Management

Senate: Curb abuse of fed contract award fee rollovers

In the private sector, it\'s not unusual for a vendor to have incentive clauses written into a contract, but in federal contracting, agencies sometimes employ t...

Federal News Network Staff

August 5, 2009 6:57 am

2 min read

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Even when agencies do hold contractors’ feet to the fire, they often give them second and even third chances to earn profit despite repeated shortcomings. This practice, known as rollover, is meant to be used in limited situations, where contractors are unable to deliver for circumstances outside of their control. Unfortunately, rollover seems to have become a rule rather than the exception.

Carper made the comment as his panel examined the topic of contractor award fees last Tuesday.

The chairman believes that the sunlight of government transparency could help to kill the abuse of rollovers, which were first documented in a 2005 Government Accountability Office study on award fees. Carper says that following the report, the Pentagon took steps to curb the use of award fee rollovers. That, he says, resulted in savings of $450 million dollars in 8 programs that once used rollovers.

Jeffrey Zeints, the White House Chief Performance Officer and Deputy Director for Management at the Office of Management and Budget, testified before the committee that new guidance from OMB, along with some additions to Federal Acquisition Reguilations (FAR), could go a long way to stamping out the abuse of rollovers. Those changes to FAR, which will also deal with the topic of award fee rollovers, are expected late next month or sometime in October.

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