2004 DOD Authorization Act Includes Several Important Procurement Policy Changes
December 10, 2003
David Dempsey - Northern Virginia
The National Defense Authorization Act for Fiscal Year 2004 (the Act), signed by President Bush on November 24, 2003 (Pub. L. 108-136), includes a number of important policy changes, some of which are adopted from the Services Acquisition Reform Act of 2003 (SARA). These policy changes will impact the federal government’s award and administration of contracts. The key statutory changes are briefly discussed below.
Contract bundling
In an effort to promote small business participation in federal contracting, section 801 of the Act requires the Department of Defense, prior to consolidating requirements in excess of $5 million, to make a determination that the benefits of contract bundling “substantially exceed” the benefits of alternative contracting approaches involving a lesser degree of consolidation. Prior to November 24, 2003, the contract bundling provisions in the FAR were amended (effective October 20, 2003) to expressly include the bundling requirements for multiple award and task/deliver order contracts. See 68 Fed. Reg. 60000. The comments received on the then proposed bundling regulations resulted in proposed changes to the SBA regulations regarding small business subcontracting plans. See 68 Fed. Reg. 60015 (Oct. 20, 2003).
Multiyear task and delivery order contracts
Section 843 of the Act includes a provision limiting the contract period for a multiyear task and delivery order contract to cover a “total period” of not more than five years. FAR 16.505(c) currently provides that the ordering period for task and delivery orders may not exceed five years. In the past, agencies issued task orders prior to the expiration of the five-year ordering period in order to extend performance of the contract for an additional five-year period. Section 843 will prohibit this practice and limit total contract performance to no more than five years.
Assurances of technical data conformity
Section 803 of the Act eliminates the requirement that contractors providing technical data under a contract furnish written assurances that the data is accurate, complete and satisfies contract requirements. While removal of this requirement will not diminish the requirement for contractors to provide compliant technical data under a contract, it should reduce paperwork. This provision has the effect of eliminating DFARS 252.227-7036, Declaration of Technical Data Conformity. Section 803 will not affect the technical data warranty under DFARS 252.246-0001, Warranty of Data.
Definition of “acquisition”
Section 1411 of the Act amends the Office of Federal Procurement Policy Act (41 U.S.C. § 403) to provide a comprehensive, government-wide definition of the term “acquisition.” The new definition of acquisition seeks to “encompass the entire spectrum of acquisition” from the development of an agency’s requirement to management and measurement of contract performance. The revised definition should lead to changes in the government’s approach to costing and managing programs as contracting officers consider a “life cycle” approach to acquisitions.
Authorization of telecommuting for federal contractors
In an effort to encourage contractors to allow their employees to telecommute, section 1428 of the Act provides that solicitations for federal contracts should not contain any requirement or evaluation criteria that would render an offeror ineligible or reduce the evaluation score of its proposal, based on the inclusion of a plan to allow its employees to telecommute, unless the agency determines that such telecommuting would interfere with meeting the agency’s needs.
Additional incentive for use of performance-based contracting for services
Section 1431 of the Act adds an incentive for the use of performance-based services contracts by permitting such procurements, up to $25 million, to be classified as commercial item contracts if each task uses specific products that can be clearly defined and measured in terms related to the agency mission and the contractor provides similar services to the general public.
In a related development, the Defense Department issued an interim rule requiring (unless otherwise approved by a designated official) the use of performance-based service contracts when the acquisition of services is by contract or task order. See 68 Fed. Reg. 56564 (October 1, 2003).
Authorization of additional commercial contract types
Section 1432 of the Act provides that time and materials and labor hour contracts will be considered contracts for commercial services. The change does not impact the government’s preference for performance-based contracts and provides that time and materials contracts should be used only if the contracting officer determined that no other contract type is suitable.
For more information, e-mail David B. Dempsey or Peter T. McKeen, Procurement Analyst, at david.dempsey@hklaw.com or pmckeen@hklaw.com, respectively, or call toll free, 1-888-688-8500.