Reframe Acquisition Policy Background Congress directed that the Administrator, Office of Federal Procurement Policy (OFPP), within the Office of Management and Budget, be responsible for providing overall direction of procurement policy and leadership in the development of procurement systems of federal agencies.1 In meeting these responsibilities, the Administrator issues policy letters that are incorporated in the Federal Acquisition Regulation (FAR). The FAR is a massive document exceeding 1,600 pages. In addition to the FAR, the regulatory system includes supplements by federal agencies totaling an additional 2,900 pages, almost twice as large as the FAR. As described in the basic OFPP legislation, Congress intended the FAR to: -- provide federal procurement officials with a set of uniform, governmentwide acquisition policies, regulations, procedures, contract clauses, and forms; -- be wellwritten, easy to read, and logically organized; -- reduce excessive paperwork; -- ease doing business with the federal government; -- facilitate agency, industry, and public participation in the process of developing and maintaining the FAR and its supplements; -- limit individual agency regulations to those that are essential to implementing governmentwide policies and procedures within the agency; and -- represent policies and procedures required to satisfy the agency's unique needs. The FAR is issued and maintained jointly by the Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA), known as the regulatory agencies.2 The Federal Acquisition Regulatory Council (FARC) is composed of the regulatory agencies and OFPP to direct and coordinate governmentwide procurement policy and procurement regulatory activities.3 The regulations are developed by two subcouncilsthe Civilian Agency Acquisition Council (CAAC), chaired by GSA and composed of representatives of 12 other civilian agencies, and the Defense Acquisition Regulation Council (DARC), chaired by DOD and composed of DOD and NASA representatives.4 Need for Change The FAR is complex and prescriptive. This complexity and specificity primarily results from hundreds of processoriented legislative requirements affecting the acquisition process, as well as additional administrative requirements imposed by executive branch regulators. Fundamental reform of the acquisition system requires basic changes in the statutory underpinnings and cumulative administrative burdens. The Section 800 Panel. The Acquisition Law Advisory Panel to the United States Congress on Streamlining Defense Acquisition Law (Section 800 Panel) recognized in its recent report to Congress that the FAR system has grown increasingly complex due to requirements mandated by statute.5 The panel identified 889 provisions of law related to DOD acquisition. Many of these are also applicable to civilian agencies. The acquisition system is burdened with so many diverse statutory requirements and competing goals that the procurement system's efficiency has been significantly reduced. The MSPB Survey. A survey conducted by the Merit Systems Protection Board (MSPB) indicates that line managers widely believe that there are too many procurement regulations that are changed too often and are so processoriented that they minimize contracting officer discretion and stifle innovation.6 When asked in a followup survey whether they felt the procurement process appropriately balances the use of public funds with the material needs and requirements of customers, only 26 percent of the line managers surveyed agreed. The survey comments indicate that there are numerous other objectives that receive priority over the line managers. One manager expressed confusion over the ultimate objective of the entire procurement process by stating, "The FAR system does not make it clear what the principal goal of the federal procurement system is. Is it to avoid waste, fraud, and abuse? Is it to implement a social economic agenda? Is it to procure the government's requirements at a fair and reasonable cost?" To be sure, the FAR itself does not state its principal goal. The CSIS Study. A recent study by the Center for Strategic and International Studies (CSIS) concludes that government procurement laws and regulations add cost without value, impede government access to commercial stateoftheart technology, and adversely affect U.S. competitiveness by fracturing the nation's hightechnology enterprise. The CSIS study finds that companies alter their standard business procedures when the federal government is the customer, leading to higher prices for the government.7 From industry's perspective, policymakers do not allow industry to participate in the development of policy and regulations early enough in the process to have meaningful input. The GSA Survey. Efforts have been undertaken to reform the system. In 1990, GSA initiated a survey of FAR users to obtain feedback on the document and how it could be improved. Over 2,400 responses were received. Ninetyfive percent of respondents suggested one or more ways in which the FAR could be improved. The most common suggestions are to provide greater flexibility for exercising business judgment, consult users in developing regulations, and provide more guidance but less regulation. Based on survey results and additional input from focus groups of government and industry users, a report and recommendations were developed. The FARC also approved a FAR Improvement Project Report and established 19 implementation projects scheduled for completion by 1995.8 Although these changes will help, they do not involve fundamental reform. Examples of Success. In October 1988, the U.S. Postal Service (USPS) issued a new procurement manual containing innovative procurement regulations. This was made possible by the relatively permissive statute for USPS procurement.9 These regulations incorporated the best of federal and commercial purchasing policies and practices to ensure fairness to offerors and contractors. These regulations permitted more efficient contracting with greater discretion to use good business judgment to obtain the best possible deal for the USPS. Efforts to reform national procurement systems have also succeeded in other countries. An example is Australia, which several years ago transformed its procurement regulations into a set of guiding principles. Australia's equivalent of the FAR is contained in 13 pamphlets totaling 93 pages. These pamphlets state the goals of the procurement system and general operating principles for government officials on all aspects of procurement such as competition, getting best value for the government, specification development, and ethics. They are graphically attractive, written in plain English to maximize understanding by government employees and contractors, and leave no doubts as to expected results. The other examples cited above reflect simplified procurement policies, rules, and regulations without adversely affecting product quality and costs, system integrity, or public policy goals that the federal government should emulate. The federal government needs to reclaim its procurement policy framework to recognize it as an administrative process governed by clear and simply stated guiding principles while holding line managers and procurement professionals accountable for results. Cross References to Other NPR Accompanying Reports Streamlining Management Control, SMC07: Reduce Internal Regulations by More Than 50 Percent. Endnotes 1. See Office of Federal Procurement Policy Act, 6 (41 U.S.C. 405). 2. 48 CFR 1.102. 3. See Office of Federal Procurement Policy Act, 25 (41 U.S.C. 421). 4. 48 CFR 1.201. 5. Acquisition Law Advisory Panel to the United States Congress, Streamlining Defense Acquisition Law, Executive Summary (March 1993), p. 1. 6. U.S. Merit Systems Protection Board, "Workforce Quality and Federal ProcurementAn Assessment," July 1992, p. 21. 7. Center for Strategic and International Studies, Integrating Civilian and Military Technologies: An Industry Survey (Washington, D.C., April 1993), p. 16. 8. Federal Acquisition Regulation (FAR) Improvement Executive Committee, FAR Improvement Project Report (Washington, D.C., October 1992). 9. P.L. 91375, Section 410.
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