Defense bill tweaks procurement rules

The Defense authorization bill passed by Congress last week included several provisions that will affect the Pentagon procurement process:

• Education requirements for contract specialists. Defense contracting officers who worked in the department before Sept. 30, 2000 do not need to go back to school to serve at the GS-1102 level. The 2001 Defense Authorization Act required all new contract officers at the GS-1102 series to have a bachelor's degree from an accredited institution and at least 24 semester hours of business-related studies, regardless of work experience. But Section 824 of the Defense conference report makes clear the education requirement does not apply to current contract specialists.
• Acquisition workforce safe from job cuts in 2002. The conference committee on the Defense bill removed a provision in the House bill that would have cut 13,000 positions from the Defense acquisition workforce in 2002. Rep. Duncan Hunter, R-Calif., sponsored the measure, which was designed to free up funds for new weapons projects and military personnel. The Defense acquisition corps was slashed by half during the downsizing of the 1990s and is expected to shrink again in the next few years.
• Army contractor count is back, with a catch. The bill gives new life to a controversial Army study that aims to determine the size of its contractor workforce. In June, Defense and the Office of Management and Budget put a lid on the Army study because it violated federal rulemaking procedures. Section 375 of the new bill authorizes the Army study for each of the next three years, with the first version due by March 1.

  The original Army study required contractors to report a variety of information on how they do business with the department, including how much contractor employees get paid, how many hours they work, and who the actual customer of their services is within the Army. The conference report on the new bill specifies the Army cannot collect any data that requires contractors to build new data systems, a measure that will limit the reach of the new report, according to Stan Soloway, president of the Professional Services Council, an association representing federal contractors.

  "The law makes it very clear you can't impose extra burdens on the private sector," he said.

  But 1,200 contractors complied with the Army data call this year, so private firms may not need new systems to provide the required information, said Dan Guttman, a fellow with the National Academy of Public Administration.

  "DoD might state that new systems are not needed since hundreds of contractors have already complied with the reporting at issue, and, therefore, presumably have systems to do so."

  The ambiguity in the conference report leaves it up to Defense personnel and procurement officials to work out the scope and content of the Army count.

• Competition on GSA schedules. The final version of the bill removes Section 803 of the Senate version, which would have required Defense to open up competition for purchases of goods or services valued at $50,000 or more from the GSA schedules to every schedule holder--literally thousands of companies. Experts agreed that such a move would have undone nearly a decade of acquisition reform. The compromise version raises the threshold to $100,000, applies only to services procurement and requires Defense contracting officers to receive bids from only three vendors, unless they can determine in writing that they were unable to do so.
• Small business mentoring program. The Pentagon's Mentor-Protégé small business program is authorized for three more years under the bill. The Senate version attempted to make the program permanent, but under the final compromise the program is extended through September 2005.
• Navy-Marine Corps Intranet project. The final bill scuttles a provision in the House version that would have excluded the Marine Corps from the Navy's department-wide intranet venture. The legislation also directs the Navy to choose a single official to head the NMCI project and provides authority to phase in the next stage in the project.