Interagency Procurement and T&M Contracts

For almost 15 years now, the Federal Government’s acquisition workforce has been shrinking. According to a 2002 GAO report, the workforce declined by more than 22% from 1992 to 2002. And since then, the trend has accelerated, not slowed.

Over the same period, the annual Federal procurement budget has more than doubled. Doing more with less is practically a Government mantra, but please!

In this environment, the IDIQ (Indefinite Delivery, Indefinite Quantity) contract and the T&M delivery order have become the preferred contracting method for virtually all services requirements. And, sending money to GSA to have them park it on one of their IDIQs became the ultimate year-end shell game.

But, nothing is forever.

In April, 2005, the GAO issued a report so critical of the Department of the Interior’s GovWorks program (GAO-05-201), that it prompted a system-side examination of interagency contracting practices.

In June, 2007, GAO issued a scathingly critical report on DOD’s T&M contracting practices (GAO-07-273). Congress responded by inserting language in the 2008 Defense Authorization bill that would effectively restrict T&M contracting to:

(1) Commercial services procured for support of a commercial item, as described in section 4(12)(E) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)(E)).
(2) Emergency repair services.

This will pretty much restrict T&M contracting to network maintenance and copier repair. It doesn’t affect orders already placed, but the prospective prohibition is nearly absolute. The restrictive language also applies to procurements “on behalf of DOD,” so sending the money out to GSA won’t help.

Of course, the same bill will also significantly restrict interagency contracting. Procurements over a certain threshold (as of this writing, $100K) may not be sent outside the originating agency absent exigent circumstances. The bill also requires delivery orders over $100K to be competed among all holders of multiple award contracts. It makes sense, but it’s labor intensive. See the first two paragraphs. On top of everything else, it also makes orders placed under previously competed multiple award contracts subject to protest if the estimated total exceeds $10M.

Let’s see. Heavy restrictions on going outside the home agency, severely restricted use of T&M contracts and delivery orders, a requirement to compete large orders and no more safe haven from protests. Congress may very well have killed interagency contracting along with the T&M contract, at least for DOD.

Of course, that may be what they intended all along. Congress seems to feel that Government agencies should compete and award their own contracts for mission critical requirements. And they seem to think the process should be conducted requirement by requirement, not en masse.

I think I feel the same way, but I wonder who’s going to do the work? Once again, see the first two paragraphs. In trying to address acquisition issues piecemeal, Congress may have accelerated a potential future shortage of acquisition professionals to a present day crisis.

In the GovCon business, we call this the “Law of Unintended Consequences.”

I think it originated with a guy named Murphy…