The Office of Management and Budget yesterday proposed comprehensive changes in the way the federal government, the nation's largest consumer, does its buying. The changes are sure to spark political and bureaucratic fireworks.
The plan, set forth by the OMB's Office of Federal Procurement Policy, would reverse decades of bureaucratic practice by making the Defense Department adhere to the contracting rules that apply to civilian agencies. This idea has been spurned repeatedly by the Pentagon and its top allies in Congress.
The new plan also calls for changing 40 federal laws that seek to achieve social and economic goals through the contracting process. Laws that set aside certain contracts for firms owned by minority group members and women, and laws like the Davis-Bacon Act, which tends to help unionized firms compete for government work, would apply to fewer contracts under the proposals. This idea seems sure to bring political attacks from groups that benefit from such provisions.
The procurement plan, titled "Proposal for a Unified Federal Procurement System," gives a new twist to the concept of deregulation by proposing to reduce the number of rules government officials must follow in making purchases. It also would give the officers greater status and more freedom to make contracting decisions on their own.
The proposal says the government should try to entice better people into the procurement field and train them more extensively. In turn, according to Donald E. Sowle, head of the procurement policy office and chairman of the study group that wrote the proposal, government contracting officials would be held accountable for their contracts. Sowle said certain penalties might be imposed on officials who made bad decisions. He did not specify what the penalties might be.
The government's procurement system is the product of 4,000 legislative provisions interpreted in 887 sets of regulations and implemented by 485 procurement offices.
A 1978-79 survey by the procurement policy office found that the 130,000 federal employes who handle contracting and the tens of thousands of businesses from which they buy deal with 64,600 pages of regulations, about a third of which are revoked or revised each year.
Under these rules, government agencies spend about $110 billion annually for goods and services. Another $30 billion of federal money is spent on contracts issued by recipients of federal grants, such as local governments and universities.
Both government and business officials say the complicated procurement structure leads to mismanagement and waste, and that burdensome regulations deter some businesses from dealing with the government. As a result, there have been several high-level studies of procurement by congressional and presidential commissions.
The plan issued yesterday coincides with earlier studies in its most far-reaching recommendation: that civilian and defense procurement should follow the same rules.
"There are now two nonconforming basic statutes that govern federal procurement, one for Defense and the other for civil agencies," the new plan notes. In the past, the Defense Department and House and Senate Armed Services committees have challenged proposals to establish one basic law for both realms of procurement. The Pentagon also has fought laws to establish government-wide rules for particular kinds of contracts, such as computer purchases.
To get around objections to a single statute, the study calls for "dual conforming statutes" that would "recognize traditional jurisdictional patterns" but "serve as the foundation for an integrated system."
In a further step toward uniformity, the plan calls for the appointment of a new "procurement executive," at the assistant secretary level, in each department.
Reflecting the trend in other areas of government to shift power toward the White House and the OMB, the proposal says the head of the OMB would be the final arbiter of regulatory disputes between defense and civilian agencies.
Whether these plans will get any further than previous procurement "reform" proposals will depend largely on Congress, which had asked for the new study. Neither members nor staff aides were consulted in drafting the plan, Sowle said.
"It'll be interesting to see what they think," he said yesterday.