Davis reintroduces SARA

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Rep. Tom Davis (R-Va.) has introduced a long-expected, controversial version of the Services Acquisition Reform Act after an earlier version stalled last year.

The legislation is intended to streamline the processes that federal agencies use to purchase services and also could open the door to contractors to fleece the government, critics charge.

The act calls for:

* A politically appointed chief acquisition officer to serve in every agency and the formation of a chief acquisition officers' council.

* Allowing greater use of commercial contracting practices including share-in-savings contracts and time-and-materials arrangements.

* Adding incentives for greater use of performance-based contracting.

Although witnesses who testified before the House Government Reform Committee today largely supported the bill's goals, some witnesses and some Democratic members of the committee said they worry that it goes too far in eliminating competition among contractors.

Government acquisition changed considerably in the 1990s through a series of reforms, said Davis, the committee's chairman, in his opening statement. "We are now faced with federal spending patterns that have undergone a vast change in a relatively short time," he said. "The new service-oriented, high-technology environment has simply overwhelmed the current system."

Witnesses testifying at the hearing, especially administration appointees like Angela Styles and Stephen Perry — administrators of the Office of Federal Procurement Policy and the General Services Administration, respectively — mostly approved of the bill. However, witnesses and some members of the committee raised objections to certain measures.

One objection several committee members raised is that the bill redefines "commercial item" broadly enough that the designation can be applied to services that are not commonly available on the commercial market.

In theory, the market moderates prices of commercial items, while government acquisition of other items are governed by laws that guard against fraud and abuse. Rep. Henry Waxman, (D-Calif.) said SARA would remove those safeguards for many service buys.

"Chairman Davis believes that these accounting standards can sometimes be too burdensome," Waxman said. "In particular, he is concerned that many smaller companies and start-up companies refuse to do business with the federal government because of the burdens of complying with these standards," Waxman said. Therefore, "many of the provisions in the bill" waive the application of oversight laws.

"Mr. Davis may have a point," he added. "We do need to ensure that smaller companies and other companies that don't normally do business with the federal government are able to do so. But we must do so in a way that protects the taxpayer against waste, fraud and abuse."

Other lawmakers objected to the bill's creation of a politically appointed chief acquisition officer, specifying that the position is not to go to a career federal employee. Davis said the intent is to position a high-ranking policy expert with access to the White House in each agency, while career staff would make the day-to-day acquisition decisions. That explanation did not satisfy critics of the measure.

"You should have a career person, not someone who might be a political appointee who has a business to go back to," said Rep. Carolyn Maloney, (D-N.Y.). "I find that very wrong and dangerous."

The bill, introduced April 29, is scheduled for markup May 6.