| Eliminate Duplicative Financial
Requirements for Architect-Engineering Services Firms in Government
Contracting |
| Agency |
Federal Acquisition Regulation Council (FAR Council) |
| Submitter |
Council on Federal Procurement of Architectural and Engineering Services
(COFPAES) |
| Nominated |
February 28, 2008 |
| Description |
The existing regulation, 48 CFR 52.232-10, provides for a 10 percent
withholding or retainage of fees on firms providing fixed-price
architectural-engineering services. |
| Small entities affected |
Currently more than 230,000 small architectural and engineering (A&E)
firms are in the federal procurement system. |
| Regulatory burden |
The current provision is counter to the Brooks Act, which allows A&E
firms and the procuring agency to meet to discuss the design and scope
of services before bidding on the work. In some government contracts,
the retainage is in addition to bonding requirements. Retainage
restricts the cash flow of small businesses, with very little benefit to
the government. |
| Proposed burden reduction |
The FAR Council should consider removing this provision or reducing the
percentage from 10 to 5, as it has done for other services. |
| Small entity benefits |
A
change in this regulation will help increase the cash flow of small A&E
firms that contract with the federal government. This change should also
encourage more firms to enter the federal procurement market, with
concomitant improvements in the quality of services. |
| Status (8/28/08) |
The Office of Federal Procurement Policy (OFPP) submitted Advocacy's r3 retainage proposal to the FAR Council. The FAR case number assigned to this issue is 2008-015. The FAR case is being reviewed by the FAR finance team, which anticipates completing a committee report by September 30, 2008. The report will indicate the Council’s next steps regarding the proposed FAR change. Information describing the FAR process. |
| Advocacy contact |
Major Clark, advocacy@sba.gov |
