Section 803 remains on hold

Having already missed the deadline for instituting a new policy aimed at boosting competition in Defense Department multiple-award contract task orders, the Bush administration apparently will delay implementing the law for yet another month.

The law, generally referred to as Section 803 because of its place in the fiscal 2002 Defense authorization bill, required that DOD write a policy and have it in place by late June.

That deadline, however, disappeared when the White House sought to add a provision that would have restricted time and labor buys on the General Services Administration's schedule contracts. DOD and the Office of Management and Budget's Office of Federal Procurement Policy recently agreed to exclude that controversial provision, which DOD and industry officials said would make it virtually impossible for the services to operate.

With that issue resolved, many expected the final wording of the rule to be issued soon. Industry officials, however, said that they have been told that Section 803 will not be implemented until the start of the government's new fiscal year, Oct. 1.

"I'd say that DOD wants to get through the fiscal 2002 buying cycle before implementing the new rules," said Larry Allen, executive vice president of the Coalition for Government Procurement, a Washington, D.C., industry group that has been tracking this issue. "That would seem to make operational sense. No need to confuse buyers at the 11th hour of the buying season with a major new rule."

He noted, however, that there would have been no grounds for confusion if OFPP had not proposed the additional provision at the last minute.

Section 803's competition provisions have been almost completely eclipsed by OFPP's proposed additions to the rule. The original provisions of Section 803 essentially require 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 original wording created concern among vendors and GSA officials that the provision would make it impossible for DOD to use the schedule contracts. DOD officials have noted that it is nearly impossible to notify the more than 2,600 vendors that have schedule contracts.

DOD officials have said that the final rule will focus on the actual purpose behind Section 803 — increasing competition — and requires DOD agencies to do everything they can to get three bids on task orders. Therefore, notifying all schedule contract vendors will be done only as a last resort.