DOD rule boosts competition

Section 803 Federal Register notice

A controversial provision that would restrict Defense Department time and labor hour service buys using the General Services Administration's schedule contracts is still on the Bush administration's radar screen. However, it did not make it into a final rule designed to boost competition on the department's multiple-award contracts.

The Defense Department published in the Federal Register Oct. 25 a final version of a rule that implements Section 803, which references the citation in the fiscal 2002 Defense authorization bill.

The final rule does not include a provision that would have restricted DOD buys using the GSA schedule to firm, fixed-price task orders. The Office of Management and Budget's Office of Federal Procurement Policy attempted to add the provision but ran into opposition from industry groups that were able to successfully quash it -- at least for now.

The final version of the rule notes that OFPP intends to "work with the other [Federal Acquisition Regulation] Council members to develop appropriate revisions to the current FAR" regarding labor-hour contracts.

The final rule includes a section on training so contracting officers and vendors understand the implications of Section 803. Deidre Lee, director of Defense procurement, said DOD will have courses and training sessions, including a course that will be available online.

Training courses will be posted on the Defense Procurement Web site at www.acq.osd.mil/dp.

The rule essentially requires that DOD compete service task orders of $100,000 or more, except under certain circumstances. Contracting officers should try to get responses from at least three contractors that can fulfill the work and make sure all offers received are fairly considered.

The rule also allows blanket purchase agreements to be established against Federal Supply Schedules, but contracting officers must monitor them carefully including reviewing BPAs at least annually to determine whether they still represent the best value.