A key pillar of the Obama administration’s ongoing acquisition reform effort is boosting competition for opportunities to support the government’s missions. Yet, a decidedly non-competitive trend is emerging among federal agencies. Increasingly, agencies are forgoing altogether the normal procurement process to instead make sole-source awards to non-profits entities known as Federally Funded Research and Development Centers (FFRDCs).
The latest example comes from the Health and Human Services Department, which plans to establish a new FFRDC for the Centers for Medicare and Medicaid Services (CMS) that will be available to the entire department. In an April 12 letter, PSC objected to the CMS plan outlined in a March 17 Federal Business Opportunities (FBO) notice because their proposal does not appear to meet the basic requirements for establishing such an entity.
Simply put, CMS failed to identify any research or development needs or justify why the FFRDC should be permitted to perform work across HHS. Under the Federal Acquisition Regulation, there are 10 requirements agencies must satisfy before establishing an FFRDC, including ensuring that “existing alternative sources for satisfying agency requirements cannot effectively meet the special research or development needs” of the agency. More significantly, the FAR requires that the “basic purpose and mission of the FFRDC is stated clearly enough to enable differentiation between work which should be performed by the FFRDC and that which should be performed by non-FFRDCs.”
In our view, the notice does neither. CMS takes a different view.
In an April 13 letter to PSC, CMS wrote that although CMS leaders are “aware of the specific regulations regarding the establishment of an FFRDC,” CMS “does not have a requirement of detailing our market research or decision making processes” because “revealing this information may compromise the procurement process.” How publicly justifying procurement decisions would do so is not explained, but CMS assured PSC that all the appropriate processes were followed. Given the lack of transparency into their processes, we’ll just have to take their word for it. But that won’t stop us from raising our objections to the CMS initiative.
