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Industry representatives on Tuesday defended Office of Management and Budget rules that require in-house teams winning government contracts to re-compete for projects at regular intervals. Unions and lawmakers have recently questioned the rules.

Under the revisions to OMB Circular A-76, in-house teams that successfully bid on federal projects generally have to defend their contracts after five years. Some agency "most efficient organizations" that perform exceptionally well are eligible for a three-year extension. Most efficient organizations are in-house agency teams that submit bids for contracts.

Re-competition is healthy for contract holders because it forces them to continually strive toward "new and better ways" of performing their work, said Mark Wagner, vice president of government relations for Johnson Controls Inc., a Florida-based contractor. "As an incumbent, you're always on your toes," he said.

Companies re-compete for contracts on a fairly regular basis, and most efficient organizations should be subject to similar standards, said Alan Chvotkin, senior vice president and counsel at the Professional Services Council, an Arlington, Va.-based contractors association. "Nobody should be automatically insulated from competitive rigors," he said.

Contractors are forced to re-compete when the terms of an agreement run out, Chvotkin said. On average, federal contracts last from three to five years, Wagner added. Unlike most efficient organizations, contractors do not have the benefit of receiving a three-year extension for good performance when their initial contract is up, he noted.

But John Threlkeld, a lobbyist with the American Federation of Government Employees, argued that while contractors may re-compete for federal work, the Federal Acquisition Regulation does not require them to do so. The revised A-76 regulations therefore place an unfair burden on in-house teams, he said.

By regularly requiring most efficient organizations to defend their work, OMB might inadvertently harm morale in the federal workforce, Sen. George Voinovich, R-Ohio, said last week at a Senate Governmental Affairs Committee hearing on competitive sourcing. Federal workers should not labor under the perception that "there is always another job competition just around the corner," he said.

OMB federal procurement chief Angela Styles told concerned lawmakers at the hearing that the new policy on re-competition was difficult to write. Private companies wanted to see re-competitions required as frequently as every three years, she explained, but a time frame of five to eight years is probably more appropriate for in-house teams.

In reality, it will be "quite a while" before agencies need to think about running re-competitions, Styles added.

Comptroller General David Walker, who also testified at the Senate hearing, said he believes re-competitions are appropriate as a response to significant changes in the circumstances surrounding a contract, and should not necessarily be required on a regular timetable. Most efficient organizations need to realize that they cannot hold onto a contract indefinitely, he said, but should not automatically have to defend their contracts every five years.

COMMENTS

• I noted with interest that industry did not express an interest in recompetition with a government MEO if they win initial competitions. After numerous post contract awards to the private sector, I have seen many of them that drastically exceeded the origional bid after ten or more years without parallel increase in the work requirement. In the one competition we contested by competing a MEO against an existing contractor, the MEO was considerably more economical. Those competitions are not favored because they require additional governmental personnel authorizations. Norman Dunbar Posted August 5, 2003 10:03 AM
• This story has so much double talk in it I, for one, do NOT believe anything anyone in this administration says. They say whatever it takes to get their corporate buddies a new contract. They do NOT care about federal employees. We are only a problem they have not gotten rid of YET, but they are working on it. Maybe we should become what they say we are. GovExec.com reader Posted August 1, 2003 10:05 AM
• To say that a contractor doesn't have an opportunity to have a contract extended is false. Ever hear of an award term? This whole issue just makes me ill. There isn't one private company that can be as dedicated to serving the public as federal employees are because private industry is interested in profits. Yea, they need to be mindful of their performance but from my experience once an A76 is awarded to a contractor, the feds are supposed to do everything necessary to ensure success. Loyalty to service is second. AAhhh! No wonder many talented federal employees are losing interest in doing their best, we're constantly sold down the river in the name of fairness........ GovExec.com reader Posted July 31, 2003 8:40 AM