Legal and Administrative Framework of the Federal Procurement Project

Federal Acquisitions Regulation (2005). General Services Administration, Department of Defense. Retrieved from http://www.acquisition.gov/far/current/pdf/FAR.pdf 21 June 2014.

The Truth in Negotiations Act was passed on December 1, 1962 requiring government contractors to submit cost or pricing data if the procurement met specific requirements in order to establish that the offer is fair and reasonable. The history of The Truth in Negotiations Act will set the stage for its significance in the twenty-first century. Prior to World War II, the United States government conducted its bidding process for procurement in an open bid environment. What was required for a bid was a complete description of the requirement, two or more suppliers capable and willing to complete the requirement, a selection based on price competition and sufficient time to prepare a complete statement of the government’s needs and terms.

Part 15 of the Federal Acquisition Regulations (FAR) “prescribes [the] policies and procedures governing competitive and noncompetitive negotiated acquisitions.” One component of negotiated acquisitions that occurs early in the acquisition process is the solicitation of proposals. FAR 15.201, titled, “Exchanges with Industry before Receipt of Proposals,” regulates the type and manner of communications, also sometimes referred to as exchanges, which can – and cannot – take place between the Government and potential suppliers prior to the receipt of a potential supplier’s proposal and the subsequent award of a contract.

This essay examines the Buy American requirements of the American Recovery and Reinvestment Act (ARRA) which was signed into law in February 2009. The Act provided for $787 billion in spending and tax cuts that were intended to stimulate the U.S. economy. The ARRA provided funds for contracts to be awarded by various federal agencies. These contracts were subject to significant constraints and compliance regulations, including requirements to Buy American.

The federal government contracts substantial software projects to independent contractors. The government was disappointed by the quality and nature of the software that is delivered in response contractor commitment. So the military specification 2167A is one standard that the agencies may use constrain that way that software is developed under a government contract.

The selected project is controlled by the Forestry Department, which is part of the Department of Agriculture, placing the project under the auspices of Chapter 4 for the Federal Acquisition Regulations, which themselves make up Title 48 of the Code of Federal Regulations (e-CFR, 2012). Relevant paragraphs include a provision that all Head of Contracting Activities (HCAs) comply with FAR 7.103, detailed further below (e-CFR, 2012, Title 48, Ch. 4, Part 407, par. 407.103). In addition, paragraph 407.503 of the same chapter provides provisions for the determination of whether or not a proposed contracting function is "inherently governmental" according to FAR 7.503(e), and also sets out rules for settling disputes when there is not agreement on this issue (e-CFR, 2012). It is not expected that this will be of issue in this case, however, and thus the regulations specific to the Department of Agriculture are not of great importance in building the acquisition team for this project.

Procurement officers are the pivot of bidding. They publish bidding announcement, preparing the list of approved suppliers, hold meeting and declare the winner. Bidding process is a best place for corruption. No one monitors procurement officers’ performance. They are evaluation by their results and whenever they run a bidding and purchase required products, they were successful. The other point is that government employees are not fired up. When you are hired in a governmental company, no one can fired you up. No one evaluate your performance and you will have income till the end of your life.

Sales/Marketing Department: Review and suggest the Controls related to the Government Contracts, which has Federal Acquisition Regulations Controls (FARs).

When dealing with the ethical issues surrounding government contracts, it seems as there are several ways one could look at the issue. Many of the rules and regulations seem to be designed to protect the government from fraud and unethical behavior (standards, pricing, etc.), but also limit the potential for many smaller businesses to have the resources necessary to apply for governmental contracts. For example, there are a number of instances in which certain companies have been awarded contracts based on the recommendation and/or interference from member of congress or other governmental personnel. When one asks is the procurement system set up for the benefit of the individual company (to help grow business) or the government, both can be answered affirmatively and negatively. The government can benefit from price wars between businesses, but the business tends to benefit more because the government does not always use the low price leader there are other pieces to the proposal and documentation that are more important to the contract. Similarly, there are times that

John Peters is a new hire in training at Dryer & Sons manufacturing company. His position required reading the Procurement Integrity Section of the Office of Federal Procurement Policy Act, the Federal Acquisition Regulations and the Certificate of Procurement Integrity. They specially forbid agents to “offer, give, or promise to offer or give directly or indirectly, any money, gratuity, or other things of value to any procurement official or solicit or obtain, directly or indirectly, form any officer of employee of such agency, prior to the award of a contract any proprietary or source selection information regarding such procurements.”

The encouragement of small business is an important goal of government that is addressed by the FAR. The government is required to create a network of resources that provide for contract opportunities to level the playing field when procuring goods and services.

Strict adherence to formal procedures characterizes sealed bidding which attempts to provide a “level playing field” or as a multitude of references point out equal footing to all bidders who compete for a contract. Competitive negotiation is a more flexible process that enables the agency to conduct discussions, evaluate offers, and award the contract using price and other factors. The Federal Acquisition Regulation (FAR), whose origins can be traced back to the ASPA of 1947 was codified at Title 48 of the Code of Federal Regulations and became effective 1 April 1984. The FAR contains the uniform policies and procedures for acquisitions by all federal agencies to date. It addresses nearly every procurement related statute or executive policy; and subsequently encompasses every stage of the acquisition process. In a nutshell, FAR appears to have modernized and thus enveloped the aforementioned three acts.

At almost any stage, there is a potential for fraud occurring in the IT procurement process. Fraud activities may include a range of activities on the part of a fraudulent manager. As reported by the ACFE (2010), these fraudulent activities on the part of procurement managers potentially include various actions that negatively affect the organization. Accordingly, some identified types of fraudulent activities reported in the ACFE (2010) study included categories such as: selecting only information technology projects that provide higher return values with specifications tailored to limit competitive bidding, or instituted through abuse by the IT managers of confidentiality. Moreover, other potential fraudulent activity might include manipulations in the preparation stage of the contract resulting in limits to the submission of and evaluation relative to contract bids, as well as the potential for instances of false invoice and over-billing, or contract underperformance and an inability to meet the contract specifications (ACFE, 2010). Consequently, as stated by the Office of the New York Comptroller (2010), procurement activities that involve corruption commonly fall into one of three general categories:

Procurement is the action where external source provides systems, goods, services, etc. for the government itself or organizations that are depending on the government. Procurement by government and for government is the stage where has the potential for corruption to happen. Therefore, we need to pay attention on procurement to prevent corruption. What is most important in procurement is that it must be announced in a public newspaper. E-procurement on the other hand is the use of the internet and information technology by the government to get goods prices in an open and fair competition for every company, whether they are private or not. This means public and citizens can involved in this process as well. This is the first step that e-procurement

manipulation of contract awards and lack of fair competition, all of which influence the procurement process and performance negatively (E.J Loandenoije. Et al, 2005)