The final draft report of the Acquisition Advisory Panel, which
proposes ways to streamline and improve how agencies buy technology
services, comes down strongly against the use of time-and-material
contracts.
The
panel, mandated by a provision of the Services
Acquisition Reform Act of 2003 and often known as the SARA panel,
recommends weaning agencies off the use
of such contracts, which are based on fixed hourly rates, in
favor of more performance-based acquisitions, which entail fixed price
solutions.
The
report, which was released late Thursday, notes that commercial buyers generally avoid time-and-material
contracts,
“viewing them as too resource-intensive to monitor.” Companies
occasionally conduct time-and-material
acquisitions, but in such cases, “they plan
for and apply the necessary in-house resources to effectively monitor
these contracts,” the report states. That is not the case in
government, the panel found.
Still, the panel recognizes that the
government could put a stop to time-and-material
contracting without disrupting
current programs. So panel members recommend “enforcing current
policies limiting the use of time-and-material contracts” and
“establishing procedures to convert such contracts to performance-based
acquisitions,” the report states.
Finally, the panel notes that
industry groups had lobbied for recommending the repeal of a SARA
provision that required competition on time-and-material
contracts for commercial
items. But “the panel could not ultimately support this,” given its
larger concerns about preserving competition in government contracting,
the report notes.
The draft report was sent out late Thursday and the close of the comment period is Jan. 5.
Check back soon at FCW.com for more details on this report.
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