The Coalition for Government Procurement

This month, the blog posts are focusing on four key fundamentals for efficient and effective procurement. This week’s fundamental is “Contract structures that increase efficiency, competition and access to the commercial marketplace.” In particular, the Coalition continues to highlight this fundamental with regard to the $50 billion Multiple Award Schedule (MAS) program managed by the General Services Administration (GSA) and the Department of Veterans Affairs (VA). Other Direct Costs (ODCs), MAS pricing policies and the role of the Price Reduction Clause (PRC), data collection requirements, Federal Acquisition Regulation (FAR) 8.4, and MAS Blanket Purchase Agreements (BPAs) are all areas the Coalition has addressed in an effort to stimulate even more efficient and effective contracts for customer agencies and contractors.

ODCs remain a top priority. The lack of ODCs on MAS services contracts reduces efficiency and competition for commercial solutions to government requirements. It also leads to contract duplication as customer agencies create alternative contract vehicles to address their needs. It does not have to be this way. The FAR provides a solution through FAR Part 12 and the commercial item clauses. FAR 52.212-4, Alternate I, provides an efficient and accountable method to include materials, ODCs and indirect costs in task orders under commercial item contracts. Importantly, as the blog post has noted before, most MAS service contracts already include the clause. The infrastructure for addressing ODCs is already in place!

With regard to the pricing policies and the role of the PRC, the Coalition welcomes the upcoming 2012 launch of the GSAR rewrite that will include a review of the current pricing policies and procedures. It is time. The current policy was written in the early 1980s! The commercial marketplace is a much different place. Services account for the majority of purchases by both commercial customers and the government. The internet exists! Technology has changed the way companies compete. Just as importantly, the new statutory mandates for task order competition now drive pricing under the MAS program—not the PRC. In response to GSA’s Federal Register notice seeking comment on the paperwork burden associated with the PRC, the Coalition provided two submissions with compelling information on the significant burden associated with the clause. The administrative costs of PRC compliance far outweigh its perceived benefits, especially when competition and requests for price reductions at the task order are mandated by regulation. The new FAR 8.4 competitive ordering procedures trump the PRC.

Data collection requirements are a new area where GSA is seeking to serve its customer agencies. It is an area where we look forward to working with GSA to identify commercial best practices. Lastly, the Coalition believes that the key to effective use of BPAs is the inclusion of volume commitments that create real incentives for contractors to participate while setting sound expectations for the work to come. On all these issues, the Coalition encourages feedback. Please let us know what you think!

A final note, our Spring Conference will include a session with GSA’s Steve Kempf, FAS Commissioner, focusing on the Next Generation MAS program and Jim Ghiloni, OASIS Program Manager. These conversations will provide a great opportunity to learn more about the acquisition strategies and potential contract structures for these two important contracting programs. We look forward to seeing you there!

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