Federal Contracts Report™
Reproduced with permission from Federal Contracts Report, 98 FCR 349, 09/18/2012. Copyright 姝 2012 by The
Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
Acquisition Reform Policy
Serious About Torching the FAR, or Just Overheated Rhetoric?
BY KENNETH B. WECKSTEIN
AND
AIDAN J. DELGADO
y now, the procurement community has had time
to digest the April 2012 report by the Defense
Business Board (DBB) and its somewhat incendiary suggestion to ‘‘zero-base,’’ i.e. scrap, the entire procurement system.1 And just in case that recommendation flew under anyone’s radar, the chairman of the
DBB Task Group, Arnold Punaro, doubled down on it in
a follow-up interview, stating that if the defense procurement regulations were up to him, he’d ‘‘take ‘em all
and put a match to it.’’2 Fellow DBB Task Group mem-
B
1
DEFENSE BUSINESS BOARD, REPORT FY12-02: LINKING AND STREAMLIN-
ING THE DEFENSE REQUIREMENTS, ACQUISITION, AND BUDGET PROCESSES
13
(2012).
2
Sydney J. Freedberg Jr., ‘Put a Match To It’ And Scrap
DoD’s Buying Rules: Top Pentagon Advisor EXCLUSIVE, AOL
Defense – Strategy & Policy (Aug. 30, 2012), available online
at:
http://defense.aol.com/2012/08/30/put-a-match-to-it-andscrap-dods-buying-system-top-pentagon/ (last visited Sep. 11,
2012).
Kenneth Weckstein is a partner in Brown
Rudnick’s Government Contracts & Litigation
Group. He represents clients on matters
related to government contracts, complex civil
litigation, and trade secrets law. Aidan Delgado is an associate in Brown Rudnick’s Litigation group.
COPYRIGHT 姝 2012 BY THE BUREAU OF NATIONAL AFFAIRS, INC.
ber Dov Zakheim expressed a similarly belligerent attitude towards the procurement rule book, stating his
frustration at being unable to ‘‘raze it entirely to the
ground.’’3
So what is with all this apocalyptic language? Is it
merely the cyclical appeal to pruning ‘‘red tape’’ and
draining regulatory ‘‘swamps’’ that crops up whenever
the economy is at a low ebb? It’s hardly the first time
that industry, procurement officials, or members of
Congress have called for a flattening of the procurement landscape. A prior serious attempt to overhaul the
acquisitions industry, the Packard Commission of 1986,
failed to achieve the kind of systemic reforms that its
backers envisioned, and it seems that industry leaders
like Punaro and Zakheim feel that a reckoning is long
overdue. But just because the notion of ‘‘streamlining
regulations’’ has attained near-Scriptural status in government circles doesn’t mean it’s not a good idea. And
good ideas bear repeating.
This time around, the Task Group’s complaints fall
into three broad categories: first, that the regulations
are a patchwork of unconnected, Band-Aid solutions;
second, that the defense acquisition system is split into
procurement ‘‘stovepipes’’ that don’t talk to each other;
and third, that military officers are pigeonholed into either procurement or operations and don’t get an opportunity to collaborate. All these observations are perfectly sensible, drawing from the ‘‘common perspective’’ gleaned from numerous studies and interviews4
across a wide range of defense and procurement officials. But there’s a huge rhetorical leap between acknowledging the FAR’s (or DFAR’s) warts and opting to
treat them with napalm.
The bottom line is that scrapping the FAR without a
plan to replace it is no plan at all. It’s rhetoric, and wellworn rhetoric at that. Obviously, any regulatory scheme
as complex as the FAR is bound to accumulate artifacts,
loopholes, and inconsistencies over time, and these defects will lead to higher costs and uncertainty for business. That’s not in doubt. But let’s take our hand off the
3
Id.
4
REPORT FY12-02, SUPRA
ISSN 0014-9063
note 1, at 2-3, Appendix A.
2
DBB’s figurative matchbook for a moment and remember what the FAR and other procurement regulations
do right.
If regulations often increase the cost of doing business, they can also decrease it. The FAR in particular
provides an a la carte menu of contract clauses that are
familiar and tested in court, and standard operating
procedure for a variety of procurements. Though the
procurement system may be, in the words of Mr. Punaro, a bureaucratic swamp,5 it is at least a well-travelled
swamp. Scrapping these go-to provisions in favor of a
new and untested regime would impose massive costs
and uncertainty on contractors navigating a new legal
landscape. And let’s not forget that procurement regulations protect not only the rights of contractors but
those of the agencies and taxpayers who support them.
The DBB’s ‘‘burn it all’’ recommendation sounds particularly tin-eared in the wake of the financial crisis,
which showcased the potentially devastating results of
under-regulation and industry policing itself. If the FAR
burns, what becomes of the conflict of interest provisions that protect taxpayers from cozy, revolving door
arrangements? Or the contract language and case law
that permits changes to contracts and corresponding
Requests for Equitable Adjustment? What about the
right to protest language in RFP’s and selection
decisions? Clearly, when the DBB recommended ‘‘zeroing out’’ all procurement regulations with a presumption that any given provision should be discarded,6 they
5
6
Freedberg, supra note 2.
REPORT FY12-02, SUPRA note 1, at 14.
9-18-12
didn’t mean those provisions. Just the ‘‘burdensome’’
ones, which is a lot like saying we should cut only
wasteful government spending. Everyone agrees, just
not on the same things.
And the Task Group’s proposed solution to this dilemma is stranger still. Reading the DBB report and Mr.
Punaro’s comments leaves one with the distinct impression that they believe the problem with defense procurement is too little industry involvement, rather than
too much. When the former vice-president of an $11 billion defense supplier and current CEO of national security consulting firm,7 charged with helping the Defense
Department rewrite its own policies, laments that
‘‘[t]hey’ve totally choked industry out of the problem,’’8
you’ve know you’ve entered the procurement Twilight
Zone. And you can’t help but get a tingle in your objectivity bone when the same industry leader suggests that
new accountability regulations, like those put in place
after the $800,000 GSA conference debacle, create
more waste than they prevent.9
Authorized by the Secretary of Defense or not, at the
end of the day we should remember that oath that doctors take about first doing no harm. In our haste to reform an obviously imperfect and patchwork procurement system, let’s not throw the baby out with the bath
water.
7
Defense Business Board, Member Profiles, available online
at:
http://dbb.defense.gov/board_members/arnold_
punaro.shtml (last visited Sep. 11 2012).
8
Freedberg, supra note 2.
9
Id.
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FCR
ISSN 0014-9063