Contractors Oppose Plan to Centralize Pentagon Commercial Purchasing

The largest contractors trade organization has asked the House Armed Services Committee to rethink several components of its bill to reform the Pentagon’s acquisition process, opposing in particular a plan to centralize decision-making on whether to buy products on the existing commercial market.

The 400-company Professional Services Council on April 17 sent a letter to committee Chairman Rep. Mac Thornberry, R-Texas, and top Democrat Rep. Adam Smith, D-Wash., calling their bill (H.R. 1597) a step in the right direction, but raising several objections over provisions they said might place contractors at a disadvantage while complicating acquisition management.

Thornberry’s Agile Acquisition to Retain Technological Edge Act is designed to streamline the acquisition process, modernize military technology and enhance workforce training.

But the bill’s plan to have the Defense secretary designate an individual to make determinations on whether an item sought by a Pentagon unit is commercially available “would likely result in actions contrary to Congress’ desire to foster greater reliance on commercial items and, at the same time, reduce competition,” said the letter from council President and CEO Stan Soloway, who served as an undersecretary of Defense during the Clinton administration.

“There are thousands of commercial items determinations made each year and requiring that they all be conducted by one office, disconnected from the customer base and the acquisition offices, will almost certainly result in procurement delays,” the contractors argued.  In addition, they noted that the Congress has tasked the Defense Department with enhancing its workforce training and development. “Since commercial items determinations are among the core responsibilities of a contracting officer, rather than negat[ing] that training and removing that authority from contracting officers, we would recommend that the training continue and Congress direct an assessment of such efforts to see if the training has been effective and where additional focus may be necessary,” the letter stated.

If such a central office must be created, PSC recommended that it focus on “arbitrating disputes about commercial items, and that such an office be entirely separate from the department’s existing cost and pricing activities.”

The contractors also questioned the Pentagon’s use of full-time equivalent headcounts to transparently measure service contracting, requested that caps on service contracting be lifted, and suggested that requests for proposals focus more on statements of objectives than on statements of work.