Radical changes ahead for the FAR

The Clinton administration will soon propose sweeping and potentially controversial changes to the Federal Acquisition Regulation that would alter substantially the way agencies buy information technology.

Under a plan that is expected to be released shortly contracting officers would have more power to choose how and with whom they negotiate to buy goods and services. Meanwhile vendors would be able to get more information about agencies' buying needs.

The changes are part of an ongoing rewrite of Part 15 of the FAR which governs negotiated procurements.

Because most technology acquisitions especially systems development contracts are negotiated the proposed revisions would likely touch all but the simplest IT procurements.

The revisions are intended to eliminate contracting practices that add little value to the acquisition process so that procurement officials will have more time for "highly valued work " such as market research and crafting performance-based work statements said Steven Kelman administrator of the Office of Federal Procurement Policy.

"We have downsized the work force that is being asked to undertake some new important activities " he said. "There is no way we can possibly make that equation compute if we do not aggressively look for&hellip features of our current way of doing business that we have to get rid of."

According to a copy of the proposed regulations obtained by FCW new rules would include:* Letting vendors and contracting officers talk more freely about agency requirements and proposals before and after bids are submitted.* Encouraging contracting officers to select as finalists only bidders that have the "greatest likelihood" of winning a contract rather than assuming all bidders could possibly prevail.* Allowing agencies to consider a pre-determined number of offers.* Letting agencies revise solicitations freely anytime during a procurement.* Authorizing agencies to solicit proposals in multiple stages and to request oral presentations from bidders.

While many of these ideas have broad support especially those that encourage more open talks between the government and its suppliers other proposals are likely to draw vendors' ire. For example contractors have objected to proposals to let agencies change evaluation criteria in midstream because that would be unfair to vendors who might already have been eliminated from a competition under the earlier rules.

Olga Grkavac vice president of the Information Technology Association of America's Systems Integration Division said vendors are also wary of any regulations that might encourage agencies to "auction" contracts. The proposed rules would not allow contracting officers to reveal competitors' prices to each other without their permission but it would allow procurement officials to tell vendors if the prices they offer are unrealistic.

In an introduction to the proposal regulation writers said addressing concerns about "fairness while maintaining an acquisition process that promotes best value to the taxpayers " was their "greatest challenge." The issue became most prominent they said in their deliberations over how to broaden communications between the government and vendors.

Terry Kelly president of the consulting firm Terry Kelly Associates Inc. said provisions that encourage more open discussion about prices would change how vendors approach the market. "It's tilted against the style of selling into the government where vendors wait for the call from agencies to come down and negotiate " she said.

In this area the proposed rules would give contracting officers more flexibility to ask vendors questions about their offers and to use that information to evaluate bids without necessarily letting vendors make changes to their proposals.

James McAleese principal with the law firm McAleese and Associates McLean Va. said if the proposed rules are adopted the result could be that vendors offer better-quality proposals and perform their contracts more diligently.

New freedom for agencies to define the procurement process combined with a new emphasis on contractors' past-performance records means vendors will have to put their best proposals forward first he said.

Unless agencies select contractors based mainly on price they would have little incentive to consider low-cost bids that are "minimally technically acceptable."

"If you are the lowest cost and you have any deficiencies you are in great danger " McAleese said. "You have set yourself up to be thrown out."

The proposed revisions to Part 15 are expected to appear in the Federal Register within the next couple of weeks.