What’s likely to change in the rewrite of the Federal Acquisition Regulation

Tom Temin Well, what’s at stake here? What do you think they’re after when people are waiting for this to drop out?

Eric Crusius Obviously, what they’ve talked about is that they want things to be more simpler, easier to use, more friendly to businesses trying to break into the marketplace. The FAR has kind of built up over years through statute and through kind of best practices. So it’ll be really interesting to see kind of what they strip away under the kind of guise of making it more simple that will leave a lot of gray area where a lot procurement attorneys like me will come in and try to interpret that gray area.

Tom Temin Some of it is statutory basis. There’s the Competition and Contracting Act, but some of it just regulatory. Do we know what are some of the important parts that are not really based in statute, but have become ingrained through popular practice?

Eric Crusius That’s a great question. And you think about kind of the termination for convenience where the government can terminate a contract at any time. I’m not convinced that’s statutory based. I’m sure this is kind of the debate that they’re having inside the government right now, looking through all these provisions, some of which are very helpful to the government, but are not necessarily statutory based, like the Termination for Convenience clause, which the government uses and is using a lot right now. They probably wouldn’t be too thrilled with not having that in the FAR right now. So I imagine, as they kind of review these provisions, it’s not going to be as strict as it required by statute or not, because if they go that route where it’s completely strict, I think they may not like all the results that come from it.

Tom Temin And what about things like oral down selects, or down selects based on oral presentations instead of written presentations. Administration, several of them, have tried to get the government more comfortable with doing that. That, I think, is not something in the law that says you have to have an oral or they’re allowed. It’s just kind of grown up over the years.

Eric Crusius Right. That’s another one where you really see kind of things that the government has done over the last 10, 20, 30 years that’s not necessarily based on something that Congress told them to do. But the way the system has worked, all the parties have found that it’s helpful to do it that way, or the government has found it’s more advantageous to do it that way. And the question is, are we going to be losing those things? The rumor I heard is that some things will be placed into kind of almost like recommendations or guidance or something like that is separate and apart from the FAR. And then you wonder, OK, if you’re just moving a bunch of stuff into guidance, what’s the practical impact of that and is the FAR really any simpler because of it?

Tom Temin Sure. And best value, that’s come up over the years. I remember one of the early best value procurements was by the IRS to the old AT&T. And they paid way more to get a graphical user interface on a computer system when those weren’t necessarily the way everyone went. And they argued the lifecycle costs, because of training and so forth, would be lower. And that went all the way to the courts, and the courts sided in favor of the IRS at that time. Best value — is that a statutory thing, or just something that seems smart because who can argue with best value?

Eric Crusius It’s something that more seems smart. And I think though, that’s one of the things that’s kind of murkier, because you have had with Congress a lot recently kind of limiting lowest price technically acceptable, which they argue is kind of in the best value continuum. I am a little skeptical that LPTA could be considered best value. But be that as it may, if it’s on the best value continuum, Congress has spoken to that quite a bit in restricted kind of lowest price, technically acceptable. And then you could kind of suppose from that best value is where they would want to go, but there’s nothing from a statutory standpoint that says they have to use best value in all circumstances.

Tom Temin And what other laws besides the Competition and Contracting Act form the basis for the FAR as we know it today?

Eric Crusius It’s really a patchwork. So you kind of think about kind of the labor laws that contractors have to abide by. The Service Contract Act — that’s a statute where there are three or four FAR clauses that implement that between the SCA itself. And then you have the price adjustments clause and the exceptions to SCA — same thing with Davis-Bacon Act. And then you have something like the Chinese tech ban that came out a few years ago through the National Defense Authorization Act. And that one is statutory-based, and that’s a final interim rule, that’s a FAR clause now. So there’s a lot of stuff like that that’s just pulled from different sources.

Tom Temin Buy American — it’s probably one of them.

Eric Crusius Right, exactly, Buy American. Very important one, of course, especially in this administration. And the last one, too.

Tom Temin Sure. Well, maybe Hunt Andrews Kurth has room for me there with the knowledge of the law here. We’re speaking with procurement attorney Eric Crusius, who is a partner at Hunt Andrews Kurth. And the other issue is why the FAR Council — it’s pure speculation — as to why the administration would go around the FAR Council, NASA, GSA, I guess the Defense Department, and have the White House, the OFPP, do this.

Eric Crusius This is just a pure guess, but my pure guess is they wanted to try to hit really quickly, and the more people you get involved, the harder it is to do something like that. But because we didn’t see kind of the rumored April 1 executive order about the FAR, maybe this is going to be a more meticulous process where they actually bring in the FAR Council. I think the FAR is such a complicated body of work. When you’ve changed one thing in the FAR, it might have implications elsewhere that folks don’t realize unless they do it for a living. And I think having the FAR Council involved is a good idea, because they know where all the different pieces are. And the more people you have involved with something like this, the less chance there is that you break something by changing something else.

Tom Temin And there’s also a cultural, if you will, issue here. And that is every time there’s been a gambit, say, like Mythbusters — where I think that was in the Obama administration — they wanted some of the flexibilities that people were afraid of. They wanted contracting officers to actually use them because they were allowed under the FAR. They just weren’t exercised very much. How do you get the 1102 community — which is really where the rubber meets the road here — to adopt these things? Because that’s a very cautious community, contracting officers.

Eric Crusius I think part of that is that folks in that community are not rewarded enough for taking on those risks or even just doing things they’re allowed to do. There is something to be said of the fact that those folks have to be encouraged to take those risks and not punished if something goes wrong, because they take a risk or because they use an authority that they are allowed to use. So I think a lot of that is kind of changing the mindset and allowing those folks — they’re very knowledgeable, they’re really smart, they’ve been doing it for many years — their presence in the government is kind of what makes this whole thing work. They have to be allowed to kind of go and make those executive decisions. And even if there are negative consequences for them, not be punished because of those negative consequences, as long as they abided by the law and did what they were supposed to do.

Tom Temin And it’s often said, well, the government should operate more like a business — a common phrase — and in some ways it should. But then there is the issue of the fact that the government is not spending its money. In theory, it doesn’t have money, it only has taxpayers’ money. That’s kind of an idealistic concept these days. But nevertheless, it is a technical truth, and the fact it is public dollars makes fundamentally buying by the government always different, or should be, from the way the private sector. My brother-in-law, Maury, can get me a great deal here. I’ll just get it there. I’m not violating any law. But I am if I do that in the government.

Eric Crusius Absolutely. And all these things we have in the FAR are there because over the years we’ve learned lessons about spending the public’s dollars that are not the government’s own dollars. And all of these protections that have been put in place — like organizational conflicts of interest, personal conflicts of interest — are aimed at protecting those public dollars that are the tax dollars that you and I have paid into the government, and we expect them to be a fiduciary to those dollars.

Tom Temin And by the way, have you heard or know of any contractors, large or small, that have been consulted in what OFPP might be doing, asking industry what it thinks, or is that pretty much something they’re cooking up deep in the bowels of the Old Executive Office Building?

Eric Crusius I think it’s more of the latter. I would really hope that they would put these things out to public comment because so many times proposed rules go out there and they’re changed drastically during the comment period because the public, which has to deal with these rules when they’re finished, kind of has unique insights. Industry has unique insight into how to shape these things. I understand it’s going to slow it down, but I think it’s better and more important to get it right. We have a unique opportunity here to really reshape the FAR in a way that works well for everybody, and that will work best if the public has a chance to comment on it.

Tom Temin So at this point, the legal community would not like this to come out, say, right before Memorial Day weekend.

Eric Crusius Any Friday before a holiday would be not ideal, but that seems to happen a lot, so we’ll be ready whenever it comes out.