FAA proposal would limit bidders, protests and regs

Just months after being cut free from conventional federal procurement regulations, the Federal Aviation Administration is circulating copies of its acquisition reform proposal in preparation for getting a new system in place by April.

As expected, the proposal contains many elements of reform initiatives proposed by the Defense Department and the Office of Federal Procurement Policy. It also sets up the FAA as a proving ground for broader governmentwide reform.

"If it proves to be successful, it will be very difficult for anyone in Congress to say the rest of the government shouldn't use it," said Dennis DeGaetano, director of acquisitions at the FAA. If, on the other hand, the initiative fails, "it will be a negative test case," he said.

The FAA received clearance to create its own acquisition and personnel systems in a provision of the 1996 Transportation Department appropriations bill, which freed the agency from many federal regulations, including the Competition in Contracting Act (CICA) and the Small Business Act as well as protest and contract-dispute procedures.

The current draft of the FAA's acquisition reform plan focuses on three areas: life-cycle acquisition management system reform, procurement reform and a life-cycle acquisition work-force learning system.

The agency thus far has consolidated its decision and planning documents down from 24 to six. "And most policy requirements that remain are presented as best practices, lessons learned and guidance for use by acquisition specialists," according to a recent draft proposal. The FAA also will use integrated product teams to guide a procurement from start to finish.

"What we are trying to do is create an environment where people can use their knowledge, skills and intelligence to see what makes sense for a given [situation]," DeGaetano said.

Flexibility to Limit Competitive Field

The proposed system also gives the agency more flexibility to limit the competitive field during the procurement process, which has been discussed as part of other government reform initiatives. The FAA may establish qualified-vendor lists for specific products and services. Similarly, the agency plans to use a two-phase procurement process to narrow the field before source selection.

However, the FAA's policy on protests and contract disputes goes further than other initiatives in consolidating protest procedures. The FAA Disputes Resolution System would be the only recourse available to vendors short of a formal protest to U.S. courts after an agency decision.

As part of the acquisition system, the FAA also plans to take a methodical approach to educating its work force about the reform. The system would not be put in place all at once but would be rolled out over about six months in focused segments.

"The overall direction is very consistent with a lot of the administration's procurement reform initiatives," said Steven Kelman, administrator of the Office of Federal Procurement Policy. Kelman said he was not familiar with all the details of the proposal but said it appears to put the FAA on the path toward changing its "internal policies, management and culture."

He said the biggest experiment will be how the FAA conducts its procurements free from the regulation of CICA. In general, he said, "it's fair to say the FAA will give us an early understanding of how well some of the changes in the procurement system are working."

Some camps—both inside the FAA and out—do not believe the FAA has gone far enough in its reform efforts.

Over the last several months, the FAA has been working with a steering group of agency officials and a blue-ribbon panel of government and industry stakeholders to shape its strategy.

However, the FAA recently added a "red team" of agency employees who want to see the agency consider more radical ideas. The FAA gave the panel 30 days to draw up a list of ideas, which it submitted to the blue-ribbon committee. "As it turns out, there's agreement maybe 60 to 70 percent of the way," DeGaetano said.

For example, the group proposed the agency adopt the Uniform Commercial Code, which guides private-sector contracts, rather than create its own procurement policies. FAA management rejected the proposal because officials believe the agency needs defined procedures to follow, DeGaetano said.

William Kovacic, a law professor at George Mason University, said the FAA's proposals are "a step in the right direction" but that they are not far-reaching enough.

Aviation industry groups also expressed "cautious optimism" about the reform effort. In particular, the FAA appears to be willing to listen to ideas coming from its blue-ribbon panel, several sources said.

The reform effort is "an unprecedented opportunity," said Jack Ryan, vice president of air traffic management at the Air Transport Association. "They have a lot of people who are on this panel who have a lot of experience and are offering good suggestions," Ryan said.