By Emelie Rutherford
The House is poised to pass today a Pentagon acquisition-reform bill that aims to expand the defense-industrial base and may mandate the military place a greater emphasis on proposed systems’ costs during contract competitions.
The Implementing Management for Performance and Related Reforms to Obtain Value in Every (IMPROVE) Acquisition Act of 2010 is intended to address defense-acquisition matters not targeted by the Weapon Systems Acquisition Reform Act of 2009, which was approved last year and focuses on large weapon-system procurements.
The House is set to weigh an amendment to the bill today that would mandate the Pentagon give at least equal importance to cost in relation to other evaluation criteria when weighing competitive proposals for contracts. The amendment, offered by Florida Democratic Reps. Alan Grayson and Alcee Hastings, would allow for waivers that would have to be publically disclosed.
Grayson told the House Rules Committee yesterday that increasing the weight Pentagon contracting officers give to the cost of proposed systems in competitions would diminish the purchase of “gold-plated” proposals. A product’s cost is now counted as 10 percent of the criteria used to evaluate bids, he said.
“One change that you’ll see immediately is that there’ll be far more awards being made to low-cost offerers.” Grayson testified. He also predicted his amendment, which spurred no opposition during the Rules hearing, would result in defense firms submitting “much better proposals that save the government money.”
The Rules panel deemed Grayson’s measure and 15 other amendments in order, priming they to be debated and voted on today by the House.
Other amendments cleared for floor consideration would: allow the Pentagon to make awards for existing contracts for non-developmental items to alternate firms with new proposals showing savings of more than 15 percent; create an Industrial Base Council within the Pentagon; and spur the Pentagon to conduct competitive–as opposed to non- competitive–acquisitions.
The Rules committee shot down a controversial amendment calling for banning the practices of “bid shopping” and “bid peddling” in defense construction and repair contracts. Offered by Rep. Paul Kanjorski (D-Pa.), the failed proposal was intended to thwart two practices: when a prime contractor pays a subcontractor less than the quoted price in the contractor’s bid, and when a subcontractor, after a successful bid, tries to take the place of the subcontractor selected by the winning contractor.
The IMPROVE Acquisition Act of 2010, which the House Armed Services Committee (HASC) approved last week, is divided into sections on the defense-acquisition system, the defense-acquisition workforce, financial management, and the industrial base (Defense Daily, April 22).
The legislation calls for the defense secretary to create a program to expand the defense industrial base to increase competition and the Pentagon’s access to innovation by using tools to better communicate with suppliers that have received contracts worth less than $100,000 in the past five years (Defense Daily, April 15). Under the bill, this program would continuously review the industrial base and identify markets of importance to the Pentagon.
The bill also would compel the Pentagon to create a panel, made up of large and small “non-traditional” defense contractors that would create recommendations on eliminating barriers to contracting with the Pentagon. The legislation also would require the Pentagon craft a program that compels more interaction between the acquisition workforce and the people who use the products it purchases.
Rep. Rob Andrews (D-N.J.), chairman of the recently disbanded HASC Defense Acquisition Reform Panel, told the Rules committee the bill attempts to “get more competitors involved in the process.”
“If there’s a software company with four or five people…sitting out there that can do a better job figuring out a way solve problems than huge companies, let’s give them a fair change to compete and to do that,” he said.
The legislation notably would require the Pentagon increase its acquisition of technical-data rights to support the long-term sustainment of weapon systems.
The bill also calls for an assessment of the Joint Requirements Oversight Council and the creation of a performance management program for the Joint Capabilities Integration and Development System.
And the legislation’s authors are touting provisions intended to compel factions of the Defense Department to have financial statements ready to be audited by or before a 2017 deadline.
Andrews estimates the measure would save the Pentagon $130 billion over five years.
HASC Chairman Ike Skelton (D-Mo.) also plans to fold the bill into the fiscal year ’11 defense authorization bill, in an attempt to ensure the reform measure is addressed by the Senate.
The Weapon Systems Acquisition Reform Act of 2009, which Obama signed into law last May, created new cost-oversight positions in the Pentagon, changed Nunn-McCurdy rules for major defense programs that suffer cost breaches, and includes multiple provisions intended to thwart cost and schedule problems with large weapon systems early in their development cycles (Defense Daily, May 22, 2009).