GSA Mission Critical – Effective Communication
Guest Blogger: Carolyn Alston, Executive Vice President & General Counsel, The Coalition for Government Procurement
We are all well aware that GSA cancelled GSA Expo, its signature trade show and training event that was scheduled for Orlando Florida in May. For years, GSA used the show to cost effectively train thousands of federal employees regarding various aspects of commercial item contracting. GSA contractors were able to showcase industry’s ability to satisfy the critical missions of government. However after more than 15 consecutive years of providing essential CEU acquisition training, the Expo fell victim to sequestration. The Coalition supports GSA Acting Administrator Dan Tangherlini’s decision to cancel GSA Expo and recognizes his demonstration of leadership during a time of difficult circumstances. Participation in GSA Expo requires a significant investment by government and industry. That taxpayer and industry investment is worthwhile only when there can be a robust turnout of the customer base. With smaller budgets looming and the uncertainty of the impact on agency travel budgets, it made sense to decide early to cancel GSA Expo and to limit any further investments due to cancellation closer to the date of the event.
Having acknowledged that the decision to cancel GSA Expo was reasonable given the circumstances, we also recognize that the cancellation now provides time to do a GSA Expo “makeover”. While the GSA Expo is a critically needed acquisition training event, it also hosts a necessary trade show and provides a unique platform for an exchange of information among stakeholders. A core value of the Coalition is advocacy for common sense in government procurement based on open communications between stakeholders. Coalition members have consistently exhibited at the Expo in large numbers not only because of the opportunity to market their services, products, and solutions, but also because Expo served as an important platform for communication with the government and industry acquisition community. GSA Expo is one of the few places where acquisition stakeholders gather at one time with the potential to engage in discussions about the market, cutting edge solutions and best practices outside the structure of a specific acquisition or transaction. The Expo environment fosters constructive exchanges that could lead to lasting solutions.
It would be easy to bemoan the impact of sequestration on the Expo, but we will not. Winston Churchill said a pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. The Coalition believes there is now an opportunity for GSA to map the Administrator’s six agency goals to the design of a new GSA Expo. Even the location of Expo should be reconsidered. Why Orlando when there are so many feds, and so many feds with buying authority in the DC metro area? There is the DC Convention Center and National Harbor that could host an event of this scale. Could a change in venue allow agencies to participate without significantly tapping their travel budgets? Sequestration is going to be impactful for the near future so now is the opportunity for GSA to demonstrate a leadership position and deliver a GSA Expo that will support the future Federal Marketplace!
With the 2013 Expo cancelled, the Coalition believes that it is critical to provide avenues for effective communication between GSA and its industry stakeholders. In GSA programs, effective communication is not just a nice thing to do or even just a best practice, it is mission critical. GSA is an essential “shared services” function of government. It provides access to essential services and products that allow DOD to carry out its military functions, that support VA’s ability to care for wounded veterans and that help the Department of Interior to keep the gates of our national parks open. GSA delivers its services primarily through its contractor base. Contractors are an essential part of GSA’s efforts to market its offerings, educate its customers and deliver its services.
In order to provide avenues for effective communication the Coalition will have its annual Spring Training Conference on April 17 (register here). The conference focuses on strategic acquisition and features a panel of large acquisition agencies including Homeland Security, Navy, GSA and VA. The panel will be moderated by Joe Jordan, Administrator, Office of Federal Procurement Policy. This spring, the Coalition is also in the process of planning a Business Roundtable to facilitate an interactive discussion of GSA’s $60+ billion contracting portfolio. We will provide additional information on these important events.
Look forward to seeing you at future events,
Executive Vice President & General Counsel
The Department of Homeland Security (DHS) announced the award of seven small business contracts under Eagle II. The contract is worth an estimated $22 billion over the seven-year period of performance and is designed to be the primary vehicle for DHS IT purchases. The awards were made under Functional Category 3 – Small Business Track, which covers independent test, validation, verification, and evaluation services. Last December, DHS announced awards to six firms under the full and open competition portion of category 3. Future awards will be made in category 1, service delivery, and category 2, IT program support.
A recently released memo from the Administrator for Federal Procurement Policy Joe Jordan tasks agencies with improving information about contractor performance and integrity. “Assessments of a contractor’s performance on a government contract and general information about their adherence to certain Federal rules and regulations are critical to informing source selection and award decisions and ensuring the government builds relationships with high-performing suppliers,” writes Joe Jordan. In order to improve contractor performance reporting, OFPP establishes a baseline for reporting compliance; sets performance targets to use in monitoring and measuring compliance; and establishes standards for workforce training.
According to ASI Government, the memo requires agencies to conduct quarterly reviews to ensure 100 percent of required information—such as non-responsibility determinations, terminations for default, and suspensions and debarments—is reported to the correct performance system.
On March 7, 2013, Defense Procurement and Acquisition Policy (DPAP) released its annual list of products for which Federal Prison Industries (FPI) has significant market share, and therefore must be competed. Defense Federal Acquisition Regulation Supplement (DFARS) 208.602-70 defines these products as “item[s] for which FPI’s market share of the DoD market for the federal supply class including that item is greater than 5 percent.” Effective April 5, 2013, the following Federal Supply Codes (FSC) must be competed:
- 5220: Inspection Gages and Precision Layout Tools
- 5335: Metal Screening
- 7210: Household Furnishings
- 7230: Draperies, Awnings and Shades
- 8405: Outerwear, Men’s
- 8415: Clothing, Special Purpose
- 8465: Individual Equipment
- 9905: Signs, Advertising, Displays and Identification Plates
DFARS 208.620-70 requires that competitive procedures (e.g. use of GSA Schedules, full and open competition, and set-asides) apply when acquiring items for the items listed above where FPI has significant market share. In this case, contracting officers must:
- Use competitive procedures, which includes GSA Schedules
- Consider timely offers from FPI
- Evaluate all offers, including FPI, based on evaluation criteria
- Award based on best value
For products not covered by the FSC codes listed above, contracting officers must follow FAR Subpart 8.602.
- Make a comparability determination based on price, quality and time of delivery
- Purchase the FPI item if it is comparable to the commercial item in all three areas
- If not, use competitive procedures, which includes GSA Schedules
- Evaluate all offers, including FPI, based on evaluation criteria
- Award based on best value
Because FSC 7110 for Office Furniture was removed from the list of items for which FPI has market share, DoD contracting officers would follow FAR Subpart 8.602 for the procurement of these products until DPAP reassesses this list in early 2014.
According to an article in the Washington Post this week, protests by government contractors rarely help companies reverse contract awards in their favor. Former Administrator for Federal Procurement Policy, Dan Gordon, led the study that found that less than one percent of roughly 1,600 protested awards filed with the Government Accountability Office in FY 2010 led to the protestor winning an award. In addition, “only 45 protested awards that came to a decision in fiscal 2012 ended with the GAO agreeing with the complaining vendor.” In the Washington Post, Gordon commented, “If I were the chief financial officer of a company, I would want to know this before I committed resources to a fight.” The study is expected to be published in April.
The GSA Office of Inspector General (OIG) released a report on March 8 citing major issues with Multiple Award Schedule (MAS) preaward audits. The report assessed the results of FY 2011 MAS preaward audits compared with FY 2010. In FY 2010, the OIG found that 1) vendors provided information that was out of date, inaccurate and incomplete; 2) vendors had minimal or no non-federal commercial customers, making it difficult for determining price reasonableness; and 3) vendors that supplied labor did not meet the minimum educational and/or experience qualifications required.
For FY 2011, the OIG found that two of these areas showed some improvement. The reported noted, however, that the high rates of recurrence are still a concern. In addition, the OIG found that of 53 audits performed in FY 2011, 18 vendors (34 percent) did not have adequate systems for accumulating and reporting schedule sales, and 19 vendors (36 percent) did not properly compute the IFF.
- Sections explaining DoD’s strategic sourcing framework, key doctrines, and how the DoD-Wide Strategic Sourcing Program (DWSS) helps to achieve the initiatives contained in Better Buying Power.
- A taxonomy section, organizing the Department of Defense (DoD) spend to enable portfolio management, spend analysis, and the establishment of baselines for measuring progress.
- A spend analysis section, identifying spend patterns and buying practices of services, supplies and equipment from both the requiring office and contracting perspectives.
Members are encouraged to visit the site at www.acq.osd.mil/dpap/ss/index.html.
At the IT/Services Committee meeting this week, Jack Horan, Partner with McKenna Long & Aldridge LLP provided an overview of bid protest statistics and trends based on a report issued by the Government Accountability Office (GAO). The report is sent annually to Congress and contains an analysis of bid protests for the previous five years. The report found that the number of cases filed increased by 5% from 2,353 in 2012 to 2,475 in FY2012. The sustain rate also increased from 16% to 18%. The effectiveness rate has remained the same from Fiscal Year’s 2010-2012 at 42%. GAO notes that this rate is based on a protestor obtaining some form of relief from the agency, either as a result of voluntary agency corrective action or GAO sustaining the protest. The figure is a percentage of all the protests closed in the given fiscal year.
Let’s Just Pretend the FAR Change Didn’t Happen
By Phil Seckman, Partner, McKenna Long & Aldridge LLP
The Federal Circuit’s recent decision in Sharp Electronics Corporation addresses a quandary familiar to federal supply schedule contractors regarding the proper contracting officer (CO) to whom the contractor must direct its contract claims to ensure jurisdiction. Sharp Corporation v. McHugh, 2013 WL 646330 (Fed. Cir. 2013). The Federal Circuit’s decision relates to a 2002 change to the Federal Acquisition Regulation (FAR) and seeks to provide contractors with certainty by announcing a so-called bright-line rule for interpreting the meaning of the disputes provision for schedule contracts. Despite the Federal Circuit’s intentions, ambiguities remain.
Prior to the 2002 FAR change, the FAR provided that “[t]he ordering office shall refer all unresolved disputes under orders to the schedule contracting officer for action under the Disputes clause of the contract.” 48 C.F.R. § 8.405-7 (2000). Because only the GSA CO had authority under the Disputes clause, it was clear before the FAR change that any contractor claim relating to an order placed under a schedule contract must be submitted to the GSA CO to ensure jurisdiction under the Contract Disputes Act (CDA). The FAR also made it clear that the ordering office was to refer any unresolved contractor claims to the GSA CO.
Then, on June 27, 2002, the FAR was amended to incorporate new policies for disputes in schedule contracts. 67 Fed. Reg. 43,514 (the final rule was effective on July 29, 2002). As the FAR councils noted when publishing the proposed rule, the change was being made to “permit the ordering office contracting officer to issue a final decision regarding disputes pertaining solely to performance of schedule orders.” 65 Fed. Reg. 79,702 (Dec. 19, 2000).
The revised regulation provides:
(a) Disputes pertaining to the performance of orders under a schedule contract. (1) Under the Disputes clause of the schedule contract, the ordering activity contracting officer may —
(i) Issue final decisions on disputes arising from performance of the order (but see paragraph (b) of this section); or
(ii) Refer the dispute to the schedule contracting officer.
(2) The ordering activity contracting officer shall notify the schedule contracting officer promptly of any final decision.
(b) Disputes pertaining to the terms and conditions of schedule contracts. The ordering activity contracting officer shall refer all disputes that relate to the contract terms and conditions to the schedule contracting officer for resolution under the Disputes clause of the contract and notify the schedule contractor of the referral.
(c) Appeals. Contractors may appeal final decisions to either the Board of Contract Appeals servicing the agency that issued the final decision or the U.S. Court of Federal Claims….
48 C.F.R. § 8.406-6 (2004) (the text from the 2002 FAR amendment was renumbered in 2004).
The plain language of this regulation establishes that when a contractor submits a claim to an ordering activity CO, it is that CO’s responsibility to determine whether a dispute relates solely to the performance of an order or, instead, pertains to the terms and conditions of the schedule contract. Thus, one might have read the regulation to mean that a contractor could submit a claim to either the ordering activity CO or the GSA CO. Then, the government would determine which CO possessed authority to issue a final decision.
While such an interpretation is certainly logical and reasonable, it is wrong. The Federal Circuit’s decision makes it clear that it is the schedule contractor, and not the CO, that is responsible for determining to whom its claims must be submitted. Failure to identify the correct CO may result in the dismissal of an appeal for lack of CDA jurisdiction. Choosing the appropriate CO is made all the more critical where a schedule contractor is nearing the CDA six-year statute of limitations.
The Sharp Electronics case involved a contractor’s certified claim requesting fees under the termination provisions of an Army order placed against a schedule contract. The contractor submitted its claim to the Army CO. Critically, the Army CO disregarded the clear responsibility under FAR 8.406-6 and ignored the claim. Thus, the 60-day CDA decision period elapsed and — in the contractor’s view — resulted in a “deemed denial.”
The contractor then appealed to the Armed Services Board of Contract Appeals (ASBCA). Sharp Elecs. Corp., ASBCA No. 57583, 12-1 B.C.A. 34,903. Both the contractor and the government believed that their dispute should be decided by the ordering agency CO. Both parties believed the dispute was based on the order contract performance and not the terms of the schedule contract. In fact, neither party raised the jurisdictional issue. The ASBCA raised the issue on its own.
The ASBCA then held that it lacked jurisdiction over the appeal because the dispute did require the interpretation of the schedule contract and, therefore, only could have been decided by the GSA CO. The contractor’s decision to submit the claim to the Army CO, combined with that CO’s failure to forward the claim, meant there had been no properly submitted claim under the CDA and, therefore, no “deemed denial” from which to appeal. Id. The fact that the regulation clearly places the responsibility upon the ordering activity CO to make a determination regarding his/her own authority to resolve the dispute and then to forward claims to the GSA schedule CO when the dispute pertains to the terms and conditions of the schedule contract did not alter the outcome.
In a split decision, the Federal Circuit affirmed the ASBCA decision finding that under FAR 8.406-6 the ordering agency CO did not have the authority to make a determination regarding the contractor’s claim because the dispute involved, at least in part, interpretation of the terms of the schedule contract. The Federal Circuit’s decision announces a so-called bright-line rule that “all disputes requiring interpretation of the schedule contract go to the [GSA] schedule CO, even if those disputes also require interpretation of the order, or involve issues of performance under the order.” See Sharp Elec., supra at *6
The Federal Circuit, in highlighting the bright-line, attempts to address the jurisdictional uncertainty under FAR 8.406-6 created by the 2002 rulemaking. As noted by the dissent, however, the Court has succeeded in, effectively, reinstituting the prior rule that all disputes relating to schedule contracts should be submitted to the GSA CO. In other words, when in doubt, contractors must submit claims to the GSA CO.
Perhaps being defensive regarding the dissent’s objections, the Court noted that under a schedule contract an ordering agency CO remains authorized to make final determinations regarding performance, the terms of an order or its modifications “as long as the dispute does not involve interpretation of the schedule contract.” The Court also states that an ordering agency CO may resolve a dispute by “applying the relevant provisions of the schedule contract “as long as their meaning is undisputed.”
Despite these statements, however, the actual effect of this holding, as the dissent properly points out, will be that most contract disputes under schedule contracts will be submitted to the GSA CO and not the ordering agency CO. Indeed, many disputes can be characterized as requiring interpretation of the schedule contract. Thus, contractors that submit claims to ordering activity COs who are inclined to disregard the claim, as did the Army CO in the Sharp case, run the risk that what seems to be a “deemed denial” is, in reality, a nullity under the CDA.
For these reasons, prudent schedule contractors will submit claims to GSA COs. GSA COs, however, typically have very little, if any, knowledge regarding the facts of a dispute that primarily relates to performance under an order and only tangentially requires the interpretation of the schedule contract. This could lead to increased denials or deemed denials of contractor claims. Nevertheless, after this decision, if a dispute may pertain to interpretation of a schedule contract terms and provisions, a schedule contractor, particularly one with a potential statute of limitations issue, will be wise to submit its certified claim to the GSA CO or risk a similar outcome.
Senators Barbara Boxer (D-CA), Charles Grassley (R-IA), and Joe Manchin (D-WV) have proposed an amendment to the continuing appropriations bill (H.R 933) recently passed by the House. The amendment would lower the cap on government reimbursement of contractor executive salaries. FCW reports that in a letter to the Senate Appropriations Committee, the Senators wrote that, “most Americans would be shocked to know that under current law, government contractor employees can charge taxpayers $763,029 per year for salary reimbursements.” The amendment proposes a new cap of $230,700.
GSA will be hosting a webinar on April 4, 2013 from 1:00pm to 2:00pm (1 CLP). The course will familiarize participants with commonly-used methods of acquisition: issuing task or delivery orders under GSA’s Multiple Award Schedules (FAR Subpart 8.4), and the Simplified Acquisition Procedures of FAR 13 or negotiating a stand-alone contract under FAR Part 15. The course will explore the differences and similarities between Subpart 8.4 and Parts 13 & 15 procedures, advantages and disadvantages for various situations, and help participants analyze the alternatives when developing an acquisition strategy. For full webinar and registration information, please click here.
“Continuing the Dialogue”
PBS Acquisition Focus for 2013
Dorothy Robyn, Commissioner, GSA Public Buildings Service
Thursday, March 28, Offices of Mayer Brown, 1999 K St, NW, Washington DC
Registration at 7:30am, Presentation and Discussion at 8:00am
Coalition members are invited to join the conversation as we delve into the PBS acquisition focus for 2013 with PBS Commissioner, Dorothy Robyn. As PBS Commissioner, Dr. Robyn leads one of the largest and most diversified public real estate organizations in the world. The Public Buildings Service is responsible for providing superior workplaces for federal customer agencies at good value for the American taxpayer.
Dr. Robyn manages the nationwide asset management, design, construction, leasing, building management and disposal of approximately 375 million square feet of government-owned and leased space, accommodating over 1 million federal workers, and covering all 50 states, six U.S. territories and the District of Columbia. Additionally, Dr. Robyn oversees an annual budget of more than $9.4 billion and a workforce of almost 6,800.
Attend this session to see how PBS priorities and initiatives will impact sales of products and services to Federal customers. For more details and to register, please contact Athena Oliff at email@example.com.
Registration is now open for the Coalition’s Spring Training Conference on April 17th 2013 at the Crystal Gateway Marriott. Attendees will engage in a government-industry “Myth-busters” dialogue with acquisition leadership from the Department of Defense, Department of Veterans Affairs, General Services Administration and others about key procurement issues that impact members’ government business. The focus on “strategic acquisition” at this year’s conference is in response to increased interest in federal strategic sourcing. Strategic Acquisition can both improve the efficiency of government and provide an opportunity for businesses to offer innovative solutions that help agencies meet this goal. We have developed a robust and informative agenda with early speaker confirmation from Government and industry leaders alike. This is a conference you will not want to miss! Register Here!
Continuing Legal Education (CLE) credits are now available for the Coalition’s General Services Administration (GSA) Schedule Contracting for In-House Counsel training scheduled for June 27, 2013. Attendees can earn 6 CLEs for the course with the Virginia State Bar.
GSA Schedule Contracting for In-House Counsel Training
June 27, 2013 8:00 am
McKenna Long & Aldridge LLP
1900 K St NW
About the course:
This GSA Schedule Contracting for In-House Counsel training will provide information and tools to help you understand the GSA/VA Schedule contracting program and provide insightful legal advice to your in-house client.
The GSA Schedule, including the delegated VA Schedules, is a $50 billion contracting program that all federal agencies use to acquire commercial services and products. These multiple year, government-wide contracts cover professional services, information technology, pharmaceuticals, medical equipment and a vast array of commercial products.
Schedule contracts offer a huge market opportunity. Thousands of companies including both Fortune 500 companies and a vast number of small businesses have GSA/VA Schedule contracts. All federal agencies, and in some instances state agencies, can place orders against the contracts.
Of particular interest to in-house counsel, Schedule contracts have a pricing methodology, and disclosure requirements that are unique in federal government contracting. The contracts provisions must be correctly understood, managed and monitored to assure that your company realizes anticipated profits. Failure to do so can result in significant monetary, administrative, civil and even criminal penalties.
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 firstname.lastname@example.org.