New FAR rules crack down on contracting abuse

Wednesday - 1/4/2012, 9:45am EST

Joseph Petrillo, attorney, Petrillo and Powell

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By Jolie Lee
@jleewfed
Federal News Radio

Three new rules in the Federal Acquisition Regulation aim to crack down on practices that may be considered "somewhat dubious in procurement," said Joseph Petrillo, attorney of Petrillo and Powell in an interview with The Federal Drive.

The rules, released Tuesday, will go into effect on Feb. 2.

  • Interagency contracts
    These contracts will have to be approved with a business case analysis, a process that will be phased in through fiscal year 2014, Petrillo said.

    The analysis will include, among other things, small business participation, contract administration costs, the potential effect of "diluting" other contracts, and the roles and responsibilities of contract administrators, he said.

    The specifics of the content for a business case analysis are not set forth in the rule, but the Office of Procurement Policy set out a template in a September memo.

  • Firm fixed price preference
    The rule limits time-and-materials contracts and labor-hour contracts for commercial items.

    "The issue is the government is taking on added risk when the contractor is simply providing hours and not specific results or specific dollars," Petrillo said.

    The rule also clarifies that these contracts are neither fixed price nor cost reimbursement contracts, but a third type of contract, he said.

  • Brand names specifications
    The rule is "clearly trying to make it harder to use and to discourage their use," Petrillo said.

    Any justification to use a brand name must be posted to eBuy or FedBizOpps

    "Posting it in some cases might lead to vendor protesting that the determination that a brand name specification is necessary ... if a protest is available for that kind of procurement," he said.