Industry group defends interagency contracting

A leading representative of government contractors expressed concern that interagency contracts are being underutilized and that agencies do not accurately measure acquisition costs.

Stan Soloway, president of the Professional Services Council in Arlington, Va., told reporters that he's concerned that agencies, particularly within the Defense Department, are "increasingly pressuring their activities to stay within [their own agency] and not use other agency vehicles."

Interagency contracting should be viewed as a tool in the acquisition process, he said. Many agencies resist it because they look at the costs of going to another agency without measuring the costs of keeping an acquisition internal, which often are more, he said.

To capture the entire cost of the acquisition process, agencies need to look at areas such as customer service, as well as other internal costs that are often overlooked, such as surcharges, said Soloway. "If you add up those costs internally, it may be cheaper to go outside," he said.

Last month, the Government Accountability Office added interagency contracting to its high-risk list. It noted that interagency contract sales have increased almost tenfold since 1992, and reached $32.5 billion last year.

GAO said that in some cases, the agencies administering these contracts have little experience with them, and "they contribute to a much more complex environment in which accountability has not always been clearly established." At the time of the report's release, Comptroller General David M. Walker said that contract management would best be improved by implementing existing laws rather than creating new ones.

Alan Chvotkin, senior vice president at PSC, said part of the problem is the lack of enough qualified acquisition officers in the federal government. "We may not have the right resources in the right places," he said.

Soloway also said that size standards set by the Small Business Administration should differ for the private and public sectors. Consultancies serving the federal sector are larger than many of the small consulting firms in the private sector, for example, so the definition of a small business in the government arena should probably be larger than it is in the private sector, he said.

The current size standards squeeze mid-size companies, he said, because there is a "palpable fear among small businesses of graduating." Once firms grow past the designated size of a small business, they no longer qualify for certain contracts and may have difficulty competing with large companies.

Soloway suggested a multi-tiered approach in which companies are not designated as simply large or small, but rather qualify under a spectrum of sizes.

SBA is soliciting comments on how it should establish a new set of simplified size standards.