SARA gets optimistic launch

Text of the new Services Acquisition Reform Act

Proponents of the Services Acquisition Reform Act, a sweeping, controversial bill intended to bring more flexibility to the purchase of services, say they believe the bill has a good chance of passing this time around.

Rep. Tom Davis (R-Va.), the bill's primary sponsor and chairman of the House Government Reform Committee, offered similar legislation last year.

Bill advocates attribute their optimism in part to Davis' new stature as committee chairman, a position he assumed in January. Apart from that, they say the bill, introduced last week, is filled with sensible and smart measures to smooth civilian agencies' path to purchases. SARA's detractors say the bill weakens government oversight.

"Davis has assumed a whole new level of authority, being chair," said Chip Mather, senior vice president of Acquisition Solutions Inc. "From that standpoint, it's encouraging. We're big supporters of Tom Davis. We believe he truly has the good government focus and understands many of the issues around acquisitions."

"Tom is in a better position to move the bill than he was before," agreed Stan Soloway, president of the Professional Services Council.

Olga Grkavac, executive vice president of enterprise solutions at the Information Technology Association of America, which backs the bill wholeheartedly, noted that after the first SARA died, Davis was able to incorporate three of its provisions into the 2002 E-Government Act.

"He doesn't give up," she said. "I would not underestimate his ability."

However, some of Davis' Democratic colleagues say it would open the door to abuses by contractors. That sentiment was echoed by experts like University of Baltimore law professor Charles Tiefer, who testified at a Government Reform Committee hearing on the bill last week.

While Soloway considers most of the objections raised against the bill baseless, he recognizes that the opposition presents a real challenge. Dispelling that threat will "hinge on the collective ability to deconstruct the mythology," he said.

The bill calls for acquisition workforce training, the appointment of a noncareer chief acquisition officer to each civilian agency, and a number of measures intended to incorporate broader use of commercial practices, such as share-in- savings contracts, in the federal system.

Government acquisition changed considerably in the 1990s through a series of reforms, Davis said at the hearing last week. "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 mostly approved of the bill, especially Bush administration appointees like Angela Styles and Stephen Perry — administrators of the Office of Federal Procurement Policy and General Services Administration, respectively. Critics of the bill, however, also attended the hearing.

SARA defines some service procurements as "commercial item" contracts. Rep. Henry Waxman (D-Calif.) noted that under the Federal Acquisition Regulation, laws intended to ensure the government is getting fair and reasonable prices do not apply to such contracts. However, Waxman said, Davis' bill will designate as "commercial" many services that are not sold on the commercial market and therefore don't benefit from the economic forces that shape private- sector prices.

Tiefer agreed with Waxman's point, saying in his written testimony that a proposal to relax the oversight measures amounts to "a giant giveaway for the biggest traditional defense contractors."

The debate is likely to take some time to sort through, Acquisition Solutions' Mather said, because procurement rules can be arcane and subject to broad interpretation. "It takes three lawyers and a dog to figure out what this thing means," he said.

Styles expressed concern over the bill's support for time-and-materials contracting, in which contractors bill by hours worked or materials used instead of a fixed price. The method is commonly used in commercial contracts, but the government has been cautious about allowing it.

Styles cited a report from the Defense Department inspector general, in which one unnamed contractor's bill soared from about $111 million to more than $700 million during the course of a project. Because the contractor was getting paid based on time and materials, "There was no incentive for the contractor to control costs," she said.

Other lawmakers objected to the bill's creation of a politically appointed chief acquisition officer. 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 daily 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." Maloney pledged to introduce an amendment that would make the CAO post a position for career federal employees instead of appointees.

The bill, introduced April 29, is scheduled for markup May 6. Mather expressed hope that Congress doesn't let it languish.

"We think there's a lot of good in this bill. The only issue is, acquisition reform on the Hill, I don't know how sexy it is," he said. "For the most part, Congress thinks they've dealt with acquisition reform, that acquisition has been reformed."

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Key SARA provisions

* Establish an acquisition workforce training fund within the General Services Administration.

* Create a government/industry exchange program for acquisition officials.

* Establish a chief acquisition officer position in each agency as a noncareer employee; create a Chief Acquisition Officers Council.

* Authorize agencies to use share-in-savings contracts, in which the contractor's price depends on how much money the service saves for the agency.

* Treat a performance-based service contract or task order as a contract for a commercial item if it is valued at $5 million or less and defines tasks to be performed in measurable, mission-specific terms.

* Approve the use of time-and-materials contracts for commercial services.