Office of Federal Procurement Policy officials admit they dropped the ball in getting share-in-savings off the ground and have fumbled again in their attempts to fix it.
Administration and agency officials had expected that the Federal Acquisition Regulations Council would issue the final regulations last week, but sources say the rule still is under review.
A Bush administration official, who re- quested anonymity, said OFPP administrator David Safavian is reviewing the final rule because of concerns that it seems to require awarding contracts based exclusively on cost and developing a business case for every proposed project, no matter the dollar value.
“These are not small issues,” the official said. “There is some consideration that a rewrite in parts may be needed.”
Safavian would not comment on when the final regulations would come out or what issues his office is looking into, but he said OFPP had failed to provide good guidance. “We dropped the ball in part because my predecessor was no fan of share-in-savings. This has taken far too long.”
Angela Styles preceded Safavian as head of OFPP and oversaw most of the development of the proposed rule before leaving the Office of Management and Budget in August 2003.
The E-Government Act of 2002 allows for 10 share-in-savings IT projects in 2004 and 2005, and it lets agencies keep the extra savings they realize, as long as they spend it on IT.
Under share-in-savings contracts, a vendor pays for developing an IT system and is compensated from the savings it generates for the agency.
‘Shady financing’
Styles had testified before the House Government Reform Committee that agency interest in share-in-savings was weak and the benefits were unclear. She also warned in an American Bar Association newsletter last year that this contracting method should be used judiciously because of concerns over “shady financing and accounting techniques” and because it moves federal IT buys away from “public and congressional scrutiny.”
Styles did not return calls asking for comment on Safavian’s charge.
The delay of the final regulations also compelled OMB to ask Congress to extend the pilot for three years. The program is scheduled to end Oct. 1, 2005.
“This will provide ample time to determine whether the agencies will increase their use of share-in-savings contracts to a significant extent,” said Clay Johnson, OMB’s deputy director for management, in a report to Sen. Susan Collins (R-Maine), chairwoman of the Homeland Security and Governmental Affairs Committee.
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