraduate and graduate curricula, procurement research programs, executive seminar programs, and other academic pro grams.

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36. Enact legislation to authorize negotiated sale of surplus elephantine tools (such as heavy machine tools) and of equipment which is "excess to Government ownership but not to Government requirements," with adequate protection to the Government for its future needs when competition is not feasible. While the lack of such authority now appears to be a problem only for the Department of Defense, to provide for future contingencies the legislation should cover all agencies.

9. [Legislative action preferred.] Eliminate recovery of R&D costs from Government contractors and grantees except under unusual circumstances approved by the agency head.

Chapter 11

National Policies Implemented Through the Procurement Process

10. Recognize in cost allowability principles that independent research and development (IR&D) and bid and proposal (B&P) expenditures are in the Nation's best interests to promote competition (both domestically and internationally), to advance technology, and to foster economic growth. Establish a policy recognizing IR&D and B&P efforts as necessary costs of doing business and provide that: (a) IR&D and B&P should receive uniform treatment, Government-wide, with exceptions treated by the Office of Federal Procurement Policy. (b) Contractor cost centers with 50 percent or more fixed-price Government contracts and sales of commercial products and services should have IR&D and B&P accepted as an overhead item without question as to amount. Reasonableness of costs for other contractors should be determined by the present DOD formula with individual ceilings for IR&D and

44. Raise to $10,000 the minimum level at which social and economic programs are applied to the procurement process.

46. Revise current debarment policies to provide for uniform treatment for comparable violations of the various social and economic requirements and to establish a broader range of sanctions for such violations.

B&P negotiated and trade-offs between the two accounts permitted. (c) Contractor cost centers with more than 50 percent cost-type contracts should be subject to a relevancy requirement of a potential relationship to the agency function or operation in the opinion of the head of the agency. No relevancy restriction should be applied to the other contractors.

PART D

(1) determination and recoupment of the

true costs for providing such prod. ucts and services will be facilitated,

and (2) efficiency in the use of resources will

be fostered (c) Evaluate continuously the efficiency, economy, and appropriateness of the procurement and distribution systems on a total economic cost basis at all levels, without prejudice to mobilization reserve and other national requirements.

8. [Legislative action preferred.] Authorize primary grantees use of Federal sources of supply and services when: (a) The purpose is to support a specific grant program for which Federal financing exceeds 60 percent, (b) The use is optional on the grantee, the Government source, and, in the case of Federal schedules or other indefinite delivery contracts, on the supplying contractor, and (c) The Government is reimbursed all costs.

ACQUISITION OF COMMERCIAL PRODUCTS

Chapter 3 Requirements

4. [Legislative action preferred.] Assign responsibility for policy regarding the development and coordination of Federal specifications to the Office of Federal Procurement Policy.

Chapter 5
Special Products and Services

17. Establish by legislation a central coordinator to identify and assign individual agency responsibilities for management of the Federal food quality assurance program.

PART E

ACQUISITION OF CONSTRUCTION AND ARCHITECT-ENGINEER SERVICES

Chapter 4
Acquisition

6. Provide statutory authority and assign to the Office of Federal Procurement Policy responsibility for policies to achieve greater economy in the procurement, storage, and distribution of commercial products used by Fed eral agencies. Until statutory authority is provided and until such responsibility is assigned to the Office of Federal Procurement Policy, the following actions should be taken: (a) Establish reasonable standards to permit local using installations to buy directly from commercial sources if lower total economic costs to the Government can be achieved. However, decentralization of items for local purchase should not be permitted to affect adversely centralized procurement and distribution management required for purposes such as mobilization planning, military readiness, and product quality assurance. (b) Develop and implement on an orderly basis industrial funding of activities engaged in interagency supply support of commercial products and services, to the fullest practical extent, so that

Chapter 2
Architect-Engineer Services

1. Base procurement of architect-engineer services, so far as practicable, on competitive negotiations, taking into account the technical competence of the proposers, the proposed concept of the end product, and the estimated cost of the project, including fee. The Commission's support of competitive negotiations is based on the premise that the fee to be charged will not be the dominant factor in contracting for professional services. The primary factor

should be the relative merits of proposals for the end product, including cost, sought by the Government, with fee becoming important only when technical proposals are equal. The practice of initially selecting one firm for negotiation should be discouraged, except in those rare instances when a single firm is uniquely qualified to fill an unusual need for professional services.

4. Repeal the statutory six-percent limitation on A-E fees. Authorize the Office of Federal Procurement Policy to provide appropriate policy guidelines to ensure consistency of action and protection of the Government's interest.

standards for personnel and caseload; and grant the boards subpoena and discovery powers.

4. Establish a regional small claims boards system to resolve disputes involving $25,000 or less.

5. Empower contracting agencies to settle and pay, and administrative forums to decide, all claims or disputes arising under or growing out of or in connection with the administration or performance of contracts entered into by the United States.

6. Allow contractors direct access to the Court of Claims and district courts.

7. Grant both the Government and contractors judicial review of adverse agency boards of contract appeals decisions.

8. Establish uniform and relatively short time periods within which parties may seek judicial review of adverse decisions of administrative forums.

9. Modify the present court remand practice to allow the reviewing court to take additional evidence and make a final disposition of the case.

10. Increase the monetary jurisdictional limit of the district courts to $100,000.

11. Pay interest on claims awarded by administrative and judicial forums.

12. Pay all court judgments on contract claims from agency appropriations if feasible.

PART F

FEDERAL GRANT-TYPE ASSISTANCE PROGRAMS

Chapter 3
Proposed Changes

1. Enact legislation to (a) distinguish assistance relationships as a class from procurement relationships by restricting the term “contract” to procurement relationships and the terms "grant," "grant-in-aid,” and “cooperative agreement” to assistance relationships, and (b) authorize the general use of instruments reflecting the foregoing types of relationships.

PART G

LEGAL AND ADMINISTRATIVE REMEDIES

Chapter 2
Disputes Arising in Connection With Contract
Performance

2. [Legislative action preferred.] Provide for an informal conference to review contracting officer decisions adverse to the contractor

3. [Legislative action preferred.] Retain multiple agency boards; establish minimum

Chapter 4
Equitable and Special Management Powers
Under Public Law 85804

21. Make authority presently conferred by Public Law 85–804 permanent authority.

22. Authorize use of Public Law 85–804 by all contracting agencies under regulations prescribed by the President.

23. Incorporate Public Law 85–804 into the primary procurement statute.

24. Revise existing requirements in Public Law 85–804 on reporting to Congress.

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