In accordance with Public Law 96-83, "The Office of Federal Procurement Policy Act Amendments of 1979," and on behalf of this Administration, I respectfully submit an integrated proposal for the Uniform Federal Procurement System, as developed by the Office of Federal Procurement Policy. The proposal describes desirable reforms in Federal procurement and management systems as well as the substance of changes in legislation to accomplish these reforms. It has long been recognized that major reforms in Federal procurement practices are needed, not only to minimize adverse impacts upon the private enterprise system, but also to improve the economy and efficiency of Government operations. The recognition has progressed through the Commission on Government Procurement (1969 - 1972), the establishment of the Office of Federal Procurement Policy (1974), the OFPP Reauthorization Act requirements (1979), and has culminated in the enclosed proposal. This proposal represents the Administration's commitment on the need for, and the nature of, procurement reform. In furtherance of that commitment, we anticipate that a Presidential Executive order will be issued within the next few days on the subject of procurement reform. It will assure that the reforms that can be accomplished by administrative actions are made in an orderly, effective, and timely manner. This Executive order is but one in a series of actions this Administration is taking to improve the process by which over one-fifth of the Federal Budget is spent. You will note that Chapter 5 of the proposal contains the substance of possible amendments to the Armed Services Procurement Act, the Federal Property and Administrative Services Act and to other statutes. These draft revisions contain the essence of changes believed desirable to fully achieve all the management system and procurement system improvements anticipated for the proposed system. Further work and interagency coordination are needed to finalize these and convert them into bill format. Where appropriate, tests should be conducted in those areas where the possible amendments result in what appear to be fundamental changes to long established acquisition processes, such as the new concepts and methods of competition. Legislative authority to conduct such tests will be sought where necessary. We anticipate forwarding an executive branch bill by April 30, 1982. In the meantime, the Executive order, once issued, will permit proceeding immediately. with those changes not dependent upon statutory revisions. The Administrator for Federal Procurement Policy stands ready to work with the Congress in the implementation of the Uniform Federal Procurement System. Sincerely, Stiin haay Edwin L. Harper Enclosure NOTE: The Executive Order, referenced above, was signed by President Reagan on March 17, 1982, and is included as Appendix F to this Proposal. Executive Summary This Administration proposal for a uniform Federal Procurement System responds to Public Law 96-83. It will put Federal procurement on a more systematic, professional and businesslike basis than it is today and will result in substantial savings. Why This Proposal Federal procurement is a $134-billion-a-year business, involving about one-fifth of the Federal budget, tens of thousands of Federal employees, and over 18 million procurement actions a year. Another $25 billion are spent on procurement under assistance programs. Federal procurement over the past decade has been studied in depth by the Congressional Commission on Government Procurement and the Presidential Blue Ribbon Defense Panel, and has been the subject of numerous General Accounting Office reports and congressional hearings. Some of the persistent problems are: • The procurement process is so complex that users of products and services often do not get what they need when they need it. • The statutory base is outdated; regulations are voluminous and complex; meaningful standards of performance are lacking; flow of authority and responsibility is not clear; and there is a lack of accountability for results. • Excessive delays, changes and cost growth in the procurement of new systems have resulted in wasted resources and shortfalls in agency capabilities. • Competition is curtailed by the complexity of the process, lack of funding flexibility, restrictive specifications, and limited advance planning and market knowledge. • The Government and its suppliers are often adversaries because the procurement process is cumbersome, costly and frustrating. This has discouraged competition and contributed to the erosion of the industrial base. • There are quality extremes. The preferred method of competition encourages suppliers to cut corners; on the other hand, overly expensive items are sometimes procured to be sure of acceptable quality. • Wasteful, hurry-up spending occurs at the end of every fiscal year. • Career management programs are not adequate to maintain a professional work force. Congress decided two years ago, and the President concurred, that enough procurement studies had been made and it was time for fundamental changes. They directed that a uniform Federal Procurement System be developed, together with compatible statutory changes. This proposal is a composite of the procurement system, management system and legislative proposals required by Public Law 96-83. Features of the Proposed System The features of the proposed Federal Procurement System are integrated by a common objective-to effectively satisfy agency mission needs. The system recognizes the economies to be derived from effective competition. An amended statutory foundation provides the basis for improved procurement practices and a simple, understandable regulation. Principal system features are: • A streamlined management structure with clear lines of authority, responsibility and accountability. • Decentralized agency procurement operations that are responsive, efficient, and free of cumbersome rules and regulations. • A professional work force with latitude for initiative and business judgment. • Understandable and measurable standards for management and operational performance. • A control system that identifies problems early. • Organized feedback of information on system performance. A means to adjust the individual components of the system. What the Proposed System Will Do The Administration is committed to far-reaching and fundamental reforms in the Federal procurement process. A number of these reforms are highlighted below. The System Is to Be Simplified and Made More Responsive Procurement personnel will enter the process at the "front end" where sound business views are frequently missing. The purpose is to enable them to coordinate with program managers, analyze the marketplace for available products or services, and then devise a procurement strategy that best meets the need. The proposed system calls for agencies to plan procurements sufficiently ahead to allow time, not often available today, to analyze the |