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Inside the World's Biggest Buyer
The federal government takes more than $1 trillion per year to operate, with nearly half of its operating budget spent on the acquisition of goods and services. Congress, executive branch political leadership and career federal managers all agree — federal acquisition needs to be a lot more efficient and effective. Federal News Radio's week-long special report, Inside the World's Biggest Buyer, takes a look at acquisition from every perspective: agency, industry, workforce, oversight, and suspension and debarment.
Competition in Contracting Act (1984)
Friday - 6/8/2012, 11:08am EDT
Congress is always active in the acquisition and procurement area. Every year, it enacts some provisions that are intended to improve the acquisition process.
"Most of that activity occurs in the national defense authorization bill, because that's the one bill that's considered on the Hill to be a 'must-pass' piece of legislation," said William Woods, director of acquisition and sourcing management at the Government Accountability Office. "That tends to be the vehicle for enactment of various pieces of acquisition legislation."
Despite annual activity around the defense acquisition bill, Woods said that Congress enacts major pieces of procurement legislation about every 10 years. He points to the Competition in Contracting Act (CICA) of 1984 as the foundation of much of the federal government's procurement policy.
"That together with several other pieces in that 10-year cycle are what we would consider to be the major pieces of acquisition legislation," Woods said.
CICA altered the government's approach to acquisition in a fundamental way. Prior to the act, most federal agencies used one of two methods to announce its intent to buy goods or services.
"They used formal advertising in which the government would announce its intent to buy goods or services and the contractors would submit a bid," said Timothy DiNapoli, acting director of GAO's acquisition and sourcing management office. "The government would open that bid and whichever had the lowest price that met the government's needs would win the award. That gave rise to the lowest-bid perspective."
CICA changed that dynamic by allowing agencies to employ a more extensive use of competitive procedures. Instead of relying just on the lowest bid, agencies could now use a "best-value" procurement techniques.
"It has now become standard practice to use that competitive negotiation for our best value, as opposed to lowest bid," DiNapoli said.
CICA also established full and open competition as the policy of the government. According to DiNapoli, that means all responsible contractors are able to solicit a bid with seven exceptions to that rule, such as urgent and compelling need or only one responsible source.
"You can look at the Competition in Contracting Act as the Constitution of federal procurement," said Roger Waldron, president of The Coaltion for Government Procurement. "It laid the foundational rules with regard to how the federal procurement system was going to operate with a focus on a full and open competition to the maximum extent practicle. … It is the landmark legislation in enshrining competition in the statutes."
One of the other things CICA did was to formalize the bid protest process at the Government Accountability Office. Although the agency had been deciding bid protests since it was established in 1921, it was CICA that gave GAO formal statutory recognition for that authority. Vendors knew which agency they could bring their complaints to if they felt an agency was not following the proper procurement procedure.
This story is part of Timeline: Congress crafts acquisition policy.
Inside the World's Biggest Buyer (Main Page)