Summary: Testimony was given concerning S. 338, a bill which GAO strongly supports and believes could improve Federal procurement. However, GAO does believe that a few areas of the bill need technical improvements. S. 338 proposes several changes in the Federal procurement statutes which would: (1) remove the present strong statutory preference for sealed bidding; (2) strengthen procedures for publicizing prospective awards; (3) require agencies to use advance procurement planning and market research to obtain competition; and (4) provide a Government-wide ceiling of $25,000 for small purchases. GAO suggested that the bill be revised to exempt agencies from conducting market research and publishing a preaward notice when these procedures might disclose proprietary information. GAO also suggested that the bill clearly provide that the use of noncompetitive procedures is appropriate in awarding follow-on contracts where competition is not feasible. In such cases, an agency should be required to demonstrate that noncompetitive award is necessary to avoid unacceptable delays or duplication of costs. Aside from the exceptions provided in the bill, GAO felt that an exception to the requirement to use competitive procedures should only be allowed if: (1) it is used infrequently; (2) the reasons for the use of the exception are disclosed and justified; and (3) the authority to use the exception is not delegated to any official more than one level below the agency head. GAO also suggested that the bill clearly reflect that: (1) the use of noncompetitive procedures due to lack of available data is permissible only if the agency ensures that adequate data are available for competition or demonstrates that obtaining such data is not in the Government's best interests; (2) requesting officials must notify procurement officials as soon as the requirements become known to allow reasonable time to obtain competition; and (3) an award should not be considered competitive unless the award follows the receipt of two or more proposals that are capable of satisfying the agency's needs.
