DOD revising competition rule

The Defense Department is rewriting a proposed rule about multiple-award service contracts to emphasize competition, the DOD procurement chief told an industry group May 22.

The final wording of the provision, called Section 803 in reference to the section of the fiscal 2002 Defense authorization bill that mandated the changes, should be published June 26, said Deidre Lee, director of DOD procurement.

Section 803 essentially requires that for task orders of $100,000 or more, DOD contracting officers must notify all vendors on a multiple-award contract or notify a sufficient number of vendors in order to get three bids.

The rule has created concern among vendors and the General Services Administration that the provision would hog-tie GSA's schedule contracts. Notifying the more than 2,600 vendors that have schedule contracts would be virtually impossible, Lee noted.

In part as a result of public comment, DOD is reworking the rule so that the purpose — competition — is clear. "We're now making it clear the goal is to get good competition," Lee said at a May 22 breakfast with vendors sponsored by Federal Sources Inc., a McLean, Va., market research company.

Notifying all schedule contract vendors is only a last resort, she said.

Lee said, however, that DOD needs to better police its procurement practices. "The Department of Defense deserved this legislation," she said. And contracting officers are taking liberties that could result in further restrictions, she cautioned. One tactic, which she called "unprofessional," is putting a contract out on a Friday and expecting responses by Monday.

"We need to knock it off," she warned. "If we don't correct this, we will get help," similar to what happened with Section 803.

Lee projected that there would be a short-term drop off in the use of schedule contracts and other multiple-award contracts as procurement officials get used to the new rule, but she said she did not expect it to be a permanent situation.

The rule also will include a clause that allows DOD to re-examine the issue after a period to see if the rule is working the way it was intended.

Meanwhile, Lee said that DOD is spearheading an effort to create a Web site of all governmentwide acquisition, multiple-award, and indefinite-delivery, indefinite-quantity contracts.

DOD will host the site, but it will include contracts from all agencies and will help procurement officials understand what vehicles are available to them, she said. The initiative is something Lee has urged for some time.

The site will enable government to determine all of the available contracts — something that is now almost impossible — and to assess which are working well and why, she said.