Contracting Limits on DoD Advance

The Senate has passed an appropriations bill for the Defense Department (HR-2863) despite a Bush administration statement that it “strongly opposes” a provision that would bar contractors from having an advantage in contracting-out cost studies because of savings from not offering its employees health insurance or by paying less toward premiums than the government does for its employees. “While well intentioned, this provision ultimately undermines the efficiencies in private health plans and provides another disincentive for the private sector to participate in DoD’s competitions,” the administration said in a statement. It said such a requirement would be “particularly burdensome” on small businesses and would discourage private sector interest in contracting-out competitions. However, the White House did not threaten to veto the bill over the language and it has accepted similar provisions in past DoD spending bills.