The House and Senate gave final approval and the President signed October 28 the FY 2005 National Defense Authorization Act providing $447.2 billion in new budget authority of which $420 is for defense and Energy Department defense related programs and $25 billion for ongoing military operations “to combat terrorism” in Iraq and Afghanistan.   Congress already passed and President Bush signed a $447 billion defense appropriations measure for FY 2005 where the appropriations measure provides actual funding and covers FY 2005 only while the authorization measure specifies how the funds will be spent and provides policy until it is otherwise superseded.  Highlights of acquisition-related provisions are:

Raises TO/DO cap to 10 years.  The revision corrects an oversight in last year’s defense measure that set a maximum period of five years, including options, for performance of task and delivery order contracts.  The revision doubled the maximum duration of TO/DO contracts to 10 years, including options.  The 10 year cap is considered a compromise between Industry and House attempts for an open-ended performance period and the Senate measure limiting the total contract period, including options, to eight years.

Cost and pricing data on noncommercial modifications of commercial items.  Made clear that the numerous exceptions to the requirement to submit cost or pricing data does not include noncommercial modifications of a commercial item that is expected to cost more than $500,000 or 5 percent of the total price of the contract, whichever is lower.

Retains streamlined competitions.  Overcoming a congressional mandate to suspend for one year public-private competitions under recent revisions to the Office of Management and Budget Circular A-76, the bill decided to keep the streamlined procedures.  The OMB A-76 Circular sets the ground rules for private-public competitions and the proposed ban on following the revised circular would have removed use of streamlined competition procedures for evaluating competitions for functions performed by 11 to 65 full time equivalents. However, language in the earlier passed appropriation act prohibited expenditures of FY 2005 funds on streamlined competitions as well as requiring that proposals be evaluated so that there was comparability on employee health care costs.  Thus reading the appropriations and authorization acts together, most commentators conclude that it appears DOD will have to conduct formal – “standard” competitions where the government submits most efficient organization (MEO) statements and the work stays in the public sector unless the private sector can beat the federal proposal by the lower of $10 million or 10 percent - rather than streamlined competitions for all DOD functions when there are more than 10 FTEs.

Limited federal employee protest rights.  The Act contains compromise language that authorizes award protests by federal employees.  The Act gives authority to file protests to the official responsible for submitting the federal agency tender – agency tender officials (ATOs) - in public-private competitions conducted under OMB Circular A-76.  If requested by a majority of agency employees the official will file a protest “unless the official determines there is no reasonable basis for the protest.”  Still, if a so-called interested party files a bid protest a federal employee representing the majority of those workers “may intervene” for future A-76 competitions.  

{TAG_FORM_TITLE}