Trade group calls for share-in collaboration

Share-in-savings pre-solicitation notice

Successful share-in-savings contracts come from contractors working closely with their customers, and a proposed federal rule should allow an ample amount of that collaboration, the leader of an industry group says.

Under share-in-savings contracts, contractors earn money based on how much they save their customers. The General Services Administration published a "notice of proposed rulemaking" Oct. 1, seeking comments on guidelines for such contracts that fall under a provision in the E-Government Act of 2002.

In written comments sent today to GSA, Information Technology Association of America President Harris Miller called for openness.

Miller recommended that the rule be written to allow agencies and contractors to work closely in jointly developing proposals for projects.

"To be successful, share-in-savings contracts require a close partnership between the government and industry," he wrote. "Because share-in-savings projects often originate based on innovations tested in the commercial marketplace, government agencies require industry input to identify and develop candidate projects."

Miller's other suggestions include:

* Publish a final rule as soon as possible, rather than a proposed rule. Almost a year has already passed since the act was passed, and the provision authorizing share-in-savings contracts expires in 2005. However, agencies can write the contracts under the older Federal Acquisition Streamlining Act as well, Miller said.

* Determine the share ratio — how much of a project's cost savings go to the company and how much the agency keeps — based on the value expected, not the company's upfront investment. Industry needs to earn a high rate of return for the contract model to be attractive, he said.

* Allow maximum flexibility for agencies and contractors to negotiate cancellation fees.

* Allow flexibility in negotiating ownership rights of technology developed for projects.