Proposals for Part 15 released

The Clinton administration last week proposed long-anticipated revisions to the Federal Acquisition Regulation designed to improve communications between agencies and vendors and give government contracting officers more discretion over how they make purchases.

The proposed changes to FAR Part 15 which governs negotiated buys would introduce more commercial-style - and potentially controversial - practices into federal acquisitions including more up-front exchanges of information between agencies and potential suppliers and more freedom for agencies when evaluating vendors' bids.

More proposed changes to Part 15 covering pricing and unsolicited proposals are expected within the next few months.

Among the suggested revisions published in the Federal Register Thursday is an attempt by policy-makers to free agencies from what some officials consider an unreasonably restrictive concept of fairness. The new philosophy is that contracting officers should not make "arbitrary or capricious" decisions but also do not need to treat all vendors alike. "All offerors and contractors are entitled to fair treatment " the proposal states but "fairness does not mean that offerors and contractors of differing capabilities past performance or other relevant factors must be treated the same."

To that end the proposed rule would encourage agencies and vendors to talk to each other informally beginning with the early stages of a procurement through the selection of a competitive range.

Gone is the rigid framework for "discussions" with vendors. Suggested provisions instead would let agencies ask vendors questions about their initial proposals without having to talk to each bidder and give contracting officers more flexibility to ask for revised offers.

Although the proposal has changed little since a draft was circulated last month policy-makers abandoned an effort to rewrite language governing amendments to solicitations. Some vendors feared suggested revisions to the rules on amendments would amount to a change in the policy of giving all bidders the chance to respond to substantial changes. That was not the intent said Steven Kelman administrator of the Office of Federal Procurement Policy. "We had tried to simplify it [but] we just decided to avoid confusion " he said.

Perhaps the most controversial changes proposed in the rule would enable contracting officers to consider their available resources when deciding how many proposals to include in the competitive range of a procurement. Critics have charged that this language which already has been proposed in a separate regulation to carry out the Federal Acquisition Reform Act would result in bidders being excluded arbitrarily from competition.

Kelman said this view is based upon a "misconception" about the proposed provision.

He said that although agencies would be allowed to estimate how many proposals they might select as finalists they still would have to evaluate every proposal they receive. Whether proposals become part of the competitive range would depend upon how they are all rated by contracting officers he said.

The proposed regulation would allow contracting officers to select finalists whose proposals "have the greatest likelihood for award" instead of considering all offers that might have a chance of winning as is current practice.

"If somebody wants to say that the issue of how many people you negotiate with shouldbe totally divorced from the amount of resources you have they are not living in the world that I'm living in " Kelman said. He added that vendors should not expect the government to on one hand lift regulations that burden industry such as audit and data collection requirements but also "have a straightjacket of rules" that burden contracting officials.

In response to concerns raised by vendors that the government would encourage agencies to "auction" contracts Kelman said the proposed regulations would not change existing rules that let agencies tell vendors when their prices are off base.

A different regulation proposed earlier this month would however let agencies test auction techniques in procurements of commercial items.

That rule would carry out provisions of FARA allowing the use of simplified procedures when spending between $100 000 and $5 million on commercial products. The rule would cover nearly one-fourth of all contract actions involving information technology hardware and software purchases and cover 63 percent of the money spent on IT equipment and applications.