Defense Acquisition Regulations System
Attn: Ms. Amy Williams
3060 Defense Pentagon
Washington, DC 20301–3060
Submitted via Regulations.gov
Subject: DFARS Case 2017–D009: Only One Offer
Dear Ms. Williams,
The Project On Government Oversight (POGO) supports the Department of Defense’s (DoD) proposed rule to provide certified cost or pricing information to the Department in circumstances where only one bid is expected.1 POGO has a long-standing interest in federal contracting issues, and has long advocated for government access to certified cost or pricing information.2 This information substantially improves contract pricing, negotiation, and accountability.
DoD’s proposed rule is a step in the right direction; however, it deviated from the statutory language stating that certified cost or pricing information must be supplied by contractors in circumstances where DoD “only expected to receive one bid.”3 DoD instead proposed that certified cost or pricing information shall only be requested “if only one offer is received.” This shift in language could prevent DoD from obtaining that vital information during the award phase and could create obstacles to obtaining the information at a later date.
Additionally, the proposed rule should apply to contracts and subcontracts for commercial item acquisitions. Numerous DoD Inspector General reports,4 as well as contractors,5 have identified instances in which commercial items in fact are only sold to the government. DoD must limit the circumstances where contractors deny the Department access to certified cost or pricing information—especially in all instances where there is no genuine competitive market to ensure the reasonableness of prices.6
The proposed rule should be rewritten to apply to circumstances when DoD only expects to receive one offer, as required by statute, and be expanded to apply to all sole-source and one-offer-expected contracts and subcontracts above the simplified acquisition and the commercial product and services thresholds. If this rule is not so modified, DoD will be denied access to certified cost or pricing information and, as a result, will continue to enter into bad deals for the Department and taxpayers.
If you have any questions, I can be reached at [email protected] or (202) 347-1122.
Scott H. Amey
Letter from Project On Government Oversight to Lois Mandell, Regulatory Secretariat, General Services Administration, about contractors denying access to cost or pricing information to agencies, August 13, 2018. https://www.pogo.org/letter/2018/08/pogo-urges-council-to-limit-when-contractors-deny-agencies-access-to-vital-cost-information; Letter from Project On Government Oversight to Mark Gomersall, Defense Acquisition Regulations System, opposing latest commercial item rule, November 10, 2016. https://www.pogo.org/letter/2016/11/pogo-opposes-latest-commercial-item-rule-that-will-lead-to-bad-deals; Letter from Project On Government Oversight to Mark Gomersall, Defense Acquisition Regulations System, supporting DoD commercial item reforms, October 2, 2015. https://www.pogo.org/letter/2015/10/pogo-supports-defense-department-proposal-to-buy-items-that-have-genuine-commercial-market; Letter from Project On Government Oversight to Raymond J.M. Wong, Cost Accounting Standards Board, Office of Federal Procurement Policy, opposing blanket CAS exemptions for commercial items, January 18, 2013. https://www.pogo.org/letter/2013/01/pogo-opposes-blanket-cost-accounting-standards-exemption-for-commercial-item-acquisitions; Letter from Project On Government Oversight to Senators Carl Levin and John McCain and Representatives Henry Waxman and Chris Shays, urging review of huge sole-source commercial item contract, November 27, 2006. https://www.pogo.org/letter/2006/11/pogo-urges-congress-to-review-hamilton-sundstrands-9-year-no-bid-commercial-item-spare-parts-contract3
Public Law 114-328, Section 822 (stating that certified cost or pricing data shall be provided in circumstances when only one bid is expected). https://www.congress.gov/114/plaws/publ328/PLAW-114publ328.pdf4 Scott Amey, Project On Government Oversight, “Congress Locks Pentagon into Commercial Item Ripoffs,” December 23, 2015. https://www.pogo.org/analysis/2015/12/congress-locks-pentagon-into-commercial-item-ripoffs 5
Mandy Smithberger and Scott Amey, Project On Government Oversight, “Thornberry Buying Industry Commercial Item Policies,” April 28, 2015. https://www.pogo.org/analysis/2015/04/thornberry-buying-industry-commercial-item-policies6
The Government Accountability Office recently found that obtaining cost or pricing information from contractors and subcontractors to determine price reasonableness can be challenging. Government Accountability Office, Defense Contracts: Improved Information Sharing Could Help DoD Determine Whether Items Are Commercial and Reasonably Priced, July 31, 2018, pp. 9-12. https://www.gao.gov/assets/700/693529.pdf