Preventing Abuse of Interagency Contracts (FAR Case 2008-032)

FAC 2005-47 includes an interim rule, with request for comments, amending the Federal Acquisition Regulation (FAR) to implement provisions regarding the Duncan Hunter National Defense Authorization Act (NDAA) for Fiscal Year 2009 requirements for preventing abuse of interagency contracts.

Background:

Interagency acquisitions offer important benefits to Federal agencies, including economies and efficiencies and the ability to leverage resources. This interim rule, which implements section 865 of the Duncan Hunter National Defense Authorization Act (NDAA) for Fiscal Year 2009, is designed to ensure these benefits are consistently achieved. The rule strengthens FAR subpart 17.5, Interagency

Acquisitions, by--

•  Broadening the scope of coverage to address all interagency acquisitions (with limited exceptions), rather than just those conducted under the Economy Act (31 U.S.C. 1535), in recognition that an increasing number of interagency acquisitions are conducted under other authorities;

•  Requiring agencies to support the decision to use an interagency acquisition with a determination that such action is the "best procurement approach";

•  Directing that assisted acquisitions be accompanied by written agreements between the requesting agency and the servicing agency documenting the roles and responsibilities of the respective parties, including the planning, execution, and administration of the contract;

•  Requiring the development of business cases to support the creation of multi-agency contracts. The Office of Management and Budget (OMB) is developing additional guidance on the use of business cases;

•  once the guidance is issued, it will be referenced in the FAR; and

•  Requiring the senior procurement executive for each executive agency to submit an annual report on interagency acquisitions to the Director of OMB, in accordance with section 865(c) of Public Law110-417.

The interim rule clarifies the meaning of "interagency acquisition," "direct acquisition," and "assisted acquisitions" and moves the terms from FAR subparts 4.6 and 17.5 to FAR part 2. It also amends FAR subpart 8.4, Federal Supply Schedules, to add a cross reference to the requirements in subpart 17.5 for orders over $500,000 (a threshold established by statute).

In developing the rule, the Councils reviewed interagency guidance issued by the Office of Federal Procurement Policy at http://www.whitehouse.gov/omb/assets/procurement/iac_revised.pdf.

The OMB guidance addresses procedures for the use of interagency acquisitions to maximize competition, deliver best value to executive agencies, and minimize waste, fraud, and abuse. In addition, as required by section 865(a), training on interagency acquisitions has been made available through the Federal Acquisition Institute (see http://www.fai.gov/IAA/launchpage.htm).

This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

The Effective Date for this interim rule is 13 December 2010.

Comments are due on or before 11 February 2011 to be considered in the formulation of a final rule.

Click here to read the entire Federal Register notice for this rule.

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