Davis to reintroduce outsourcing legislation next week

Lawmakers on Wednesday will consider legislation that would establish acquisition workforce training programs and exempt certain contractors from government accounting requirements.

Rep. Tom Davis, R-Va., plans to reintroduce the Services Acquisition Reform Act (SARA) next week and the House Government Reform Committee will hold a hearing April 30 on provisions in the bill, according to committee spokesman David Marin. Similar legislation stalled in committee last year.

Marin declined to comment on whether the final version of the 2003 act would include controversial changes to the rules governing certain federal service contractors. Previous versions of SARA have not included the provision.

Under a draft version of Davis' bill, contractors providing widely available commercial services would be exempt from federal bookkeeping rules, known as cost accounting standards, on agreements worth up to $200 million. Currently, contractors must follow federal bookkeeping rules on most contracts worth more than $7.5 million.

Contractors that do only a quarter of their business with the government would qualify for the exemption in the draft bill, as would companies holding a substantial number of federal agreements governed by Part 12 of the Federal Acquisition Regulation (FAR).

Part 12 of the FAR is intended for commonly available "commercial" items that do not require much oversight. The draft bill contains a provision allowing contractors with at least 75 percent of government transactions in this category to work around cost accounting standards.

The measure is intended to simplify the accounting rules that contractors providing widely available, commercial-type services would have to meet, Marin said in an earlier interview. The rules would save taxpayers money because contractors often have to design new accounting systems to comply with the current cost accounting standards, he said.

But according to a statement from the Project on Government Oversight, a watchdog group, the provision is akin to "asking the government to put blinders on" and would likely result in "outrageous contract overpricing and wasteful spending." The group is also opposed to language in Davis' draft bill encouraging the use of share-in-savings agreements, which allow contractors and agencies to split savings generated by innovations.

The 1996 Clinger-Cohen Act authorizes the share-in-savings contracting approach on a pilot basis, but the Office of Management and Budget has not endorsed the approach and the Project on Government Oversight called the method a "speculative and unproven financing scheme."

Davis' draft legislation also contains provisions that would focus more attention on training federal procurement workers.

The draft bill directs the General Services Administration to create a fund devoted to training acquisition workforces at all executive branch agencies except the Defense Department. Agencies would contribute 5 percent of fees collected from task and delivery contracts, IT contracts, and various other contracts to the fund for training, which GSA's Federal Acquisition Institute would manage.

The draft bill also sets up an exchange program that would allow federal acquisition officers to spend some time working for a private contractor. To qualify for the exchange, officers would need to hold at least a GS-11 level civil service position, and would need to have demonstrated exceptional performance. Exchange assignments would last from six months to a year, with the option for extension of the assignments in three-month increments, up to a maximum of two years.

In return for the opportunity to participate in the exchange, the draft bill would require acquisition workers to go back to their agencies after working for the contractor. They would need to take on increased responsibilities upon their return to government and would have to stay at the agency for at least as long as they worked with the contractor. Employees breaking the terms of the exchange agreement would be responsible for paying the agency all expenses incurred for sending them on the assignment.