Anytime the Defense Department hires another federal agency to do procurements for it, those servicing agencies are now responsible in regulation for ensuring that the General Services Administration schedule orders they place on behalf of the DoD comply with Defense regulations.
The new regulation–part of an interim rule made effective Dec. 13 and so subject to change (although, if past experience is anything to go by, minor changes)–settles an argument among federal agencies about how far regulations from the original customer agency penetrate past the level of another federal agency hired to perform procurement services. The answer is all the way.
The rule, in fact, applies to the entire government, but the Defense Department is the federal agency with the most involved set of department-specific regulations and so generally the most likely to have a difference from federalwide regulations. The new rule specifically states that the contracting officer placing the order is responsible for applying the regulatory and statutory requirements of the agency for which the order is being placed. The same goes when establishing a GSA blanket purchase agreement. The new language is part of a revised Part 8.404 (b)(1) of the Federal Acquisition Regulation
Many federal agencies, the Defense Department included, hire agencies such as GSA or the Interior Department’s Acquisition Services Directorate to perform procurements for them, paying them a fee for their services. The Pentagon a few years ago grew highly strained in its relationship with GSA and Interior in part over the extent to which those agencies were applying DoD rules to procurements made on its behalf.
All agencies that utilize an interagency procurement vehicle–including GSA schedules, although only for orders worth more than $500,000–must also now make a determination that use of another agency’s contract is the “best procurement approach.” That means at a minimum a document that analyzes the suitability of the contract vehicle and the value of utilizing it. Also from now on, any agency utilizing the services of another agency to make procurements (except, apparently, for assisted acquisitions made through GSA schedules that are worth less than $500,000) must have in place a written interagency agreement governing roles and responsibilities before the servicing agency releases a solicitation on behalf of its customer agency. These changes are all found in the new FAR Part 17.502-1 .
The interim rule also requires any agency setting up a new multi-agency contract vehicle with payment between agencies governed by the Economy Act to put together a business case analysis, although the rule’s language doesn’t appear to require that business case to gain approval from any higher authority before it proceeds with the new vehicle.
The rule does say that the agency should consider strategies for small business participation; analyze all the direct and indirect costs to the government for administering such a contract; describe the impact the vehicle will have on governmentwide purchasing power; analyze whether there “is a need” for establishing the multi-agency contract and, finally, document roles and responsibilities in contract administration. That new language can be found in FAR Part 17.502-2 .
Multi-agency contracts have come under some criticism in the past few years for diluting the ability of the government to concentrate its purchasing power. An August 26, 2010 report (.pdf) from the Office of Procurement Policy found that while during fiscal 2009 interagency contracting amounted to $53 billion worth of procurements, multi-agency contracts accounted for about $3 billion of that, or almost 6 percent.
Orders through GSA schedules totaled about $37 billion, orders through the Department of Veterans Affairs administered schedules totaled about $9 billion, and orders through governmentwide acquisition contracts (which are statutorily different from multi-agency contracts) accounted for about $3 billion.
Comments about the interim rule are due by Feb. 11, 2011.
— by David Perera – Dec. 15, 2010 – Fierce Government – Source URL: