OFPP’s Gordon not stymied by bumps in the road to acquisition reform

Despite pushback on some issues by industry, Dan Gordon listens to input from all sides as the Office of Federal Procurement Policy continues to follow its own ...

By Jason Miller
Executive Editor
Federal News Radio

When several industry associations protested the increased use of interim rules to change the Federal Acquisition Regulations, Dan Gordon listened.

The administrator of the Office of Federal Procurement Policy, who is known by vendors, Hill staffers and agency acquisition professionals for his calm demeanor and thoughtful actions, is changing how the FAR Council uses these interim rules instead of proposed rules.

“I appreciate the temptation to use interim rules, but I think the concerns that have been raised are legitimate concerns and I’ve told my colleagues on the FAR Council and in other agencies, we need to take a hard look every time that we are considering an interim rule to be sure we are not doing it in any automatic way, in any mechanical way,” Gordon said during an exclusive interview with Federal News Radio in his White House office. “We need to be persuaded it’s absolutely justified in this particular case. Not only that, when we do issue an interim rule, I don’t want us to have a situation where we issue a final rule that is essentially the same thing and we weren’t really considering comments. If we issue an interim rule, people get to comment and those comments are taken seriously.”

Over the last 18 months, the administration has made changes to the FAR through interim rules too often, said industry officials.

“We believe that the ever increasing reliance on the use of interim rules violates the spirit of the Office of Federal Procurement Policy Act, at a minimum, and misuses the ‘urgent and compelling’ exception to the standard notice and comment process outlined in the FAR,” wrote six industry associations in a June 9 letter to Gordon.

The last straw for many in industry was the May 31 interim rule requiring that 95 percent of new contract actions (including those for construction) contain requirements for products that are designated as energy-efficient, water-efficient, biobased, environmentally preferable, non-ozone depleting, or those that contain recovered materials.

The FAR Council is accepting comments on the interim rule through Aug. 1, but the effective date was immediate.

“We feel that this practice is an unnecessary deviation from the required regulatory promulgation process and is contradictory to this administration’s commitment to transparency, openness and public engagement,” the letter stated. “While we can appreciate the desire to complete action on this rule, there is no urgency to implementing this regulatory action and, in fact, the administration has repeatedly assured the supplier community that this initiative would be implemented using a phased approach – not an immediately effective acquisition requirement.”

Trey Hodgkins, TechAmerica’s senior vice president for national security and procurement policy, told the Federal Drive they haven’t gotten a firm explanation from OFPP except that there is a statutory need.

One former government senior acquisition official, who requested anonymity because they didn’t want to be seen a critical of the administration, said under previous administrations OFPP rarely approved the issuance of interim rules, and generally, they should only be used to implement a statute or executive order.

Gordon said the FAR Council must be more careful when using interim rules.

“We also are exploring other ways to get feedback from industry and other stakeholders very early in the process,” Gordon said. “We’ve had public meetings for many rules. I want to be sure we are using the public meeting avenue whenever we can. There will be situations where we may have to issue an interim rule because of a statutory deadline, but if we’ve been able to get industry input early on, at least the interim rule could benefit from having gotten that input from a public meeting.”

The issue of interim rules isn’t the only area Gordon is working closely with industry on.

Business case guidance out shortly

OFPP soon will issue new guidance requiring agencies to submit business cases for future multiple award contracts and a final rule redefining jobs that are considered inherently governmental, closely associated with inherently governmental and critical.

OFPP released a proposed rule on inherently governmental in March 2010 and received hundreds of comments.

The business case rule is closer to being final. OFPP released an interim rule requiring business cases in December.

“We are supplementing the FAR rule, as we often do, by providing more specific guidance,” Gordon said. “It will be telling the agencies, and we developed it with the agencies so it will be no surprise, they need to think about duplication before they start their own contract, especially if their own contract will be a large dollar one.”

But industry also is concerned that self-justification doesn’t have enough enforcement teeth.

Gordon said the business case should lead the same level of attention that governmentwide acquisition contracts receive.

“I think you will see a decrease in duplication,” he said. “I think many agencies thought they weren’t supposed to be piggybacking on other agency’s contracts. That is why I’ve had an ongoing conversation with GAO talking about the idea that interagency contracting isn’t a bad thing, it’s a good thing, but it needs to be done properly. If we are not decreasing duplication we deserve to be criticized.”

Office supplies BPA making a mark

Gordon said focusing attention on the need to decrease duplication already is having an impact. He pointed to the office supplies blanket purchase agreement under the Strategic Sourcing initiative.

Gordon said before awarding the contract agencies told him they had unique needs for office supplies and couldn’t use the vehicle. He said other agencies raised other concerns about the BPA’s affect on small businesses or the Ability One program.

A year after the award, he said more agencies are using the office supplies BPA than expected.

“Not only are we doing well with office supplies, virtually every month is better than the month before,” he said. “We are seeing agencies shifting in fairly dramatic ways to using the BPA for office supplies. I could name [the departments of] Veterans Affairs, Commerce [and] the Navy, we have significant success. The numbers are way higher than people said were possible.”

Gordon said the success is not because OFPP mandated the BPA’s use. Rather, the administration encouraged agencies to analyze the costs and terms and conditions of the office supplies contract, and if they decide it’s the best deal, then they should use it.

“We have 16 agencies that have said ‘we have checked and these BPAs are the best deals we can get for office supplies and we are making real savings,'” he said. “It has worked and that is our model going forward. It is not heavy handed. It is not mandatory. It is showing them why these are good deals for them.”

No dramatic changes to inherently governmental

Along with the business case guidance, OFPP is preparing a final rule to redefine which jobs are considered inherently governmental, closely associated with inherently governmental and critical.

Gordon said regulation would be finished “soon,” but wouldn’t offer a more specific timeframe.

“I don’t think it will lead to dramatic changes because the agencies already have taken vigorous efforts to rebalance their workforce and to be sure they have control of their mission and operations,” he said. “When we are faced with inherently governmental functions, it is true that work needs to be done by federal employees. But what we’ve learned is that there is a very limited universe of inherently governmental functions that were improperly outsourced. And frankly, I think agencies have already addressed that or are already addressing that. They don’t need to wait for the rule because we already have statutory guidance in the FAIR Act.”

As for critical functions, Gordon said it is acceptable to use contractors as long as there are federal employees with the capabilities to maintain control of the agency’s operations.

Gordon added concerns about widespread insourcing of contractor positions were unfounded.

“Insourcing was and is a limited, targeted exercise,” he said. “We never planned to do massive insourcing, and we haven’t done that. I think there is actually relief on the part of industry that was worried about insourcing because they’ve understood this administration is committed to doing this in a reasoned and focused way.”

Gordon said many of these efforts can be improved through the mythbusters campaign. He said the effort to increase communication between industry and agencies is a culture change.

“We are constantly talking about this with agencies, industry,” Gordon said. “I’ve been meeting with agency procurement lawyers about this and I’ve been meeting with others. We need to get the message through that there are ways to increase communications with today’s rules. We don’t need statutory or regulatory changes. We on the government side will benefit from increased communication.”

RELATED STORIES: 95 percent of all new acquisitions must be green

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OFPP defines ‘inherently governmental’

New interagency contracts now require business cases

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