DoD Contracting Restrictions Advance

The House version of the Defense Department appropriations bill (HR-2863) for the upcoming fiscal year would continue certain restrictions that have applied to the department’s contracting-out program for the last several years. The language would require that the in-house bid be based on a “most efficient organization” and bar contracting-out unless the projected savings from contractor performance would be at least 10 percent or $10 million. Those provisions effectively override parts of the revisions the White House made to the general government-wide contracting policy, Circular A-76, two years ago. Also, the contractor’s offer could not have an advantage because of savings from not offering its employees health insurance or by paying less toward premiums than the government does for its employees—around 72 percent. The Bush administration objected, saying it “urges the House to eliminate DoD-specific restrictions to take advantage of government-wide Circular A-76 policies to achieve the best value for the taxpayer.”