Rule implements share-in-savings

The two councils that set acquisition rules for the civilian and defense sides of the federal government have approved a draft final rule that would lay out share-in-savings contracting procedures for the future.

If approved by the Office of Federal Procurement Policy and the General Services Administration, the rule would implement the share-in-savings contracting authority provided by the E-Government Act of 2002.

A GSA spokeswoman confirmed that the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have approved the document, but no details have been released. Laura Smith-Auletta, director of GSA's Acquisition Policy Division, is chairwoman of the civilian council.

Share-in-savings contracts require vendors to absorb much of the expense of implementing projects and then base their compensation on the amount of money their work saves for an agency. The E-Government Act authorized share-in-savings only for information technology projects.

However, the contracting approach remains controversial. Critics, including former OFPP Administrator Angela Styles, say it reduces the effectiveness of government oversight of procurement. Supporters say it allows agencies to do more than their budgets would otherwise support and gives contractors an incentive to perform above expectations.