Federal Manager's Daily Report

House and Senate conferees have agreed to a compromise version of the annual defense budget (HR-2810) containing several acquisition reform provisions.

One seeks to add oversight to service contracts–used for everything from lawn mowing on military bases to maintaining equipment to hiring specialized experts and administrative support—which account for 53 percent of the $274 billion in the department’s annual contract spending.

“The bill requires more specificity in funding requests for service contracts, which will now be submitted through the DoD budget process, forcing the Pentagon to analyze actual needs and spending patterns much like they do for weapons. Those within the DoD who need to contract for a service will have to specify their requirements early enough to have them validated, the contracts awarded, and the funding secured,” according to a summary by the House Armed Services Committee.

Another allows purchases from online commercial sites of off-the-shelf items that currently must be purchased through the department’s contracting process or through the GSA. “These portals function like minimarketplaces, ensuring that the buyer gets the best price without a lot of red tape,” it says.

In addition, the bill will shift performance of some incurred cost audits to the private sector from the Defense Contract Audit Agency “to ensure that DCAA eliminates its audit backlog, all audits are completed within a year, and DCAA can focus its experience and expertise on forward-pricing audits” that yield much higher returns per dollar spent on the audit than do incurred cost audits, the summary says.

The bill further “includes provisions intended to signal a longer-term effort to remove unnecessarily prescriptive and obsolete requirements from U.S. Code, which create a culture of compliance within the acquisition community, rather than empowering smart, agile, decision-making.” That includes support for a report of an internal DoD review panel issued earlier this year recommending revisions to streamline acquisition statutes and regulations.