When are defense contracts in effect 'non-defense'?

• Author: McGrath, Dorn
• Position: ETHICS CORNER - Military regulations for procurement

For several years, Congress has been concerned that the Defense Department's use of "assisting" procurement agencies and other contracting vehicles has concealed poor acquisition planning or attempts to circumvent limits placed on funding.

These include orders issued under federal agency multiple award contracts (MACs), government-wide acquisition contracts (GWACs), as well as the General Service's Administration's federal supply service (FSS) schedules.

As a result, Congress and the administration have established new policies to ensure accountability for Pentagon funds spent through non-defense contracts.

Concerns have centered on five key areas:

Scope. Have defense contracting officers or assisting agency officers issued task or delivery orders for items outside the original scope of the underlying contract? The prison interrogators scandal at Abu Ghraib spotlighted this type of "out-of-scope" contracting--misusing a non-defense agency (Interior Department) information-technology contract--by arguing that interrogators would be entering data into a computer system.

Funding. Have funds transferred to assisting agencies under indefinite delivery/indefinite quantity (ID/IQ) contracts been used to create obligations beyond the time period specified in an appropriation, thus circumventing the intent of the appropriators? This practice essentially "parks" money to circumvent annual budget constraints.

Acquisition planning. Has an acquisition plan been prepared in advance of every task order or delivery order issued under an ID/IQ or schedule contract, as required by the federal acquisition regulation?

Ordering procedures. Have contracting officers followed the ordering procedures required under each specific contract? ID/IQ ordering procedures differ from other forms of contracting.

Competition. Did non-defense assisting agencies ensure the acquisition process was transparent and competitive, and that the government and taxpayers receive the best value through the contracting process? The Government Accountability Office recently found that competition was waived for nearly half of the MAC and FSS orders GAO reviewed. Guidance for granting waivers apparently did not sufficiently describe the circumstances under which a waiver of competition was appropriate, or at what levels waivers should be approved.

In response to a new statutory requirement, specific Defense Department requirements exist for reviewing and approving use of non-defense...