Government Contracts Monitor

Congress Considers Reforming DoD Services and IT Acquisition [UPDATED]

April 29, 2010

Legislation was introduced in the U.S. House of Representatives last week that would significantly change the way the Department of Defense purchases services and information technology. The bill’s focus reflects the new reality that services and IT now constitute the vast majority of what DoD buys.

The legislation – the Implementing Management for Performance and Related Reforms to Obtain Value in Every Acquisition Act of 2010 (H.R. 5013), ( the “IMPROVE Acquisition Act”) – is estimated to impact roughly 80% of DoD’s purchases.

Significant provisions of this bill include:

Expand the Industrial Base: The Act would require the Secretary of Defense to establish a program to expand the defense industrial base by “identifying and communicating with non-traditional suppliers.” § 401.
Manage Defense Acquisition Performance: Bring DoD purchasing more in-line with private sector standards, including the application of performance assessments and the requirement that DOD create metrics for the defense acquisition system supported by specific goals and standards. § 101.
Develop the Acquisition Workforce: The Act would allow DoD to reward good performance, speed up security clearance procedures, encourage continuing education, and “develop appropriate procedures for due process” for members of the acquisition workforce who consistently fail to meet performance standards. § 201. The Act would also put a new emphasis on hiring IT acquisition experts. § 206
Reform DoD Financial Management: The Act incentivizes DoD components to more rapidly validate financial records as “auditable.” § 301

In addition, a provision impacting contractors with delinquent tax liability was added during the Committee markup. This provision would require Contractors to certify that they do not have “seriously delinquent” federal tax debt prior to being awarded a DoD contract. § 403. This section follows a January 20, 2010 Executive Order requiring review of the issue.

The IMPROVE Acquisition Act builds upon reforms contained in the Weapons System Acquisition Reform Act of 2009 (see our previous post on WSARA here. It also embraces new OFPP Administrator Dan Gordon’s federal acquisition reform initiatives.

As a result of new acquisition streamlining, lawmakers are predicting the Act could have a significant fiscal impact on DoD. The chair of the House Armed Services Committee Defense Acquisition Panel, Rep. Robert Andrews (D-NJ), predicts the reforms could save DoD $130 billion over the next five years.

The IMPROVE Acquisition Act passed the House Armed Services Committee on a 56-0 vote and is set to go before the full House next week. If it passes, look for DoD departments to enact follow-on regulations directly affecting services and IT acquisition.

UPDATE: On Wednesday April 28, 2010 the U.S. House of Representatives passed the IMPROVE Acquisition Act by a vote of 417-3.