President Donald Trump issued two key executive orders on Tuesday night – one that seeks to pare down the existing Federal Acquisition Regulation (FAR) to make it more efficient – and a second that directs the government to “prioritize” acquisitions of “commercially available” products and services rather than “non-commercial, custom products or services.”
The commercial acquisition priority order, which is explained in a fact sheet from the White House, appears to relate to all products and services that the government buys. However, it also singles out the type of savings that the order could yield for the government when purchasing IT products and services.
“The Order directs the administration to prioritize the procurement of commercially available products and services, as required by the Federal Acquisition Streamlining Act of 1994 (FASA), rather than non-commercial, custom products or services,” the order says.
“With respect to IT procurement, a 2019 report found that the Federal government could have saved an estimated $345 billion over the last 25 years if it had abided by FASA and purchased more commercial off-the-shelf IT solutions, rather than building systems from scratch,” the White House said.
The order says that prioritizing compliance with the 1994 law will make sure the government uses “the competitive marketplace and the innovations of private enterprise to provide better, more-cost-effective services to the taxpayer.”
Contract Review Ordered
The order calls for Federal agency contracting officers to undertake a 60-day review of “all pending contracts for non-commercial products or services,” and to submit proposed waivers that “justify their necessity.”
“Waivers for non-commercial procurements must be reviewed and approved or denied in writing,” the order states.
Federal agencies will have 120 days to report to the Office of Management and Budget (OMB) detailing their FASA law compliance and progress on implementing the executive order. Annual agency reports on compliance will follow.
Cost Savings Envisioned
The White House said the order is aimed at “eliminating unnecessary and imprudent expenditures of taxpayer dollars by requiring government procurement of existing commercial products and services where possible.”
The order chides “previous administrations” for abusing the “federal contracting framework by procuring custom products and services where a suitable or superior commercial solution would fulfill the Government’s needs,” and says that the “overreliance on custom items increased government spending and caused costly delays to the detriment of American taxpayers.”
“Federal agencies are wasting taxpayer dollars on non-commercial solutions that fail to leverage the efficiency and competitiveness of the private-sector marketplace,” the order says.
FAR Overhaul Aims for Simplicity, Efficiency
In a second executive order issued Tuesday night, the White House said its ultimate aim in overhauling the FAR is to “create the most agile, effective, and efficient procurement system possible.”
“Removing undue barriers, such as unnecessary regulations, while simultaneously allowing for the expansion of the national and defense industrial bases is paramount,” the White House order says.
“Accordingly, the FAR should contain only provisions required by statute or essential to sound procurement, and any FAR provisions that do not advance these objectives should be removed,” the order says.
The FAR, the order says, has become more cumbersome since its creation more than 40 years ago, and evolved into “an excessive and overcomplicated regulatory framework” that in turn has created “an onerous bureaucracy” that makes doing business with the government “prohibitively inefficient and costly.”
As currently operated, the FAR’s harmful effects “permeate various items paid for by American taxpayers, from commercial products like laptops and office supplies to major defense weapons systems,” the order says.
“The management and expenditure of nearly $1 trillion annually in procurements cannot continue on this trajectory,” the order says, adding, “Fortunately, its inadequacies are self-inflicted and can be remedied through a comprehensive reform of the FAR.”
180-Day Deadline
The White House order instructs the administrator of the Office of Federal Public Procurement Policy – which operates within OMB – to work with Federal agency heads and other officials to amend the FAR “to ensure that it contains only provisions that are required by statute or that are otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.”
Federal agencies that exercise procurement authority under the FAR will have 15 days to appoint a “senior acquisition or procurement official” to help with the FAR overhaul and make any agency-specific recommendations.
Within 20 days, OMB will issue a memo to agencies containing further guidance on implementing the executive order, including proposals for “new agency supplemental regulations and internal guidance that promote expedited and streamlined acquisitions.”
“With respect to such proposals, the Administrator shall direct the appropriate agency and its subordinate agencies to adhere to the ten-for-one requirement described in Executive Order 14192,” the order says. That order issued by the White House on Jan. 31 requires the government to get rid of ten existing regulations for each new one created.
Finally, the order says that OMB should “consider” amending the FAR rule so that the new portions of the regulation sunset within four years, unless renewed and extended by the FAR Council.