Summary of changes in Procurement Statutes To: "AO - All Administrative Officers" cc: "Catherine L Hill, ACH/Operations, Reston, VA" , "Carole Carter-Pfisterer Reston, VA" , "MaryLou D Pectol Reston, VA" , "Alice A Sabatini, Administrative Officer, Reston, VA" , "Gayle A Sisler Reston, VA" , "Joseph S Pillera Reston, VA" , "Michele B Connolly Reston, VA" , "David C Madril, Admin Officer, Reston, VA" , "Connie F Magaha, Chief, Mgmt Support Section, Reston, VA" Subject: Summary of changes in Procurement Statutes Date: Mon, 15 Jul 1996 18:55:08 -0400 From: "Alice A Sabatini, Administrative Officer, Reston, VA" I asked John Peterson to provide us with a summary of the recent legislative changes in the procurement arena. The following is that summary. Please address any questions that you might have on this information to Susan McCullough. ------- Forwarded Message Date: Mon, 15 Jul 1996 14:55:24 -0400 X-Mailer: Z-Mail 4.0.1 (4.0.1 Apr 9 1996) To: "Alice A Sabatini, Administrative Officer, Reston, VA" Subject: Summary of Statutory Changes Federal Acquisition Streamlining Act of 1994 The Federal Acquisition Streamlining Act of 1994 (FASA) has now been largely implemented in the Federal Acquisition Regulation (FAR). This statute affected a wide range of acquisition practices and has so far resulted in issuance of 10 Federal Acquisition Circulars representing 3" of change pages to the loose-leaf FAR. Some coverage has been implemented only through interim rules, with further revisions still to come. Necessary revisions to the Department of the Interior Acquisition Regulation (DIAR) have yet to be made, although interim DOI directives have permitted us to implement most of the regulatory changes. Some of the changes that may be most significant to requisitioners and field purchasing agencts are summarized below. $100,000 Simplified Acquisition Threshold FASA eliminated the old $25,000 small purchase threshold and replaced it with a $100,000 simplified acquisition threshold, contingent on use of an electronic commerce (EC) system. Because USGS had implemented the IDEAS EC capabilities, we have been able to use the $100,000 threshold since For actions over $25,000, the acquisition process should be simpler and faster than contracts, but more complex than old small purchases. The requirement for public solicitation above $25,000, either through the Commerce Business Daily (CBD) or through FACNET requires us to provide a reasonable response time and will result in larger numbers of quoters. The higher level of public visibility and competition is producing little dollar savings, and means we will be dealing more with companies which are new to us. This is also true of actions not exceeding $25,000 if solicited through FACNET. Noncompetitive procurements over $25,000 which are not exempt from the CBD notice requirement must comply with the 45 day notice and response time requirement that previously applied only to contracts. Non-FACNET transactions Once an office has FACNET capability, we are required to use FACNET for all actions over $2,500 unless we prepare a written determination that use of FACNET for that action it is not practicable or cost effective. Offices which do not have FACNET capability are not required to document individual actions. By Dec 31, 1999, those offices will need to either have FACNET or be covered by a DOI determination that it is not cost effective or practicable to install and use this capability in those locations. (Federal Acquisition Reform Act of 1995 (FARA) removed language pertaining to interim FACNET capability, and further legislative action to remove this requirement is also likely.) Non-price Factors The FAR now expressly permits use of procedures involving evaluation of technical and past performance information in the simplified acquisition selection process and award on a basis other than price. In the past we sometimes requested and evaluated technical materials for acceptability, but now we are permitted to make price-technical tradeoffs and award on other than the lowest price, acceptable response. We now regularly consider both price and past performance in awarding purchase orders and have on numerous occasions passed over the low quote if that vendor had performance problems on a previous USGS order. Small Business Set-asides Although the statutory small business reserve was removed for actions not exceeding $2,500, the upper limit has been raised from $25,000 to $100,000. For action below $25,000, small business vendors may offer any domestic product. Over that amount both the vendor and the producer of the item must be small. This means that when we solicit on a "brand name or equal" basis, we should try to refer only to products of small manufacturers. Where we previously had the option of using an open market solicitation or a non-mandatory schedule (like for PC buys), the set-aside requirement seems to be causing us to do more GSA Schedule order solicitations, which are not restricted to small business. CO's still have the authority to waive the set-aside requirement when there aren't enough small, domestic manufacturers or vendors to obtain adequate competition. Commercial Items One important piece of FASA authorizes streamlined contracting procedures for commercial item acquisitions of any amount. The intention is for the Government to deal as much as possible like any other commercial customer when buying commercial items. Commercial item procedures include much simplified and shorter solicitation documents and elimination and much detailed contractual language. For contracts, we are now permitted to negotiate advance or periodic payments, if consistent with commercial practice. At behest of USGS, DOI has waived the FAR requirement for use of the new commercial item form for simplified purchases. This means OPS and field offices may continue to use existing PO forms for both commercial and non-commercial items. Streamlined procedures for soliciting commercial items includes direct solicitation through Commerce Business Daily, response times of less than 30 days, and streamlined solicitation and award instruments. When this process can be used, substantially reduced lead times should be possible. We are finding the minimal clause concept is a source of consternation to some USGS requisitioners, who are not comfortable forgoing custom clauses such as extended acceptance testing. Miscellaneous Other FASA changes raise thresholds for several clauses and certifications, but this will not be too noticeable to end-users. The most significant change was raising the threshold for obtaining Certified Cost or Pricing Data from $100,000 to $500,000 and broadening conditions for waiving this requirement for commercial items. Performance Measurement FASA requires agencies to identify "major and non-major acquisition programs" and to measure achievement of cost and schedule goals for those programs. Interagency teams have developed models for performance measurement and a DOI team is now working to develop evaluation and reporting mechanisms for bureau acquisition programs. Title V Workforce Development FASA requires each agency to designate "acquisition positions" and to manage selection, training, and development of employees in designated positions. FARA amended this section to give the head of OFPP authority to prescribe common standards for workforce development and management. This is expected to involve a formal training curriculum, more restrictive selection and promotion standards, and documentation of career-development activities demonstrating achievement of a required knowledge standard in a list of over 100 "competency" areas. Every proposal forwarded so far by OFPP has met with agency objections, so it remains to be seen what form this ultimately will take. Federal Acquisition Reform Act of 1995 This Act was contained within the DoD FY96 Authorization Act and provides more flexibility particularly in the competitive negotiation procedures, making it easier to eliminate non-contenders from the process at an earlier stage. This Act contained unusual language prohibiting any of its provisions from being observed prior to their implementation in regulation. More visible provisions of the Act are as follows: CICA Approval Thresholds Higher level approval thresholds for noncompetitive justifications have been raised as follows: Competition Advocate - was $100K, to be $500K; Head of the Contracting Activity - was $1M, to be $5M; DOI Procurement Executive - was $10M, to be $50M. These increases take effect August 19, 1996. Simplified Acquisition of Commercial Items Further revision to FASA coverage excludes commercial acquisitions from some additional statutes, including the requirement for certified cost and pricing data and cost accounting standards coverage. It also permitted development of simplified procedures for use in commercial item acquisitions between the simplified acquisition threshold and $5 million for a 3 year test period. Procurement Integrity This statute has been completely rewritten, eliminating certification requirements for Government employees (OF-333) and contractors. The revised law still contains restrictions regarding disclosure of information, negotiating for employment with competing contractors, and post-employment restrictions for procurement officials. We have not yet seen any draft implementation. This will require revision to SM 401.11. Information Technology Management Reform Act This act was also contained within the DoD FY96 Authorization Act and repealed the Brooks Act, which previously gave GSA exclusive authority over IT (FIP/ADP) acquisitions. Increased responsibility is placed in OMB for implementation of substantial new coverage on management of IT investments, including capital planning and performance measurement. Frank Andriani in OPS-OIS would be a better source for information on this statute. The procurement-related impacts of this Act include: APR/DPA Requirements The Act eliminates the requirement for agencies to submit an "agency procurement request" to GSA to obtain a "delegation of procurement authority" to conduct major IT acquisitions. It remains to be seen the extent to which DOI-OIRM will elect to maintain a pre-procurement approval process for IT acquisitions. GSBCA Protests The General Services Administration Board of Contract Appeals will not have authority to hear procurement protests filed after August 7, 1996. IT protests can still be filed with the GAO, like any other commodity. FIRMR The entire Federal Information Resources Management Regulation (FIRMR) will be eliminated. Some old FIRMR requirements will be moved to the FAR, some to the Federal Property Management Regulation, and some will be replaced by new issuances from OMB. An interagency team is working on this conversion process. ------- End of Forwarded Message