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Acquisition Panel Wraps Up: What does it all mean?

Nearly two years after its initial meeting in February 2005, the Acquisition Advisory Panel (also known as the 1423 or the Services Acquisition Reform Act (SARA) Panel) will release its report on the status of the federal contracting system. During that time period, the Panel held over thirty public meetings, interviewed scores of government and private sector witnesses, reviewed thousands of pages of testimony, studied numerous government reports, and formulated hundreds of findings and recommendations that, if considered and passed by Congress, could improve the government's system for buying goods and services.

"Congress has been thrown a contracting softball, and it should hit the ball out of the park," said POGO's general counsel Scott Amey, a frequent Panel meeting attendee. "Although the Panel's recommendations do not go as far as POGO would like, the Panel focused in on some core problems that, if resolved, will improve competition, negotiations, oversight, and transparency, and provide better spending decisions. The evidence presented to the Panel highlighted many flaws in the government's system. Hopefully, the Panel's work will push Congress to reject those inside the government and the contracting industry who often contend that the system isn't in need of repair," said Amey.

"I was surprised by some of the industry Panel members who were critical of the current contracting system, and shocked that other Panel members, including some senior government employees, who made numerous attempts to protect the status quo," Amey further stated. "At times I was wondering if some of the Panel members from inside the government were better pro-contractor advocates than many of the industry representatives," Amey added.

Considering that federal contract spending eclipsed $380 billion in fiscal year 2005 and contracting issues are very high on Congress's agenda, the Panel's work should spur a wave of contracting improvements that should add sound spending practices, public access, and oversight controls that have been sorely missed since the mid-1990s.

POGO urges Congress to pass legislation that incorporates the following Panel recommendations:

1. Congress should redefine the definition of "commercial" services to include only those services that are actually sold in substantial quantities in the commercial marketplace. (POGO would also recommend that Congress re-define "commercial" items to include only those goods sold in substantial quantities in the commerical marketplace.) "Commercial" item requirements should be revised to strengthen price reasonableness determinations when no or limited competition exists.

2. Contractors should receive an agency's annual ethics training.

3. Federal contract reporting systems should be improved to ensure that complete, accurate, and timely information is available to the public. Agencies should improve transparency and openness of all no-bid task and delivery orders.

4. Agencies should develop a system to un-bundle contracts and mitigate the effects of contract bundling.

5. Contractors should be permitted to file bid protests of task and delivery orders over $5 million under multiple award contracts.

On May 17, 2005, POGO testified before the Panel, highlighting contracting vulnerabilities that included:

1. Cozy Negotiations - To make every effort to get the best value for the taxpayer, the government must promote aggressive arm's-length negotiations with contractors;

2. Inadequate Competition - To better evaluate goods and services and get the best value, the government must encourage "competition" so that it can correct the current trend of entering into non-competitive contracts in nearly 50 percent of government purchases;

3. Lack of Accountability - To ensure that taxpayer dollars are being spent responsibly, the government must regularly monitor and audit contracts after they are awarded;

4. Little Transparency - To regain public faith in the contracting system, the government must ensure that the contracting process is open to the public, including contractor data and contracting officers' decisions and justifications; and

5. Risky Contracting Vehicles - To prevent abuse, the government must ensure that certain contract types that have been abused in the past (including performance-based contracts, interagency contracts, time & material contracts, share-in-savings contracts, purchase card transactions, commercial item purchases, and other transaction authority) are only used in limited circumstances and are accompanied by audit and oversight controls.

POGO followed-up its oral presentation by sending additional materials to the Panel throughout the Panel's tenure. Please visit the following links for more information on POGO's submissions to the Panel.

Click on the following links to view:

POGO's May 17, 2005 Presentation

POGO's August 19, 2005 Letter

POGO's August 30, 2005 Letter

POGO's December 6, 2005 Presentation

Authorized by Section 1423 of the Services Acquisition Reform Act of 2003, the Panel of "recognized experts" in government acquisition law and policy were directed to "review and recommend any necessary changes to acquisition laws and regulations as well as government-wide acquisition policies with a view toward ensuring effective and appropriate use of commercial practices and performance-based contracting." To handle the complexity of the federal contracting system, the Panel created smaller working groups in the following areas: (1) Commercial Practices; (2) Federal Acquisition Workforce; (3) Interagency Contracting; (4) Performance-Based Services Acquisition; (5) Small Business; and (6) Appropriate Role of Contractors Supporting the Government.

Follow the link to see the Panel's Final Report.