[Federal Register Volume 65, Number 206 (Tuesday, October 24, 2000)]
[Notices]
[Page 63628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-27117]
=======================================================================
-----------------------------------------------------------------------
OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
Notice of Solicitation of Public Interest
AGENCY: Executive Office of the President, Office of Management and
Budget (OMB), Office of Federal Procurement Policy (OFPP).
ACTION: Notice of solicitation of public interest.
-----------------------------------------------------------------------
SUMMARY: OFPP is developing a new initiative to fundamentally examine
the manner by which the Government develops and applies incentives to
its contractual vehicles, and is seeking information and advice that
would advance this effort.
COMMENTS DUE DATE: Comments and information regarding the proposed
initiative must be received on or before December 26, 2000.
FOR FURTHER INFORMATION CONTACT: Comments and information should be
sent to Stanley Kaufman, Deputy Associate Administrator, OMB, OFPP, 725
17th Street NW., Washington, DC 20503. He can be reached electronically
at [email protected] or by phone at 202-395-6810.
SUPPLEMENTARY INFORMATION:
I. Background
Procurement reform initiatives such as the Federal Acquisition
Streamlining Act of 1994, the Federal Acquisition Reform Act of 1996,
the Information Technology Management Reform Act of 1996, and
Performance-Based Service Contracting are significantly changing the
way the Government acquires supplies and services, moving from a
process-oriented, rules-based, risk avoidance culture to one
emphasizing performance outcomes, business judgment, streamlined
procedures, and risk management.
The rules-based culture constrained contracting officials'
flexibility to serve as business advisors focusing on the overall
business arrangements. While the cited acquisition reforms provided
contracting officers increased flexibilities in negotiations and
communication with contractors, research by the Army and studies by
OFPP and industry found that innovative contracting methods are being
used insufficiently, and effective incentives exist which are not being
considered.
Consideration of incentives typically was limited to the fee
portion of contracts to the detriment of other incentives that
contractors would find more appropriate and meaningful, such as a
consistent revenue flow and the promise of future business. In
addition, incentives too often focused on the process of the work to be
performed vs. the outcomes, thereby rewarding unnecessary and/or even
counterproductive behavior. Furthermore, profit is not an effective
incentive for non-profit entities such as universities and research
laboratories. As a result, contractors often did not provide their best
solutions and Government requirements were not fulfilled in as timely,
quality-related, and cost-effective manner as possible.
II. The Project
OFPP is looking to develop a new contracting paradigm that will
encourage acquisition officials to develop joint objectives with
contractors and effectively incentivize both parties to create ``win/
win'' business arrangements.
In pursuing this project, OFPP would like to pull together any
experiences and literature regarding non-fee type incentives.
Consultation with the private, non-profit, and public sectors is hereby
sought. A review of current policy, regulatory and statutory guidance
will be conducted to determine any barriers to achieving the project's
objective and the need for any additional guidance to facilitate
compliance.
Accordingly, OFPP is seeking ideas, recommendations, practices,
lessons learned, etc. on what works in industry, the non-profit
environment, and state and local governments. Such information tailored
to specific industries (e.g., manufacturing, services, construction),
subsets of industries (e.g., information technology, advisory and
assistance services, environmental remediation), types of contractors
(e.g., universities, small businesses) and types of endeavors (e.g.,
research and development) would be welcomed. We also would welcome any
studies or literature that analyzes, assesses, or validates these
practices, as well as information on relevant training courses and
materials.
In examining this information and developing any policy initiative,
we will consider approaches that would fundamentally restructure our
contractual relationships to accommodate improving our business
arrangements, and so would welcome any appropriate recommendations as
well as the identification of any impediments (legal, regulatory or
policy). OFPP welcomes written comments and materials, and is willing
to meet with individual companies, associations, and other
organizations to hear their views and recommendations. OFPP is
concurrently surveying Federal agencies to ascertain any ongoing
innovative practices that could be used in this initiative.
We are also considering a public meeting to facilitate the exchange
of information between the Government and general public to explore
this issue if sufficient interest exists. Topics could include:
developing alternative incentive strategies; providing recommendations;
sharing best practices and lessons learned; reviewing existing
literature; and identifying barriers and potential benefits and
disadvantages for both agencies and contractors. Expressions of
interest in such a meeting would be appreciated.
Kenneth J. Oscar,
Acting Deputy Administrator.
[FR Doc. 00-27117 Filed 10-23-00; 8:45 am]
BILLING CODE 3110-01-P