[Views on Draft Segment of Federal Acquisition Regulation: Subparts 8.3 and 32.5]

GAO comments were requested on draft segments of the Federal Acquisition Regulations which cover acquisition of utility services and progress payments based on costs. GAO felt that the review threshold levels for proposed utility services acquisitions were too high and, consequently, a significant number of substantial contracts will not be subject to high-level review. In addition, one proposed draft segment adopts a recent change to Defense Acquisition Regulations (DAR) which establish a customary progress payment rate of 95 percent for small business concerns and 90 percent for other concerns. The DAR change stemmed from a concern that previous contract financing policies and practices adversely affected industry in the current environment of high interest rates. GAO believed that more careful consideration of the costs and assumed benefits was needed to assure that informed judgments can be made regarding the likely results of these changes.