By Emelie Rutherford
The White House in the near future is expected to release guidance intended to curtail the use of cost-plus and noncompetitive federal government contracts, an effort lawmakers are closely monitoring for Pentagon weapon-systems deals.
A congressional contracting-oversight panel scheduled a hearing for next Wednesday on the Obama administration’s forthcoming contracting guidance. And lawmakers including Sen. Carl Levin (D-Mich.), chairman of the Senate Armed Services Committee, said yesterday they stand by their belief that the Pentagon can and will shift to entering into more price- controlling deals, instead of cost-plus contracts, with defense firms.
The White House’s Office of Management and Budget (OMB) is expected to release the contracting guidance before an Oct. 28 hearing of the Contracting Oversight subpanel of the Senate Homeland Security and Governmental Affairs Committee, according to the panel.
“At the hearing the Subcommittee will have an opportunity to question Jeffrey Zients, the Deputy Director for Management and Chief Performance Officer at OMB, about the plan,” the Contracting Oversight subcommittee said yesterday in a statement.
The Obama administration’s federal government contracting offensive began March 4. Obama in a memo then directed OMB, after working with officials including Defense Secretary Robert Gates, to issue two rounds of guidance to government agencies dictating actions including reviewing existing contracts to identify those that can be modified and canceled. The first round of guidance, which required agencies to reduce contracts by a minimum of 7 percent, was issued July 29. The second, forthcoming guidance is expected to dictate when different types of contracts–including cost-plus and noncompetitive contracts–are appropriate.
“This next phase will focus on maximizing competition, choosing appropriate contract types, building the capacity of the federal acquisition workforce, and clarifying when outsourcing is appropriate,” OMB said in a July 29 statement.
The July guidance “covered 95 percent of the contracting directives that the President placed on OMB,” while the “coming guidance will address remaining issues,” a spokesman for of the office said yesterday.
Sen. Claire McCaskill (D-Mo.), chairman of the new Contracting Oversight subpanel, told reporters yesterday she will “continue to look over” the shoulder of administration officials when it comes to curbing defense contracts she believes need to be curtailed.
“We’re going to…hold them to the commitments they’ve made about reforming some of the contracting processes,” she said. McCaskill said she plans to ask Zients at next week’s hearing: “‘What’s your goal for next year at this time as to how many cost-plus contracts there are in government.'” Then, she said, “we’ll have the hearing next year and see how close they get.”
Levin told reporters yesterday he expects the new defense-acquisition-reform law, which he helped write and President Obama signed into law in May, will make it easier for the Pentagon to strike more fixed-price deals with defense firms developing often-complicated technology.
“One of the ways that you’re going to get a fixed-price contract is if…there are fewer uncertain technologies,” he said. “The problem is that we have too many technologies that are incomplete, undeveloped, that we put into the requirements for systems. And then they reach a production stage either with those undeveloped technologies or…we keep changing the requirements after the production stage.” Firms don’t want to enter into fixed-price contracts with the Pentagon for such uncertain end products, Levin said.
The SASC plans to hold a confirmation hearing tomorrow for Obama’s nomination of Christine Fox to be the first-ever Pentagon director of cost assessment and program evaluation. The acquisition-reform law McCain and SASC Ranking Member John McCain (R-Ariz.) championed created the post.
Levin said she wants to hear from Fox, “if she gets it, in terms of what we tried to do in our reform legislation, she if she understands it.”