As agencies look for ways to cut costs and consolidate IT systems, the government’s move to a secure cloud computing environment is accelerating. The Coalition for Government Procurement is proud to announce an additional speaker to join our Cloud Computing Breakfast event on February 28^th, 2012. Mark Day, Director of GSA’s Office of Strategic Programs at the Office of Integrated Technology Services (ITS), will be joining Dave McClure, Associate Administrator of the Office of Citizen Services and Innovative Technologies at GSA to discuss a host of issues concerning cloud computing. Mark Day manages GSA’s strategic government-wide information technology programs, including responding to Executive Orders, Office of Management and Budget (OMB) directives and the changing needs of customer agencies. He oversees ITS’ Center for GWAC Programs and Center for Strategic Solutions and Security Services. During the breakfast, important topics will include the certification and approval process for FedRAMP, a breakdown of security controls and requirements, and how the FedRAMP program fits into the government-wide cloud computing and IT strategy.

As reported in an article by Federal News Radio, Dave McClure recently announced that GSA is planning to launch an online market place for cloud computing solutions by the end of 2012. According to McClure, GSA wants to “create a robust environment so that the government is maximizing the use of its computing environment, which is not occurring and which has not occurred historically.” The marketplace will allow agencies to offer excess storage, virtualization, and other software-as-a-service offerings to other agencies for a fee. Some of the areas that have been identified as probable offerings in the marketplace include financial management, human resources, customer relationship management, and geospatial services.

Consistent with the constrained budget environment, the recently released FY2013 budget detailed efforts to cut costs by consolidating IT systems across the government in order to increase the utilization of a secure cloud-based environment. In addition to increased investment in cybersecurity and the revamping of information systems, the budget lays out a number of cuts to increase efficiency and decrease costs in information technology systems. Overall the FY 2013 budget request from President Obama calls for a cut of slightly more than 1 percent in funding for all of federal IT. The move to the cloud is an increasingly critical issue for the contracting community. The constant threat of cyber attacks from various entities has ushered in a new focus on protecting networks and data. To hear the latest on cloud computing and the future of Federal IT programs, join Dave McClure and Mark Day and register for the Coalition for Government Procurement’s Cloud Computing Breakfast!

With regard to contract duplication, last week’s post highlighted the Air Force’s recently issued RFP IDIQ for multiple award contracts for commercial office furniture.  By its own terms, the Air Force’s acquisition strategy as articulated in its draft RFP duplicates current GSA schedule contracts for commercial office furniture.  In fact, the RFP instructs offerors to submit their GSA schedule pricing as part of the pricing proposals!  Rather than creating a new set of standalone IDIQ contracts with furniture companies, these same companies already hold GSA schedule contracts which the Air Force could use immediately to conduct streamlined competitions for orders or BPAs under the GSA schedules program.  At a time when Secretary of Defense Leona Panetta is asking DoD to do more without more through the Better Buying Power initiative, the Air Force’s current approach unnecessarily increases overhead and other costs for itself and industry.  The increased transactional costs associated with the Air Force’s acquisition strategy are not in the interests of the government, industry and most importantly the American taxpayer.   

With regard to small business goals, this week we saw the introduction of legislation to increase small business goals from 23 percent to 25 percent.   At a time when the focus seems to be on creating employment opportunities for small business concerns, the GSA schedules remain the most effective small business contracting program in the federal government.  Over the last decade over 30 percent of the dollar value of orders under the GSA schedules have gone to small business prime contractors, exceeding the government-wide goal of 23 percent.  And that does not include small business subcontracting revenue under GSA schedule contracts with large businesses.   As currently structured, the GSA schedules streamlined ordering procedures provide the flexibility and discretion for contracting officers to utilize small businesses in an efficient and effective manner.  Agencies get credit towards their socio-economic goals for orders placed with small businesses. 

It is a testament to GSA and its management of the program that they continue to expand so much opportunity for small, medium and large businesses across the commercial marketplace.  It would be unfortunate and counterproductive if in an effort to support small businesses, new burdensome regulations that reduce flexibility and limit agency discretion are proposed.  Such an approach would further divide the market, increase contract duplication and ultimately reduce opportunities to increase employment for small businesses. 

So what do Contract Duplication, Small Business Goals and Saving Taxpayer Dollars have in common?  The flexibility, competition and efficiency of the GSA schedules program, as currently structured, can address these issues.   The depth and breadth of commercial services and products on the GSA schedule means that agencies can compete and place schedule orders or establish BPAs rather than create new, duplicative IDIQ contracts.  The GSA schedule’s flexible, streamlined ordering procedures and corresponding access to small business contractors means that agencies can effectively use the program to achieve their small business goals without resorting to mandatory set-asides.  The GSA schedule commercial market place is positioned to meet these very important initiatives!

Contract Duplication remains a challenge for government and industry and is an issue that the Coalition will continue to highlight in the interest of improving the efficiency and effectiveness of the procurement system.  Duplicative contracts for the same or similar commercial products and services increase government and contractor administrative, bid and proposal and other overhead costs.  Overlapping, duplicative contracts increase confusion and transactional costs for all.   Contract duplication is not good for government, industry or the American taxpayer.

That’s why Coalition members are very concerned about the current acquisition strategy being employed by the Enterprise Sourcing Group (ESG) at Wright-Patterson Air Force Base.   The ESG’s current acquisition strategy for commercial office systems and modular furniture is to award four multiple-indefinite-delivery-indefinite-quantity (IDIQ) contracts.  Additional competitions at the task order level for individual requirements would follow during the life of the contracts.  

ESG’s acquisition strategy provides for the award of contracts for commercial furniture that are already on government contracts through the GSA schedules!  The GSA schedules program includes all major furniture manufacturers.  The GSA schedules also include a robust network of furniture dealers as well as small business manufacturers on contract.   Fundamentally, there is no significant difference between a commercial office place and a government office place in terms of furniture needs.  The GSA schedules provide the same quality furniture that commercial customers purchase every day; quality that may actually exceed typical government requirements.   As such, unique quality demands cannot reasonably justify the decision to conduct a separate procurement. 

In multiple award contracts, price competition is driven by specific requirements and commitments to purchase reflected at the task order level.  FAR 8.4 task order competition requirements for  GSA schedule contracts provide the opportunity for GSA contractors to compete and offer additional discounts from the contract price in response to customer requirements.  In addition, GSA Advantage! and e-Buy provide a streamlined framework facilitating task order and Blanket Purchase Agreement competitions.

The GSA schedules already provide the government contract framework, competition, quality and pricing for the commercial furniture that ESG is seeking.  As a result, the total cost of ownership when using the GSA schedules is significantly lower than conducting an entirely new acquisition.     

Over a year ago, Secretary Gates announced the Department of Defense (DoD’s) Better Buying Power initiative. ESG’s acquisition strategy is inconsistent with this objective. Greater efficiency and effectiveness through the use of pre-existing contracts for commercial services and products is low hanging fruit for the Better Buying Power initiative. Today Secretary Panetta is continuing the drive to do “more without more.” One area where DoD can do “more without more” is by not creating more IDIQ contracts and instead, using pre-existing contract vehicles, like the GSA schedules and GWACs. Such an approach would be a win for DoD, industry and most importantly, the taxpayer.

The GSA Multiple Award Schedule (MAS) program is the crown jewel of government-wide contracting programs.  The MAS program provides customer agencies with access to thousands of contractors offering millions of commercial services and products.  State and local governments can use the MAS program’s information technology contracts to meet their needs as well as using MAS of all types for disaster recovery.  With contractors located from Maine to California (and don’t forget Alaska and Hawaii) the MAS program supports hundreds of thousands of American jobs.  The program includes a mix of small, medium and large business reflecting the diversity of the commercial market place.  Last year the MAS program accounted for over $50 billion in competitive purchases by federal, state and local governments.  One third of the dollar value of these purchases went to small business concerns, far exceeding the government-wide goal. 

The MAS program’s success can be attributed to three key features:

Reliance on the Commercial Market Place

First, the fundamental strength of the MAS program is its reliance on the commercial market place.  Reliance on the commercial market place increases competition and cost effective solutions.  It ensures access to the latest technologies.  Indeed, Jacques Gansler, Director of the University of Maryland’s School of Public Affairs and former Under Secretary of Defense for Acquisition, Technology and Logistics recently commented on who DoD should buy from stating in part that ”It’s very clear that in many areas, the Department of Defense is no longer the leader .  . . . [In] a lot of electronics, a lot of information systems, software packages, the commercial world is way ahead, so we should be drawing on that commercial world. . .” 

Continuous Open Seasons

Second, continuous open seasons ensure on-going access to the ever-changing commercial market place.  In the commercial world nothing stands still; companies are always looking to improve services and products.  The competition inherent in the commercial market place leads to innovation, growth and value. Continuous open seasons brings that dynamic to the MAS program.  Under continuous open seasons, companies can submit offers to GSA any work day throughout the fiscal year.  The use of continuous open seasons provides new commercial firms of all sizes with an ongoing opportunity to participate in a vital federal market place.  In particular, continuous open seasons provide opportunities for emerging small businesses seeking to enter the federal market place.  As a result, competition is enhanced and the government gains access to the latest commercial technologies.  There is a direct connection between continuous open seasons and the depth and breadth of commercial capabilities available to federal customers.  Indeed, the Government Accountability Office has cited continuous open seasons in finding that the MAS program is a competitive procedure under the Competition in Contracting Act.

Electronic Market Tools

Third, GSAAdvantage! and e-Buy provide an efficient and effective electronic market place through which agencies can compare commercial offerings and conduct streamlined task order competitions.  These tools enhance transparency and competition at the delivery/task order level.  As a result, contractors have increased visibility of agency requirements which means more business opportunities.  In turn, agencies can leverage requirements and conduct efficient competitions that deliver best value outcomes.   

There has been a lot of discussion recently regarding the future of the MAS program.  GSA is exploring the next generation of the MAS program.  In exploring the future structure of the program, GSA should maintain these three features which have been at the core of the MAS program’s success. 

In the spirit of the Administration’s “Myth-Busters” initiative, the Coalition looks forward to working with GSA on improvements to the MAS program.  In addition to addressing Other Direct Costs, here are four suggestions that we look forward to exploring with GSA and the VA:  

• Restructure and consolidate the solicitation and Special Item Numbers and move to a single “Corporate” or “Consolidated” Schedule Model. 
• Reform the Pricing Policies and Procedures to eliminate the Price Reduction Clause and rely on the mandated competition requirements for task orders to drive pricing.
• Consolidate operational management of the MAS program in a single office and strengthen the policy role of the Office of Acquisition Management.
• Leverage resources across the MAS enterprise through increased coordination and cross-program support between GSA and the VA, including electronic acquisition tools, marketing and outreach (GSA Expo), and policy development.

These suggestions would increase the efficiency and effectiveness of the program for customer agencies, taxpayers, GSA and industry, including small business contractors across the socio-economic spectrum.  In the coming weeks, the blog posts will elaborate on how these suggestions can reduce processing and paperwork, eliminate overlap and duplication, enhance operational consistency and strengthen oversight and management of MAS operations.

Last week’s blog post focused on the opportunities for GSA leadership as customer agencies increasingly look to the agency for procurement solutions.  The post further observed that “GSA’s commercial item contracting leadership through the MAS program can be the lynchpin in providing savings and value for customer agencies.”  GSA has a wonderful opportunity to provide a robust, flexible and sound framework for commercial item service solutions that provides best value to customer agencies and the taxpayer.  This week, I write again about addressing “Other Direct Costs” (ODCs) on MAS service contracts and task orders. 

We are at an interesting point in the federal market.  With the challenges associated with the budget, the stakes for the procurement system couldn’t be higher.  Agencies are under pressure to meet mission requirements with less or, in the case of DoD, to do “more without more.”  As a result, agencies want comprehensive solutions that efficiently and effectively meet their requirements.  Solutions based on commercial services offered via GSA’s MAS program can be the best value option in meeting customer agency needs.  In fact, agencies want to use the GSA MAS program for service solutions and MAS contractors want to offer, compete for and deliver solutions. 

Unfortunately ODCs are holding both parties back.  Service requirements, by their very nature, typically include ODCs (e.g. materials, travel and other costs) associated with providing a solution.  As such, agencies want contract vehicles that allow competition for complete service solutions inclusive of ODCs.  The Federal Acquisition Regulation (FAR) has addressed this issue.  The FAR includes commercial item clauses that allow for ODCs on commercial service contracts and task orders.  The FAR clauses provide flexibility and accountability for ODCs while the MAS ordering procedures provide a robust competitive framework for task orders.  The flexibility and accountability in the FAR clauses recognizes the need for sound, comprehensive solutions to service requirements.  ODCs can assist agencies in acquiring the latest technologies to support service work, including green technologies.  ODCs can be win for government, a win for contractors and ultimately a win for the taxpayer.  

In the absence of an ODC mechanism (i.e. the FAR clauses) in MAS contracts and task orders, instead of looking to the MAS program for solutions, agencies will use other contract vehicles that are not as transparent or competitive as the MAS program.  Worse, agencies will create their own service contracts, resulting in duplicative contract vehicles that unnecessarily increase contract transactional and administration costs for government and industry.  ODCs can be addressed in the MAS program in a sound, accountable and competitive manner.  GSA has the authority and the tools.  In the interests of economy and efficiency we look forward to working with GSA in resolving this issue.

This week, the Department of Defense announced the results of its strategic review and outlined its vision for the future. At the same time all across government, departments and agencies are also facing strategic, long range decisions on how to accomplish their missions efficiently and effectively in time of severe fiscal stress. As we tackle the challenges of the federal budget, GSA’s mission as the central purchasing arm of the government will become even more critical to the success of our procurement system. It is an opportunity as well as a responsibility for GSA and its workforce. Increasingly, agencies are turning to GSA for help in acquisition planning and execution. Agencies see an opportunity to leverage GSA’s acquisition workforce and contracts to meet their needs. Agency customers are also asking GSA for help in understanding their purchasing profiles–what and how much they are buying and through which contract vehicles.

GSA is well positioned to support its customers. GSA’s portfolio of contracts and programs (Multiple Award Schedules (MAS), GWACs, other IDIQ contracts and supply programs) can efficiently and effectively meet agency requirements, reduce contract duplication while providing business opportunities that deliver best value for the government, the taxpayer and contractors. In particular, GSA’s commercial item contracting leadership through the MAS program can be the lynchpin in providing savings and value for customer agencies.

As GSA’s leadership continues to work with its customers to meet their needs, the Coalition looks forward to working with GSA in ensuring its programs provide sound, effective and efficient best value solutions. For example, as GSA contemplates the next generation of the MAS program, the Coalition is prepared to engage in a thoughtful, comprehensive dialogue. In fact, this month the Coalition will be holding the first meeting of our Pricing Working Group (PWG). The PWG will develop a comprehensive set of recommendations with supporting rationale for reform of the outdated MAS pricing policies and procedures. The impetus for the PWG grew out of our 2011 Fall Conference. During the Fall Conference’s panel discussion entitled “Current MAS Pricing Practices, Policies and Audits: Compliance Risks and Rewards” the recommendation was made for a Coalition “Pricing Working Group” modeled on the “ODC Working Group.” The consensus of the panel and the audience was that a “Pricing Working Group” would play a very positive role in addressing the outdated regulatory framework for the negotiation of MAS prices. We look forward to working with GSA on this important issue.

Finally, on another note, I am pleased to announce the launch of our updated website. Thank you to Melissa King and all the Coalition staff for their hard work. We are not done, additional improvements and refinements to our web capabilities will continue over the coming months.

This week an update on the IT Schedule 70 software licensing issue and the way forward. As you know, last week I suggested including a new contract clause in the IT Schedule 70 contracts addressing conflicts between commercial license terms and federal law and regulation. Here again is the suggested language:

The parties acknowledge and agree that this Contract and any orders hereunder are subject to certain federal laws and regulations. Notwithstanding any clause to the contrary in any license agreement attached or appended to any order under this Contract, to the extent any clauses in the attached license agreement conflict with federal law or regulation or the terms of this Contract, such clauses shall not be given effect. The parties agree to review and negotiate the license clauses in good faith to the extent necessary to ensure compliance with applicable law and regulation.

The above language or some variation of it should adequately address GSA’s concerns while maintaining operational, competitive opportunities for the affected IT Schedule 70 contractors. The language reflects the long standing government contracts legal principle that to the extent a contract term conflicts with federal law, the federal law controls. It also reaffirms conflicts language already contained in FAR Clause 52.212-4 and FAR Clause 52.216-18 of the IT Schedule 70 contract. Hopefully the suggested language will assist all the parties in reaching an efficient and effective solution that protects the Government interests while enhancing competition and business opportunities through the GSA’s schedules program.

As noted in last week’s Friday Flash, GSA, in demonstrating its commitment to Myth-Busters, is seeking input from the Coalition and its membership on how to efficiently and effectively address this issue. It would be a wonderful to way to start out the New Year if GSA and the contractors worked together to quickly resolve this issue.

Here are our current “Top Five” issues that have a direct impact on our members that we will continue to address in 2012.

1. Other Direct Costs (ODC). Developing an efficient, effective and accountable contract mechanism for including ODCs and materials on GSA MAS service contracts is vital to providing best value, comprehensive solutions to customer agency service requirements via the MAS program. Too often, the prohibition on ODCs leads customer agencies to other less competitive contract vehicles or to the creation of duplicative contracts. The FAR provides the flexibility to include materials and ODCs on commercial item indefinite quantity, indefinite delivery contracts. The MAS program should follow the FAR. This year the Coalition and its ODC working group developed and provided GSA with a White Paper addressing the issue. We will continue to engage GSA.
2. MAS Pricing Policies and Procedures. The MAS pricing policies and procedures have not fundamentally changed in over 30 years. Yet, the commercial and federal market place are far different today than in 1982. Services account for approximately two-thirds of the dollar value under the MAS program while the pricing for services is governed by regulations essentially written for commercial products. Moreover, given the statutory mandate for competition at the order level for orders over $150,000, the price reduction clause (PRC) is no longer relevant. Yet, government and industry are incurring significant compliance costs associated with the PRC. Reform of the MAS pricing policies would increase competition, streamline the process and provide best value to the taxpayer. In 2012, the Coalition will be establishing a Pricing Working group to address the current policy. It is our understanding that next year GSA also will be reopening its GSAR 538 rewrite of the MAS pricing policies. The Coalition looks forward to the opportunity to work with all stakeholders on the MAS pricing policy.
3. Implementation of Section 1331 of the Small Business Jobs Act of 2010. Section 1331 directs the Administrator of OFPP to develop guidance providing that agencies, at their discretion, may set-aside or reserve contracts and/or set-aside orders for small businesses under multiple award contracts. On November 2, 2011, an interim FAR rule was issued implementing Section 1331. The language of the interim rule essentially mirrors the statute providing that agencies may, at their discretion, set-aside contracts and/or orders. The interim rule covers multiple award contracts under FAR 16.5 as well as MAS contracts under FAR 8.4. The key to the statute and regulation is that the decision whether to set-aside a contract or order is discretionary not mandatory. The MAS program already is the most successful governmentwide small business contracting program. Over the last decade under the MAS program, approximately 30-35 percent of the dollar value of orders has gone to small businesses, exceeding the governmentwide goal of 23 percent. The small business success of the MAS program is based on flexible, discretionary ordering procedures that provide opportunity for agencies and small business to transact. It is not based on mandatory set-aside requirements. The Coalition will continue to work for a flexible and efficient MAS program that benefits government, contractors (small, medium and large) and the taxpayer.
4. Contract Duplication. Contract duplication increases government and industry costs. The proliferation of contract vehicles over the last decade has reduced contract effectiveness and efficiency. We cannot afford unnecessary contract duplication. GSA plays and will continue to play a leading role in reducing contract duplication through the MAS program and IT GWACs. Over the last year, the Coalition has supported the Administration’s efforts to develop business case analysis policy that requires review and consideration of pre-existing contract vehicles before creating a new standalone contract. In the next year, the Coalition will continue to identify opportunities to reduce contract duplication.
5. Improving MAS Blanket Purchase Agreements (BPAs). The use of generic BPAs without specific requirements and/or volume commitments unnecessarily increases government and contractor bid and proposal costs. This is especially true when governmentwide multiple award BPAs contemplate further task order competitions under the BPAs. Throughout the last year, the Coalition has raised awareness of practices that unnecessarily increase costs and reduce efficiency. In 2012, the Coalition will be issuing a list of BPA best practices that identifies the keys to successful BPA competitions and outcomes for government, contractors and the taxpayer.

Of course there are other issues of importance the Coalition will also address in 2012, including ever growing data reporting requirements imposed on contractors, Trade Agreements Act implementation and compliance, strategic sourcing, ecolabels, and the development of policy addressing counterfeit items and the supply chain. In addition, over the next 30 days each of our committees will be developing business agendas for 2012 identifying committee level objectives for the members.
As always, the Coalition will work for common sense in government procurement that provides sound business opportunities for contractors and delivers best value for government and the taxpayer.

The $50 billion GSA MAS program is where federal requirements and commercial practices intersect creating a highly competitive governmentwide commercial marketplace. As the federal government’s largest commercial item contracting program, it is imperative that MAS contracts efficiently and effectively reconcile government requirements and commercial practices. With thousands of contracts covering millions of items, the ability of GSA and MAS contractors to work together to ensure clear, flexible and sound contract terms is vital to the success of the program in delivering best value to customer agencies and the taxpayer. Moreover, maintaining balance between government requirements and commercial practices in MAS contract terms enhances access to the commercial marketplace and fosters efficient and effective competition.

MAS contracts are living documents. Over time government requirements and commercial practices can and do change. A recent example of this is the ongoing dialogue between GSA and the IT schedule contractors regarding software license terms and conditions. GSA has identified certain commercial license terms that GSA believes are inconsistent with certain government requirements. With hundreds, if not thousands of potential software license agreements under the MAS contracts, GSA and IT schedule contractors should work together to find an efficient and effective process for addressing these concerns.

For those IT schedule contracts where the software licensing issues have not been resolved there may be a balanced, phased solution that allows the IT schedule contractors to continue competing for MAS orders while the issue is being addressed. Perhaps a first step would be to explore the possibility of bilaterally modifying IT schedule contracts to include an overarching conflicts statement addressing government laws or regulations and the standard commercial software license terms. Here is some sample language for the contracts:

The parties acknowledge and agree that this Contract and any orders hereunder are subject to certain federal laws and regulations. Notwithstanding any clause to the contrary in any license agreement attached or appended to any order under this Contract, to the extent any clauses in the attached license agreement conflict with federal law or regulation or the terms of this Contract, such clauses shall not be given effect. The parties agree to review and negotiate the license clauses in good faith to the extent necessary to ensure compliance with applicable law and regulation.

In addition, the IT schedule contracts already include FAR Clause 52.216-18 Ordering (OCT 1995) (Deviation II—FEB 2007) which provides in part that “[a]ll delivery orders or task orders are subject to the terms and conditions of this contract. In the event of a conflict between a delivery order or task order and this contract, the contract shall control.” This clause, along with the new conflicts language should adequately address GSA’s concerns thereby allowing continued operation and use of current IT schedule contracts. At the same time, GSA and the IT schedule contractors can continue to engage in thoughtful discussions regarding unique government requirements and commercial practices in software licensing. These discussions should lead to a better understanding on both sides ensuring clear, sound and flexible commercial software license terms on IT schedule contracts.

On October 5, 2011, the Small Business Administration issued a proposed rule implementing the small business subcontracting plan provisions of the Small Business Act of 2010 (the 2010 Act). Among other things, the rule implements Section 1322 of the 2010 Act and requires an offeror to make a representation that in performing the contract it will make a good faith effort to acquire articles equipment, supplies, services or obtain the performance of construction work from small business concerns used in preparing and submitting the bid or proposal in the same amount and quality used in preparing and submitting the proposal. Section 1322 also requires the prime contractor to notify the contracting officer in writing whenever the prime contractor does not utilize a subcontractor that was used in preparing its proposal.

The purpose of Section 1322 of the 2010 Act is to support and enhance opportunities for small businesses by addressing so-called “bait and switch” tactics in small business subcontracting. The Coalition supports efforts to reduce “bait and switch” practices. Unfortunately, Section 1322 will likely create a much more challenging environment for small businesses seeking subcontracting opportunities under federal prime contracts.

Here’s why. The new statutory requirement that an offeror represent that it will make good faith efforts to subcontract with small business in the same amount and quality as indicated in the proposal creates a new avenue for potential Civil False Claims Act liability. Under the Civil False Claims Act qui tam, lawsuits could be filed alleging that a prime contractor falsely represented in its proposal that it would a make a good faith effort to utilize small business subcontracts in the same amount and quality as indicated in its proposal if it turns out that the prime contractor ultimately does not use a particular subcontractor. The statute creates a new risk factor for other than small businesses (large, medium and new graduated small businesses) regarding their government contracts. In order to reduce this risk, large business prime contractors may have no choice but to develop business strategies that reduce their small business subcontracting opportunities. At a minimum, the vetting process by prime contractors and the corresponding marketing efforts by small business concerns will be much more challenging and complex. Subcontracting opportunities for small businesses will suffer.

Section 1322 is a prime example of the law of unintended consequences. Public comments on the proposed rule are due January 6, 2012. The Coalition will be submitting comments.