The Coalition for Government Procurement


Legal Corner

By:  Jonathan Aronie, Partner, Sheppard Mullin Richter & Hampton

I acknowledge it runs counter to the traditional, universally-accepted, ultra-cool image of DC Government Contracts lawyers, but I must admit I like reading GSA OIG Audit Reports.  So it was with great anticipation that I poured myself a generous glass of milk the other night and curled up in front of a warm desk lamp to devour the pages of the OIG’s latest commentary, engagingly titled “Audit of Contractor Team Arrangement Use.”

As its title foreshadows, the Report, dated September 8, 2014, recounts the exhilarating tale of the OIG’s exploration of GSA Contractor Team Arrangements (“CTAs”).  The noble objectives of the audit team, established in the Report’s opening pages, were to “(1) determine the extent to which contracting officers follow existing guidance and regulation in the administration of contractor team arrangements and (2) assess contracting officer awareness of risk in improperly administering team arrangements.”  They had me at “objectives.”  Snuggling up closer to my desk lamp, I read on.

Because GSA’s CTA records were “incomplete, inaccurate, and unverifiable” (a finding, incidentally, that would spell disaster for a contractor), the OIG’s audit was performed on a limited sample of GSA task orders – 7 orders, to be exact.  The auditors, however, did interview numerous contracting officers and supervisors, and the conclusions they were able to draw from their review are nothing short of hair-raising.  According to the auditors – wait for it – GSA’s contracting officers “have been provided minimal instruction and have received no formal training relating to the award and administration of team arrangements.”  The auditors also concluded GSA has provided inadequate guidance regarding the use and administration of CTAs.  I was pulled deeper and deeper into the story with each new paragraph.  As I flipped the pages with zest, hungering for the surprise around the next corner, I . . . .

Okay, I give up.  The truth is, there is absolutely nothing surprising, engaging, hair-raising, or even particularly interesting about the OIG’s audit findings.  We all have known for years that GSA contracting officers don’t understand Contractor Team Arrangements – and, frankly, most contractors don’t either.

For the last 15 years or so, I’ve taught an Advanced Issues in MAS Contracting Course – previously with Carolyn Alston (currently with the Coalition) and currently with Larry Allen (previously with the Coalition) – and the issue of CTAs comes up in every class.  The pervasiveness of the confusion among Government COs and contractors never ceased to amaze me – at least until I attended a CTA course at GSA Expo a few years back taught by a now-retired CO.  With due respect (and apologies) to the many good COs and Government teachers out there, the course was awful.  The information was vague, not useful, and, in many ways, just plain wrong.  Thus, it came as no surprise to me, as it probably didn’t to you, that the GSA OIG auditors concluded COs are not being well educated on this topic.

I was more interested in the OIG’s view of the consequences of the lack of training and guidance.  The consequences identified by the auditors, however, were presented through the lens of a Government actor – not a contractor.  While I don’t quibble with the correctness of the auditors’ findings, I do regret they ignored most of the risks to the contractor of misunderstanding CTAs.  And there are several.  But before getting to that, let’s get some basics out of the way.

A CTA is an agreement between two (or more) GSA Schedule contractors to provide a solution to an authorized Schedule purchaser that neither could provide on its own.  In GSA’s words, a CTA allows Schedule contractors “to meet the government agency needs by providing a total solution that combines the supplies and/or services from the team members’ separate GSA Schedule contracts.  It permits contractors to complement each other’s capabilities to compete for orders for which they may not independently qualify.”  Here are a few other important elements of CTAs:

  • All participants in a CTA must have their own Schedule contract, and must contribute something to the CTA.
  • The products or services offered through the CTA must be “on Schedule” just as they would have to be if offered by a sole Schedule holder.  (Open market items may be offered only as provided in FAR Part 8.)
  • Notwithstanding the penchant of Schedule contractors to characterize one member of the CTA as the prime and the other member as the sub, in fact, all CTA participants are primes.  The leader commonly is known as the “Team Lead,” while the others commonly are known as “Team Members.”  But, legally speaking, they all are primes.  As the OIG pointedly reminded GSA in its Audit Report, “each team member is a prime contractor and should be treated as such.”  The point is critical for reasons discussed further below.
  • As prime contractors, all CTA participants have “privity of contract” with the Government.  In other words, all participants assume the rights of, take on the obligations of, and subject themselves to the risks of being a prime contractor.
  • All CTA participants are responsible for complying with the terms and conditions of their respective Schedule contracts, including pricing terms, TAA requirements, Price Reductions Clause obligations, labor qualification requirements, etc.
  • Each CTA participant is responsible for reporting its own revenue and paying its own IFF.

And importantly, each CTA participant – whether it views itself as the lead or as a member – is at risk for any non-compliance, including breach risk for its or its teammates’ non-compliance, past performance risk for its or its teammates’ performance failures, False Claims Act risk at least for its own recklessness (and possibly for its teammates’ recklessness if it was known), and, as a practical matter, reputational risk for most anything that goes wrong regardless of fault.

With that as background, let’s now take a look at the aspects of a CTA that create some of these risks from the perspective of the contractor.

Billing Errors Risk

In the context of a Subcontract, the prime contractor must have all products/services on its Schedule and must bill the Government at or less than its Schedule price – even if the products/services are provided by a subcontractor.  This means that, unless a unique solicitation provision directs otherwise, the prime contractor can “mark up” the subcontractor’s price to the prime’s Schedule price.  In the context of a CTA, however, each participant is beholden to its own price list.  Thus, the team lead cannot “mark up” a team member’s products/services beyond that team member’s Schedule price.  Failure to appreciate the difference between a Subcontract and a CTA can create the risk of pricing errors and, at the very least, the risk of confusion among COs and auditors.

IFF Reporting Risk

Each team member is responsible for paying its own IFF on sales made through a CTA.  Where CTAs are structured so the Team Lead handles all interactions with the customer, however, the Team Lead sometimes pays the entire IFF obligation and, consequently, the Team Members may lack visibility into the timing or even the amount of Schedule revenue.  While GSA typically receives its due tribute in any case (since, as noted, the Team Lead sometimes pays the full IFF amount), the absence of a specific, traceable payment by the Team Member can create all sorts of problems when it comes time for IOA reviews and/or OIG audits.

Labor Qualification Risks

A prime contractor must ensure all personnel working on the project meet the labor qualification requirements set out in the prime contractor’s GSA Schedule contract – whether or not the individual performing the work is employed by the prime contractor or a subcontractor.  In contrast, each participant in a CTA must ensure its personnel meet the labor qualifications set forth in its own Schedule contract.  Here again, a clearly written CTA is essential.  Lack of clarity regarding the nature of the contracting relationship can increase the risk of an inadvertent contract breach in an area (i.e., labor qualification issues) that increasingly is a favorite among auditors.

Ability-to-Offer Risk

As GAO has made clear again and again over the years, except in very limited situations, Schedule procurements require the proposal of Schedule items.  The failure to offer products or services on the offer’s valid Schedule contract can result in rejection of the proposal, or, if it does not, will provide fodder for an easy bid protest.  While a contractor bidding under a CTA can pull from any/all of its teammates Schedule contracts to prepare a compliant 100%-Schedule solution, a prime contractor cannot pull from its subcontractor’s Schedule if the prime does not have the product/service on its own Schedule.  The prime contractor must have 100% of the items on its own Schedule.  One unlucky contractor found this out the hard way back in 2007 when it submitted a quotation in response to a management operations RFQ, but didn’t make clear it was proposing as a Contractor Team.  Consequently, GSA rejected the quotation, finding it not to be a CTA and finding the offeror did not independently hold all of the necessary Schedule items required by the RFQ.[1]

Price Reductions Clause Risk

This one is best described through the ancient and time-honored art of a war story.  I had a client years ago that entered into what it thought was a prime/sub relationship with another Schedule holder.  It was a service contract for the military and the “prime” didn’t have all the necessary labor categories on its Schedule so it “subbed” to my client.  As many companies do, the companies structured their relationship as a prime/sub arrangement, with the “sub” providing personnel at a discount to the “prime,” and then the “prime” marking up the personnel to its Schedule price; the markup serving as the “prime’s” fee.

A year or so after the project came to an end, the “sub” was hit with an OIG audit.  The auditor saw the “discounts” to the “prime” and accused it (the “sub”) of violating its Price Reductions Clause.  (The company’s Basis of Award included prime contractors.)  The auditor did not particularly care that the Government was the ultimate customer.  He saw only a discount to a BOA customer and, to him, that spelled PRC violation.

Nor was the auditor taken by the company’s argument that the relationship actually was a CTA and, therefore, the sales to the “prime” actually were sales to the Government because (as you know if you’ve read this far) each CTA member is a prime contractor.  The company’s argument was not made any easier when the auditor reviewed the order (which only referenced the “prime”), reviewed the agreement between the “prime” and the “sub” (which was titled a “Subcontract” and referenced only a “prime” and a “sub”), and recognized that the “prime” had paid the totality of the IFF (an action consistent with a prime/sub relationship, not a CTA).  Had the parties clearly identified the agreement as a CTA, employed the correct terminology, and acted consistent with GSA’s CTA guidelines, there would have been no PRC violation allegation.

The moral of this little tale is this:  Words matters.  Contractors should use prime/sub when dealing with a subcontract, and use lead/member when dealing with a CTA.[2]

Risk Mitigation Techniques

Add to the foregoing risks the additional, mostly-Government-facing risks identified in the OIG’s Audit Report and you have yourself one very confusing, very misunderstood, and very risky contract vehicle.  This is not to say, of course, you should avoid entering into CTAs.  But you should look before you leap, understand the rules and the risks, and take compliance seriously.  And, oh yes, don’t read the OIG Audit Report as though it sets forth all the risks!

In its Audit Report, the OIG identified a number of measures GSA can/should take to help reduce some of the confusion around CTAs.  These involved better training for COs, better internal record keeping systems within GSA, and better policies.  While industry awaits these enhancements, there are things contractors can do to protect themselves.  Here are a few:

  • Understand the difference between a Subcontract and a CTA, and clearly identify which vehicle you are employing.  Be clear internally, be clear to your teammates/ subcontractors, and be clear to the Government.
  • Do not rely on oral CTAs (or oral subcontracts for that matter).  Prepare properly crafted CTAs in writing.  While, as confirmed by the OIG, GSA historically has paid little attention to the content of CTAs, the agency’s website does offer a pretty good list of what contractors should include in their CTAs.  See www.gsa.gov/portal/content/202253.  While GSA identifies these elements as requirements of a CTA (i.e., “The CTA document must address” X or Y), they are not.  They are, however, quite good recommendations.
  • Share the CTA with the contracting officer.  GSA “strongly encourages” contractors to do so, and so do I.
  • Use correct terminology.  If you are establishing a CTA, call it a CTA and identify one company as the Lead and the other as the Member.  If you are establishing a subcontract, call it a subcontract and identify one company as the prime and one as the sub.  Do not use the terms interchangeably.[3]
  • Try to have the award issued in the name of the CTA rather than in the name of one member of the CTA.  If this is not possible (e.g., because the agency, for whatever reason, resists), then try to have the CTA identified on the face of the award document.  As the OIG recognized in its Audit Report, contracting officers often do not remember to do this on their own.
  • Identify clearly in the CTA (and in the proposal and/or contract) which team member will submit invoices and how payment is expected to be made.  Remember, while the Government should pay each team member independently, agencies rarely want to take that approach, and GSA does not force them to.  Failure to deal with invoicing and billing issues early can create great confusion down the road as auditors struggle with reconciling reported revenue to internal records.  The OIG correctly recognized this issue in its Audit Report as well.

*          *          *

In hindsight, perhaps I was too hard on the OIG in my introduction.  While GSA’s CTA files may be incomplete, inaccurate, and unverifiable, the Audit Report nonetheless got it right.  CTAs are misunderstood by the contracting community – industry-wise, CO-wise, and otherwise.  So maybe the Audit Report was not as exciting as I had hoped, but it did provide a good opportunity to reflect upon a risky area of GSA Schedule contracting.  Perhaps the sequel will be more riveting.  GSA estimates it will publish updated CTA regulations by April 2016.  I plan to be the first in line to get a copy so I once again can curl up in front of my warm desk lamp with a nice glass of milk and get lost in the world of GSA Schedule contracting.  Oh, what a life!

Jonathan is the co-managing partner of Sheppard Mullin’s Washington, DC office, and has been practicing government contracts law since 1994.  He is the co-author of the GSA Schedule Handbook (West Publishing), teaches on a variety of Government Contracts topics across the country, and is a frequent speaker at Coalition events.  When not reading or writing about Government Contracting, he can be found trying to get control over his two young girls, one of whom became a teenager this month.

[1]               The Computer Cite protest (B-299858) is an interesting one and a good read for contractors participating in CTAs.  In the bid protest that followed GSA’s rejection of the offer, the offeror contended its teaming agreement satisfied “the essential requirements for a CTA. . . .”  GAO disagreed.

[2]               For those interested, the audit actually came to a very interesting and successful conclusion.  Since the “prime” did not have the necessary labor categories on its Schedule and the “sub” did, we explained to the auditor that either (1) the prime and the Government agency violated the procurement rules by providing/procuring non-Schedule services under a Schedule procurement or (2) the parties actually had intended to establish a CTA, but simply failed to use the proper language.  Ultimately, the auditor went with door number two, which, legally, was the correct result.  The parties’ poor terminology and documentation, however, caused what should have been a simple audit to turn into a very expensive one.

[3]               To add to the confusion, in the context of a CTA, either team member also may have subcontractors of its own.  But that’s an article for another time.

Happy Federal Fiscal New Year!

October 3rd, 2014

Happy Federal Fiscal New Year!  The Coalition wishes everyone in the procurement community a Successful Fiscal Year (FY) 2015!  Success for all is ultimately measured as to whether the procurement system delivers best value mission support for customer agencies and the American people.  We are all stakeholders in that effort!

Of course, the next month will highlight the Coalition’s 35th Anniversary Celebration, the Excellence in Partnership (EIPs) Honors, and the 2014 Fall Conference.  At the center of the 35th Anniversary Celebration Dinner is our silent auction to support the Coalition endowment for veterans enrolled in the George Washington University’ Law School or Master’s Degree program in government contracting.  For information about the celebration dinner and 2014 Fall Conference please check here.

But there is much more to come.  As we move into FY 2015, the Coalition’s agenda will continue to have a laser like focus on procurement policies, procedures and programs that deliver best value solutions for customer agencies through sound business opportunities for small, medium and large businesses.  Here is a quick snap shot of our FY 2015 agenda:

  • Strategic Sourcing. In Spring 2014 the Coalition established a Strategic Sourcing Working Group to share information and best practices regarding strategic acquisition.  The Coalition will be sharing a draft strategic sourcing white paper with members at the Fall Conference.  This white paper will be informed by GSA’s recent response to the Coalition’s Freedom of Information Act (FOIA) seeking all documents relating to claimed savings via the Federal Strategic Sourcing Initiative.
  • VA Schedule Pricing Policies and Procedures.  The Coalition will be supplementing our September 2013 White Paper: GSA Multiple Award Schedule Pricing: Recommendations to Embrace Regulatory and Commercial Market Changes.  The supplement will address current VA schedule pricing practices, procedures and policies as well as current commercial market trends and best practices.
  • Coalition Innovation Task Force (CITF).  In calendar year 2015, the Coalition will launch the CITF.  The CITF will identify opportunities to streamline acquisition procedures and embrace requirements development and contracting techniques that leverage commercial solutions and innovation.
  • Promoting the Results of OMB’s Open Dialogue:  As you know, eight of the top ten recommendations to reform the procurement system that OMB received were suggested by the Coalition.  Among the recommendations are reforming the Price Reduction Clause and addressing “Other Direct Costs.”  In addition, the Coalition provided GSA with a list of contracting fixes to reduce transactional costs and increase value for customer agencies. We look forward to a Myth-Busters dialogue with GSA and OMB on these reform opportunities.
  • Alliant 2 Working Group: The Coalition has established an Alliant 2 working group through our GWAC/MAC Committee to support engagement and dialogue between GSA and industry members regarding this vital follow on procurement.
  • FSSI HR Services & Training Working Group:  Coalition has established a working group to support engagement and dialogue between GSA and OPM regarding the follow on procurement for human resources and training program support. This government-wide procurement vehicle will replace OPM’s TMA contract program.  Just this week the working group met with officials from GSA and OPM to discuss the procurement.

Each day we will continue to focus on common sense operational policies and procedures that foster competition, reduce transactional costs and enhance value for customer agencies and the American people. Beyond the items listed above, we will continue to discuss, highlight and address contract duplication, data reporting requirements, and government-unique requirements where the costs outweigh the benefits.  If you have feedback and/or items that you believe we should be focusing on please do not hesitate to contact me at (202) 331-0975.

 

Roger Waldron

President

Data, Data, Data

September 26th, 2014

The current procurement passion for collecting data, in particular prices paid data, raises many policy questions.  Coalition members have, on a number of occasions, indicated that data is not a free good!   Shifting the burden of data management and reporting to federal contractors increases costs for industry, and therefore, government; costs that are ultimately borne by the American people.   The passion for data reporting can overshadow the fundamental purpose of a government contract, which is the delivery of products, services and solutions to meet customer agency missions.  Contracts should be structured to maximize the potential for contractors to deliver best value to customer agencies.  The impetus must be on contract structures that maximize performance of mission requirements rather than data reporting.

It is time for a comprehensive dialogue between government and industry regarding data collection.  Among the questions to be discussed are the following:

  • How can government and industry work to together towards common sense management of data?
  • What does the Federal Acquisition Regulation (FAR) say about determining a “fair and reasonable” price?
  • What will the information be used for?
  • What data is relevant?
  • Can the government collect its own transactional data?
  • What information will be in the prices paid portal?
  • When does the Paperwork Reduction Act apply to new contract provisions seeking additional data?

A dialogue around these fundamental questions is the first step towards government and industry working together towards common sense management of procurement data.

The FAR guidance regarding determining a “fair and reasonable” price should inform the collection, management and use of prices paid information.  As a threshold matter, FAR 15.404-1(b)(2)(i) states that “[n]ormally, adequate price competition establishes a fair and reasonable price.”  As such, under the GSA Schedule program or any other multiple award IDIQ (e.g. Seaport-e, Alliant, NASA SEWP, Networx), adequate price competition at the task order level for agency specific requirements is sufficient to determine fair and reasonable pricing.  Agency specific requirements and commitments at the task order level drive competition and pricing.  Accordingly, what role will the prices paid portal data play?

Price alone is incomplete data.  The FAR provides guidelines for comparing proposed prices to historical prices paid, for the same or similar items. Notably, FAR 15.404-1(b)(2)(ii)(A)(B) states:

(A) The prior price must be a valid basis for comparison. If there has been a significant time lapse between the last acquisition and the present one, if the terms and conditions of the acquisition are significantly different, or if the reasonableness of the prior price is uncertain, then the prior price may not be a valid basis for comparison.

(B) The prior price must be adjusted to account for materially differing terms and conditions, quantities and market and economic factors. For similar items, the contracting officer must also adjust the prior price to account for material differences between the similar item and the item being procured.

Does the prices paid portal include sufficient information for contracting officers to comply with the above guidance?  Are contracting officers sufficiently trained to identify, understand and reasonably consider and adjust prior prices based on materially different terms, quantities, and market and economic factors?

The underlying concern across industry is that the prices paid portal will be used to drive contract level prices to the lowest reported point, regardless of terms and conditions, quantities, market and economic factors.  This type of pricing is not sustainable by industry over the long term.  Such an approach may make for a short term “gain” or headlines regarding savings by the government.  However, such an approach will compromise the government‘s long term, strategic interests in fostering competition, ensuring best value mission support and access to “priceless” commercial innovation.

Roger Waldron

President

Healthcare Spotlight

By: Donna Lee Yesner, Partner, Morgan Lewis & Bockius LLP and Stephen E. Ruscus, Partner, Morgan Lewis & Bockius LLP

The U.S. Department of Veterans Affairs and Department of Defense are major buyers of medical devices and supplies. Companies wishing to sell in this multibillion dollar market, however, must be aware of an important federal procurement requirement regarding country of origin, which is inapplicable to nonfederal sales, and understand the risk of noncompliance.

Government contractors must agree that the products they sell to the U.S. government under contracts valued in excess of $204,000 comply with the Trade Agreements Act, unless the TAA requirement is waived by a federal agency. Failure to comply with this requirement has provided grounds for whistleblower actions under the False Claims Act, particularly against companies that sell commercial items under Federal Supply Schedule contracts or through Distribution and Pricing Agreements, which require compliance with the TAA.

Recently, Smith & Nephew Inc., a medical device manufacturer, settled what may be the first such case involving allegations that a company knowingly sold medical devices manufactured in a country not compliant with the TAA to the company’s government customers. See United States ex rel. Cox v. Smith & Nephew Inc., No. 2:08-cv-02832 (W.D. Tenn., order of dismissal, Sept. 4, 2014).

Trade Agreements Act Requirements

The TAA is intended to remove barriers to government procurement of foreign-sourced items and to incentivize countries to become signatories to the World Trade Organization Government Procurement Agreement and other international trade agreements. When a contract is subject to the TAA, the Buy American Act and its preference for end items manufactured in the U.S. is waived, creating more opportunity for companies selling foreign-made products. At the same time, the TAA prohibits the U.S. government from acquiring end items other than those made in the U.S. or countries that have signed the WTO GPA (referred to as “designated country end products”), unless the agency determines that offers of eligible items are unavailable or insufficient to fill the agency’s needs. If a contract is below the threshold amount, the agency may acquire an item made in a nondesignated country, such as India or China, under that contract. For contracts in which the quantity of items that may be ordered is indefinite, the estimated contract value is used in determining whether the applicable threshold has been exceeded. As a policy matter, the TAA applies to all FSS contracts, including those covering medical supplies and devices administered by the VA.

The TAA is implemented through mandatory contract clauses in government contracts over the threshold amount and country of origin representations and certifications made by companies responding to a federal contract solicitation, as prescribed by the Federal Acquisition Regulation Part 25.4 and FAR 52.225-3 through 52.225-6. A product’s country of origin must be disclosed when it is manufactured in a nondesignated country. If the TAA applies, the contracting agency, in its discretion, may make a nonavailability determination or may request a categorical waiver of the TAA from the Office of the U.S. Trade Representative. The agency also may order small amounts of the product under individual contracts below $204,000 in value without regard to the TAA. Unless the TAA has been waived or is, by law, inapplicable to a transaction, the acquisition of end items from a nondesignated country violates the TAA. Accurate representations by the contractor are thus necessary for a federal customer to adhere to procurement law and regulations.

The test the government uses for determining country of origin under the TAA is the “substantial transformation” test applied by U.S. Customs and Border Protection when assessing import duties under Section 304 of the Tariff Act of 1930, and implementing regulations. Customs’ regulations define “country of origin” as “the country of manufacture, production or growth of any article of foreign origin entering the United States” and also provide that “[f]urther work or material added to an article in another country must effect a substantial transformation in order to render such other country the ‘country of origin’ within the meaning of this part.” 19 C.F.R. 134.1(b). In general, a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing, but will not result from minor manufacturing or combining process that leaves the identity of the article intact. Determining where a product has been substantially transformed into the end item acquired by the government often requires a fact-intensive analysis of the manufacturing process.

For example, in a July 2014 decision regarding the country of origin of a medical device that interfaces with a breath monitor, Customs considered the country of origin of the item’s components, the extent of the processing that occurred within a country and whether such processing rendered a product with a new name, character and use. The device consisted primarily of tubing from Israel, cut to length in China and combined there with various connectors, filters and adaptors sourced from several countries. The decision noted that the “key issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article,” that “factors such as the resources expended on product design and development, extent and nature of postassembly inspection and testing procedures and the degree of skill required during the actual manufacturing process may be relevant,” and that “assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation.” Holding that the tubing imparted the essential character to the end product and that this tubing was not substantially transformed by the cutting and assembly operations in China, Customs, in this case, held that the country of origin of the finished product was Israel.

Although required to certify TAA compliance, a reseller of an item acquired from its manufacturer may be unable to validate country of origin independently. Recently, however, the D.C. Circuit affirmed in another whistleblower case that resellers may reasonably rely on their suppliers’ country of origin representations, and, absent evidence that would make such reliance unreasonable, need not conduct independent evaluations before they provide their own certifications in order to shield themselves from FCA liability. See United States ex rel. Folliard v. Gov’t Acquisitions Inc., No. 13-7049 (D.C. Cir. Aug. 29, 2014).

This was an important decision for wholesalers and distributors that contract directly with agencies like the DOD and VA to supply medical devices that they purchase from device manufacturers. In such cases, the contractor may not be liable if the product is a nondesignated country end item, but misrepresentation concerning country of origin by the manufacturer supplying the contractor could still be potentially actionable against the manufacturer.

Once a company represents that an item is a U.S. or designated country end product and it is placed on the company’s FSS contract, the company must ensure that units manufactured in nondesignated countries are not delivered to government customers ordering under the FSS. If a manufacturer of medical supplies sources a product in a nondesignated country for sale to commercial customers, because it is more economical to do so, it must have a second, designated-country source before it sells the product to the federal government under its FSS contracts and must have inventory controls designed to ensure that shipments to government customers conform to the representations and certification of TAA compliance. The VA has explicitly advised manufacturers sourcing from nondesignated countries of the need to implement such inventory controls. See Dear Manufacturer Letter here.

Smith & Nephew Settlement

In the Smith & Nephew case, the company allegedly imported items from Malaysia, a nondesignated country, repackaged them in the U.S. and failed to segregate them from products sourced in designated countries that could be sold to the government. Thus, the company could not ascertain whether units shipped to customers that ordered under its medical/surgical FSS contract or the GSA Advantage website were TAA compliant. The company voluntarily disclosed to the DOD Office of Inspector General and VA National Acquisition Center that it may have violated procurement law and the terms of its contracts and took corrective action. However, three months later, a former employee filed a whistleblower action against the company for knowingly violating the TAA, and the court declined to dismiss the case on the grounds that the FCA public disclosure bar applied to the voluntary disclosure.

Reducing the Risk of Liability in TAA Whistleblower Suits

The Smith & Nephew case highlights the vulnerability of device manufacturers that source products from nondesignated countries to potential FCA liability and the need not only for diligence in ascertaining country of origin, but also for controls to prevent products manufactured in nondesignated countries from being supplied to the government when such sales are not permitted.

Reasonable controls could include: (1) a system that identifies country of origin, and segregates and tracks inventory from import to shipment if items are purchased from both designated and nondesignated countries; (2) a system that monitors sourcing decisions before changes are made to ensure the item continues to be substantially transformed in the U.S. or a designated country; (3) a policy requiring country of origin representations of vendors if the components are not later substantially transformed into the delivered end item; and (4) a procedure for obtaining legal opinions when the country of origin is unclear or, in some cases, an opinion from Customs.

Purchasing items made in nondesignated countries may substantially reduce production costs and make economic sense, and a company’s sales to the federal government may be very small compared to its commercial business. However, the risk of exposure to a whistleblower suit and the consequences for failing to implement measures to avoid violating the TAA are likely considerably greater than the cost of compliance.

In the Smith & Nephew case, the company was forced to defend an action that settled for millions of dollars even though it disclosed the situation to the VA, and the department neither referred the matter to the U.S. Department of Justice nor intervened in the whistleblower case after it was unsealed.

Judicial precedent is currently divided over the application of the public disclosure bar to such voluntary disclosures. In the Smith & Nephew decision, it is unclear whether the company’s disclosure to the VA affected the settlement negotiations in which the VA participated, or the department’s decision not to intervene, but it is also noteworthy that the VA’s policy has been to encourage self-disclosure. Thus, although the company’s actions did not shield it from a whistleblower suit, they may have protected the company from greater harm.


Legal Corner

By: John Horan, Partner, McKenna Long & Aldridge LLP 

Contractors will have to provide another written representation to do business with the government.  On July 31, 2014, President Obama issued an Executive Order called Fair Pay and Safe Workplaces intended to ensure that contractors comply with the following labor laws:

  • Fair Labor Standards Act;
  • Occupational Safety and Health Act;
  • Migrant and Seasonal Agricultural Worker Protection Act;
  • National Labor Relations Act;
  • Davis-Bacon Act;
  • Service Contract Act;
  • Equal Employment Opportunity requirements (Executive Order 11246);
  • Rehabilitation Act (Section 503);
  • Vietnam Era Veterans’ Readjustment Assistance Act;
  • Family and Medical Leave Act;
  • Civil Rights Act (Title VII);
  • Americans with Disabilities Act;
  • Age Discrimination in Employment Act;
  • Federal Contractor Minimum Wage Requirements (Executive Order 13658); and
  • any equivalent State laws.

The less than stellar showing of government contractors in a Government Accountability Office study on whether contractors comply with labor laws likely provided at least some motivation for the President.  See FEDERAL CONTRACTING: Assessments and Citations of Federal Labor Law Violations by Selected Federal Contractors, GAO-10-1033 (Sep 17, 2010).  After reviewing Federal labor law actions from 2005 through 2009, GAO found that the Department of Labor made 25 of the 50 largest wage assessments against 20 contractors and OSHAassessed eight of the 50 largest workplace health and safety penalties against seven other contractors.  In addition, the government awarded fifteen contractors cited for violations of wage and hour determinations, OSHA laws, and National Labor Relations Board requirements over $6 billion in government contracts in 2009.

The President justified his Order by finding that complying with labor laws will “increase efficiency and cost savings in the work performed by government contractors” because compliant contractors are more likely to have “workplace practices that enhance productivity and increase the likelihood of timely, predictable, and satisfactory delivery of goods and services to the Federal Government.”  He determined that his Order would also help agencies “avoid distractions and complications that arise from contracting with contractors with track records of noncompliance.”

New Requirements for Contractors, Subcontractors, and Agencies

The Executive Order imposes the following additional requirements for contracts exceeding $500,000, currently without an exception for commercial items (GSA and VA FSS) contracts:

Pre-award Representation with Updates

A contractor will have to provide a representation prior to award of any contract exceeding $500,000 that, to the “best of the offeror’s knowledge and belief,” it has not had an administrative merits determination, arbitral award or decision, or civil judgment, within the preceding three-year period, for violations of labor laws listed above.  Where there has been a violation, the CO will provide the contractor with an opportunity to disclose any steps taken to correct the violations or improve compliance with the labor laws.  The CO must consider the violation and mitigation information provided by the contractor in making the responsibility determination required for award of the contract.  In addition, the contractor must also represent that it will require the same representation for subcontracts exceeding $500,000 (except subcontract for COTS items) and consider disclosure and any mitigating information prior to making any subcontracting decision.

A contractor must update its representations and information every six months for the duration of the contract.  Upon receiving an update of a violation, the CO must consider whether to require remedial measures and provide compliance assistance, and whether to exercise an option, terminate the contract, and refer the contractor to the agency suspension and debarment official.  In turn, the contractor must consider taking action against a subcontractor that has had a violation whether disclosed by subcontractor or “obtained through other sources.” Likely to ensure that contractors and subcontractors are providing accurate representations and to provide another source of information to COs, the Department of Labor must inform contracting agencies of its investigations of contractors and subcontractors.

Referral to Suspension and Debarment Officer

In addition to taking action under the contract, the CO must forward any adverse information of compliance with labor laws by contractors and subcontractors to the agency suspension and debarment officer.

“Transparency” Requirements

The Order also imposes two requirements on contractors that have a potential for significantly affecting a contractor’s exposure to litigation based on labor laws, which the Order describes as “transparency” requirements.  First, contractors must provide employees covered by any of the wage rate labor laws with a weekly statement of hours worked, overtime hours, pay, and any additions made to or deductions made from pay.  These disclosures ensure that covered employees have the information required to assess the contractor’s compliance with the wage rate requirements.

Second, for contracts exceeding $1 million, contractors are precluded from obtaining an agreement from employees or independent contractors to arbitrate claims arising under Title VII or any tort related to or arising out of sexual assault or harassment until after the claim arises.  Thus, contractors that view arbitration as a protection from costly litigation or verdicts will have a much more difficult time obtaining arbitration agreements from employees.

Flow Down Requirement

The Order also imposes representation requirements on subcontractors.  Prime contractors must include the pre-award representation requirement in subcontracts exceeding $500,000 (except subcontracts for COTS items).

Labor Compliance Advisor

The Order requires each agency to designate a senior agency official as a Labor Compliance Advisor.  The Labor Compliance Advisor has the responsibility to support the agency, COs, and contractors in complying with the Order, coordinating with the Department of Labor, assist in the development of regulations, send information to the agency suspension and debarment officer, and publicly report annually a summary of “agency actions taken to promote greater labor compliance.”

Regulations to Follow

The Order requires the FAR Council to propose “regulations, rules, and orders” required to carry out the requirements of the Order.  In addition, the FAR Council must “propose to amend the [FAR] to identify considerations for determining whether serious, repeated, willful, or pervasive violations of the labor laws . . . demonstrates a lack of integrity or business ethics.”  In short, the Order is placing primary responsibility on the FAR Council to ensure a uniform consideration of the effect of labor law violations on responsibility determinations government-wide.

What Does this Mean?

Although the Order does not create new labor law compliance obligations, it imposes obvious additional administrative obligations for contractors and subcontractors.  In addition, these requirements will likely create new, fertile grounds for False Claims Act cases.  31 U.S.C. §§ 3729 – 3733.  The required representations and potential for submission mitigation information (and continual updates) create new opportunities for contractors to make errors that will be subject to attack as false information submitted to the government knowingly, recklessly, or with deliberate ignorance of its accuracy under the False Claims Act.  Moreover, the explicit requirement that COs consider this information in award and administration decisions, such as responsibility determinations, option exercises, and terminations, will provide qui tam relators and the government with a basis to argue that this “false information” was material to the government’s decision to award the contract, permit the contractor to continue performance, and to pay the contractor for its performance.

FAR and Beyond Blog

In last week’s article I detailed our upcoming 35th Anniversary Black Tie Gala and Excellence in Partnership Awards (nominations close October 3rd!).  This week I want to go into a bit more detail about the tentative agenda for our 2014 Fall Training Conference, 35 Years of Commonsense in Government Procurement: Looking Back and Moving Forward, taking place at the JW Marriott in DC on November 6th.

Morning Session

Registration, breakfast,  and networking will begin at 7:00am and I will open the conference at 8:00am with an outline of the day’s events, thank you to our sponsors, and updates on current CGP initiatives.  Shortly after, we will hear from our keynote speaker, The Honorable Thomas M. Davis – former Virginia Congressman and Chairman of the House Government Reform Committee – who now serves as the Director of Federal Government Affairs for Deloitte where he continues his commitment to effective, common-sense solutions to government.  Mr. Davis will continue our conference theme and be discussing Looking Back and Moving Forward – Post Elections.

The mid morning sessions will include Jeff Koses, Senior Procurement Executive at GSA, discussing GSA Schedules – Retooling for the Future, as well as Brad Medairy, Senior Vice President of Booz Allen Hamilton, discussing Cybersecurity – A Game Changer. The morning will wrap up with our Town Hall session that will give attendees the opportunity to ask questions directly to our panel which will include Anne Rung, OFPP Administrator; Steve Schooner, Professor and Co-Director of the Government Procurement Law Program, George Washington University; Christine Harada, Associate Administrator for Government-wide Policy at the General Services Administration; and representatives from DPAP (Defense Procurement and Acquisition Policy), which is responsible for all Contracting and Procurement policy matters including e-Business in the Department of Defense (DoD).  The panel will be discussing a variety of topics such as Innovative, Streamlined, Cost Effective Acquisition – Where Are We, What Needs To Change And How Do We Get There?

Lunch Session

Lunch will begin at approximately 12:30, where we will be joined by our lunchtime speaker, Mike Causey.  Mike writes a daily column for Federal New Radio, Mike Causey’s Federal Report, and can be heard daily on the radio as well.  Mike’s presentation will be on The Changing Federal Workforce – what it means for government, industry and America.  As always, we fully expect his remarks to be  thought provoking, insightful, and entertaining!

Afternoon Breakout Sessions

We will be having our ever popular breakout sessions in the afternoon, offering four different topic areas you can choose between at 2:00 and 3:15.  Our 2:00 session will allow you the opportunity to attend one of the following:

1.)    Electronic Platforms and Social Media – From EMALL to GSA Advantage! to the Common Acquisition Platform – an explanation of how current systems connect and where the government is headed with electronic platforms and the use of social media in the acquisition process.

2.)    Global Supply Update – Update on strategic sourcing initiatives ,transitioning from GSA warehouse to Direct Delivery, and more!  This breakout will be lead by Shaloy Castle-Higgins, Director, Greater Southwest Acquisition Center; Janet Haynes, Acting, Schedules Acquisition Director, Center for Facilities Maintenance and Hardware (CFMH); Peter Han, Director, National Administrative Services and Office Supplies Acquisition Center; and Brian Knapp, Director, GSA, Integrated Workplace Acquisition Center (IWAC).

3.)    Customer Users of Government-wide Vehicles – How do major customers use government-wide vehicles?  What are the opportunities and challenges of various vehicles?

4.)    OASIS and beyond – Changes in the Acquisition of Professional Services – Topics will include Consolidated Schedules and the future of GSA Schedules, pricing tools, update on OASIS, and use of OASIS as a model for future acquisitions – what works and what doesn’t?  Jim Ghiloni, Acting Director of Acquisition Operations, will be leading this breakout, among others.

Our 3:15 session will allow you the opportunity to attend one of the following:

1.)    DOD Acquisition Update – Impact of the DOD waiver for Schedules Pricing, changes to commercial acquisition, and significant acquisitions of the military services.

2.)    Update on Government-wide IT Acquisitions – A highlight of major acquisition programs supporting the acquisition of government wide IT programs, including CIO-SP3, Alliant, NASA SEWP and more.  Don’t miss this opportunity for information and best practices that helps enhance your performance in the IT market.  This breakout will be led by Casey Kelly & Team, Integrated Technology Service, GSA; Joanne Woytek, Program Manager, NASA SEWP; Robert Coen, Acting Director, NIH Information Technology Acquisition and Assessment Center (NITAAC); and Kay Ely, Director, IT Schedules Acquisition Center.

3.)    Strategic Sourcing –  What’s ahead in furniture, managed print services, OPM Training and Management Assistance (TMA), and  IT FSSI.

4.)    Coming Soon in the Federal Market – Business Analysis.  This breakout will be led by Ray Bjorklund, President, Birchgrove  Consulting, and Cameron Leuthy, Bloomberg Government.

We will wrap up the day back in the main ballroom for a quick report out from the afternoon breakout sessions and be done around 5:00.

We will have more announcements in the near future regarding newly confirmed speakers, but it is certainly shaping up to be a must attend event and we hope to see you there!  Plan on attending?  Please visit our website or click here to register– we look forward to your participation!  Lastly, thank you again to AvKARE for being our Title Sponsor at this year’s Fall Conference!  For a list of sponsorship opportunities, please click here.

Thanks,

Roger Waldron

President

A November to Remember!

September 12th, 2014

Registration is officially open for our exciting two day event on November 5-6, which includes our 2014 Fall Training Conference at the JW Marriott., Excellence in Partnership Awards and 35th Anniversary Black Tie Gala at The Reagan Building.

As many of you are aware, in honor of our 35th Anniversary, we have created the Coalition for Government Procurement Endowed Government Procurement Scholarship/Fellowship Fund with The George Washington UniversityThe Coalition has made it a priority to fund and endow a scholarship/fellowship to provide financial support to a deserving veteran concentrating their studies in the field of US Government procurement and pursuing the JD or LLM degree in Government Procurement Law or the interdisciplinary Masters of Science in Government Contracting degree (MSGC) at GWU.   This Scholarship/Fellowship represents the two pillars of all that we do at the Coalition—- promoting common sense acquisition and supporting our veterans!!   Common sense in acquisition starts with starts with education and the students, including the veterans, enrolled in these programs will become the next generation of skilled professionals leading this critically important sector of the US economy.

This year’s 35 Anniversary event is special.  In order to raise funds for the scholarship/fellowship, we will be holding a silent auction the night of the Gala where all net profits will be dedicated to endowing the scholarship/fellowship.  We kindly ask that you and/or your company support our endowment efforts by donating an item for this special occasion.

Thank you to the companies and individuals below for leading the charge and jumping on board right away!

  1. Suite at the Verizon Center for February 3rd at 7:00 p.m. when the Caps play the Kings (Stanley Cup Champions) – donated by Lockheed Martin
  2. Box Seats at Nationals Park – donated by Baker Tilly
  3. Golf Lessons and a Foursome – donated by Whiskey Creek Golf Club
  4. Patriotic Quilt – made and donated by Robin Klonarides of Raytheon
  5. Football Memorabilia signed by Ron “Jaws” Jaworski – donated by the Judge Group

You can see from the above list of committed items the types of donations we are seeking to make this silent auction a huge success.  Please contact Matt Cahill at mcahill@thecgp.org or 202-315-1054 to discuss your possible donations today!

Additionally, sponsorships are now available for the Fall Conference, EIPs and the Gala  Thank you to our first committed sponsors!!

Gala & EIPs: BDO will be a GOLD Sponsor

Fall Conference: AvKARE will be out TITLE Sponsor

There are opportunities at all sponsorship levels and we will greatly appreciate your support.  Once again, please direct any questions or commitments to Matt at the contact information listed above.

Roger Waldron

President


Healthcare Spotlight

By: John Horan, Partner, McKenna Long & Aldridge LLP 

Contractors will have to provide another written representation to do business with the government.  On July 31, 2014, President Obama issued an Executive Order called Fair Pay and Safe Workplaces intended to ensure that contractors comply with the following labor laws:

  • Fair Labor Standards Act;
  • Occupational Safety and Health Act;
  • Migrant and Seasonal Agricultural Worker Protection Act;
  • National Labor Relations Act;
  • Davis-Bacon Act;
  • Service Contract Act;
  • Equal Employment Opportunity requirements (Executive Order 11246);
  • Rehabilitation Act (Section 503);
  • Vietnam Era Veterans’ Readjustment Assistance Act;
  • Family and Medical Leave Act;
  • Civil Rights Act (Title VII);
  • Americans with Disabilities Act;
  • Age Discrimination in Employment Act;
  • Federal Contractor Minimum Wage Requirements (Executive Order 13658); and
  • any equivalent State laws.

The less than stellar showing of government contractors in a Government Accountability Office study on whether contractors comply with labor laws likely provided at least some motivation for the President.  See FEDERAL CONTRACTING: Assessments and Citations of Federal Labor Law Violations by Selected Federal Contractors, GAO-10-1033 (Sep 17, 2010).  After reviewing Federal labor law actions from 2005 through 2009, GAO found that the Department of Labor made 25 of the 50 largest wage assessments against 20 contractors and OSHAassessed eight of the 50 largest workplace health and safety penalties against seven other contractors.  In addition, the government awarded fifteen contractors cited for violations of wage and hour determinations, OSHA laws, and National Labor Relations Board requirements over $6 billion in government contracts in 2009.

The President justified his Order by finding that complying with labor laws will “increase efficiency and cost savings in the work performed by government contractors” because compliant contractors are more likely to have “workplace practices that enhance productivity and increase the likelihood of timely, predictable, and satisfactory delivery of goods and services to the Federal Government.”  He determined that his Order would also help agencies “avoid distractions and complications that arise from contracting with contractors with track records of noncompliance.”

New Requirements for Contractors, Subcontractors, and Agencies

The Executive Order imposes the following additional requirements for contracts exceeding $500,000, currently without an exception for commercial items (GA and VA FSS) contracts:

Pre-award Representation with Updates

A contractor will have to provide a representation prior to award of any contract exceeding $500,000 that, to the “best of the offeror’s knowledge and belief,” it has not had an administrative merits determination, arbitral award or decision, or civil judgment, within the preceding three-year period, for violations of labor laws listed above.  Where there has been a violation, the CO will provide the contractor with an opportunity to disclose any steps taken to correct the violations or improve compliance with the labor laws.  The CO must consider the violation and mitigation information provided by the contractor in making the responsibility determination required for award of the contract.  In addition, the contractor must also represent that it will require the same representation for subcontracts exceeding $500,000 (except subcontract for COTS items) and consider disclosure and any mitigating information prior to making any subcontracting decision.

A contractor must update its representations and information every six months for the duration of the contract.  Upon receiving an update of a violation, the CO must consider whether to require remedial measures and provide compliance assistance, and whether to exercise an option, terminate the contract, and refer the contractor to the agency suspension and debarment official.  In turn, the contractor must consider taking action against a subcontractor that has had a violation whether disclosed by subcontractor or “obtained through other sources.” Likely to ensure that contractors and subcontractors are providing accurate representations and to provide another source of information to COs, the Department of Labor must inform contracting agencies of its investigations of contractors and subcontractors.

Referral to Suspension and Debarment Officer

In addition to taking action under the contract, the CO must forward any adverse information of compliance with labor laws by contractors and subcontractors to the agency suspension and debarment officer.

“Transparency” Requirements

The Order also imposes two requirements on contractors that have a potential for significantly affecting a contractor’s exposure to litigation based on labor laws, which the Order describes as “transparency” requirements.  First, contractors must provide employees covered by any of the wage rate labor laws with a weekly statement of hours worked, overtime hours, pay, and any additions made to or deductions made from pay.  These disclosures ensure that covered employees have the information required to assess the contractor’s compliance with the wage rate requirements.

Second, for contracts exceeding $1 million, contractors are precluded from obtaining an agreement from employees or independent contractors to arbitrate claims arising under Title VII or any tort related to or arising out of sexual assault or harassment until after the claim arises.  Thus, contractors that view arbitration as a protection from costly litigation or verdicts will have a much more difficult time obtaining arbitration agreements from employees.

Flow Down Requirement

The Order also imposes representation requirements on subcontractors.  Prime contractors must include the pre-award representation requirement in subcontracts exceeding $500,000 (except subcontracts for COTS items).

Labor Compliance Advisor

The Order requires each agency to designate a senior agency official as a Labor Compliance Advisor.  The Labor Compliance Advisor has the responsibility to support the agency, COs, and contractors in complying with the Order, coordinating with the Department of Labor, assist in the development of regulations, send information to the agency suspension and debarment officer, and publicly report annually a summary of “agency actions taken to promote greater labor compliance.”

Regulations to Follow

The Order requires the FAR Council to propose “regulations, rules, and orders” required to carry out the requirements of the Order.  In addition, the FAR Council must “propose to amend the [FAR] to identify considerations for determining whether serious, repeated, willful, or pervasive violations of the labor laws . . . demonstrates a lack of integrity or business ethics.”  In short, the Order is placing primary responsibility on the FAR Council to ensure a uniform consideration of the effect of labor law violations on responsibility determinations government-wide.

What Does this Mean?

Although the Order does not create new labor law compliance obligations, it imposes obvious additional administrative obligations for contractors and subcontractors.  In addition, these requirements will likely create new, fertile grounds for False Claims Act cases.  31 U.S.C. §§ 3729 – 3733.  The required representations and potential for submission mitigation information (and continual updates) create new opportunities for contractors to make errors that will be subject to attack as false information submitted to the government knowingly, recklessly, or with deliberate ignorance of its accuracy under the False Claims Act.  Moreover, the explicit requirement that COs consider this information in award and administration decisions, such as responsibility determinations, option exercises, and terminations, will provide qui tam relators and the government with a basis to argue that this “false information” was material to the government’s decision to award the contract, permit the contractor to continue performance, and to pay the contractor for its performance.

For this week’s comment I wanted to share with you a blog post first published on the Federal Times’ Acquisition Blog (www.federaltimes.com). The post highlights GSA’s recent Federal Strategic Sourcing Initiative (FSSI) Office Supply 3 (OS3) and contract duplication. 

GSA increases contract duplication one solicitation at a time

A little over two weeks ago GSA awarded the Federal Strategic Sourcing Initiative (FSSI) Office Supply 3 (OS3) Indefinite-Quantity-Indefinite Delivery (IDIQ) contracts—the third generation FSSI for office supplies. These new OS3 IDIQ contracts duplicate the current GSA Schedule 75 for office supplies—so much so that the OS3 solicitation used GSA Schedule 75 pricing as a benchmark. Moreover, for those GSA Schedule 75 contractors who now have OS3 contracts—the OS3 contract terms require pricing consistency across both vehicles, essentially incorporating by reference the operative GSA Schedule 75 contract terms!

As a result of this effort, GSA and the firms competing OS3 together spent millions of bid and proposal dollars for a duplicative contract vehicle. Time and money could have been saved through the competitive establishment of BPAs under the GSA Schedule 75. More importantly, task order competitions using the GSA Schedule 75 would have leveraged individual agency requirements in a cost effective and efficient manner.

Now comes the latest effort in contract duplication, GSA’s new solicitation seeking a set of commercial office furniture IDIQ contracts for the Total Workplace Furniture and Information Technology (FIT) program. The FIT program is GSA’s new offering to customer agencies to minimize initial capital investments for furniture and IT. Through FIT, GSA will offer customer agencies an installment program to spread the cost of the furniture purchase over a five-year period. The FIT solicitation includes five functional areas covering commercial workplace furniture, tables, high density and rotary filing, seating and demountable walls. Functional Area 1 provides for multiple awards. Functional Areas 2-5 are single-award.

The parallels between the FIT solicitation and GSA Schedule 71 for commercial office furniture are striking. They cover the same types of commercial office furniture. They both establish IDIQ contracts with a $2,500 guaranteed minimum (the FIT solicitation provides a $2,500 minimum for each functional area).

They both use FAR Part 12 commercial item provisions and clauses. As IDIQ contracts, they are both designed to meet agency specific commercial office furniture requirements at the task order level—specific agency requirements that are unknown at the time of award.

If these parallels were not enough, the FIT solicitation goes a step further and makes GSA Schedule 71 pricing a benchmark stating in part that “Pricing Forms must be equal to or less than the price for the same offering on the Offeror’s current Schedule after discounting for any GSA or other Government fee such as the 0.75% GSA fee.”

GSA cannot have it both ways. GSA complains about agencies creating their own contract vehicles that duplicate GSA’s governmentwide contract vehicles, when it is doing the very same thing. It is disheartening. Rather than expending significant time, talent and taxpayer dollars on creating duplicative contract vehicles; GSA can and should improve the efficiency and effectiveness for the acquisition of commercial products and services under the GSA schedules program. It is time to make a good commercial products and services schedules program great.

Finally, and most troubling, is GSA’s decision that Functional Areas 2-5 should be single-award. Under the FIT solicitation, the subsequent agency specific requirements for Functional Areas 2-5 are unknown and unarticulated over the potential five-year life of the single award contracts. As such, the contracts for each Functional Area will result in de-facto sole source procurements for each subsequent task order issued over the life of the contracts. This makes no business or procurement sense for customer agencies or the American people. Competition for agency specific requirements is vital to achieving best value for customer agencies. There is an alternative. GSA Schedule 71 contractors stand ready each and every day to compete, like they do in the commercial market, for the very agency specific requirements that GSA will be “sole sourcing” under the FIT solicitation.

Roger Waldron

President

Wow, what a day!  Nice weather, beautiful course, exceptional cause, and great camaraderie all accurately sum up Wednesday’s Joseph P. Caggiano Memorial tournament.  It was a very special day in honor of Joe Caggiano and veterans, a cause he was extremely passionate about.  We were fortunate to have Joe’s wife Kathleen, along with his parents Sue and Paul, and brother Michael, join us in the morning to personally present the donation to The George Washington University.  As you are hopefully aware, in honor of our 35th anniversary, and in conjunction with The George Washington University, we have made it a priority to fund and endow a scholarship to provide financial support to a deserving veteran who is concentrating their studies in the field of US Government procurement and pursuing the JD or LLM degree in Government Procurement Law or the Masters of Science in Government Contracting degree (MSGC) at GWU.

golf

Due to our generous sponsors and participants in Joe’s tournament, I am proud to announce we will be able to contribute more than $25,000 to the scholarship fund from this event alone!  I would especially like to thank our Title Sponsor, The Gormley Group; our Lunch Sponsor, CohnReznick; our Reception Sponsors, AvKARE and CACI; and our Beverage Cart Sponsors, EY and Integrity Consulting.

Additionally, I would like to thank our Driving Range Sponsor, Baker Tilly; our Putting Green Sponsor, Brocade; our bag sponsor, Senoda; and all our Hole Sponsors: 3MAllen Federal Business PartnersBerkeley Research GroupBooz Allen HamiltonCGICoalition for Government ProcurementDeltekGeneral Dynamics Information Technology (x2), George Washington UniversityHONJudge GroupKoniagL-3MarkitectureRendely FamilySAP, and TORO.  We look forward to your participation again next year!

Thank you to Steve Schooner from George Washington University for making opening remarks at the reception and coming out to witness firsthand how we, as the government contracting community, can come together and raise awareness and funds for charitable and educational causes such as this one.  On that note, a big thank you to the team at the Coalition, as well as the staff at Whiskey Creek Golf Club, for running a smooth and efficient tournament.

Thanks again and congratulations to all the players and companies involved.  We look forward to seeing you again at next year’s tournament!

Roger Waldron

President

golf gw

Recent Posts

Categories

Archives

© Copyright 2005-2011| 1990 M Street NW, Ste 450 | Washington, DC 20036 | 202.331.0975
Site by Web Weaving.
Linked InFollow Us on FacebookJoin Us on TwitterView Our Flickr Pics!Subscribe to Our RSS Feed