Will Rule Changes Go too Far?

ny discussion I have had about procurement with senior managers at federal agencies has invariably led to complaints about the FAR--the procurement professional's "book of wisdom." Many managers see the Federal Acquisition Regulation--1,600 pages of rules governing how the government conducts business-more as a "magic eight ball," in which the answer "no" always seems to float to the surface: "No, nice idea, but the FAR won't let you."

Contracting officials, whose job is to interpret the rules but also to try to protect agencies from making improper choices, often serve as the messengers of these unwelcome tidings. We all know what can happen to such bearers of bad news. A "can't do" answer is anathema to anyone seeking action and results.

A political appointee, whose term often runs less than two years, can't wait four years or more to see a new management information system put in place. He or she wants it now, or as close to now as possible. And the official would like contracting officers acquiring the system to use their ingenuity unhampered by outmoded and unnecessary regulations.

This concern about over-regulation strikes a sympathetic chord with industry, whose officials complain about the paperwork, intrusiveness, certifications and endless complexities of working with federal agencies. Simplification and streamlining have become watchwords in industry as well as in government. Both sides ask, "Why can't we do business more like it's done in the commercial world?" This is, after all, one of the key tenets of Vice President Al Gore's National Performance Review. In this reform environment, thinking "out of the box"-outside the traditional, sanctioned, rule-driven way of doing things-is encouraged.

Not everyone in the private sector, however, is so enthusiastic. Rules may be burdensome, but they also provide standards, precedent and consistency.

Nowhere is this issue more starkly drawn than in the debate about the FAR section, "Contracting by Negotiation." The administration's proposed rule, issued May 14, 1997, addresses such areas as past performance in awarding contracts, communications with vendors and setting the competitive range.

Steve Kelman, administrator of federal procurement policy, describes the goal of this FAR Part 15 rewrite as "trying to reflect in our source selection process many of the common-sense changes that some people on the front lines [i.e., contracting officers] are already using effectively." He cites as an example an aggressive process already in use by NASA to eliminate contractors who have little chance of winning an award.

Jody Olmer, director of domestic policy for the U.S. Chamber of Commerce, in contrast, argues the rule leaves the basic determination of fair competition "open to such wide discretion by the contracting officer that it will almost certainly at times lead to favoritism, political funneling of contract money, or the exclusion of valid and worthy proposals at the convenience of the officer."

Both the chamber and the Computer and Communications Industry Association cite the rule-making as inconsistent with the 1996 Federal Acquisition Reform Act.

The legislation permits the government to limit proposals in the competitive range to the "greatest number that will permit an efficient competition." The industry groups view the proposed rule-making language which limits the competitive range to those proposals "most highly rated," as allowing contracting officers to limit competition to as few as two firms. Moreover, in their view, the rule fails to set standards for "efficient competition" that firms can use to measure contracting officials' actions.

This debate is not just about the niceties of competitive range prescriptions. It is about trust between industry and government, and about whether industry believes government officials on their own will continue to be fair. The chamber fears small businesses will lose out in an environment where contract awards could be based on a company's relationship with the contracting officer, not on the quality of its goods and services.

Unless contracting officials can demonstrate that they have the integrity and skill to accomplish agency missions without trampling on such legal mandates as full and open competition, every efort to reduce regulatory layering will have to refight this battle.

A well-educated, well-trained, workforce and effective agency-industry communications are prerequisites to building trust on both sides.

Some in industry believe that the battle for stricter standards and clearer delineation of authority is futile. With user-friendly General Services Administration schedule offerings, blanket purchase agreements, and looser competition standards found in governmentwide, multiple-task-order contracts, "Contracting by Negotiation" may become another relic of a previous way of doing business. Under any scenario, however, the contracting officer's influence can only increase. It is in everyone's interest that he or she be up to the job.

Allan V. Burman, a former Office of Federal Procurement Policy administrator, is president of Jefferson Solutions in Washington.