OFPP tables Section 803

The Bush administration has abandoned its effort to propose a controversial regulation that would have restricted how the Defense Department buys information technology services on the General Services Administration's schedule contracts.

Officials from the Office of Management and Budget and the Office of Federal Procurement Policy (OFPP) have told lawmakers and industry officials that they would not push forward with a last-minute addition to a rule that would have prohibited the long-standing practice of hiring outside contractors to supply IT services on a labor-hour basis. The provision would have restricted DOD's schedule buys to those with a firm, fixed price.

OFPP officials, however, told lawmakers that they plan to rework the rule and propose it at a later date.

The administration had been seeking to include the firm fixed-price provision as part of a rule designed to spur competition on multiple-award contracts. Larry Allen, executive director of the Coalition for Government Procurement, which has been leading the rally against the provision, said it was not the appropriate place for the rule.

The final version of the rule, called Section 803 because of the part of the fiscal 2002 Defense authorization bill that specified the mandate, was supposed to be published in late June.

But in a July 22 meeting, OFPP Administrator Angela Styles told Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee's Technology and Procurement Policy Subcommittee, that the firm fixed-price provision would not be in the Section 803 rule, a spokesman for Davis said.

Furthermore, OFPP and OMB officials told members of the coalition that the provision would not be included in the Section 803 regulation.