Defense policy bill has major implications for contractors

The 1,500-page fiscal 2010 Defense authorization bill approved by a congressional conference committee on Wednesday will have major repercussions for contractors and the government's acquisition workforce.

Rep. Ike Skelton, D-Mo., chairman of the House Armed Services Committee, said the legislation "supports the [Pentagon's] plan to increase the size of the civilian acquisition workforce; reduces the Department of Defense's reliance on contractors for critical acquisition functions; and eliminates waste, fraud and abuse through better contract oversight."

The House approved the conference version of the bill on Thursday 281-146. The Senate is not expected to vote on it until Friday or early next week.

As expected, the legislation once again suspends the Defense Department's authority to hold public-private competitions for government jobs under Office of Management and Budget Circular A-76 until Defense conducts a review of its procedures, including issues related to cost, oversight and data integrity. The Government Accountability Office will assess the quality of the Defense review.

If the ban is lifted, then there would be a two-year time limit for conducting public-private competitions. The legislation provides the secretary of Defense some flexibility to extend a competition based on its complexity.

The bill includes several other provisions that would affect the contractor community.

The legislation provides Defense Department officials with the authority to deny award or incentive fees to a contractor when the "gross negligence" or "reckless disregard" of one of its employees leads to the death or severe bodily injury of a service member or civilian employee. The types of incidents the provision covers include criminal convictions and civil or administrative findings of fault that result in a fine of more than $5,000 or damages in excess of $100,000.

In response to reports of faulty wiring and electrical hazards that have wounded or killed U.S. personnel in Iraq and Afghanistan, the legislation requires Defense to establish appropriate safety standards for expeditionary facilities that military or civilian personnel use.

The bill also includes a number of provisions designed to enhance the size and training of the acquisition workforce. Lawmakers expanded and extended the department's expedited hiring authority, allowed additional funding for the Acquisition Development Workforce Fund and eliminated limits on the number of civilian personnel who can be hired for Defense acquisition work.

Other acquisition-related provisions would:

• Extend the Commission on Wartime Contracting for an additional year and enhance the support available to the group from federal agencies;
• Mandate that the Panel on Contracting Integrity, a body established in the 2007 Defense authorization act, review revolving door policies surrounding officials who leave the Pentagon to work in the defense industry;
• Clarify that suspension and debarment rules apply to subcontracts;
• Require the Defense Department to justify sole-source contract awards in excess of $20 million;
• Force the Pentagon to notify the public before making any decision to bundle multiple contracts into a single large contract prior to issuing a solicitation;
• Direct the Defense Science Board to conduct an independent assessment of improvements in the procurement and oversight of contract services;
• Require GAO to study Defense's use of categories other than cost or price as the predominant factor in evaluating competitive proposals, and to examine how prime contractors award and manage subcontracts on major weapons systems.