'84 Law Angers Defense Contractors

WASHINGTON—A 1984 law to encourage competition among defense contractors has forced federal agencies to become aware of the importance of evaluating all possible bidders for contracts, but also has slowed the procurement process and angered many industry officials. The Competition in Contracting Act was an attempt by Congress to end "sweetheart" deals between the Pentagon and individual defense contractors. Its requirement that agencies seek bids from a range of contractors has led some agencies to give out fewer, but larger, awards. Although research, including money to university-based contractors, forms only, a small portion of the Defense Department's $300 billion annual budget, it is expected to amount to $10 billion in the coming fiscal year—$3 billion for basic technology and $7 billion for advanced technology and development. Some industry officials believe the cure has been worse than the disease. Two federal agencies, in fact, are experimenting with procedures to streamline a process that now takes almost twice as long as it did before the law was passed. Earle Williams, president of BDM International Inc., a leading high-technology research firm, has become the R&D industry's most prominent critic of the new law, known as CICA. He contends that the new rules drastically prolong the time required to award a contract and slow the pace of technological innovation. The law also has promoted what he called a "low price at all costs" mentality that threatens to scuttle high-quality R&D work. "The CICA has become a threat to America's R&D base," he said. Intellectual Theft One of the most sensitive issues raised by the emphasis on competition is the fear of intellectual theft by the government. Williams says ideas from his company's unsolicited proposals have reappeared on several occasions in government-issued requests for research proposals, effectively divulging the firm's proprietary information to its competitors. He refused to discuss specific cases. "Can I document a case [of intellectual theft]? No," said Ron Bell, associate director for contract administration at Georgia Tech Research Institute. "But I do sense a reluctance of people to put their ideas in an unsolicited proposal." Brig. Gen. Charles Henry, competition advocate for the Army, said the CICA has not altered the Pentagon's long-standing prohibition against giving a firm's ideas to its competitors. When similar concerns surfaced last year at an Air Force workshop on competition, "no one could cite a specific instance," an Air Force procurement analyst said. Scientists at the Georgia Tech lab last year worked on some 400 defense-related projects, in particular millimeter wave technology and other electro-optical research, worth $50 million. Although the number of projects and their total value have not declined since the law was passed, the lab has shifted from being prime contractor on smaller contracts to being subcontractor on larger projects. Bell said the law has created "significant obstacles" to working for the Defense Department. Longer lead times have also increased overhead costs, made it more difficult to keep research staff intact and strained communications between the lab and defense officials. The law has been less of a problem for applied centers that operate on one huge annual grant, such as MIT's Lincoln Labs and the Applied Physics Laboratory at Johns Hopkins University. Faster Track Sought Defense officials deny some of Williams' charges but agree that it now takes longer to procure research contracts. The average processing time for contracts from the Defense Advanced Research Projects Agency (DARPA) went from 130 days in 1982 to a projected 250 days in 1985. Other agencies have had similar increases. Last fall DARPA and the Office of Naval Research (ONR) began a two-year test of new procedures designed to streamline R&D acquisition procedures. The experiment attempts to "get R&D on a faster, less complex acquisition track," said Joseph Bolos, ONR director of acquisition. The rules are also aimed at weeding out weak proposals earlier in the competition. DARPA also is making greater use of another method to procure basic and exploratory research. Under this procedure, specifically authorized in the CICA, an agency publishes an outline of the technical areas in which it plans to fund research during the following year. Firms and universities that respond are awarded contracts based on an evaluation of the technical merit of their research proposals. The method, known as Broad Agency Announcements (BAAs), is a competitive procedure. However, it allows an agency to bypass the requirements needed to justify the sole-source awards resulting from unsolicited proposals. James Goodwyn, DARPA's director of program management, estimated that products could be acquired 50 percent more quickly this way than by using the more formal procedures. Although the new procedures play a part, government officials say that the current procurement logjam predates the 1984 law. Factors include chronic under-staffing of procurement offices, inadequate training to help officers cope with increasingly complex requirements and bureaucratic overreaction to a wave of criticism. Contractors are waiting to see if the Pentagon reduces delays in procurement. So is Congress, which does not want the changes to water down the legislation. "If they want to make the CICA and competition work, then we welcome it," said a staffer on the House committee that developed the 1984 legislation. "But if it's going back to the way we did things before, it's not acceptable." Charles is a freelance writer based in Washington, D.C.

'84 Law Angers Defense Contractors

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