New interagency contracts now require business cases

Monday - 12/13/2010, 3:20pm EST

By Jason Miller
Executive Editor
Federal News Radio

Agencies developing interagency contracts must now write a business case explaining why they need such as contract instead of using an existing one.

This was one of four new requirements for interagency contracting issued Monday in an interim rule with a request for comments by the Federal Acquisition Regulations Councils.

The councils are implementing provisions in the fiscal 2009 Defense Department Authorization bill.

"A determination has been made under the authority of the Secretary of Defense, the Administrator of General Services [Administration] and the Administrator of the NASA that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment," the notice states. "This action is necessary because section 865(b) of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417) required the publication of the regulations within one year after enactment, October 14, 2008. However, pursuant to 41 U.S.C. 418b and FAR 1.501-3(b), the councils will consider public comments received in response to this interim rule in the formation of the final rule."

The interim rule doesn't apply to agencies developing multiple award contracts just for internal use only.

The proliferation of multiple award contracts (MACs) over the last decade has raised questions about the duplication and costs to agencies and vendors.

The Office of Federal Procurement Policy is developing guidance around writing the business cases. Dan Gordon, OFPP administrator, said in September that this is one of several approaches his office is taking to improve agency use and management of MACs.

Agencies spent $52 billion on govermentwide acquisition contracts and MACs in 2009, OFPP found in a recent report to Congress. Of that, $37 billion went through the General Services Administration's schedules program, and agencies spent another $3 billion through GWACs.

The report states agencies used NASA's SEWP contract the most last year, spending $1.8 billion, while on all but one of the GWACs agencies spent less than $100 million.

The interim rule will address several areas around interagency contracting.

  • The councils are broadening the definition of interagency contracts to include more than those that fall under the Economy Act.

  • The interim rule requires agencies to support their decision to use an interagency contract "with a determination that such action is the best procurement approach'."

  • The rule directs that assisted acquisitions, such as those services provided by GSA or the Interior Department's National Business Center, to create written agreements with the customer agency documenting roles and responsibilities for planning, execution and contract administration.

  • The councils want each agency's senior procurement executive to submit an annual report to the Office of Management Budget on their use of interagency acquisitions.

The councils will accept comments on this interim rule through Feb. 11.

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