Impact of Section 809 panel findings on defense contractors

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The Section 809 panel report recently sent to Congress suggested some major changes to the way the Defense Department is managed. These potential changes are aimed at streamlining the acquisitions process. Some of the ideas are to eliminate offices and to change the definition of “commercial items.”

“The report talks in depth about the different definitions of commercial that are out there. In the industry we’ve seen it a lot. There’s one definition and another definition somewhere else. It can be confusing. They are really talking about standardizing that definition,” said Eric Crusius, partner at Holland & Knight. “When they made the definition of commercial, it was really to exempt a lot of government contracting clauses from those procurements that were commercial, but there have been a lot of clauses that have been laid on to that.”

While attempts to court non-standard contractors have resulted in some minor success, Crusius says they’re not enough.

“There’s a reticence to enter into certain agreements with the government. Commercial companies that have a slice of the commercial contracts business are willing to walk away,” said Crusius. “That being said, there are reasons why the clauses are in there. There’s that tension, you have to try to resolve those things and that is what the Section 809 panel is doing.”