“Thirteen Thoughts for 2013” continues this week with Thought No. 3: ODCs in 2013!(?). As you know, throughout the last year the Coalition for Common Sense in Government Procurement (the Coalition) has highlighted the fundamental value to customer agencies of the inclusion of ODCs and materials (at cost) in Multiple Award Schedule (MAS) contracts. The Coalition has pointed to Federal Acquisition Regulation (FAR) Part 12 and FAR Clause 52.212-4, Alternate I, which authorize the inclusion of ODCs and materials in commercial item contracts. An approach that is consistent with the structure of MAS contracts which, as commercial item contracts, already include the applicable FAR Part 12 clauses. Indeed, many hundreds, if not thousands, of MAS contracts also already include FAR 52.212-4, Alternate I.
Implementing ODCs in MAS contracts aligns directly with Acting Administrator Dan Tangherlini’s mission statement for GSA “The mission of GSA is to deliver the best value in real estate, acquisition, and technology services to government and the American people.” Moreover, implementing ODCs is consistent with four of the six new priorities outlined in the Administrator’s January 14th memorandum to the entire GSA staff. Implementing ODCs will:
- Enable the MAS program to deliver better value and savings to customer agencies by enhancing competition and streamlined access to commercial solutions.
- Serve GSA’s partners through the reduction of unnecessary contract duplication fostered by the current inability to include ODCs on MAS orders
- Expand opportunities for MAS small businesses at a time of increased competition small business in the federal marketplace.
- Lead innovation through the MAS program providing greater access to the latest, cutting edge commercial solutions for customer agencies.
GSA has a strategic opportunity to “modernize” the MAS program through the implementation of ODCs. Customer agencies are seeking commercial solutions to their requirements that include ODCs. MAS contractors are ready to compete for and deliver commercial solutions to GSA’s customers. Addressing ODCs will enhance the value and efficiency of the MAS program for all. It is a strategic imperative for GSA in serving a federal government that continues to face budgetary headwinds.
The Coalition looks forward to continuing the dialogue with GSA and working towards a flexible, accountable implementation of ODCs that increases competition, efficiency and savings for the MAS program, customer agencies, and contractors.
2013 is the year to eliminate the “(?)” from Thought No. 3.
It is time for ODCs in 2013!
GSA launched two new communities on GSA Interact this week as part of the Federal Strategic Sourcing Initiative (FSSI). The first community is for Janitorial and Sanitation (JanSan) Supplies, which includes products like bleach, trash bags, paper towels, mops, and buffers. The second is for Maintenance, Repair, and Operations (MRO) products such as hardware, power tools, pipes, valves, electrical equipment and lighting.
GSA has created these communities on Interact in order to collaborate with industry on the development of two new FSSI contract vehicles for JanSan and MRO products. As a first step, GSA is scheduling one-on-one sessions with industry to discuss data collection and reporting, cost drivers, ease of use for customers and other topics.
Interested vendors should submit a white paper to GSA no later than February 15. Please note that availability for one-on-one sessions is limited. Interviews will be conducted on a first-come-first-served basis with the first 20 respondents. For more details about the white paper and scheduling a one-on-one meeting, visit:
GSA recently released a solicitation to expand the services available under the Federal Strategic Sourcing Initiative (FSSI) for Managed Print Services. These new FSSI BPAs will mark the second phase of GSA’s Print Management Program.
Under the current FSSI BPAs for Managed Print Services, Federal agencies are able to purchase fleet assessments and the accompanying document imaging solutions including copiers and printers, maintenance, and usage reporting (such as energy use).
Phase two of the program will establish FSSI vehicles that will allow Federal agencies to more efficiently manage existing print and copier devices. Vendors will also provide maintenance, toner replacement, cost management and data collection services.
Sustainability and small business opportunities are key objectives of the FSSI Print Management Program. Equipment provided must be ENERGY STAR qualified and track energy use. In addition, GSA plans to award a “Sustainable Managed Print Services Provider” designation in phase 2 to vendors that have adopted certain corporate practices, such as completing a greenhouse gas inventory, purchasing 30% of utilities from renewable power generation sources, or purchasing remanufactured or biobased products (for 20% of all company-wide purchases). In order to maximize participation by small businesses, fleet assessments and the management of printer devices have been set-aside for small business.
The Department of Defense (DoD) will submit its sequestration plans to the White House by the end of the week. According to Defense News, the Feb. 8 deadline will begin a series of high level meetings with Congress that will focus on the pending issue of sequestration. For more details from Defense News, link here.
This week the U.S. Army released plans for the implementation of $18 billion in FY2013 spending cuts, set to occur due to the pending sequester. Should Congress not take steps to avoid sequestration, the cuts will take place on March 1. The Army’s plans are based on the assumption that the government will be funded for the remainder of FY2013 on a continuing resolution (CR). The Army notes that “while all accounts are impacted by the potential sequestration, the greatest impact for the Army is in Active Component Operation and Maintenance, Army (OMA) due to compounding challenges that sum to an ~$18B shortfall.”
The Army warns that the effects of these reductions “will distress and shock Army installations and their surrounding communities with terminations of temporary and term employees, wide-scale reduction of support contracts with more than 3,000 industry partners, and furlough of all 251K Army civilians for up to 22 days.” Specifically, “the cancellation of new depot maintenance orders will require an immediate release of ~5,000 temporary, term, and contract employees, mostly in Alabama, Texas and Georgia,” with an economic impact expected to be larger than $2 billion. Additionally, the sequester would cancel all FY13 Restoration and Modernization projects on Army installations and reduce purchase orders to vendors across the country. Every Army procurement program is expected to be affected; reducing quantities by 10% – 15%. According to the Army, these reductions affect more than 1,000 companies in more than 40 states as they reduce their workforces.
The Council on Environmental Quality released the annual Strategic Sustainability Performance Plans this week for each Federal agency, as required by Executive Order 13514. 2012 marks the first year that agencies are required to include a Biobased Purchasing Strategy describing how they will increase the purchase of USDA-designated biobased products.
Like other agencies, GSA has outlined their Biobased Purchasing Strategy including what they have accomplished to date and plans to improve compliance in FY 2013. One plan moving forward is to include biobased requirements in Federal Strategic Sourcing Initiatives (FSSI) BPAs. GSA’s accomplishments to date include:
- The Federal Acquisition Service (FAS) added “BioPreferred only” requirements to Multiple Award Schedules (MAS) 73 and 84 for cleaning equipment and gun cleaning solvent.
- FAS incorporated biobased clauses/provisions into applicable MAS solicitations/contracts.
- FAS’s Global Supply program partnered with AbilityOne to develop and offer biobased products, including laundry detergent and cleaning products.
- Global Supply added 62 Item Purchase Descriptions for biobased products.
- PBS added several biobased products to the PBS national custodial and operations & maintenance scopes of work.
In order to improve bio-based compliance in FY 2013, GSA plans to incorporate requirements and clauses for biobased products in relevant and appropriate contracts. Other aspects of the plan include:
- Incorporation of biobased requirements into upcoming Federal Strategic Sourcing Initiative (FSSI) Blanket Purchase Agreements (BPAs), as appropriate.
- Posting information on new contractor biobased reporting requirement on gsa.gov and on FedBizOpps.
- Automatic inclusion of both biobased clauses in all applicable contract actions in the new PBS contract writing system to be released 2nd quarter FY 2013.
- Annual verification that all biobased requirements in the PBS custodial and operations & maintenance national scopes of work have been included in all new custodial and operations & maintenance contracts.
Each Federal agency describes their Biobased Purchasing Strategy in their 2012 Strategic Sustainability Performance Plan. To access these documents, visit http://sustainability.performance.gov/.
On February 11, the Interagency Task Force on Veterans Small Business Development will meet to resume work on acquisition challenges including achieving small-business contracting goals, mentor-protégé matches and reducing procurement paperwork. This task force was created in 2010 by Executive Order 13540 after the Government Accountability Office and Inspectors General reports identified vulnerabilities in agency certification processes that have resulted in ineligible firms obtaining small business status. According to Federal Computer Week, the task force proposed in its 2011 report that the government establish a “veteran-owned” small business standard based on the number of veterans a business employs, similar to the criteria used to qualify firms located within Historically Underutilized Business Zones (HUBZones). However, Congress and the administration have yet to move forward with implementation.
Coalition President, Roger Waldron, recently appeared on the televised Government Contracting Weekly with AOC Key Solutions’ Hillary Fordwich. During the show, Roger discusses how to win business in the complex Federal & Health marketplaces. He also shares some key elements that set a company apart including driving true partnership with clients to fulfill strategic goals, the ideal program manager, and how to marry BD, Capture, and Delivery. To watch the segment, click on the video below.
This week NASA posted a Sources Sought Notice on FedBizOpps.gov to small businesses for NASA SEWP V. The purpose of the notice is to determine the appropriate level of competition and/or Small Business subcontracting goals. NASA is interested in advanced technology, including:
- desktops and servers
- IT peripherals
- network equipment
- storage systems
- security tools
- software products
- cloud based services
- video conferencing systems
- other IT and Audio-Visual products
NASA is also interested in the product-based services such as installation and maintenance that accompany these products. The notice states that a portion of this potential requirement will be set-aside for small business. Responses are due February 15, 2013.
This week, both Houses of Congress introduced legislation that would expand the boundaries of the Historically Underutilized Businesses Zones (HUBZones) for communities affected by the DoD Base Realignment and Closure Act (BRAC). The legislation aims to increase access to the HUBZone contracting program to include a town or county where the closed installation is located. The intent is to help communities near closed military installations recover. The HUBZone Expansion Act (S. 206) was introduced by Senator Susan Collins (R-ME). The House version of the bill (H.R. 489) was introduced by Representative Chellie Pingree (D-ME) and has been referred to the House Small Business Committee.
What Does 2013 Have In Store for Government Contractors and Their Lawyers?
By Louis Victorino, Partner, Sheppard Mullin and Jonathan Aronie, Partner, Sheppard Mullin (originally published in the San Diego Business Journal)
It has been noted, the more things change, the more they stay the same. In the world of Government Contracts Law, however, the more things change, the more the phone rings. And while we’re only a month into 2013, the phone has been ringing off the hook. Here are a few of the reasons why.
The Government’s anti-contractor bias continues unabated. From the moment President Obama stepped into office, his executive team made clear their distrust of defense contractors. Indeed, one of OMB’s first public pronouncements focused on curbing perceived rampant contractor fraud. Shortly thereafter, Congress passed the Close The Contractor Fraud Loophole Act, certainly not the title one gives to an Act intended to extoll the virtues of the long and critical partnership between Government and industry. In late 2008, the Government continued down the anti-contractor path when it created what is known as the Mandatory Disclosure Rule, a regulation that requires contractors to self-report “credible evidence” of an extremely broad list of potential wrongdoing. The purported rationale for the rule? The Government’s belief that contractors were affirmatively hiding their fraudulent activities from the Government. Putting aside for a moment the many flaws in the Government’s apparent view that contractors generally are not to be trusted, the fact is the anti-contractor bias remains strong in 2013 and shows no signs of abating.
Increased enforcement activities. Tied closely to the Government’s view that contractors are not to be trusted, is the Government’s ever-increasing efforts to police those contractors more aggressively. Like 2012 before it, 2013 is poised to see increases in federal audits, investigations, and False Claims Act lawsuits. DCAA, the Defense Department’s primary audit watchdog, for example, continues to reach new levels of aggressiveness. As one commentator put it not long ago, the DCAA “is out of control.” Suspensions and debarments also are likely to increase in 2013. The President has directed federal agencies to make better use of the suspension/debarment process, and the OMB is making sure the President’s direction is implemented. It would be naïve, of course, to think this increase in enforcement activity is due solely to a mistrust of contractors. The Government’s collection of $4.9 Billion (yes, that’s Billion with a B) in False Claims Act settlements and recoveries in 2012 no doubt feeds the Government’s view that contractors need more policing, and fuels the arguments of the enforcement community that they need to be more, not less, aggressive.
Shrinking pots of money mean more bid protests. The number of bid protests (that is, disputes between a contractor and an agency over the non-award of a federal contract) has increased every year since 2008. In 2008, 1,652 actions were filed with the General Accountability Office (GAO), the primary arbiter of procurement award disputes. That number steadily increased to 2,475 in 2012. Whether or not that number will rise again in 2013 remains to be seen, but the likelihood that larger award decisions will be protested by a disappointed bidder will increase. As federal opportunities become fewer, the competition for those that remain almost certainly will heat up. In short, some companies simply cannot afford not to protest.
The Government will take more work in-house. With shrinking budgets and the elimination of programs, the Government will bring more work in-house in 2013 to maintain their internal funding levels and workforce headcounts. The move to in-sourcing will be advocated by Government labor “unions” and supported by the Democratic administration. See, e.g., Subtitle C of Title III of the National Defense Authorization Act for Fiscal Year 2012. This won’t just be in-sourcing of traditional Systems Engineering and Technical Assistance (SETA) work and weapons depot work, but will extend to major weapon systems repairs and overhaul, as well as design, development, and implementation of major Government software system upgrades. We also likely will see that Government engineering centers and laboratories will move to keep in-house significant research and development funding and activities. These efforts will have an obvious significant impact on contracting opportunities available to private companies, large and small.
The Government will become more aggressive with respect to securing intellectual property. As a consequence of bringing more work in-house, the Government will need the intellectual property necessary to perform that newly in-sourced work. As a result, 2013 likely will manifest an acceleration of recent trends to a more confiscatory Government policy regarding rights in data, including patents and copyright. Regardless of the standard rights in data delineated in applicable regulations and contract clauses, in connection with the solicitation of contracts for major programs, the Government will seek to obtain, at a minimum, a Government Purpose Rights License not only to data first produced or developed under the contract but also to a significant portion of all data used in the performance of the contract. Definitions of “Commercial Items” will be narrowed, expanding the Government’s rights in data, including software. Formal challenges to current contractor claims of data rights will increase. And, unfortunately, in some instances, contractor intellectual property simply will be used by the Government, with the propriety of the use left to be determined by years of litigation.
Greater competition for fewer dollars will prompt industry consolidation. The reduced number of contracting opportunities will have many collateral impacts on the Government contracting community and their legal advisors. As occurred with the end of the “cold war,” there likely will be an upswing in industry consolidation. With a reduction in funding and new programs available to contractors, the industry base will need to shrink. Some commercial and “dual use” companies simply will abandon the market. Others, with shrinking backlogs, will seek strength and economies through corporate combinations or “spin-offs.” Some companies, particularly smaller companies, will be targets of acquisition because of their success in winning large or significant program contracts. A business that wishes to be the leader in a particular technology may well need to acquire the winning competitor of the next and only large, long term contract involving that technology.
The increased pressure that comes with increased competition will cause some to stray. While the federal contracting community is, far and away, one of the most self-policed industries in the country, every industry has its exceptions. While most contractors will assess the new environment and adapt their business strategy accordingly, some will bend to the new fiscal pressures and adapt their strategies in more reckless ways. When contractor managers and employees see their livelihoods hitched to the success of the next proposal submission, some will do foolish things – some will seek inside information regarding the procurement, seek proprietary information about their competitors, provide false information to support their offer such as “inflated” resumes or product performance claims, and any number of other prohibited activities. In short, some people do pretty stupid things when they are under pressure. Fortunately, these events are the exception rather than the rule, but companies cannot afford to take any chances. If contractor leadership is not extremely vigilant and committed to internal integrity and compliance, the increased audits and investigations described above may well negate all efforts to be successful in the new smaller, Government contracting market.
Contractors continue to embrace ethics and compliance as a core element of success. Years ago, the implementation of an in-house ethics and compliance program was viewed by many contractors as a necessary evil; something needed to keep the lawyers happy, but rarely embraced by the “revenue generators.” Over the last 5-10 years, however, there has been a cultural shift among contractors. Contractors now embrace the benefits of an effective ethics and compliance program. Codes of Conduct are the rule rather than the exception. Training programs are standard fare for Government contractors. While the Government can take some credit for this evolution – there is nothing like a few multi-million dollar False Claims Act settlements in your industry to highlight the importance of compliance – contractors also deserve much of the credit for embracing the benefits of such programs. As the Government’s enforcement activities become more and more aggressive, one can expect to see a continued increase in the roster of Company’s embracing the benefits of an effective internal control system and ethics/compliance program.
* * *
In short, we are reminded of an observation provided by an astute securities law school professor who noted: When the stock price of a company goes up, stock sellers will sue the buyers. When the stock price goes down, the buyers will sue the sellers. When the stock price remains the same, each will sue the other. Government contracting is a challenging market. Challenges exists in up-times and they exist in down-times. They likely will be different challenges from year to year, but challenges always are present. The astute contractor understands this and guides the organization accordingly.
The 2013 market clearly counsels in favor of enhanced care in the pursuit of new business. With respect to new solicitations, assure that the proposed terms and conditions and the statement of work/specifications are reviewed carefully and risks identified. Assure decisions to accept risk are fully informed and made at an appropriate level within the company. Finally, refresh your internal personnel training regarding Government and company rules delineating what are prohibited activities in connection with the submittal of a proposal. And, if all else fails, pick up the phone and give your friendly Government Contracts lawyer a call. You won’t be alone.
This article formed the basis, in part, for an article appearing in the January 21-27 issue of the San Diego Business Journal (www.sdbj.com) and special thanks to the editors of that publication for permission for its re-use.
GSA posted a notice this week in the Federal Register requesting public input on the Federal government’s use of green buildings certification systems. Every five years, GSA is required to reassess its use of green building certification systems and recommend to the Department of Energy which system should be used for Federal agencies. The government currently uses the U.S. Green Building Council’s LEED rating system.
GSA is currently evaluating three rating systems to determine which best meets the Federal government’s needs. Under consideration are LEED, the Green Building Initiative’s Green Globes, and the International Living Future Institute’s Living Building Challenge. The most recent evaluation conducted in May 2012 showed that Green Globes aligns with more of the Federal requirements for new construction, while LEED meets more of the requirements for existing buildings.
The notice seeks feedback from the public on a number of questions related to new construction, total cost of ownership, and the appropriate metrics for building performance tracking and reporting. GSA has also outlined several key concepts that they would like the public’s input on.
The information received in response to the notice will help GSA make its final determination and recommendation to the Department of Energy.
The Department of Homeland Security (DHS) will be hosting numerous engagement opportunities in the coming weeks. They are:
- Webinar: Tagging and Tracking Technologies for High Value Material and Personnel – February 11, 2013 at 11:30am EST hosted by the DHS Science & Technology Office of National Labs. The guest speaker will be Mr. Joseph Cordaro, Advisory Engineer at Savannah River National Lab. More details and registration information is available here.
- Webinar: Introduction to the SAFETY Act – February 14, 2013 at 11:00am EST hosted by DHS Science & Technology Office of SAFETY Act Implementation (OSAI). The guest speaker will be Mr. Bruce Davidson, the Director of OSAI. Additional details and registration information is available here.
- DHS 6th Annual Industry Day – March 18, 2013 hosted by the Office of Procurement Operations. This will be a full day event at a site to be determined within the Washington, D.C. metropolitan area. The preliminary announcement can be found here.
If you have any questions or would like to discuss other avenues to establish engagements with DHS, please contact Pete Ladowicz, DHS Industry Liaison at firstname.lastname@example.org.
GSA will have a webinar on CCR Account Migration and Update/Renewing Registration for SAM.gov on Tuesday, Feb. 26.
Host: GSA/FAS Office of the Integrated Award Environment
Date of Event: Tuesday, Feb. 26, 2013
Time of Event: 1 p.m. – 2 p.m. EST
This course is geared to those interested in doing business with the government and who previously registered in CCR. The course will cover essential activities for getting started and using the System for Award Management (SAM).
Upon completion of this course, you should be able to:
- Create a new SAM user account
- Migrate permissions from the legacy Central Contractor Registration (CCR) system in to SAM
- Update/renew an existing registration
All interested participants should register using the link above. This webinar will be available for the first 1,500 participants; for those that cannot attend the live session, this course will be recorded and posted to SAM.gov following the event.
The Coalition is establishing a Strategic Acquisition Working Group to make recommendations to the government about how to increase efficiencies in federal procurement and eliminate unnecessary cost drivers in the procurement system. As new Federal strategic sourcing solutions are being developed, this is a wonderful opportunity to share best commercial practices with GSA and OMB. More details will be discussed with members in the committee meetings this month. If you are interested in learning more or would like to volunteer, please contact Aubrey Woolley at email@example.com.
MAS Basic Training – February 14, McKenna Long & Aldridge, Washington D.C.
The intensive, one day training workshop teaches the basics of utilizing the Multiple Award Schedules program. Over the course of the workshop you will learn how to obtain and manage your GSA schedule, market GSA contracts, comply with Federal procurement requirements, follow policy changes, and prepare for MAS audits. A highlight of the course is training on GSA’s electronic tools including eBuy, GSA Adavantage! and GSA eLibrary. Other material covered will include of structuring your contract to address the schedule compliance requirements while retaining flexibility to compete in the federal and commercial market place, as well as training on the new FAR 8.4 ordering procedures. The courses will be taught by those on the front lines of GSA schedule negotiations and contract management.
Attendees are eligible to earn up to 8 CLP credits with submission of an attendance certificate and course training packet available for pick-up after the event. REGISTER HERE!
Tuesday, Feb. 19
Hilton McLean Tysons Corner
Members: $120; Non-Members: $155
Join the Fairfax Chamber, and the more than 350 government contracting insiders already registered, for the annual GovCon Symposium, which will focus on best practices for “doing more with less” and thriving in the “Innovation Era.” CGP is a Supporting Partner of this event.
At a time when innovation is key to the future success of the government contracting industry, Frank DiGiammarino, Director of Innovation & Global Expansion for Amazon Web Services, will provide the keynote address. DiGiammarino, an accomplished leader with a proven track record of leading organizations and solving difficult problems, will share his experiences growing organizations and leading complex initiatives to success.
Speakers and Panelists Include:
Insights into Compliance Trends
- Walt Kobos, Vice President, Internal Audit & Government Compliance, CACI International Inc
- Douglas Manya, Vice President, Deputy General Counsel & Secretary, Booz Allen Hamilton
- Gerard Mene, Assistant U.S. Attorney, ACE Coordinator, Eastern District of Virginia
- Julian Rosenberg, Director-Government Contractor Services Leader, Grant Thornton LLP
- Moderator, John Brownlee, Partner, Holland & Knight LLP
Pioneering through M&A
- Fred Funk, Co-founder and Vice President, KEYW Corporation
- Mark Spoto, Managing Director, Razor’s Edge Ventures LLC
- Peter Schuster, Vice President, Mergers & Acquisitions, SAIC
- Moderator, John Song, Director- Aerospace Defense Government Group, Houlihan Lokey
Seizing the Technology Renaissance
- Guy Filippelli, Co-Founder, Oxpoint Holdings and President, RedOwl Analytic
- Kymm McCabe, President & CEO, ASI Government
- Samir Nanavati, Chief Technology Officer and Senior Vice President, Novetta Solutions
- Moderator, Mike Condro, Partner, Deloitte LLP
Lessons Learned from Industry Visionaries
- Greg Baroni, Chairman & CEO, Attain, LLC
- Pierre Chao, Managing Partner, Enlightenment Capital and Renaissance Strategic Advisors
- Joe Martore, President & CEO, CALIBRE Systems, Inc.
- Todd A. Stottlemyer, CEO, Acentia
- Moderator, Dara Castle, Managing Partner, Washington Metro Offices, McGladrey