Contract Management and the Federal Acquisition Streamlining Act (FASA)

By Eric Baker

Enacted in 1994, the Federal Acquisition Streamlining Act (FASA) was a bi-partisan effort to simplify the process by which the government procures third-party goods and services. In this article, we hope to break down FASA into more understandable terms so as to help business owners realize the impact of this important legislation on their contract management.

 

Background

In the early 1990s, the United States government was spending hundreds of billions of dollars procuring various goods and services. Furthermore, the procurement process was incredibly bloated as both the government and companies had to undergo complex and difficult regulations in order to do business. So, in order to combat antiquated procedure, politicians from both sides of the aisle came together and drafted the Federal Acquisition Streamlining Act.

 

Highlights

FASA’s greatest impact was that it helped bridge the wide gap between the requirements for doing business with the government and the government’s need to lower its own spending costs.

Prior to FASA’s implementation, contracts that cost under $25000 could be streamlined with a simplified procedural process. Service providers were not required to comply with the advanced series of terms, conditions, and audits that made closing deals difficult and time-consuming. However, these procedures did not exist for services that cost over $25000. As a result, many companies avoided government contracts or found themselves unable to comply with government regulation.

So, in order to attract service providers towards government contracts, FASA raised the simplified procedure threshold up to $100000. This measure saves both the government and service providers money while also expediting the entire contract process. In fact, the law was so successful that the government was able to secure an additional 45000 procurements without accruing any additional costs. Furthermore, an additional stipulation allowed for the government to utilize micro-procurements for contracts ranging from $2500 to $20000. In these situations, government officials can simply make necessary purchases with a credit card barring a few restrictions.

 

Commercial Benefits

One of the greatest benefits of FASA was that it allows for government agencies to do business on commercial terms. In other words, when purchasing goods from a commercial company, the government is able to abide by commercial procedure as opposed to the lengthy process that the government normally abides by. For years, small businesses were unable to operate within the government’s unfamiliar marketplace, but with the passing of FASA, these businesses were able to take greater advantage of the government’s new and simpler fixed-price performance based contracts.

 

Uniform Procurement System

One of the greatest difficulties of working with government agencies was that each individual agency had its own unique rulebook when it came to negotiations. Contractors were forced to abide by the differing procurement processes of each organization, a factor that drove many civilian organizations to further avoid government contracts. In an attempt to curb this, FASA amended several existing statues to promote a uniform procurement process. Therefore, service providers can now work across multiple agencies using both similar procedures and paperwork.

 

Conclusion

In summation, FASA removed many of the barriers between government agencies and civilian contractors. The act allowed for the government to save billions while also lessening the burdens placed on service providers. There can still be some minor complications when providing services for government agencies, but for the most part, the procurement process has been simplified.

 

References

 

  1. Federal Acquisition Streaming Act (FASA)

https://en.wikipedia.org/wiki/Federal_Acquisition_Streamlining_Act

  1. Highlights of the Federal Acquisition Streamlining Act of 1994

http://www.dau.mil/pubscats/pubscats/PM/articles94/drelicha.pdf