The Coalition for Government Procurement

Strategic acquisition offers government and industry an opportunity to work together to identify unnecessary costs in the acquisition process and pass those savings along to federal agencies.  However, a new term has entered the dialogue regarding the Federal Strategic Sourcing Initiative (FSSI).  That term is “supplier suppression.”  What does “supplier suppression” mean in the context of FSSI?

At bottom, “supplier suppression” means constricting the supply chain and, ultimately, restricting competition through a limited set of generic, government-wide contract vehicles.  GSA is currently repeating its past.  Over 20 years ago, GSA had a limited set of FSS contracts that were mandatory for use across the federal government.  The result was static pricing, restricted competition, limited access to best in class commercial companies, and high customer dissatisfaction.  Customer agencies avoided using GSA.

“Supplier suppression” will have long term negative consequences for customer agencies and the American people.  Limiting competition in the supply chain will inevitably lead to higher prices and lower quality for customer agencies and the American people.

In response to FSSI and the concept of supplier suppression, the Coalition has begun work on a white paper focusing on FSSI and its impact.  The Coalition will host a Forum focusing on FSSI and its impact on customer agencies, contractors and the American people.  The Coalition has also developed a set of “Strategic Acquisition Principles” that, if adopted, would deliver best value solutions for customer agencies while maintaining a vigorous, robust commercial supply chain.  At the heart of these principles are sound requirements development and volume commitments as driving value for customers and sound business opportunities for contractors.  Effective requirements development is the key.

Strategic Sourcing initiatives, appropriately structured, could be a win for all stakeholders.  The current FSSI approach, however, creates significant detachment between customer agencies and contractors.  It is a top down approach rather than a bottom up one.

The Coalition’s “Strategic Acquisition Principles” are built around the fundamental procurement principle that the closer the acquisition is to the requirements holder the more likely a best value outcome will result for all.  The closer a procurement is to the actual requirements holder, the better opportunity for clear, consistent requirements with corresponding volume commitments.  Clear, consistent requirements and volume commitments drive competition and savings.  Here are the Coalition’s principles:

 Strategic Acquisition Principles

  1. Strategic acquisition offers government and industry an opportunity to work together to identify unnecessary costs in the acquisition process and pass those savings along to federal agencies.  Commercial item contracting is a model that reduces the cost of acquisition.  By eliminating government-unique requirements in favor of commercial practices, the costs involved in doing business with the Federal government are reduced and the taxpayer saves. In essence, put “commercial” back into commercial item contracting and save.
  2. Savings calculations should cover the Total Acquisition Costs to the government including the administrative costs involved in planning, conducting acquisitions, data collection, and contract management.  How the government calculates its strategic sourcing savings should also be transparent to the American public.
  3. GSA Schedules are a strategic source. Agency specific BPAs with well-defined requirements and volume commitments lead to innovative solutions through robust competitions, at competitive prices, with improved efficiency.  Generic government-wide BPAs add costs without commensurate value.
  4. Continuous open seasons enhance competition and innovation while meeting the Multiple Award Schedule program’s statutory mandate that it remains open to all sources.  Continuous open seasons facilitate an active supplier base; provide access to the latest commercial services, products, and solutions for GSA and its customer agencies; and encourage task order competition.

We look forward to your feedback on these principles.  More importantly, we look forward to delivering our Strategic Sourcing White Paper and hosting our Strategic Sourcing Forum in June.

Roger Waldron

President

As March enters in like a polar bear, it is time to provide an update on the Coalition’s event schedule for March and April.

Myth-Busters Forum with Daniel Gerstein, Acting Under Secretary for Science & Technology (S&T) at the Department of Homeland Security, March 13

On the morning of March 13th the Coalition will be hosting a Myth-Busters Forum with Daniel Gerstein, Acting Under Secretary for Science & Technology (S&T) at the Department of Homeland Security.  The forum will held at the law offices of McKenna Long & Aldridge, LLP.  DHS S&T plays a central and strategic role in supporting/facilitating requirements development, acquisitions and the implementation of cutting edge technologies supporting DHS component offices nationwide.

Cyber solutions, chemical/biological detection technologies, behavioral sciences, and first responder infrastructure, are among the mission capabilities DHS S&T supports across the homeland security enterprise.  DHS S&T is a key interface connecting requirements to technologies through its work with stakeholders within DHS, at the state and local level, internationally, and the private sector.  Our DHS S&T Myth-Busters Forum with Daniel Gerstein focuses on how technology is supporting the DHS mission, and importantly, how industry can engage DHS.  The forum also provides an opportunity for dialogue on the vital role technology identification, development and implementation plays in protecting the homeland.  The forum is a must attend event for industry program managers, account managers and executives focusing on the DHS market.

Myth-Busters webinar on Contractor Assistance Visits under GSA Multiple Award Schedules, March 25

On March 26th, the Coalition will be hosting a Myth-Busters webinar focusing on the processes and procedures for Contractor Assistance Visits under the GSA Multiple Award Schedule program.   As you know, Contractor Assistance Visits are conducted by the Industrial Operations Analysts (IOA) from GSA’s Federal Acquisition Service (FAS).  An MAS contractor can expect 2-3 visits from an IOA over the course of a five year contract period.  It is vital to understand the IOA role and expectations for MAS contractors.

The Myth-Busters webinar features Tom Brady, Director, Supplier Management Division, Office of Acquisition Management at GSA’s Federal Acquisition Service.  Tom will be discussing the respective roles of the Administrative Contracting Officer (ACO) and the IOA.  Topics will include the updated review parameters and processes for IOA visits as well as key compliance issues (e.g. Industrial Funding Fee) surrounding MAS contracts.  This webinar is a “must dial in” event for contractor compliance managers, in house counsel, contracting officers, and executives responsible for management and oversight compliance.

2014 Spring Training Conference on Opportunities for Success in the Federal Market, April 10

On April 10th, the Coalition will hold our Spring Training Conference at the Fairview Marriott in Falls Church, Virginia.  The theme for this year’s Spring Training Conference is Opportunities for Success in the Federal Market.  The Spring Training Conference’s speakers include representatives from:

  • Department of Army
  • Department of Air Force
  • Department of Health & Human Services
  • Defense Procurement and Acquisition Policy (DPAP)
  • GSA Office of the Chief Acquisition Officer
  • Offices of the GSA Inspector General and VA Inspector General

Our breakout sessions include a session focusing on the GSA FAS Acquisition Centers, the Department of Homeland Security, the IT GWAC programs (GSA, NASA, and NIH), the Small Business Administration, and GSA’s Office of Acquisition Management.  It is a jam packed line up!  To review the agenda and register click here.

The breadth and depth of speakers demonstrates our commitment to fostering a robust Myth-Busters dialogue between government and industry.  Robust dialogue and communication improves understanding and opportunities to deliver best value procurement solutions that support agency missions for the American people.  We look forward to seeing you there!

Roger Waldron

President

 

By Guest Blogger: Ray Bjorklund, President, BirchGrove Consulting LLC

As a business developer, you follow the money. You trek toward the customers that spend money and the customers that spend the most. Discretionary spending authority, appropriated by Congress, is your bellwether.

As an experienced business developer, you follow that portion of the budget authority intended to be spent on contracts for what your company offers. Discretionary spending does not necessarily correlate to contract spending; about 40% of discretionary spend goes to compensation of government employees and not to contracts; that percentage is slowly rising, as agencies are told to buy less of everything.

Your objective should be to become a savvy business developer.  Savvy business developers, look beyond planned contract spending for any trends that will shift your prospects in the federal market segment you are pursuing, either in specific customer agencies, in the types of services or products purchased, or both.

Using the federal budget, how does the savvy business developer develop the situational awareness to find opportunity?  The President’s Budget is an annual political statement, which the Executive Branch begins preparing approximately 18 months before the fiscal year starts. When you add up the documents prepared by the Office of Management and Budget and all the congressional justification materials prepared by the agencies, the page count is well north of 20,000. There are many messages, some bold and some mysterious, residing in those pages. In the 2014 budget it is clear that spending on infrastructure, education for jobs, and veterans assistance are again important messages.

But consider that federal contracts for “infrastructure” will decline by $700M to $11.1B in 2014. Spending on workforce development contracts will rise 10% to $6.1B. Federal contract spend on veterans programs will increase from $33.5B to $35.7B, or 7%. You may have to decide between growth and revenue. Do you want to pursue growth, perhaps with smaller revenues? Or do you want to do business where the government spends a lot, even though spending is declining in those areas?

And then there are more specific, exciting growth areas like big data and cyber security. Looking beyond the hype, however, we see subtle shifts among the categories of contract spending and a few initiatives that propose new or at least different levels of contract spending.

The Air Force plans to ramp up cyber superiority spending to more than $4.1B, 8% over 2013. Are there cyber contract opportunities? No and yes. There are increases in spending on military personnel and civil service that will suppress spending on services contracts. But one of the largest components of the net increase is $85M in new construction at Fort Meade, the first increment in a new $358M operations center for about 1,400 cyber people. The new facility will eventually require another $64M in equipment and IT and over $6M in furniture. Watch it unfold over the next couple of years.

Worried about another sequester? The lateness of the 2013 decision to sequester budget authority inhibited many spending initiatives and compounded uncertainty about any requirement for a 2014 sequester. Program planning and rationalization suffered.

Then the partial government shutdown in Oct 2013 overrode the Administration’s intent to systematically plan for a 2014 sequester. The bipartisan, bicameral budget deal provided a little stability. But not enough stability to completely overcome the risk aversion that persists. The good news is that a 2014 sequester is extremely unlikely. The bad news is that it’s going to get a little worse, before it gets better.

Still struggling to find new opportunities? Since there will be little overall change in the level of contract spending, a business developer has to peer deeper into the budget to see if the contract spending is really new or is merely going to entrenched incumbents, with little opportunity to get a foot in the door.

To meet your shareholders’ expectations of revenue, you must “up your game” in following the money and become the savvy business developer. Somewhere in those 20,000 pages of nooks and crannies, you’ll find fresh opportunities.

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Legal Corner

By: Brian Miller, Inspector General , U.S. General Services Administration

The mandatory disclosure rule contained in the Federal Acquisition Regulation has now been in effect for slightly more than five years.  Under the rule, federal contractors are required to report potential fraud and false claims related to their contracts to the Office of Inspector General (OIG).  We believe implementation of the rule at the General Services Administration (GSA) has been successful, but we also believe more can be done.  In this article, we outline the GSA OIG disclosure program, why contractors should make disclosures, and some best practices for contractors that we have noted.

The GSA OIG Disclosure Program

When the mandatory disclosure rule was made final at the end of 2008,[1] the GSA OIG implemented a program to process contractor reports.  My office has received over 120 disclosures and recovered almost $15 million under this program so far.

When the GSA OIG receives a disclosure, we provide a copy to the responsible contracting officer and the Department of Justice (DOJ), and we notify the OIGs of other affected agencies.  We regularly coordinate with the Department of Defense (DOD) OIG since a significant number of disclosures involve both GSA and DOD (for example, an affected DOD program purchased goods or services through a GSA schedule contract).

We make an effort to keep contractors up-to-date on the status of the disclosure, starting with an acknowledgement letter after receipt of a disclosure and an initial in-person meeting to talk about details of the reported conduct.  After the meeting, we request further details as necessary to better understand the nature of the conduct or verify the amount owed the government.  These requests may include documentation of facts and figures, explanations of calculation methods, or interviews of company employees who can explain how problems occurred and any mitigating factors that will prevent future problems.  As explained below, we have noticed some best practices by contractors that we suggest all should follow.

Why it’s a Good Idea to Make Disclosures

While we are encouraged by the number of contractors making disclosures, we believe that more should do so.  It is in the contractor’s own interest to disclose.  Making disclosures is legally required and making a disclosure by itself will not result in suspension or debarment.  However, a failure to disclose can lead to suspension or debarment.  In addition, a good-faith disclosure and full cooperation can go a long way toward demonstrating a contractor’s integrity and present responsibility, and should be in compliance with the contractor’s ethics program.  In this regard, my office has not referred any contractor that has made a disclosure to GSA’s suspension and debarment official, and only in two unique instances has my office referred a disclosure to DOJ.

Another reason for making a disclosure to the OIG is that it gives a contractor an opportunity to do an internal investigation and to present its side of the story to the OIG, without being distracted by litigation or in the middle of an OIG investigation or audit.  We suggest that contractors are better off disclosing before we begin an investigation or audit.  After contacting us, we prefer that the contractor do an internal review, as long as we are informed as the internal review progresses.

We recognize that a few contractors may hope that their conduct is never discovered and they are never held accountable for their actions.  In today’s world, however, that belief may be unrealistic. We live in a world where most things come to light in one way or another.  Contractors may choose to balance the risk of getting caught against the potential penalties, but in our view that balance is clear:  reporting produces benefits that outweigh the risks — besides it being the right thing to do.

Best Practices When Making Disclosures

During the course of processing disclosures, we have seen some contractor practices that are particularly helpful in resolving disclosures efficiently, and we are hopeful that all contractors will:

1)      provide timely and thoroughly documented factual information with the initial disclosure (or in an update to the disclosure as soon as an internal investigation is complete);

2)      include a description of the conduct that occurred, an explanation of the date range, how the conduct was discovered, its consequences, remedial action taken, an assessment of the amount owed to the government, and an explanation of how the amount was calculated, including any legal conclusions used for the calculation;

3)      identify relevant issues and witnesses;

4)      keep the OIG informed on the progress of an internal investigation and the collection   of additional materials and information; and

5)      err on the side of over-communicating.

Of course, contractors have amassed experience during the past five years of the disclosure program as well, and we are interested in hearing your lessons and suggestions.


[1] Contractor Business Ethics Compliance Program and Disclosure Requirements, 73 Fed. Reg. at 67,064, 67,066 (Nov. 12, 2008).

Wednesday night brought 14 inches of snow—significantly more than predicted! (Gee, how did that happen?)  I spent Thursday morning shoveling the driveway and sidewalk.  Everything is closed.  The streets are not plowed.  It is Washington, DC.  Enough already!  It is time for Olde Man Winter to retire!  And with the venting done, let’s turn to this week’s comment.

Earlier on Wednesday the Department of Defense (DoD) issued a request for public comment as part of the Director of Defense Procurement and Acquisition Policy’s (DPAP’s) “assessment to identify impacts experienced by industry resulting from contracting statutes.” The Federal Register notice can be found here.   DPAP has identified approximately 400 DFARS requirements based solely on statute.   As part of the assessment, the DPAP Director is seeking public input with regard to—

  • Particular impacts associated with specific contracting statutes;
  • Why the identified impact does not achieve the intended benefit of the identified legislation, or why the identified benefit is not helpful to the Department; and
  • Any recommendations for alternative approaches to achieve the intended benefit of the identified legislation.

The notice also states that DPAP is interested in feedback on DFARS provisions that are not based on statute, but warrant similar consideration.   Public comments are due March 14th.

DPAP’s request presents a wonderful opportunity to provide information/data regarding statutory requirements where the costs outweigh the benefits.  Just as important, the public should use this opportunity to also address the benefits of certain statutes.  In particular, the benefits of the current statutory definition of “commercial item” far outweigh perceived costs.  With the budget challenges facing the federal government, innovation can drive savings, efficiency and effectiveness.  The flexibility provided by the “of a type” definition enhances competition and expands the commercial market across the federal enterprise.  Simply put, the commercial item definition facilitates access to new technologies, solutions and services.  We cannot afford to restrict it.

Our first comment in response to the notice will be a recommendation to extend the due date for comment to May 14th.  Given the importance of the task combined with the extensive number of statutory requirements to review, additional time is needed for the public to respond with fulsome, sound comments for consideration by the Secretary of Defense..

Finally, the Coalition will be responding to the request for comment.  We will be providing our members with the 400 statutory cites with the corresponding DFARS reference as compiled by DPAP.  We look forward to your feedback.  Next week we will be seeking volunteers for a working group to develop consensus comments for submission to DPAP.

On January 10th the “FAR and Beyond” blog published a comment identifying fourteen key procurement items for 2014 that will be addressed throughout the year in future blog postings.   This week it is time to address “GSA’s Strategic Plan:  Plan versus Implementation.”  We appreciate GSA providing the public an opportunity to comment on the draft plan and look forward to continuing the dialogue on delivering best value procurement solutions for customer agencies and the American people.

As you know, my Federal Times Blog highlighted the GSA Strategic Plan’s lack of focus on GSA’s biggest, most strategic program, the Multiple Award Schedule (MAS) program.  In addition, the Coalition submitted comments to GSA on the strategic plan which can be reviewed here.  GSA, with its unique statutory procurement authorities can be the innovation laboratory for streamlining the procurement process.

In the spirit of Myth-Busters, the Coalition would like to offer GSA a list of strategic implementation initiatives to include in the Strategic Plan that would deliver efficiency, savings and best value procurement solutions to customer agencies and the American people:

  • Create an Innovation Schedule (The goal is to embrace the commercial marketplace, reduce barriers to entry and deliver innovative, flexible, best in class solutions to customer agencies.  For example, the innovation schedule could enhance and grow flexible, cloud solutions, and software as a service.)
  • Review, reform, and/or eliminate acquisition regulations, procedures, terms and conditions where the costs outweigh the benefits.
  • Reform the MAS pricing policies to better leverage and reflect the current commercial marketplace as well as the statutory requirement for competition at the order level.   This includes implementing “other direct costs” on MAS contracts and orders.
  • Embrace the MAS program for the Networx follow on procurement. (GSA has incorporated SATCOM services onto IT Schedule 70—it’s time to add all forms of commercial data transmission/management to the MAS program.)
  • Pursue the Alliant follow on procurement (The Alliant follow on procurement will be a critical part of GSA’s ongoing IT portfolio.  It is a portfolio that can reduce contract duplication, increase efficiency and deliver best value solutions to customer agencies.)
  • Improve the effectiveness and cost savings under the Federal Strategic Sourcing Initiative by shifting strategic sourcing to agency specific BPAs. (It is clear that the closer the procurement is to the agency requirements holder, the greater the opportunity for a best value outcome.  Agencies can articulate their requirements, schedule, buying patterns and dollar volume commitments better than can ever be set forth in a set of generic, government-wide BPAs or contracts.  The result will be enhanced competition, greater value and a vibrant supply chain for years to come.)

At their core, these recommendations are about simplifying the procurement process for customer agencies, GSA acquisition professionals, and contract partners.  There is power in simplicity!  Streamlining processes empowers customer agencies and contractors to focus on competing requirements and delivering best value solutions.  We have had more than a decade of layering on additional processes, procedures and oversight—we can no longer afford costly procurement policies and procedures that increase transactional costs.

Roger Waldron

President

Before tackling the comment of the week there are some updates I’d like to share with you.  First, it is an exciting time with the launch of my new Federal Times Blog!  The first blog posting appeared last week and can be found here.  I encourage all Friday Flash readers to follow this new blog focusing on GWACS and GSA.  The next blog will be posted the second week of February and will focus on the “GSA supplier” relationship.

MAS Contract Compliance and the 5th Anniversary of the Mandatory Disclosure Rule, Feb 5th

With GSA Inspector General, Brian Miller

Second, next week is Compliance Week at the Coalition!   On Wednesday, February 5th, Brian Miller, GSA Inspector General (IG), Aleksandra Doran, Assistant General Counsel to the IG, and Jonathan Aronie, Partner at Sheppard Mullin will participate in a Myth-Busters dialogue focusing on MAS Contract Compliance and the Mandatory Disclosure Rule!  Space is filling up fast and this is a great educational opportunity!  Attendees will hear the ins and outs of the Mandatory Disclosure Rule and contract compliance from those on the front lines of compliance management.   The Forum is a “must attend” event for contractor in-house counsel, compliance managers, contract managers, and executives.  There is still time and you can register here.

Fundamentals of Ethics and Compliance Webinar, Feb 6th

Steptoe & Johnson

The following day, the Coalition will be hosting a webinar, ”Fundamentals of Ethics and Compliance” by Steptoe & Johnson.  Tom Barletta, Partner at Steptoe & Johnson will focus on the latest developments in the unique world of government contract ethics rules.  These two sessions provide a powerful package of insight, information, and best practices around the business imperative of contract compliance!

The Cost-Build Approach for GSA Schedule Labor Pricing, Feb 11th

Baker Tilly

On February 11th, Baker Tilly will present a Coalition Webinar on “The Cost-Build Approach for GSA Schedule Labor Pricing.”  Another great opportunity to learn about key trends, issues and strategies associated with the negotiation of labor rates using the cost-build approach.

ITS Priorities for 2014, Feb 20th

With Mary Davie, Assistant Commissioner for GSA’s Integrated Technology Service (ITS) and Mark Day, ITS Deputy Assistant Commissioner

Finally, the Coalition is pleased to announce that Mary Davie, Assistant Commissioner for GSA’s Integrated Technology Service (ITS) and Mark Day, Deputy Assistant Commissioner for ITS will be providing an update on ITS Priorities for 2014 at our February 20th  Myth-Busters Forum.  The forum will be from 7:30 am to 10:00 am at the Tower Club.  You can register here.

Today marks the target release date for the new FSSI IDIQ for office supplies (OS3).  As you know, last week’s “FAR and Beyond” blog focused on OS3.  GSA’s decision to create a duplicate IDIQ contract program that overlaps the GSA schedules is troubling.   The apparent rationale for creating the new IDIQ is that customer agencies have indicated that some MAS terms and conditions could hinder pricing.   If that is the case, we must ask the obvious question. Why not fix the MAS program, which accounts for 75 percent ($40 billion) of the Federal Acquisition Service’s total annual dollar volume?

The MAS program is the backbone of GSA, Federal Acquisition Service.  It is the leading commercial item contracting program across the federal enterprise.  It provides a streamlined marketplace for commercial firms and customer agencies to efficiently and effectively compete for and acquire commercial services, products and solutions.  But the full potential of MAS has not been achieved.  The MAS program can be a driver for— innovation in services, solutions, and technologies.  It can bring new, creative commercial practices, pricing and contract structures to customer agencies.  By better mirroring the commercial marketplace, the MAS program will better serve the American people.

It is time to for reform of the MAS program that achieves greater, openness, flexibility, and streamlining.  It is time to innovate the MAS program!

Rather than focusing on innovation, GSA focuses on “supplier suppression.” For example, without any fanfare or advance notice, GSA closed one of the largest, most important SINS on Schedule 51V to new offers.

The closure of the schedule is an anti-competitive, anti-market approach.  To the extent the goal is simply to reduce the number of contractors, the long term implications for customer agencies and the American people are not good.   Limiting the supply chain could reduce quality and increase prices over the long term.  Closing schedules is making a symbolic statement that innovative best in class small, medium and large businesses need not apply!

Roger Waldron

President

Here in DC it has been cold and snowy—and parents across the region are wondering if school is going to last through July 4th given all the cancellations. It seems that everyone in DC has lost productive time due to our winter weather. The Coalition is no exception.

Our “Fundamentals of Ethics and Compliance” webinar presented by Tom Barletta, Partner at Steptoe & Johnson, originally scheduled for January 21st has been rescheduled for February 6th. This makes the week of February 3rd “Coalition Compliance Week” as on February 5th we are excited to host Brian Miller, GSA Inspector General, and Aleksandra Doran, Assistant General Counsel to the GSA Inspector General, as well as Jonathan Aronie, Partner at Sheppard Mullin for a Myth-Busters Forum on “MAS Contract Compliance and the 5th Anniversary of the Mandatory Disclosure Rule.” For more information on these two important contract compliance events please click here.

Touching on the compliance theme, this week’s blog focuses on the impact that the Price Reduction Clause is having on GSA’s acquisition strategies for its Federal Strategic Sourcing Initiatives (FSSI). As many of you know, last Fall GSA issued a draft Statement of Work (SOW) for the establishment of Multi-Agency Multiple Award Indefinite-Delivery Indefinite Quantity (IDIQ) contracts for Office Supplies Strategic Sourcing (OS3). GSA’s previous office supply (OS1 and OS2) FSSI efforts utilized Blanket Purchase Agreements (BPAs) under the Multiple Award Schedule (MAS) program as the contracting platform. In a change of direction, the draft OS3 SOW made clear GSA’s intent to create a new contract vehicle, apart from the MAS program for office supplies. The proposed new contract vehicle will essentially duplicate the MAS program.

GSA’s MAS program was designed to be a cost effective platform that could be used across a broad spectrum of commercial services and products. If the program no longer achieves that objective, now is the time to fix the schedule rather than creating a duplicative contract that in the long term will raise costs for both contractors and customers and reduce access to the Federal market for both large and small businesses.

We have a situation where MAS contractors and customer agencies apparently agree that the PRC may play a counter-productive role in the program by driving costs and prices up. The Coalition provided GSA with insight into the costs associated with the PRC via our 2012 response to GSA’s Paperwork Reduction Act public notice seeking comment on the burdens associated with the clause. GSA’s response to our comments can be found here. The Coalition’s White Paper on MAS Pricing provides positive framework for reform. Central to the Paper are recommendations to eliminate or change application of the PRC. We look forward to a robust dialogue on reforming the pricing policies.

More immediately, GSA still has the opportunity to conduct a streamlined competition for FSSI office supply BPAs under the MAS program that will reduce transactional costs for all. I know, I know–but what about the potential for the PRC driving up costs under the resulting BPAs? GSA has options!

Last year, in order to enhance competition, GSA waived application of the PRC for the Air Force’s commercial furniture strategic sourcing procurement! If GSA can waive application of the PRC for a customer agency’s procurement why can’t it waive the clause for its own acquisition? Moreover, as authorized in the General Services Acquisition Regulation (GSAR), GSA can issue a class deviation from the PRC under the office supply schedule. As such, these two options would allow customer agencies, GSA and its MAS contractors to save time and money through a streamlined BPA competition under the MAS program. Under the circumstances, GSA’s decision to duplicate the MAS program with a new contract vehicle rather than address the underlying PRC is troubling.

Roger Waldron

President

Congratulations Jeffrey Koses!

January 17th, 2014

The Coalition for Government Procurement (“the Coalition”) congratulates Jeffrey Koses on his new role as Senior Procurement Executive (SPE) at the General Services Administration (GSA). Jeff Koses has had a long successful career at GSA working across program operations for the Federal Supply Service and its successor organization, the Federal Acquisition Service. During his time with the Federal Acquisition Service, Jeff developed the expertise in GSA’s procurement programs and acquisition policies to fill the critical role of SPE.  The Coalition looks forward to working with Jeff in pursuing common sense solutions for the acquisition of commercial services and products that deliver best value and cost savings to the American taxpayer.

Our engagement with Jeff will focus on a “Common Sense Agenda for Best Value and Cost Savings:”

  • Improving communication and engagement between contractors and GSA, especially with regard to the impact of strategic sourcing on the supply chain
  • Reviewing GSA contract clauses and requirements and eliminate those where the costs outweigh the benefits (i.e. put “commercial” back in commercial item contracting)
  • Reforming the Multiple Award Schedule (MAS) pricing policies to enhance competition and efficiency (the Coalition developed a white paper addressing reform of the MAS pricing policies which can be found here)
  • Addressing and reinforcing the positive role senior and middle management plays in the management of FAS operations (to date the procurement community, including MAS contactors, has seen  no formal, public FAS response to industry’s position on the GSA Inspector General Office’s June 4, 2013 audit “Improper Management Intervention in Multiple Award Schedule Contracts)
  • Addressing contract duplication by improving the GSA marketplace of governmentwide contracts so customer agencies and contractors can more efficiently and effectively compete, propose and acquire solutions, services and products

The Coalition will be reaching out to Jeff to begin the dialogue on these key issues.

Roger Waldron

President

By: John E. McCarthy Jr., Partner, Crowell & Moring LLP and James G. Peyster, Counsel, Crowell & Moring LLP 

On January 2, 2014, the Government Accountability Office (GAO) provided to Congress and released to the public its Bid Protest Annual Report to Congress for Fiscal Year 2013.  Pursuant to the Competition in Contracting Act, 31 U.S.C. § 3554(e)(2), the GAO Procurement Law Division is required each year to provide a summary report to the Committee on Governmental Affairs and the Committee on Appropriations of the Senate and to the Committee on Government Reform and Oversight and the Committee on Appropriations of the House of Representatives updating Congress as to (1) the annual protest statistics, (2) any instances in which a federal agency failed to abide by a GAO recommendation in a sustained bid protest, and (3) a summary of the most prevalent grounds for sustaining protests” during the preceding year.

FY 2013 Bid Protest Statistics

The most interesting aspect of the FY 2013 GAO report is the year-on-year protest statistics.

For the first time since 2006, the number of total protests filed at GAO dropped from the previous year, although the 2429 new protests is only 2% lower than the FY 2012 total, and it is still the second highest total in GAO’s history.

The “effective rate” for GAO protests – defined as the percentage of cases in which the protester obtains a favorable result either through written decision from GAO or voluntary agency corrective action – ticked upward slightly to 43% after having held steady at 42% for each of the previous three years.  Conversely, the total percentage of written sustained protests dropped from 18% in FY 2012 to 17% in FY 2013.  The combination of a rising effective rate and a dropping sustain rate demonstrates that agencies are perhaps being increasingly more aggressive in taking voluntary corrective action to fix legitimate problems identified by protesters.

Another trend suggested by the FY 2013 statistics is an effort by GAO to streamline the protest process.  After a recent dip, the number of cases in which outcome prediction alternative dispute resolution (ADR) was used by GAO increased by 37% from the FY 2012 figures.  Moreover, 86% of the 145 cases in which ADR was used resulted in a resolution of the protest, which represents the highest ADR success rate since 2009.

At the same time ADR figures were rebounding, GAO continued its trend of dramatically reducing the number of hearings conducted.  Only 3.3% of all protests were deemed to require a hearing in FY 2012.  This number reflects an all-time low for GAO since hearing statistics have been published in the GAO annual report, and is far below the 12% rate of hearings in FY 2009.

The combination of more voluntary corrective action, more outcome prediction ADR, and fewer hearings suggest that the protest process has perhaps become slightly more streamlined for prospective protesters.

Agency Decisions to Reject GAO Remedial Recommendations

As required by CICA, GAO also informed Congress that on seventeen occasions an agency had declined to abide by GAO’s recommended corrective action.  But this total, which is well above historical averages, is somewhat misleading.  Sixteen of the seventeen remedial rejections relate to a single issue relating to an ongoing dispute between the Department of Veteran Affairs and GAO about the requirements of the VA to abide by the Veterans Benefits, Health Care, and Information Technology Act of 2006 (“the VA Act”), 38 U.S.C. §§ 8127-8128, before making purchases off the Federal Supply Schedule.

The VA Act requires that the VA procure goods and services from veteran-owned small businesses any time the contracting officer has a reasonable expectation that two or more veteran-owned small business concerns will submit offers and that the award can be made at a fair and reasonable price.  Since 2012, the VA has taken the position that it does not have to make this determination before it decides to make a purchase off the Federal Supply Schedule, while GAO has repeatedly concluded that 38 U.S.C. § 8127(d) requires that the veteran preference must be complied with before the VA may decide how it wants to make a purchase.  This disagreement becomes a significant issue where there are multiple veteran-owned small businesses that can do the work.  Starting in 2012, GAO has held that the VA violates the VA Act when it makes an FSS buy without first making this determination.  On 18 occasions in FY 2012 and 16 more in FY 2013, the VA has rejected GAO’s analysis.

The one instance of a rejection of a GAO corrective action remedy other than a VA Act dispute arose in the context of the Department of Housing and Urban Development’s use of a notice of funding availability (“NOFA”) for the issuance of cooperative agreements, rather than a procurement solicitation for the award of a contract.  GAO concluded that circumventing federal procurement requirements via the NOFA process was improper and contrary to the Federal Grant and Cooperative Agreement Act, 31 U.S.C. §§ 6301-6308, because the “principal purpose” of the NOFA was to obtain contract administration services for HUD’s direct benefit and use.  See Assisted Housing Services Corp., et al., B-406738 et al., August 15, 2012, 2012 CPD ¶ 236.

GAO’s Most Prevalent Grounds for Sustaining Protests

Starting this year, CICA now requires GAO to also update Congress about the most prevalent grounds for sustaining protests in the last fiscal year.  31 U.S.C. § 3554(e)(2).  In the inaugural edition of this disclosure, GAO indicated that most prevalent reasons for sustaining protests during the 2013 fiscal year were: (1) failure to follow the solicitation evaluation criteria; (2) inadequate documentation of the record; (3) unequal treatment of offerors, and (4) unreasonable price or cost evaluation.  GAO also clarified that it was only considering actual published sustained decisions in identifying the most prevelant issues, because “Agencies need not, and do not, report any of the myriad reasons they decide to take voluntary corrective action.”

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