A Double Dose of Acquisition Reform

US-POLITICS-OBAMA-CONGRESSLast week, DoD and Congress each moved forward with acquisition reform measures: DoD proposed changes to DFARS to comply with OCI-prevention language in section 207 of the Weapons System Acquisition Reform Act of 2009 (WSARA) and the House Armed Services Committee unaimously approved H.R. 5013, the IMPROVE Acquisitions Act of 2010.

DFARS Rule Changes

The proposed rule change to DFARS means that now an entire contractor firm is included in guidance to protect against conflicts of interest, as opposed to just an individual.  It also singles out four areas where organizational conflicts of interest are likely to occur:

  1. Acquisition support services
  2. Other support services
  3. Advisory and assistance services
  4. Contractor access to non-public information

For firms with a presence in these business areas, the bill suggests two ways for major integrators to avoid OCI: Firewall, using procedures and physical security arrangements “intended to restrict the flow of information either within an organization or between organizations” and Resolution, which effectively means divesting these kinds of services.

These new DFARS rules will apply “to contracts (including task or delivery orders) and modifications to contracts with both profit and nonprofit organizations, including nonprofit organizations created largely or wholly with Government funds” but “does not apply to the acquisition of commercially available off-the-shelf items, but does apply to acquisitions of other commercial items.”

IMPROVE Acquisitions Act of 2010

The IMPROVE Acquisitions Act offers some tangible improvements to the federal acquisition workforce under Title II, like measures to create “attractive career paths,” provide for “continuing higher education” and even establish “due process for members of the acquisition workforce who consistently fail to meet performance standards” in  subsection (b).

It also calls on DoD to expand the Defense Industrial Base to “increase the Department’s access to innovation and the benefits of competition.”  Also, the bill emphasizes the use of “nontraditional suppliers,” defined in paragraph 1 of subsection (d) as “firms that have received contracts from the Department of Defense with a total value of not more than $100,000 in the previous 5 years.”

But the most important change for government contractors comes under Title IV, which amends the U.S. Code to require contractors to certify to program managers through the Treasury Department that they have no “seriously delinquent tax debt” (defined in subsection (d) paragraph 4-A as debt that exceeds $3,000).  This means that contractors will be required to abide by a rigorous standard of tax compliance if the bill passes, and since it passed committee unanimously, it looks like it has the bipartisan support to pass the full Congress.

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One comment

  1. This post was good to read, very helpful. Thanks.

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