Friday Flash, 07.07.17

FAR & Beyond Blog:

Section 801: Limiting Competition to “Increase” Competition?  

Since the FAR & Beyond blog was posted on Existential Questions Surrounding H.R 2511’s Proposed “Online Marketplace,” Section 101 of H.R. 2511, the Defense Acquisition Streamlining and Transparency Act (DASTA), concerning procurement through online marketplaces, has become Section 801 in the markup of the Committee’s National Defense Authorization Act (NDAA) for Fiscal Year 2018.  Section 801 is revised slightly, as compared to the original Section 101, however, the revised language does not address the existential issues raised in the June 22nd FAR & Beyond.  Rather, the changes highlight further the growing concerns surrounding the potential impact of the legislation on the federal procurement system, customer agencies, industry partners, and the American economy.

As the Coalition noted, the language being proposed here embodies the most consequential procurement policy changes in a generation.  They have significant consequences for the government, for suppliers, and for the economy.  As such, they need a much more thorough examination and review by stakeholders across the procurement community, including, the Executive Branch, Congress, and American industry that serves government.  Such an examination and review has not taken place, and under these circumstances, the Coalition firmly believes that, by signing on to an online provider under the current language, the government risks bearing painful witness to the adage, married in haste, we may repent at leisure.

The proposed legislation represents much that the Coalition believes in:  acquisition streamlining; commercial practices, terms, and conditions; increased access to the commercial market; and market-led competition.  There remain, however, significant procurement and economic policy considerations that cause concern for many in industry.  Chief among these concerns is the real potential to create a monopoly framework.  The Coalition looks forward to continuing to work to improve the language, keeping in mind the issues discussed below.

As a threshold matter, Section 801’s use of the term “online marketplace” is a misnomer.  “Marketplace” implies an open, neutral exchange between buyers and sellers.  Current online service providers sought by Section 801 are really online platforms, not online marketplaces.  These online platforms set the terms of entry for suppliers, including the fees charged to participate.  They also set the terms of participation for buyers.  Moreover, it is our understanding that current online service providers can and do use the transactional data from the platform to compete directly against the suppliers they are servicing.  As such, the FAR & Beyond blog will use the term “online platform” in lieu of “online marketplace” used in Section 801.

Section 801 includes a handful of changes from the original Section 101 language.  Two the changes are of note.

First, Section 801 requires GSA, not the Department of Defense (DoD), to establish a government-wide program to procure commercial products through a commercial “online platform.”  Section 801 further instructs the DoD to purchase, as appropriate, commercial products through GSA’s new online platform program.  Moving the “online platform” program to GSA implicitly validates the industry feedback that GSA has been receiving over the last decade.  Specifically, current Multiple Award Schedule pricing policies, including the Price Reduction Clause, are outdated, bureaucratic, and burdensome.  The current implementation and management of these policies reduces access to the commercial market place and limits competition.  At the very least, the proposed Section 801 sends a clear message to GSA that it is time to streamline and reduce regulatory burdens that increase costs for all.

Second, Section 801 would require GSA to award “more than one contract with more than one [i.e. online platform] provider” for the government-wide program.  This language is a change from DASTA Section 101’s direction to award “one or more contracts,” but it is a change without substance.  Although it increases the minimum number of platforms from one to two, it remains a compliance-based approach that focuses on meeting a requirement rather than seeking to leverage/utilize, to the maximum extent practicable, the various robust online platforms available in the commercial marketplace, consistent with the approach to commercial item procurement envisioned in the Federal Acquisition Streamlining Act (FASA).

Significantly, the Competition in Contracting Act (CICA) is waived for the award of the online provider contract.  Apparently, the (il)logic, as expressed in the summary of the bill, is that allowing the award of the online provider contract without full and open competition will foster greater competition in the long run through the online platforms.  In addition, the language establishing the criteria for the “online provider” essentially is left unchanged.  All told, hundreds, if not thousands, of commercial firms with their own online platforms will see their access to the federal market limited to the two online platform providers GSA selects.  In essence, the language appears to stand for the proposition that we have to destroy competition to save it.

This potential distortion of the federal market is significant.  Firms that previously contracted directly with the federal government likely will pay fees to, and, largely dictated by, an online provider for access to the federal market.  In turn, to the extent an online provider competes with these firms in the federal market, that online provider will be able to utilize the transactional data captured during the firms’ transactions with the government.   As last week’s blog highlighted, this scenario represents an organizational conflict of interest that imparts an unfair competitive advantage and works to the detriment of the government.  At bottom, the online provider will be getting paid to use the U.S. citizens’ data assets, data assets which it will receive as a windfall free of charge, for its own business interests.

The limitation of entry to the federal market envisioned by Section 801 are compounded by language that continues to provide that the standard terms and conditions of the online provider cannot be altered by the federal government.  Under the legislation, the online provider would have sole authority to set the transaction terms, not the buyers or sellers.

Finally, Section 801 waives CICA regarding transactions for commercial products through the online platform.  As currently drafted, it appears that any point and click order of any size will be considered competitive, so long as there are at least two comparable products available for review/consideration via the online platform.  This approach is of concern.  Effective competition in the marketplace is enhanced by streamlining processes and increasing access to the commercial market.  Additionally, for large dollar value contracts/orders, it remains fundamental that getting a better deal is contingent on direct competition (e.g. quotes) for firm agency commitments.  It is unclear whether there are any requirements for direct competition for large dollar volume transactions (perhaps over $500,000) through the online platform.

The Coalition looks forward to working with all stakeholders on improving government-wide access to commercial products through an open, streamlined, transparent, fair, and secure process.

 

New Guidance on Enforcing Buy American Laws

Last week, the Department of Commerce and the Office of Management and Budget (OMB), issued a memorandum titled, “Assessment and Enforcement of Domestic Preferences in Accordance with Buy American Laws.” The memo was issued in accordance with the President’s Executive Order (EO) 13788 “Buy American and Hire American,” which seeks to maximize the use of goods, products, and materials produced in the United States.

The memo directs the heads of agencies to:

  1. Assess the monitoring of, enforcement or, implementation of, and compliance with Buy American Laws;
  2. Assess the use of waivers within their agencies by type and impact on domestic jobs and manufacturing;
  3. Develop and propose policies to ensure that, to the extent permitted by law, Federal financial assistance awards and Federal procurement maximize the use of materials produced in the United States, including manufactured products; components of manufactured products; and materials such as steel, iron, aluminum, and cement.

In addition, the memo requires agencies to address the following issues regarding Federal procurement in reports due September 15, 2017:

  • Procedures and guidance related to the Buy American Act, other Buy American Laws, including the Berry Amendment, as well as the application to the Trade Agreements Act (TAA)
  • Internal reviews that occur within the agency to determine compliance with Buy American Laws and the TAA
  • Marketing and outreach that the agency has taken to promote and enhance visibility for the acquisition workforce of products that are compliant with Buy American Laws
  • Training tools and other resources that are used to ensure that the acquisition workforce understands the Buy American Laws and the TAA

In general, the guidance seeks to enforce existing Buy American Laws, strengthen implementation by agencies, and better assess and track the use of waivers.  It also encourages agencies to strengthen internal procedures and update guidance to ensure greater compliance with existing statutes.

 

Congress Proposes Changes to VA Acquisition

Congress has proposed two bills which look to improve the Department of Veterans Affairs (VA) acquisition functions. The first bill would require the VA Secretary to prioritize the use of acquisition internship programs in order to hire more employees to entry-level positions. Specifically, the bill directs the Secretary to double the participants in the program. In addition, the bill would require the Secretary to develop a plan for reforming the acquisition functions of the VA in a manner that reduces duplication, increases efficiencies, and leads to cost savings.

The second bill seeks to enhance the VA’s organization of cost and price savings information. Specifically, the proposed legislation would require the VA to develop and implement a uniform documentation template for its acquisition functions to use when recording cost and price savings information.

GSA Requests Input on Acquisition Regulations

In accordance with the Enforcing the Regulatory Reform Agenda Executive Order, the General Services Administration (GSA) has published a request for comments seeking input on acquisition regulations, policies, standards, business practices, and guidance that may be appropriate for repeal, replacement, or modification. In particular, GSA is looking to identify regulations that inhibit job creation; that are outdated, unnecessary, or ineffective; and that impose excessive costs.

GSA is especially interested in feedback on topics such as evergreen, price adjustments, catalogs, Transactional Data Reporting, the Price Reduction Clause, and the Commercial Sales Practices format. Members are encouraged to provide any feedback they may have to Aubrey Woolley by Friday, July 14, for inclusion in the Coalition’s comments.

TTS Commissioner on FAS-TTS Merger

On Friday, June 30, Federal Times published an article detailing recent comments made by Rob Cook, Commissioner of the General Services Administration’s (GSA) Technology Transformation Service (TTS), regarding the consolidation of his office within the Federal Acquisition Service (FAS). Notably, Mr. Cook detailed how the move provides needed clarification related to TTS’ authorities and funding, without fundamentally altering its end mission goals. In addition, he stated that the day-to-day operations of TTS are unlikely to change.

Last month, GSA announced that TTS would be moving under the purview of FAS in order to better leverage resources and support the White House Office of American Innovation. At that time, GSA also announced the appointment of Alan Thomas as Commissioner of FAS, following the conversion of the Commissioner role from a career to political position.

 

Senate NDAA Addresses “Wasteful Spending” on IT

On Wednesday, July 5, Federal News Radio published an article detailing several provisions from the Senate Armed Services Committee’s draft National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 that would address wasteful spending related to underperforming software programs. According to Federal News Radio, “if enacted, the draft legislation would completely eliminate funding for the Army’s Warfighter Information Network-Tactical program,” which the Service has already spent more than $6 billion developing. “The airborne, satellite, and land-based communications system has been described as the future of the Army’s tactical network.”

In addition, the proposed legislation seeks to reduce authorized funding for many underperforming programs that heavily rely upon software and information technology by pressuring the military services to adopt best practices from industry. The Committee hopes that these provisions will move the Department of Defense (DoD) to a more agile approach that encourages innovative solutions.

 

Update on GSA’s New CDM SIN

The General Services Administration (GSA) is continuing the process of establishing a new Special Item Number (SIN) under Schedule 70 for Continuous Diagnostics and Mitigation (CDM) tools. GSA is establishing the SIN to support the Department of Homeland Security’s (DHS) CDM Program, and the SIN is expected to be open for offers later this summer.

GSA has provided a draft of the significant changes to the solicitation, a fact sheet about the SIN, and instructions for adding products to the CDM approved product list (APL). Additionally, GSA will be holding a webinar on Monday, July 17, from 10:00AM to 11:00AM to provide industry with more information about the new SIN.

 

Legal Corner

Change Is Upon Us: An Analysis of the Section 801 COTS Provisions of the 2018 NDAA

Jonathan Aronie, Partner, Sheppard Mullin

In the words of Taylor Swift, “This is a new year. A new beginning. And things will change.” While I suspect Ms. Swift was not writing about Section 801 of the National Defense Authorization Act of 2018 when she tweeted this inspirational prognostication, she might as well have been – although, admittedly, it probably would not have generated quite so many re-tweets. In any event, if you have not done so yet, you should give it a read (Section 801 that is; not Ms. Swift’s tweets).

Section 801 of the NDAA, which is set to be voted on in the House Armed Services Committee (HASC) as early as this afternoon, directs DOD to purchase COTS items through existing online commercial marketplaces, and to make such marketplaces available to other federal agencies for COTS purchases as well.  The directive to purchase products through an online marketplace upends current federal contracting rules and will have a significant impact on all current federal purchasing vehicles – including GSA Schedules, NASA SEWP, FedMall, NIH CIO-CS, and more.  Consequently, it also will have a significant impact on all COTS manufacturers, distributors, and resellers.

Here is a summary of the key provisions of Section 801 with some related observations that may be of interest to those who manufacture, sell, and/or resell COTS items to the Government:

Section 801 directs GSA to establish and administer a program through which DOD will purchase COTS items through existing online marketplaces.  While GSA will administer the program, it is prohibited from running the marketplaces.  The bill makes clear the marketplaces may not be managed by the Government and may not be used primarily by the Government.  The marketplaces must be run by private entities that aggregate, distribute, sell, and/or manufacture products.

  • Observation: GSA Advantage and FedMall are run by the Government and, thus, neither meets the requirements of an online COTS marketplace under the bill.  Interestingly, industry attempted to have the draft HASC language modified so that a Government online portal that could meet the marketplace requirements would receive the same benefits as a commercial portal, but the authors of the legislation rejected the idea of any acceptable Government-run marketplace.
  • Observation: The bill seems to permit a marketplace run by an entity that distributes products and sells its own products, which has led some industry groups to express concern over potential conflicts between the marketplace and the vendors selling through it.

GSA must award “multiple” marketplace contracts.  Notably, however, GSA is not required to use competitive procedures to award the marketplace contracts.  GSA expressly may award the marketplace contracts without the use of full and open competition.

  • Observation: The draft legislation originally contemplated the award of “one or more” marketplace contracts. The current language reflects a change championed by multiple vendor and industry groups to increase competition among marketplace providers. The current language, however, does not go as far as industry wanted. Multiple industry groups recommended the legislation be modified to require GSA to execute “the maximum number of contracts as practicable with online marketplace providers.” This language was rejected.
  • Observation: The bill does not instruct GSA how it should evaluate and select an appropriate marketplace.  The bill only authorizes GSA to make the award without competition.  It is unclear whether this means GSA may award the marketplace contracts without any formal evaluation.  It also is unclear what basis for legal challenge non-selected marketplace vendors will have.

While directed at DOD purchasers, the bill makes clear GSA must design the program so that it enables government-wide use; not just DOD use.

  • Observation: The HASC staff has been working with the House Oversight and Government Reform Committee to look for ways to expand the online marketplace plan to cover the entire Federal Government. HOGR Chairman Gowdy apparently has waived his committee’s jurisdiction over this issue in order to permit the HASC to proceed with its government-wide legislation.

While DOD is not required to use the marketplace for all purchases, the bill requires that DOD “shall” use the marketplace “as appropriate” for COTS purchases.  The directive does not extend to services and does not extend to non-COTS commercial items.

  • Observation: The requirement to use the marketplace for all COTS purchases “as appropriate” would seem to open the door to future legal challenges.  GSA will have to figure out what is “appropriate” and what is not, or at least provide guidelines for DOD purchasers to make that determination at the purchase level.

The bill identifies a number of capabilities a marketplace must possess in order to qualify under the new program.  The marketplace must:

  • Be widely used in the private sector, including for business-to-business purchases.
  • Offer dynamic product selection.
  • Offer dynamic product pricing.
  • Present offers from multiple suppliers.
    1. Be sortable by
    2. Product price,
    3. Shipping price,
    4. Delivery date,
    5. Supplier reviews, and
    6. Product reviews.
  • Not feature or prioritize any product or supplier based on fees or compensation that is “exclusively” paid for such featuring or prioritization.
    1. Observation: The bill does not appear to prohibit prioritization based on fees paid not “exclusively” for that purpose. Industry groups attempted to modify this language before its incorporation into the NDAA to prohibit any featuring or prioritization “based directly or indirectly on any form of compensation, consideration, or fee paid to the online marketplace . . . .” This language was rejected by the HASC.
    2. Observation: The bill also does not appear to prohibit prioritization for reasons other than fees or compensation, such as the marketplace owner prioritizing its own products over those of others.
  • Provide the capability of ensuring procurement oversight controls, including:
    1. Spending limits,
    2. Order approval, and
    3. Order tracking.
  • Allow for consolidated invoicing, payment, and customer service.
  • Provide for product screening by Government purchasers for:
    1. Excluded vendors (i.e., vendors that have been suspended or debarred from selling to the Government),
    2. Products that comply with the Berry Amendment,
    3. Products that comply with DOD’s Specialty Metals rules,
    4. Buy American Act (BAA)-compliant products,
    5. Trade Agreement Act (TAA)-compliant products,
    6. JWOD (AbilityOne)-compliant products, and
    7. Products sold by small and other disadvantaged businesses.
  • Collect necessary government purchasing data. (The bill directs GSA to maintain the ability to access purchasing data on a monthly basis, including the number of suppliers that offered a similar product on the same date a product was purchased.)
  • Observation: These requirements (a-j) severely limit the number of existing marketplaces that conceivably could qualify as a DOD COTS marketplace.

The bill requires GSA to conduct reviews of suppliers to ensure they meet the requirements listed above.

  • Observation: Ultimately, GSA will have to establish regulations to implement these requirements.
  • Observation: While not identified in the bill, presumably the GSA OIG will be involved in this facet of the new program.

With respect to ordering/purchasing, agencies will be relieved of current competition obligations.  A purchase through the marketplace automatically will meet CICA’s competition requirements so long as two or more similar products are available through the marketplace.

  • Observation: Query what exempting marketplace purchases from full and open competition means when it comes to DOD’s purchasing decisions.  Will DOD purchase through the marketplace on an LPTA (low price technically acceptable) basis, or will value still come into play?  Also, will disappointed bidders have any vehicle to challenge irrational and/or unreasonable purchasing decisions?  Since there is no cap on the size of marketplace purchases, industry could see massive non-competitive purchases become the norm.  Considering the Federal Government makes flawed procurement decisions quite often (remember, according to GAO, more than 40% of bid protests are effective, meaning the agency takes some form of corrective action), the idea that purchasers need not engage in any competitive process is concerning.

Agencies still may set aside purchases for small businesses, and awards to the vendors selling through the marketplace are considered awards to prime contractors for small business tracking purposes.

All purchases made through the marketplace must be made in accordance with the marketplace’s standard terms and conditions. And Government purchasers may not require the marketplace to change its standard Ts&Cs.

  • Observation: The bill’s language suggests that when DOD requires changes to standard commercial terms and conditions they will be precluded from purchasing through the marketplace, and will have to use a different purchasing vehicle.  This hints at a small window of ongoing usefulness for GSA Schedules, FedMall, etc.
  • Observation: The bill is silent regarding what happens when a vendor’s standard terms and conditions conflict with the marketplace’s.  Presumably, the marketplace vendor will be able to exert significant pressure on the commercial terms and conditions of all sellers.

Regarding the massive amounts of data the marketplace will control, the bill provides that the marketplace may not make data available to any third party.

  • Observation: The bill places no limitation on how the marketplace itself can use the data for its own marketing and sales purposes.  This could create a significant power differential where the marketplace provider acts as a reseller and a seller of its own products at the same time.
  • Observation: Several industry groups have objected to what they view as an unjustified Government giveaway. Recognizing the value of the data that will be available to the marketplace providers, industry pushed to have the initial language modified to require “just compensation from the entity receiving” the Government’s purchasing data. The proposed language was rejected.

The bill directs GAO to assess the program’s impact on small businesses after three years.

However the foregoing issues resolve themselves, if enacted, Section 801 unquestionably will change the way the Government purchases – and the way vendors sell – COTS items.  And it also almost certainly will have a dramatic impact on the viability of the Government’s current purchasing vehicles, including GSA’s MAS Program.  In fact, as noted above, industry attempted to modify the initial HASC language so that the regulatory advantages going to commercial online marketplace providers under the bill also would apply to Government online marketplace providers like GSA Advantage, FedMall, etc. The authors of the bill rejected the proposal outright.

While the foregoing discussion outlines some of the concerns expressed by some companies and industry groups, other groups have expressed additional concerns over the potential negative consequences of the legislation.  Some have complained the use of a marketplace that treats “similar” items as the same for competition purposes effectively renders COTS purchases LPTA and (a) will drive prices into a dangerous downward spiral and (b) will drive the Government toward cheaper foreign products.  Others, in contrast, have expressed concern the significant fees charged by online marketplaces will increase the Government’s costs.  Other criticisms have centered around the potential monopolistic power of the online marketplaces to drive prices, product attributes, and terms and conditions.  In the same vein, some vendors worry about the negative impact of putting the totality of DOD’s purchasing data in the hands of two marketplaces that also are direct competitors of the vendors they host.  (As noted above, the bill allows the marketplace to sell products as well as host products.)

The current version of the online marketplace provision, designated Section 801 of the 2018 NDAA, heads into Full Committee Markup later today. Then, depending on how things go in the House, the bill will head to the full House, and then to the Senate where new voices will be heard and, perhaps, changes made. If Section 801 makes it past the Senate, and becomes law, GSA will have to mobilize to develop the rules and regulations that will govern the new program. Here again, there will be new opportunities for supportive and concerned voices to be heard. Regardless of what tune these voices sing, Ms. Swift had it right: “This is a new year. A new beginning. And things will change.”

 

5th Annual Joseph P. Caggiano Memorial Golf Tournament, Aug. 23rd

In honor of our good friend and colleague, Joe Caggiano, who was not only a 23-year veteran of the Federal contracting marketplace, but a naval veteran as well, the Coalition will be hosting the 5th Annual Joseph P. Caggiano Memorial Golf Tournament on Wednesday, August 23, at Whiskey Creek Golf Club in Ijamsville, MD. This will be an especially important tournament for everyone as the Coalition hopes to fulfill our fundraising goal for our veteran scholarship with your help!

As you may recall from previous years, the tournament proceeds will support the Coalition’s endowment for a qualified veteran concentrating their studies in the field of US Government procurement and pursuing the JD/LLM degree or the interdisciplinary Masters degree at The George Washington University. Joe would be so proud of this endowment as we encourage the next generation of skilled professionals to lead this critically important sector of the US economy.

In addition, following last year’s landslide victory by Grainger, the Coalition is very excited for its second annual “Best Dressed Team” award, which will be presented to the foursome with the most creative, entertaining, and coordinated outfits. With their stylish hats, dapper pants, and snazzy socks, Grainger set the bar incredibly high, so start planning your outfits today!

We have several exciting sponsorships available including title sponsors, beverage cart sponsors, hole sponsors, and many more with all budgets in mind. Please click here to review sponsorship opportunities and contact Matt Cahill at mcahill@thecgp.org or 202-315-1054 with any questions or commitments. We look forward to your support, and to a day filled with competition, camaraderie and remembrance.

To register, click here.

 

Schedule 70 Myth Busting Panel, July 18

The General Services Administration’s (GSA) Office of IT Services will be hosting monthly industry meetings beginning Tuesday, July 18, from 10:00 AM to 11:30 AM in Fairfax, Virginia. These meetings will focus on various issues related to IT Services and will be open to both members and non-members who are interested.

The meeting will feature a Schedule 70 Myth Busting Panel discussion lead by Casey Kelley, Acting Director of GSA Office of IT Services, who will facilitate discussions with the following GSA and industry panelists:

  • Warren Blakenship, – GSA, IT Schedule 70
  • Jill Thomas – GSA, IT Schedule 70
  • Morgan Phillps Snyder – GSA, IT Schedule 70
  • TBD – GSA, IT Schedule 70
  • Mike McHugh – General Dynamics Information Technology (GDIT), Staff VP, GWAC Center
  • John Gregorits – Tribalco, VP of Capture,
  • Jim Fraser, Mantech, VP of GWAC Center
  • Aaron Tilock, IPNS, Sr. VP for Operations & Strategy

For more information on this event, as well as instructions on how to register, go to the Office of IT Services Interact Community website at:

https://interact.gsa.gov/group/office-it-services

In person registration is now closed.  To attend virtually, please register through the GSA Interact link above.

Coalition Meeting on NDAA’s Online Commercial Portal, July 19

The Coalition will be holding a virtual meeting on Wednesday, July 19, from 12:00PM to 1:00PM that will brief members on Section 801 “Procurement Through Online Marketplaces” of the draft National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018.

If enacted, the proposal could be one of the most consequential procurement policy changes in a generation. Significantly, Section 801 requires the General Services Administration (GSA) to establish a government-wide program to procure at least two platforms for the online purchase of commercial items. Specifically, the bill:

  • Instructs the Department of Defense to purchase, as appropriate, commercial products through GSA’s new online platform program
  • Allows award without the use of full and open competition
  • Requires that the government accept the commercial terms and conditions of the online platform without change
  • Raises significant concerns related to potential conflicts of interests

Guest speakers will be Carolyn Alston, the Coalition’s Subject Matter Expert, and Tom Sisti, the Senior Director & Chief Legislative Counsel for SAP.  They will cover the specifics of the NDAA proposal and potential impacts on companies selling commercial items to the Federal government.

Please RSVP to Jason Baccus at jasonbaccus@thecgp.org in order to receive the dial-in information.

 

GAO on DoD Prototyping

Last week, the Government Accountability Office (GAO) published a report detailing how the Department of Defense (DoD) is utilizing prototyping activities to reduce risks and increase innovation. Significantly, GAO found that most DoD major weapon acquisition programs utilize prototyping as a means of reducing risks. In addition, since 2012, the GAO found that DoD has taken steps, including the establishment of seven new offices, to increase prototyping and enhance innovation.

The report, however, identified several barriers, including limited funding, a risk averse culture, and competing priorities, that could hinder future efforts to expand prototyping at DoD. To address these concerns, GAO provided four recommended actions for DoD:

  • Develop a high-level, Department-wide strategy that clearly defines strategic goals, priorities, and roles related to prototyping
  • Implement measures to ensure adequate funding
  • Review budget activity to ensure that it is aligned with Department-wide strategy
  • Expand working groups to include budget activity

 

Congressional Proposal Would Increase Pharmacy Copays for TRICARE

In order to fund the Special Survivor Indemnity Allowance (SSIA) benefit program, Congress is considering offsetting the cost by increasing pharmaceutical copays for the Department of Defense’s (DoD) TRICARE program. The SSIA program, whose fund is set to expire in May 2018, provides financial benefits to Americans whose spouses have died and contributed to the DoD’s Survivor Benefits Plan.

Earlier this week, Federal News Radio published an article describing the proposal, which is included in the draft National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018, and the lack of clarity regarding its potential impact on the TRICARE program. Under a similar amendment put forth by Representative Susan Davis (D-CA), co-pays would increase by $4 for generic drugs. Representative Davis, however, has withdrawn the amendment pending a budget resolution between the House and Senate later this year.

 

GAO on SBA Contracting Office

Last week, the Government Accountability Office (GAO) published a report detailing recent efforts at the Small Business Administration’s (SBA) Office of Government Contracting and Business Development (OGCBD) related to its business development program. Specifically, GAO examined:

  • The infrastructure, e. field-office and reporting structure, used to implement the program
  • Progress to enhance processes for certifying small businesses as eligible for the program
  • Timeliness of SBA rule-making

Although GAO determined that reporting relationships can result in inconsistent program delivery, there have been recent efforts to improve communication between field staff and OGCBD. Considering the recent implementation of these efforts, GAO was unable to determine their effectiveness. In addition, GAO found that progress has been made to improve the various processes related to certifying small businesses. For instance, GAO found that SBA is consistently collecting documentation for it HUBZone certification process and has enhanced its oversight of third-party certifiers for its Women-Owned Small Business Program. Further, GAO determined that, considering the various legal requirements, SBA’s rule making timeliness is not abnormal. GAO made no new recommendations based on their findings.

IRS Industry Day, July 27

On Thursday, July 6, the Internal Revenue Service (IRS) announced that it will be hosting an Industry Day on Thursday, July 27, in Lanham, MD. Participants will gain insights into the IRS’ strategic priorities, goals, programs, and initiatives. Topics of discussion will include the Future State Initiative, Overview of IRS Spend, IRS Online Services, and How to Do Business with IRS.

Registration for the event is not yet open. The IRS will be posting additional information regarding registration instructions on Monday, July 17.