DOD Appropriations Act, 2010 ? Section 8121 ? Competition and Earmarks

[The_Intern]

My question is applicable to 8121 paragraph ( c ), where an earmark is sponsored by the House only, thus it is not in Senate Report 111-74 and would only be exempt from competition if issued against a competitively awarded contract, I think. The section of the Act in question is copied below, along with a recent, publicly available, OUSD memorandum.

The question. If you have funding from a House-only earmark where an Agency is the receiving organization, but it is reasonable to conclude the funds were "intended for an award" to a specific contractor, or at the very least a for-profit entity, can you place an order with the funds on a pre-existing contract that was awarded non-competitively? My read on the Act leads me to believe the answer is negative, but I'm confused by several matters and interested in your opinion.

The first point of confusion. I cannot determine what is meant by "intended for award to a for-profit entity." From what I can tell, earmarks have a receiving organization which are sometimes listed as companies (for-profit) and sometimes, say, a university (not for-profit), both of which would make sense as intended awardees. However, if the earmark is for an Agency (not for-profit) but specifically for a sole source program, is the incumbent contractor the intended awardee or does it remain, by some obscure policy, the receiving organization? The Agency in this scenario would never reasonably be considered the entity performing earmarked effort.

The second point of confusion. Does the exemption of orders from competitive requirements become a factor in answering the question? I don't believe there is any consideration for CICA exemptions or FAR Part 6 applicability, because the Act clearly states the contract shall be awarded under full and open competition. Anything outside full and open competition would seemingly be off the table.

The third point of confusion. What is meant by the term "contract"? (yes, I asked it) The broad FAR 2.101 definition which includes orders, or the often implied "new contract only" definition which is interpreted to be separate from orders? Again, the language implies the broader definition, but I see some possibly for debate.

Here is a 7 June 2010 OUSD memo on the topic. I've read it many times.

http://www.acq.osd.mil/dpap/policy/policyv...446-10-DPAP.pdf

Here is Section 8121:

Sec. 8121. (a) Each congressionally directed spending item specified in this Act or the explanatory statement regarding this Act that is also identified in Senate Report 111-74 and intended for award to a for-profit entity shall be subject to acquisition regulations for full and open competition on the same basis as each spending item intended for a for-profit entity that is contained in the budget request of the President.

( Exceptions- Subsection (a) shall not apply to any contract awarded--

(1) by a means that is required by Federal statute, including for a purchase made under a mandated preferential program;

(2) pursuant to the Small Business Act (15 U.S.C. 631 et seq.); or

(3) in an amount less than the simplified acquisition threshold described in section 302A(a) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 252a(a)).

? Any congressionally directed spending item specified in this Act or the explanatory statement regarding this Act that is intended for award to a for-profit entity and is not covered by the competition requirement specified in subsection (a), shall be awarded under full and open competition, except that any contract previously awarded under full and open competition that remains in effect during fiscal year 2010 shall be considered to have satisfied the conditions of full and open competition.

(d) In this section, the term 'congressionally directed spending item' means the following:

(1) A congressionally directed spending item, as defined in Rule XLIV of the Standing Rules of the Senate.

(2) A congressional earmark for purposes of rule XXI of the House of Representatives.