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32 Procurement Law. 1 (1996-1997)

handle is hein.journals/procurlw32 and id is 1 raw text is: GSA Resists New Statutory Limitations for Audit of Commercial Item Contracts RON R. HUTCHINSON Within the past two years, Congress has enacted two laws addressing comnercial item acquisition.' Among V the most significant matters addressed in these two enactments is the issue of . the government's audit rights when it purchases commercial items. After an ambitious-but somewhat confusing-start in the first piece of legislation, Congress made clear in the second that all audit authority in con- nection with commercial item contracts and subcontracts has been withdrawn from executive branch agencies in favor of the audit authority of an ann of Congress, the General Accounting Office.2 New GSA Regulations In a remarkably aggressive move, the General Services Administration (GSA) has issued regulations that would restore to GSA, and in some cases exceed, the full panoply of audit rights it previously asserted in multiple award schedule (MAS) contracts. These regulations, pub- lished on an emergency basis in February 1996, would subject MAS contractors to two separate forms of postaward audit by GSA-neither of which is permitted by or consistent with explicit congressional directives. GSA apparently has yet to utilize these regulations. Perhaps it will not do so, choosing instead to withdraw them and promulgate new ones that accurately reflect congressional inten. In the meantime, however, MAS contractors should carefully review every MAS solicita- tion to be certain that the improper solicitation/contract clauses have been excluded. Just a little over a year after enactment of the long- Ron R. Hutchinson is a partner in the Washington, D.C., law firm of Doyle & Bachman. awaited Federal Acquisition Streamlining Act of 1994 (FASA), Congress pushed through another package of acquisition reform provisions amid the acrimonious bud- get battle between President Clinton and the Republican-controlled Congress. The Federal Acquisition Reform Act of 1996 (FARA) was signed into law on February 10, 1996, as part of the Defense Authorization Act for FY 1996. Among other things, FARA includes provisions that make significant changes in the acquisition of commercial items. In several instances, these new statutory provisions alter the changes made in 1994 by FASA. In other instances, issues not addressed by FASA are now covered. In each case, the new statutory changes make it easier and less burdensome for companies to sell commercial items to the federal government. Section 4201 and Government Audit Rights Section 4201 of FARA outlines changes concerning the government's audit rights and the type of pricing infor- mation that can be requested by the government in con- nection with commercial item contracts. This provision creates a complete TINA exemption for commercial (continued on page 25)

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