- Wiley partners say Trump administration can usher in reform
- As tech expands, non-traditional approaches are important
The federal procurement system can play a crucial role in supporting national defense, fostering technological innovation, and driving economic growth. Yet existing procurement policies and processes have been criticized for being outdated, overly complex, and ill-suited to economic needs.
As innovators build technology in artificial intelligence and other digital sectors, it is time to reconsider existing regulations through the lens of the incoming Trump administration, a Republican-controlled Congress, and the proposed Department of Government Efficiency initiative.
There's now a unique opportunity to reform federal procurement by expanding non-traditional approaches, increasing the acquisition of commercial products and services, reforming small business policies, and streamlining regulatory burdens.
Reinvest in the US defense industrial base and expand non-traditional procurement methods. Critics have lambasted federal procurement for being bureaucratic, wasteful, and ill-equipped for technological innovation. The Trump administration and Congress should embrace more agile procurement, expanding the use of other transaction agreements, commercial solutions openings, and other rapid acquisition techniques.
OTAs, CSOs, and innovative procurement techniques can be used in sectors such as defense and cybersecurity to quickly acquire novel solutions from non-traditional vendors. OTAs aren't subject to the constraints of the Federal Acquisition Regulation, so agencies can forge more flexible relationships with industry.
Expanding the use of OTAs will allow the government to tap into the latest technologies, including artificial intelligence, quantum computing, and cybersecurity solutions. Currently, only 11 agencies have OTA authority; Congress should expand that authority.
The federal government also should expand the use of CSOs and other rapid acquisition procedures to ensure that defense capabilities remain relevant and adaptable to emerging threats.
The Defense Innovation Unit and the AFWERX innovation arm of the Air Force have adopted innovative procurement practices, such as providing a problem set to industry and requesting solutions to address it. These practices encourage innovative approaches and reduce costs. The Trump administration and Congress should build on lessons learned by these innovative agencies and incorporate their practices across legacy contracting agencies. By streamlining procurement and leveraging non-traditional contracting, the government can adapt to a rapidly changing world.
Promote acquisitions of commercial solutions on commercial terms. The government's reliance on legacy products and services has hindered its progress in information technology, cybersecurity, and digital services. Commercial hardware and software products are more cost-effective, reliable, and up to date than government-developed alternatives. But some agencies build their own solutions, and the process for acquiring commercial solutions often is slow and cumbersome, letting technology outpace procurement schedules.
The government market needs more commercial suppliers, particularly from high-tech sectors. Increasing opportunities for small and medium-sized businesses to enter defense contracting would foster greater innovation and competition and help meet the military's needs.
The incoming administration can increase the acquisition of commercial products and services. A key reform could require agencies to use existing laws requiring the acquisition of commercial items "to the maximum extent practicable." Giving these requirements teeth—perhaps by executive order or Office of Management and Budget memorandum—would allow the government to modernize its existing technology more rapidly and save taxpayers money.
It is also time to reconsider commercial item contracting writ large. In the 30 years since Congress passed the Federal Acquisition Streamlining Act, Congress and the FAR Council have chipped away at protections for commercial item contractors by applying new rules and polices—including cybersecurity and supply chain requirements—to all contract types, despite industry pleas to keep commercial item contracting simpler.
Reform small business contracting. Small businesses play a vital role in the economy but face significant barriers in contracting. Under current rules, once a small business surpasses the size threshold for its industry, it must compete with much larger, well-established firms.
One reform could allow small businesses that exceed their size standard to retain eligibility for set-aside contracts for a period of time or to transition smoothly into larger contract pools. This would encourage small businesses to scale, driving innovation and competition.
Reduce compliance burdens. Federal purchasing regulations layer on multiple requirements, including cybersecurity risk management and incident reporting, and new software attestation forms and development practices. Multiplying obligations creates the risk and cost of multiple audits, oversight, and liability for compliance disputes or incomplete disclosures about the many requirements.
Cybersecurity is just one example of the expanding and complex obligations that require heavy investment in compliance and reporting. Too many government auditors can grind a contractor's business to a halt. We have seen potential contractors decide not to work with government because of compliance burdens and enforcement risk compared with work that avoids government entanglements.
To promote innovation and reduce costs, the Trump administration can streamline contracting by eliminating redundant or unnecessary compliance requirements, simplifying reporting, and adopting performance-based contracting models that focus on delivering results rather than ticking boxes on compliance checklists.
This could include reducing extraneous clauses in some regulations. For example, FAR Part 52, which contains the clauses that are inserted in federal contracts, has over 500 individual clauses. Agency supplements to the FAR contain hundreds more.
A less onerous regulatory environment would let contractors focus on innovation and efficiency rather than administrative overhead. It also would encourage a variety of firms—especially non-traditional vendors and small businesses—to participate in government contracting.
Originally published by Bloomberg Law
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