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News & Press: WIPP Policy Watch & Newsletters

WIPP Advocacy Update - February 2019

Wednesday, February 20, 2019  
Posted by: Laura Berry
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Section 809 Panel

 

Section 809 Panel Releases Final Recommendations, Some Good and Some Bad for Small Businesses — The Section 809 Panel is an independent commission Congress created to modernize/streamline the Defense acquisition system. The panel has issued three volumes with recommendations – the last one released in January 2019. Last year, WIPP members participated in a listening session with the Commission in Chicago to provide input on challenges small contractors face with respect to contracting with the DOD. Overall, the report concludes that the Department of Defense (DOD) needs more streamlined approaches to buying goods and services from what it termed the “dynamic marketplace that makes up the 21st century economy.” While each report is lengthy, there are three recommendations under the “Simplifying Procurement and Contracting” section of the third report worth noting.  Congress must adopt these recommendations before they can go into effect.

  • Recommendation 77: Require role-based planning to prevent unnecessary application of security clearance requirements to contracts. The panel recognizes the many requirements for cleared personnel that are working on the contract but will never access the sensitive information. This places an excessive burden on contractors to comply with security clearance requirements and often times deters or prohibits them from bidding on DOD contracts. The panel recommends the use of role-based planning for acquisition personnel to develop DOD policy that ensures clearance requirements in contracts are based only on valid security requirements.
  • Recommendation 79: Enable enhanced use of advanced payments, at the time of award, to small businesses. WIPP has been instrumental in urging prompt payment to federal contractors designated as small. The Panel agrees that limited cash flow and slow payment of invoices poses a problem for these contractors. Additionally, current regulations designate the head of the agency as the decision authority for advance payment use. The 809 Commission believes this process makes it impractical to get the necessary approvals—on average a single request has to go through 8-12 independent reviews before reaching the head of the agency. In order to try and alleviate these burdens, the Panel recommends allowing approvals for advanced payment use to come from “lower levels” than the head of the agency. Furthermore, the report notes that there are many costs incurred by small companies to borrow money and the costs to continue operations can be substantial. The Panel recommends increasing the use of advanced payments to small businesses from the current limit of 15% of the contract price for commercial items to 20% for small businesses offering commercial items, in addition to the general authority of up to 100% of the contract price as appropriate.
  • Recommendation 80: Preserve the preference for procuring commercial products and services when considering small business set-asides. This recommendation is problematic for small businesses. Current law gives DOD procurers a set of simplified procedures they can use when buying commercial products and services. The Panel asserts that the federal government’s processes for this buying is unwieldy and in need of a major overhaul.

 

The Panel proposes to divide procurements into three groups: 1) goods that are “readily available,” 2) goods and services that are readily available for DOD use with some modifications, and 3) truly defense unique procurements. The Panel recommends that “goods that are readily available” could be purchased on a fixed price basis up to $15 million (or higher with senior official approval) via direct solicitations or price quotes. Contracting officials would not be required to publicly advertise their requirements and would not have to set-aside those requirements for small businesses. In exchange for doing away with small business set-asides in this category, the Panel suggests that small businesses would instead get a 5% price preference, and procurers would be able to make purchases from small and nontraditional businesses that haven’t registered in the System for Award Management (SAM).

 

Trump Announces Nomination for Head of OMB’s Office of Federal Procurement Policy – President Trump nominated Dr. Michael Eric Wooten to be the Office of Management and Budget (OMB)’s new Administrator of Federal Procurement Policy. The Office of Federal Procurement Policy (OFPP) is key to shaping the federal government’s acquisition policies and processes. Dr. Wooten is currently an Acting Assistant Secretary at the Department of Education and was previously Deputy Chief Procurement Officer for the D.C. government. Dr. Wooten must be confirmed by the Senate to lead OFPP.

 

 


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