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Friday Flash, 03.29.13

Comment of the Week

It is Spring Break this week and we are in Ohio to visit family.  It may not sound exotic or “Spring Break-like” but it has been lots of fun.  We visited the Pro Football Hall of Fame in Canton— where former GSA Administrator Steven Perry is the President.  We also visited Cleveland and the Rock & Roll Hall of Fame where we saw the U2 3D movie which is outstanding!  The highlight of the trip was attending the Boston Celtics-Cleveland Cavaliers game on Wednesday.  I have ensured that our kids are die-hard Celtics fans (as someone who grew up listening to Celtics games on my radio late into the night, there could be no other choice for our children).  The kids were thrilled to see Paul Pierce.  Their only disappointment was that we could not see Kevin Garnett because he was out of the game due to injuries.

Our visits to the Halls of Fame got me thinking about excellence.  How do we achieve excellence in acquisition?  Part of the answer, in my view, is teamwork and communication.  The Halls of Fame honor excellence—and for all those individuals, teams or bands inducted into the Halls, they would not be there were it not for outstanding teamwork.  Football is all about teamwork and communication.  A musical group or band is a team.  Even solo artists would not be successful without a team (manager, agent, musicians, writers, publishers, etc.) behind them.

Communication and teamwork are vital to ensuring our procurement system delivers best value mission outcomes for customer agencies and the taxpayer.   Unfortunately the current environment, with the overwhelming focus on oversight, does not lend itself to communication or even partnership between government and industry.  That must change.  Now more than ever, the public and private procurement sectors must work together to address the systematic and budgetary challenges we are facing.  That is why the “Myth-Busters” campaign remains so vitally important.  That is why the Coalition supports FAS Commissioner Tom Sharpe’s recent comments that FAS will focus on improving supplier satisfaction based on the feedback GSA received from its annual contractor survey.  That is why the Coalition supports the Department of Homeland Security’s strategic plan for procurement which includes as one of four strategic goals, quality communications with industry.   That is why the Coalition appreciates the open dialogue GSA has conducted around the OASIS procurement and our members look forward to continuing that dialogue.  That is why the willingness of the Office of Defense Procurement and Acquisition Policy (DPAP) to engage in an ongoing dialogue regarding the Better Buying Initiative is so important.

Robust communication leads to better understanding of government requirements and commercial practices.   This improved understanding leads to best value outcomes for customer agencies, taxpayers and contractors.  For example, a review of the total acquisition cycle would provide an opportunity for GSA and its MAS contractors to partner together to identify potential improvements in the efficiency and effectiveness of the MAS program. “Partnership” between government and industry is not a dirty word.  Rather, it is vital to successful mission performance on behalf of the American people.

Next week, Thought No. 7 of the Thirteen Thoughts for 2013, “From Strategic Sourcing to Strategic Acquisition”!

Roger Waldron



Myth-buster’s Dialogue with PBS Commissioner Robyn

Public Buildings Service (PBS) Commissioner Dorothy Robyn engaged in a “myth-buster’s” discussion on Thursday with members of the Federal Buildings Committee. Commissioner Robyn spoke to members about the current challenges before the Public Buildings Service as well as some potential solutions.  According to Commissioner Robyn, there are many Federal buildings built in the 1920’s and 30’s that will require increased investment in maintenance.  The challenge is that funds for repairs are limited in the current budget environment.

“Right-sizing” the Federal buildings portfolio is a top initiative at PBS that is expected to help agencies identify cost savings through better real estate management.  As described in the recent Freeze the Footprint guidance from the Office of Management and Budget, agencies are seeking creative ways to reduce their space utilization.  Commissioner Robyn described collaborative workspaces as one approach that some agencies have taken, and GSA in particular, has adopted with positive results.  Co-locations and consolidations are additional options that Federal agencies are considering as they look to reduce the size and cost of real estate.

GSA is also achieving savings for Federal agencies through the disposal of unneeded property such as the Georgetown Heating Plant in Washington, DC which recently sold for $19.5 million.

Commissioner Robyn also said that energy efficiency and sustainability continue to be PBS priorities.  Energy Savings Performance Contracts and the Green Proving Ground are examples of GSA initiatives that help customer agencies meet their environmental goals through innovation, while also offering significant opportunities to save taxpayer dollars.

The Federal Buildings Committee sincerely appreciates Commissioner Robyn and her team for participating in a “myth-buster’s” discussion with the committee, and for responding to member questions and input regarding PBS initiatives.


OASIS Draft RFP Released

The One Acquisition Solution for Integrated Services (OASIS) draft RFPs were released on March 28.  GSA issued two separate drafts, OASIS and OASIS SB (small business).   GSA invites industry’s comments and questions on all areas of these solicitations.  Jim Ghiloni, director of the OASIS program management office, is recording an interview with Roger Waldron about OASIS next week for the Off the Shelf radio show.  The program will air on Tuesday, April 9 at 10:00am on Fed News Radio, 1500AM.

Jim Ghiloni will also host an OASIS update breakout session at the Coalition Spring Training Conference on April 17.  This is an excellent opportunity for industry to ask questions about the draft RFP and to assist GSA in creating the best final solicitation possible.  To attend the Spring Conference, register now!


President Signs Continuing Resolution

On Wednesday, President Obama signed into law a bill to keep the government running until the end of the fiscal year. The $984 billion spending bill contains full-year funding levels covering Defense, Military Construction and Veterans Affairs, Homeland Security, Commerce, Justice and Science, and Agriculture.  Other federal departments and agencies will continue to be funded at fiscal year 2012 levels.

According to Government Executive, the legislation also extends the federal pay freeze, maintains the $85 billion in sequestration cuts and includes a number of amendments affecting furloughs of food inspectors, military tuition reimbursements, and National Science Foundation funding.


Coalition Members Meet With GSA IWAC

On Wednesday, The Coalition for Government Procurement held a Furniture Committee meeting with GSA’s Integrated Workplace Acquisition Center (IWAC) in Philadelphia. The meeting was led by Susan Labman, IWAC Director, and her team who provided Coalition members with an update on the center’s current priorities and initiatives. According to Labman, the IWAC’s biggest priority is savings. To achieve it, IWAC is currently concentrating on three areas: 1) streamlining acquisition, 2) making sure they are offering the right products and services and 3) reaching out to customers. The Coalition would like to thank the IWAC team for their hospitality and their willingness to engage with industry on these important issues. We look forward to continuing the dialogue.

The Coalition was also in attendance at the Evergreen Recognition Ceremony, held earlier that day. Congratulations to Coalition members Kimball Office and Konica Minolta on their award!


PortfolioStat Update

On March 27, Federal Chief Information Officer Steve VanRoekel released a memo commencing this year’s PortfolioStat process and summarizing improvements from last year’s program. Launched in March of 2012, PortfolioStat is a face-to-face, evidence-based review of an agency’s IT portfolio. PortfolioStat looks at data on commodity IT investments, potential duplications, investments that do not appear to be well aligned with agency missions, and more.

“PortfolioStat will be an ongoing effort, growing each year to incorporate lessons learned and changes in technology. The upgraded process streamlines agency data collection and improves analytics, consolidates the agency’s strategic IT direction and management improvements into one central plan, and holds agencies accountable for the goals set through last year’s process,” VanRoekel explained in a blog posted on March 27. He notes that a key lesson learned through the use of PortfolioStat over the past year is that agencies should evolve their IT portfolios to deliver IT ‘as a service.’ Instead of implementing traditional models for IT acquisition, VanRoekel wants the government to deploy IT like a business, optimizing it for consumption agency-wide. He cites cloud computing as an example. OMB expects agencies to report savings of approximately $300 million as a result of PortfolioStat by the end of March.


Security Clearance Wait Times Improve

According to NextGov, wait times for security clearances have fallen for the third straight year. 57 percent of applicants are receiving their clearances within four months, consistent with a survey conducted by of more than 8,000 security-cleared personnel. Additionally, the survey found that 13 percent obtained their clearance within one month, 27 percent within two months and 46 percent within three months. However, cautioned that the implementation of sequestration could impact this trend.


CBO: How DoD Can Operate Within Budget

According to a recent Congressional Budget Office (CBO) report, the Department of Defense (DoD) does not have the funds to implement its future strategy as presented in its 2013 budget request.  In 2013, DoD faces an 11% reduction in its base budget compared to 2012.  From 2013 to 2021, CBO estimates that DoD’s budget will increase by only 2% more than inflation.  The reduced spending projections for the future reverse past trends for the Department.  Between 2001 and 2010, DoD’s base budget rose by more than 40% (in real terms).  To put this year’s budget cuts into perspective, DoD spending levels in 2013 are expected to be about what they were in 2007.

At the request of Senate Budget Committee, the CBO suggests four ways that DoD can alter its future plans to stay within the reduced budget imposed by the Budget Control Act.  Each involves different combinations of force reductions and cuts to acquisitions and operations.

  • Option 1:   Preserve Force Structure; Cut Acquisition and Operations
  • Option 2:   Cut Acquisitions and Operations: Phase in Reductions in Force Structure
  • Option 3:   Achieve Savings Primarily by Cutting Force Structure
  • Option 4:   Reduce Force Structure Under a Modified Set of Budget Caps

The CBO report does not make any recommendations to the Senate Budget Committee in terms of which option is best.  Instead, they explain the potential implications of each.  For more details about CBO’s analysis, please view the full report.


Legal Corner

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.


OFPP and GSA Sign FAI Agreement

The General Services Administration (GSA) and Office of Federal Procurement Policy (OFPP) have agreed to strengthen training through the Federal Acquisition Institute (FAI).  According to Federal Computer Week, GSA and OFPP signed a service-level agreement on this initiative on March 21.  Given that a number of training conferences for the acquisition workforce have been cancelled this year, the availability of online training has become even more critical.

OFPP Administrator Joe Jordan commented that, “GSA is uniquely qualified to provide the day-to-day management of FAI, so this agreement will ensure that FAI is able to meet the needs of the acquisition community in the years ahead.”


Final Rule: DoD Proposal Adequacy Checklist

The Department of Defense (DoD) issued a final rule on March 28 to incorporate a “proposal adequacy checklist” into the Defense Federal Acquisition Regulation Supplement (DFARS).  The checklist is designed to ensure that offerors submitting certified cost or pricing data provide thorough, accurate, and complete proposals.  The effective date for the new checklist is March 28, 2013.


Register for the Spring Conference, April 17

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!


Option Extension Webinar

Join Baker Tilly government contractor advisors on April 25 at 12:30 pm as they discuss the benefits of completing a broad GSA Schedule Compliance Assessment, conducting a historical pricing and updating GSA pricing disclosures.Many contractors don’t fully understand the disclosures that form the basis for the negotiated prices on their GSA Schedule contracts, but a company’s failure to keep those disclosures current may expose it to audit risk and financial liability when the Office of Inspector General (OIG) comes knocking.  All contractors, regardless of size, should be prepared for the eventuality of an audit. When the time comes to exercise the option to extend a contractor’s GSA Schedule contract, they should take the opportunity to confirm that their practices are properly disclosed and that they have an effective compliance program in place. Registration and more information!>>


Post Award Pricing Compliance Webinar

Join The Coalition and experts from Berkeley Research Group on May 21 at 12:30 pm for a discussion regarding the systems, processes and controls necessary to comply with the requirements of the PRC and other post-award pricing considerations.  The presentation will provide an overview of the requirements of the PRC and common misconceptions related to the clause. In addition, we will share best practices and strategies for minimizing PRC and other pricing compliance risks. Finally, we will discuss processes, controls, roles and responsibilities typically found in effective PRC monitoring systems. Perhaps the most debated and lamented post-award pricing requirement in a GSA and VA schedule contract is the Price Reduction Clause (PRC). Despite being cited as the basis for a number of infamous civil False Claims Act settlements involving GSA and VA Schedule contracts, there is very little information available in the public domain in the form of case law, audit guidance or best practices pertaining to compliance with the clause. Registration and more information!>>


CLE Credits for In-House Counsel Training!

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

Washington, DC


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.


GSA Webinar on FAR 8.4 vs. Open Market, April 4

GSA has announced a new webinar on April 4, from 1:00 pm – 2:00 pm ET. According to GSA Interact, the course will cover commonly-used methods of acquisition: issuing task or delivery orders under GSA’s Multiple Award Schedules (MAS) (FAR Subpart 8.4), and the Simplified Acquisition Procedures of FAR 13 or negotiating a stand-alone contract under FAR Part 15. This course will explore the differences and similarities between Subpart 8.4 and Parts 13 & 15 procedures, advantages and disadvantages for various situations, and help you analyze the alternatives as you develop your acquisition strategy.

Webinar Instructions:

1.  Click here to join the webinar:

2.  Enter as a Guest and Type your full name

3. Click Enter Room. (There is no Password).

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