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Agency Streamlined Purchases: Simplified But Not Simple.

Saturday, March 10, 2012   (0 Comments)
Posted by: Chief Visionary Blog
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Three recent industry articles captured on the GovConChannel seem to signal the start of reviews and potential changes to how agency procurements are done under the simplified acquisition procedures and via reverse auctions.

In one, the SBA notified OFPP agencies were not following the rules for simplified acquisitions (traditionally, the purchase of goods and services valued between $3K and $150K) as the FAR cites purchases made under these procedures are reserved exclusively for small business concerns. In FY2011, purchases made using simplified acquisition procedures exceeded $16 billion dollars with roughly half being awarded to small businesses.

In the second article (actually several related articles have also been published) the VA has ordered a stop to purchases made via reverse auctions citing concerns stemming from acquisition hierarchy, protests and complaints from the VA industry base. FedBid, the most well-known provider of reverse auction services to federal agencies claims 80% of the purchases made through their system were awarded to small businesses.

But at what cost (pun intended)?

In early use of reverse auctions, many purchases were within the threshold for simplified acquisitions, but that and the sophistication of many reverse auction requirements has definitely changed.

Finally, a test program that allowed agencies to use simplified acquisition procedures to procure certain commercial items (goods and services) valued up to $6.5 million dollars was allowed to expire at the beginning of the calendar year. Now Congress and others are in a hurry to reauthorize it, but are running into snags. Although the authority for this program expired on January 1, 2012, agencies processed over 600 contract actions totaling $314,127,734.84 from October 1, 2011 to January 1, 2012 (according to FPDS-NG). DoD, DHS and VA led that particular charge.

As a point of reference, agencies spent nearly $2 billion dollars via 3,475 contract actions under this test program in FY11.

Here's the point.

If Winslow Sargeant at SBA get's his way (the FAR way according to him) then all simplified acquisitions should be competed among and awarded to small businesses. This impacts reverse auctions and the Commercial Item Test Program if re-authorized.

If this would have been implemented in FY11, small businesses would have potentially seen an additional $8 billion dollars in contract awards based on spending that year.

How would this impact small business? Government agencies? The industry at-large? Most important, who would be ticked?
Peace!

The Chief Visionary

"The person who says it cannot be done should not interrupt the person doing it."


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