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Myth-Busting: New Final FAR Rules Says You Can Speak with Agency Personnel During a Procurement, Or Can You?

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On December 1, 2022, the Federal Acquisition Regulatory Council (comprised of both the civilian and military acquisition regulatory councils) issued the final FAR rule on “Effective Communication between Government and Industry.” The final rule becomes effective on December 30, 2022. This final rule is a long time coming.

Dan Gordon, the Office of Federal Procurement Policy (OFPP) Administrator during the Obama Administration back in 2011, began the laudatory efforts to engage government and industry in achieving a better understanding of what they could say, to whom, and when in procurements in a series of three “Myth-Busting” memoranda, starting with “‘Myth-Busting‘: Addressing Misconceptions to Improve Communication with Industry during the Acquisition Process.” Lesley Field, Acting OFPP Administrator after Mr. Gordon, issued a fourth “Myth-Busting” memoranda in 2019, “‘ Myth-Busting #4’ – Strengthening Engagement with Industry Partners through Innovative Business Practices.” Those memoranda provided excellent information to the procurement community on the whys and hows of communications that should take place during the acquisition cycle.  One wonders why it took so much time to issue a final rule that reflects this long understood intent that fair and open communications are beneficial to competition.

As summarized in the Federal Register announcement, the final rule is issued “to implement a section of the National Defense Authorization Act for Fiscal Year 2016. … [to clarify] that agency acquisition personnel are permitted and encouraged to engage in responsible and constructive exchanges with industry, so long as those exchanges are consistent with existing law and regulation and do not promote an unfair competitive advantage to particular firms.” In finalizing the rule, the FAR Council appears to retreat from expressing the affirmative concept that open communication is encouraged to promote competition as expressed in the earlier draft of the rule, and instead provides that open communication cannot be used to promote unfair competitive advantage:

1.102–2 Performance standards.

(a) * * * (4) The Government must not hesitate to communicate with industry as early as possible in the acquisition cycle to help the Government determine the capabilities available in the marketplace. Government acquisition personnel are permitted and encouraged to engage in responsible and constructive exchanges with industry (e.g., see 10.002 and 15.201), so long as those exchanges are consistent with existing laws and regulations, and do not promote an unfair competitive advantage to particular firms.

In issuing the final rule, the Council makes clear that “The rule is not a mandate, allowing contracting officers the discretion to use business judgment and best practices.” It also states that it distinguishes this rule from FAR 10.002, as the communications exhortation in the new FAR rule 1.102 is intended to go beyond a procurement official’s market research communications.  However, the actual language of the rule does not make that intent as clear as the rulemaking history states.

Additionally, the final rule does not provide specific examples of the kinds of effective and appropriate communications that would provide more clear guidelines on who procurement officials should engage with, what they should discuss, and when.  Nor does the final rule require that the OFPP or individual agencies provide more or specific types of training for federal acquisition officials on how to implement and engage in effective communications.  It leaves such matters to the OFPP and the agencies to decide.

The final rule however does impose more requirements on industry when it states that “It is incumbent on industry to ensure their workforces are educated in the rules and processes involved with communicating with the Government.” The takeaway? If you’re a member of industry and haven’t already done so, you need to develop policies and conduct training to establish the parameters of what your personnel can and should discuss with government personnel during the procurement lifecycle.  A word to the wise, document your efforts in this regard to establish your good faith intent to do this the right way.

While government procurement personnel may not be rushing to engage industry to a greater extent now that the rule is issued, contractors should be thinking about what they can do to encourage communications.  While no government-industry working group has been established to better develop an understanding of the parameters of these discussions, the Dan Gordon “Myth-Busting” memoranda are still around and still a very useful resource.

If you have questions about this advisory, or other government contracting compliance matters contact the author, or your Stinson counsel.

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