Politics
OFPP making best-in-class contracts mandatory as part of FAR overhaul
As part of its overhaul the Federal Acquisition Regulation, the Trump administration is trying to put an end to most of the duplicative multiple award contracts that exist across government today.
Under the revised version of FAR Part 8, the Office of Federal Procurement Policy and the FAR Council are mandating the use of best-in-class or preferred contract vehicles for common goods and services. Under category management, these include everything from IT services to medical supplies to facilities and construction services.
Kevin Rhodes, the senior advisor at OMB and nominee to be the OFPP administrator, said the FAR rewrite isn’t just about reducing the red tape and burdens that have built up over the past 40 years, but these changes better prioritize consolidated governmentwide contracts to strengthen the government’s purchasing power, reduce duplication, lower administrative costs, shifting to a more strategic enterprisewide buying.
Kevin Rhodes is the senior advisor at OMB and the nominee to be OFPP administrator.
“The FAR Council’s model deviation is intended to drive acquisition efficiency in support of the president’s executive order on procurement consolidation. The EO made it clear that we need to buy common goods and services in the most efficient and effective manner possible for the American taxpayer and limit waste,” Rhodes said in an interview with Federal News Network. “For example, why are agencies independently buying laptops when we have contracts in place through GSA to do that so they can focus on their more agency-specific requirements? The implementation guidance that OMB put in place relies on common sense principles to drive greater acquisition efficiency, in particular, use existing governmentwide contracts before creating their own vehicles. There is no need to spend the time effort to do that when there’s already a way to go after those needs.”
The General Services Administration helped solve this buying of laptops and desktops several years ago. Agencies tend to buy a lot of them at the end of the fiscal year so GSA has set up a consolidated buying effort on Sept. 4.
Last year, the Governmentwide Strategic Solutions (GSS) for Desktops and Laptops Blanket Purchase Agreements program saved $179 million dollars, getting prices down to an average of $225 dollars per unit, wrote Larry Hale, the acting assistant commissioner in the Office of Information Technology in GSA’s Federal Acquisition Service in an Aug. 11 blog post.
Changes could lead to centralization, efficiency
Chris Hamm, a former GSA acquisition executive who used to run the FedSIM organization, said making the BIC and preferred contracts mandatory is going to put a huge damper on agencies trying to do their own contract vehicle.
He said because now agencies have to get a waiver from the head of the contracting activity and the program manager has to write a determination of finding and then route it past a lawyer, past their boss to the head of contract activity describing why they need a special contract, it will be become harder to get the approval.
“This may finally stop people from principally doing their own thing and they’ll just go use the existing vehicles,” said Hamm, who now is CEO of FIN Acquisitions. “Everyone always wanted to have their own special chef and soufflé, and there are certainly things that are absolutely unique for the Library of Congress or for the Department of the Air Force. But labor hour services and things like the pens and paper or fleet vehicles or computers, every company out centralizes the procurement of these things. That should absolutely be true for the government.”
Hamm added he believes the FAR Part 8 changes are part of the move to centralization and the drive for more efficiency.
“I think efficiency is largely a data play. It’s now much more important that we have all of the dollars flow through fewer pipes, and if you can get them centralized in a couple of these different vehicles, then you could legitimately do much better analysis using a lot of the new tools,” he said.
Over the course of the last decade or so with category management, Rhodes said the government may have missed some opportunities with consolidated buying.
“We want to use levers of category management, including the concept of best-in-class contracting, and take these concepts to the next level by prioritizing consolidated governmentwide contracts that deliver the best pricing value,” he said. “We reduce duplication, lower administrative costs and strengthen the government’s purchasing power. It also represents a broader maturation of federal procurement practices shifting toward more strategic, enterprisewide buying that ensures agencies rely on proven, high performing solutions.”
New BIC criteria underdevelopment
OFPP will issue guidance in the coming weeks that will establish new criteria for best-in-class contracts and preferred contracts.
Rhodes said OFPP will work with agencies, category managers and BIC contract holders on what that criteria should include. He said one goal of the criteria would be to focus on pricing.
“We want this to be really a game changer in terms of if you’re a BIC. We get the best pricing; we get the best contract mechanism, the best delivery timelines, all of the things that we should be doing through the acquisition system,” he said.
He added that vendors should be giving agencies their lowest prices, and maybe a “stair step” approach is needed where agencies pay one price for the first 10,000 that they buy, and then a lower price for the next so many tens of thousands that the government buys.
Rhodes said OFPP recognizes that the change in BIC criteria could disrupt the current environment and that’s why FAR Council and OFPP want to work closely with agencies and vendors alike.
FAR Part 12 and 40 also saw significant changes.
Under Part 12, Rhodes said the council removed requirements that are not necessary or in some cases don’t make any sense. One example is the old requirement for public companies to tell the government about the compensation of their senior executives. He said this is both unnecessary and duplicative.
In all, the update to FAR Part 12 reflects an approximate 30% reduction in its total size and agencies will no longer have to abide by more than 40 clauses.
“Agencies will be able to immediately begin eliminating 1/3 of the requirements from their future requirements that are not required by statute or executive order and have little to do with contract outcomes,” Rhodes said. “We did this to make it easier to buy commercially available solutions, leverage the talents of small businesses and other new entrants and build more competitive and resilient marketplaces for agencies in terms of the incorporation of simplified procedures in FAR Part 12.”
Hamm said another big change in Part 12 is the council made it very clear that quotations under the GSA Schedule are not the same as contract offers like agencies typically do when doing procurements under other parts of FAR Part 12 and FAR Part 15. The council highlighted the fact that quotations are less formal and should be a lot easier and a lot less important in terms of procedures.
Hamm said there’s several steps agencies normally have to take when doing a formal procurement, like having a technical evaluation plan, having evaluation scores and having competitive range.
Culture change remains biggest challenge
Under FAR Part 40, which is one of the newest sections of the FAR, the council tried to make the requirements easier to find, both for the workforce and the contractors.
The biggest change under Part 40 was the council got rid of explicit requirements under the American Security Drone Act of 2023 and simplified the expectations for how agencies should comply with the law.
Hamm and other experts say changing the FAR is the easy part. The real challenge comes for OFPP and the council when the agency contracting officers, program managers and industry begin change their approaches to acquisition.
Rhodes said OFPP is working with the Federal Acquisition Institute and the Defense Acquisition University on new training and guidance.
Additionally, the FAR Council is developing a companion guide and other deeper training documents.
“If we don’t change the culture, we will have failed. So we are putting some things in place that address the culture with the workforce, in terms of training, comprehension and getting after building that sense of it’s not about the least amount of risk, per se, but it’s about delivering capability first and foremost,” Rhodes said.
OFPP and the FAR Council are also asking industry and agencies for feedback on the changes to FAR. For these new latest updates, comments are due by Oct. 14.
“These latest changes are the first significant changes to how all acquisition will be done in the future, and this is incredibly positive,” Hamm said. “There’s other things that are also legislative proposals that are potentially going to come out, and we haven’t seen the changes to Parts 15, 16 and 19. But if this is a sign of where things are headed, then efficiency has won. I’m hoping that maybe Part 33 will change the protest rules. But as a leading indicator, this will make most acquisitions 50% faster. This is great.”
The post OFPP making best-in-class contracts mandatory as part of FAR overhaul first appeared on Federal News Network.
