Friday, May 25, 2007

The coming debate over federal contracting

Connie the Contractor

Unfortunately, another outgrowth of "acquisition reform" was the notion of allowing many agencies (e.g., NASA, NIH, Commerce) to earn commissions based on sales by performing contracting services for other government agencies. This concept is also known as entrepreneurial government. The result has been a tremendous growth in so-called government-wide acquisition contracts (GWACs) and other multi-agency contracting vehicles. Of course, the primary purpose of these contracting programs is not necessarily to get the best deal for taxpayers, but rather to create profit centers for the contracting agencies through commissions earned. Since the "commissions" generated by this approach all come from appropriated funds paid by the using agencies, the incentive structure to get the best deal for taxpayers is completely distorted.

This controversy is only going to grow. My advice to contractors is to make change your friend instead of your enemy.

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