Industry group urges flexibility in emergency contracting

Federal procurement policy should ensure that contracting officials have flexibilities to ease competition requirements during emergencies and should take steps to mitigate the liability and other risks faced by responding businesses, according to an industry group.

In a white paper on emergency contracting, the Arlington, Va.-based Contract Services Association, which represents about 200 firms, recommended factors to take into account for fine-tuning the procurement rules that apply in disasters. Such a reconsideration has been discussed at several agencies and on Capitol Hill, largely as a result of problems following the 2005 hurricanes and in Iraq reconstruction contracting.

Kent Sholars, CSA's manager of legislative and regulatory affairs, said the paper grew out of a small task force of association members. "Most of those … had specific experience from Katrina relief, which is why it has that sort of [slant], but we think it's applicable to any emergency and contingency operations," he said.

Among the conditions that make it difficult for businesses to respond to sudden surges of emergency contracting are payment delays, regulations aimed at ensuring broad socio-economic participation in federal contracts, and a lack of information on local businesses that are qualified to meet the government's needs, the members said.

The task force discussed a range of competition-related factors that slow contracting, and also surveyed barriers to entry for small businesses. "There is a bit of a tension there, [and] I don't think we spelled out what the right balance is," Sholars said.

The group's points sometimes conflicted. For example, one part of the paper supported sole source contracts as potentially efficient and fairly priced tools, while another recommendation said agencies should protect bidding opportunities for small businesses.

The paper stated that a "somewhat controversial suggestion" to temporarily suspend procurement goals for groups like service-disabled veterans and disadvantaged businesses could be necessary after a disaster. But they said "general small business goals could remain in place to ensure that ALL small businesses still have an opportunity to be considered."

Pressed on the reasons for protecting small business contracts while sacrificing targeted set-asides, Sholars said, "I don't really want to say that the socio-economic goals aren't important, it's just that the small business goals are so exceptionally important."

In a section on risks stemming from lawsuits and insurance liability, the association suggested that contract agreements should be adjustable to reflect increased premiums when a business undertakes work in a disaster area. CSA supported legislation sponsored in the previous Congress by Sen. John Thune, R-S.D., that would have extended greater protections to businesses in emergencies.

CSA also suggested development of a database of qualified local businesses that could meet emergency needs, citing a Government Accountability Office recommendation that agencies develop a central information resource for contracting officers.

Sholars said the database should be developed in advance and reflect companies that had demonstrated they were prepared to fulfill contract obligations. That process could be tied to pre-positioning contracts, he said, but education and training also would be required when it came time to use those contracts to ensure companies were prepared to deal with unique federal regulations.

The association also suggested identifying and addressing the problems that lead to long delays in payments and can hurt small businesses or discourage them from seeking government business. They said advance payments are permissible and should be considered a form of financial assistance to small businesses.