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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.
Federal Acquisition Streamlining Act (1994)
Friday - 6/8/2012, 11:10am EDT
Ten years after the Competition in Contracting Act (CICA) became law, it was once again time to alter the federal acquisition process in a significant way.
For many people, the process had become overly complex, so a presidential commission was established to come up with guidelines to reform the acquisition systems. These guidelines became the basis for the Federal Acquisition Streamlining Act (FASA) in 1994.
"There was a general recognition that the procurement process had become overly complex," said Williams Woods, director of acquisition and sourcing management at the Government Accountability Office. "Some of it related to the competition requirements to cost and pricing data that vendors were required to provide to the regulations that focused, in the view of some people, more on process than on outcomes."
FASA sought to improve acquisition in three broad areas, according to Tim DiNapoli, acting director at GAO's acquisition and sourcing management office. First, it aimed to reduce unique purchasing requirements. Second, it sought to increase the use of simplified acquisition procedures for low-income procurement. Third, it sought to obtain goods and services faster in order to reduce the in- house cost of doing business.
"When it comes to reducing unique purchasing requirements, you're talking in many areas of reducing the need for contractors to submit certified cost and pricing data, which is a very time-consuming and detailed description of the cost that a contractor is building into his bid, which the government can evaluate," DiNapoli said.
Rather than the federal agencies describing in specific detail what they needed, the drafters of the act sought to encourage the agencies to focus instead on what their outcomes were. "Use a more performance-based contracting as opposed to the use of a specific requirement," DiNapoli said.
To facilitate this, Congress raised the threshold from $25,000 to $100,000, so that procurements under $100,000 could be acquired more simply, with fewer rules and regulations.
"They also authorized the use of a government purchase card for very small-dollar procurement," DiNapoli said. "If they're under $2,500, for example, federal agencies could use the purchase card to acquire that. It makes for much more of a commercial approach."
FASA also established a preference for multiple-award contracting.
"When agencies had a need for specific goods or services, they would then compete that contract among the contract holders who had been awarded the multiple-award contract," DiNapoli said. "Agencies didn't have to go out and re-compete the entire requirement among the entire pool of potential contractors that are out in the private sector, but to limit it to the contract holders of the multiple-award contract."
This proved to be a much more efficient and streamlined process. "The use of the multiple-award contract has grown signficantly since FASA was passed and it is one of the predominant forms of contracting that we see in the government today," DiNapoli said.
"The important thing with the Federal Acquisition Streamlining Act of 1994 is that it was a reaction to a growing concern that the federal government was not getting access to the latest commercial technologies, being able to take advantage of the commercial marketplace in terms of access and pricing for goods and services and competing," said Roger Waldron, president of the Coalition for Government Procurement. "So it essentially reformed procurement and created preferences for commercial item acquistions, which are more streamlined. There's less regulation, fewer clauses in the contracts — the idea that you're relying on the commercial marketplace to take advantage of the competition and market forces and pricing."
At the same time, the General Services Administration's Schedules Program was going through a parallel reform, trying to streamline its process to take advantage of the small commerical marketplace.
Before FASA, agencies had all kinds of specifications for what basic things that could be purchased commercially.
"After FASA, there was a much greater reliance on commercial, off-the-shelf products, not having unique government specifications," Waldron said. "I think it's saved the government boatloads of money over the last 18 years."
This story is part of Timeline: Congress crafts acquisition policy.
Inside the World's Biggest Buyer (Main Page)