FAR@40 Part 4

In Part 1 of this special series celebrating the FAR's 40th birthday, we touched on why we have a FAR and how it came about.? Part 2 explored the process for FAR changes. Over the last 40 years, we’ve had over 1,000 FAR cases.? Part 3 looked at the four concerns the Commission on Procurement had, in recommending a uniform procurement system.? We found the FAR stood up quite well in addressing these concerns. In this concluding chapter, I offer some thoughts on a strength and a weakness of the FAR and share my thoughts (these are my personal thoughts, I’m not speaking for the FAR Council) on issues on the horizon.

Over recent years, we’ve seen the rise of non-FAR based procurement methods, such as Other Transaction Authority/Agreements and Commercial Solution Openings.? Because many acquisition specific statutes and regulations don’t apply, OTAs and CSO can be particularly valuable tools in bringing non-traditional contractors into the federal procurement system.? There’s a well recognized decline in the number of contractors interested in federal business.? OTAs are particularly useful where they help attract new entrants in critical industries, technologies, and supply chains.

To those who know how to use it well, the FAR is flexible enough that it can be used for purchasing everything from pencils to space shuttles.? While it's not always used that way, the FAR is a strong advocate for innovation.? It opens with a set of guiding principles, and contains my favorite passage,? “The role of each member of the Acquisition Team is to exercise personal initiative and sound business judgment in providing the best value product or service to meet the customer’s needs. In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.”??

In other words, if it’s legal and it makes sense, build your consensus, document, and try new approaches and techniques.??

The FAR uses variations of the word innovate some 17 different times and includes a process to deviate from regulations not required by statute.??

Unfortunately, the FAR also uses the phrase “the contracting officer shall” some 1,500 times and the phrase “the contractor shall” some 1,400 times.? ?

In that juxtaposition, we see some of the best and the worst of the FAR.? An openness to innovation coupled with very specific directions on what to do and how to do it.???

Perhaps a bigger problem, the acquisition system doesn’t adequately recognize the value of time. Many are attracted to non-FAR based approaches in the belief that they can save time. Although DoD’s Other Transactions Guide (July 23) calls the time savings angle a myth, stating “[t]he OT award process will not always be faster than the traditional procurement processes and sometimes can be as long or longer” the belief endures for a very basic reason. The standard acquisition process needs to move much faster everyday, not just when we’re responding to an emergency.?

Our acquisition system is a balance of interests. Time needs to carry more weight in the balancing tests.? Just maybe, as AI takes on a bigger role, we’ll see progress in that direction.?

On the horizon

Executive Order 14110 includes direction to the FAR Council to address AI.? While the world of AI will present immense risks to manage and challenges to understand, it will also present enormous opportunities to address great challenges, including around the value of time.

• Over the last four years, GSA acquisition has saved well over 100,000 man-hours through the use of robotic process automation to process repetitive low value tasks.?
• We can already see where generative AI will help agencies define requirements faster and more accurately.? We’re hearing of companies using generative AI in preparing their proposals, reducing bid and proposal costs. ? That may lead to more competition.? Maybe, a lot more.? Maybe too much???
• There will be fundamental changes to market research and industry engagement, and countless other processes.??
• Generative AI poses the potential to reduce acquisition cycle time, at every single stage of the contracting process.
• There is clearly a lot of potential for natural language processing to improve the rule-making process and much more risk of fake comments.

While the FAR Council will respond to the guidance it receives, my hope is that we find the opportunity to establish clear guardrails to channel the role for AI in the acquisition system.??

I believe we’ll need enough regulation to provide safe harbor and clarity, and to get there, we’ll need to learn from first adopters.? We’ll need to understand more about how AI will change acquisition in topics such as data rights and third party assessments, market research and requirements development, price analysis and evaluation of offers, and so much more.? We need to recognize how much AI can help us get the needed service or product to the customer faster while guarding against the many potential downsides of this technology.

Before I close this series, I want to give a big cheer to the brand new? sustainable products and services FAR change (FAR Case 2022-006). This FAR change fundamentally reorganizes FAR part 23 - bringing much needed clarity and consistency to help the federal acquisition workforce and all our industry partners.? It’s a beautiful bookend to the creation of FAR 40 as the home for information security and supply chain information. Both FAR changes speak to the emphasis the FAR Council is placing on clarity and usability.? Perhaps the issue is not all that different from the need for readability identified by the Commission on Procurement.??

For the last set of heroes, let’s acknowledge the incredible team of procurement analysts at GSA. Take a bow, or forty -? Dana Bowman, Marissa Ryba, Zenaida Delgado, Mahruba Uddowla, Jennifer Hawes, Michael Jackson, Malissa Jones, Carrie Moore, Benjamin Collins, and Deborah Erwin. Let’s also acknowledge their branch chief, Janet Fry, and Office Director Bill Clark and Cyber Supply Chain expert Kevin Funk.? Besides this amazing team, a big shout out to the procurement analysts from DoD, NASA, and all the CAAC and DARC participating agencies who took such? care of the newborn FAR, some 40 years ago, who gave it loving attention for decades, and who brought such energy, excitement, and passion to……acquisition regulations.???

No, the FAR isn’t perfect.? Yes, there’s opportunity for continued improvement, particularly around the value of time and around reducing use of phrases such as “the contracting officer shall.”? There’s room to keep pushing for experimentation and innovation.??

But over the last 40 years, we’ve developed a system of uniform procurement regulations which enabled the Federal Government to obligate $765 Billion last year, largely satisfied the customer, that minimized administrative operating costs, conducted? business with integrity, fairness, and openness; and fulfilled a wide range of? public policy objectives.

Happy 40th, Federal Acquisition Regulation.??

Fun FAR Facts

The one exception to the prohibition on cost plus percentage of cost contracts: The 5% reimbursement to primes under 52.226-1 Utilization of Indian Organizations and Indian-Owned Economic Enterprises

The only non small-business set-aside is the Local area set-aside in Subpart 26.2 for disasters and emergencies.? (Small business set-aside encouraged to accompany it).

Unusual FAR Cases

Life’s a circle:

2011-018 - Non-displacement of Qualified Workers under service contract act.? Final rule published December 21, 2012; and revoked by FAR case 2020-001 published May 6, 2020.

The last 5 Presidents have issued Executive Orders on non-displacement.? President’s Clinton, and Obama, issued Executive Orders supporting non-displacement while Presidents George W. Bush and Trump revoked their predecessor EOs.? Most recently, President Biden issued an EO supporting non-displacement.? One long standing CAAC agency representative reported receiving an award for helping put the non-displacement case into regulation and another award for helping take it out.??

END

#FAR@40, #future-acquisition-regulations #awesome-GSA-acquisition-policy-team