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Friday Flash, 04.12.13

Comment of the Week 

Next Wednesday, April 17th the Coalition will hold its 2013 Spring Conference, “Continuing the Dialogue: Strategic Acquisition, An Opportunity for Federal Efficiency and Commercial Business.” The conference agenda is comprehensive.  Attendees will hear from leaders across government regarding the latest strategic sourcing initiatives, procurement policy and modernization of the multiple award schedules program.  Confirmed government speakers include:

  • Shay Assad, Director of Defense Pricing, Defense Procurement and Acquisition Policy (DPAP)
  • Joe Jordan, Administrator, Office of Federal Procurement Policy, OMB
  • Tom Sharpe, FAS Commissioner, GSA
  • Elliott Branch, Deputy Assistant Secretary, Navy
  • Iris Cooper, Executive Director of Acquisition Operation, VA
  • Rob Coen, Acting Program Director, CIO-SP3, NITAAC
  • Joanne Woytek, Program Manager, SEWP, NASA
  • Mike Canales, Senior Procurement Analyst, DPAP
  • Mark Day, Director, Office of Strategic Programs, GSA
  • Jim Ghiloni, Director, OASIS Program Management Office, GSA

The conference includes breakout sessions focusing on the latest Strategic Sourcing procurement plans, OASIS, the GSA IT GWACs, CIOSP-3, NASA SEWP, Defense Procurement and Acquisition Policy (DPAP), and the Department of Homeland Security (DHS) Programs and Priorities.  The conference will kick off with a panel of experts addressing the 2014 Budget and Market Outlook—a “must hear” for business development, financial managers and government and industry executives charged with executing federal programs and contracts in support of federal programs.  And, of course, what Spring Conference would be complete without our in-person Coalition Legal Corner focusing on “Recent Developments in Case Law and Regulation” providing the latest legal news regarding contract compliance and oversight, disputes, and bid protests.

Market intelligence, contracting and procurement planning, procurement policy updates, and legal updates—the Spring Conference is comprehensive.  Government and industry contracting personnel, program and contract managers, in-house counsel, compliance personnel, and financial managers will all benefit from attending.

The Spring Conference agenda reflects an integrated world of federal procurement. The subject matter areas to be discussed are interrelated and have impacts across the federal enterprise.  Understanding the cross-cutting initiatives, issues and impact on our procurement system will better inform decision making for government and industry.    The Spring Conference will “continue the Myth-Busters dialogue” across the procurement community!  Dialogue and communication supports a procurement system that delivers best value outcomes for customer agencies, taxpayers and the private sector.

To register click this link.  We look forward to seeing you and your associates next Wednesday!

Roger Waldron



Shay Assad Confirmed for the Spring Conference Next Week

Don’t miss 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!


President’s 2014 Budget Released

On Thursday, the President released his Budget for Fiscal Year 2014 which outlines the Administration’s priorities in the coming year.  The President’s Budget is typically published by the first Monday in February and was delayed this year due to the “fiscal cliff”.  The budget contains a number of topics relevant to Federal contractors including the Government’s overall acquisition spending objectives, GSA reform, and the role of data collection in meeting agency missions.

Saving Billions in Contracting

In 2014, the Administration will continue to urge agencies to strengthen their contracting practices and save taxpayer dollars by eliminating inefficiencies and buying smarter.  Since 2009, contract spending has declined by $35 billion.  The Administration plans to continue this downward trend.  Strategic sourcing is described in the budget as one way that agencies are accelerating the pace of savings and sharing pricing.  The budget also encourages Congress to cap contractor compensation for not just executive pay, but for all contractor employees in Defense Department and civilian agencies at $230,700 (the salary of the Vice President).

Realigning and Streamlining GSA Operations

Consistent with the President’s goal to streamline government operations, the General Services Administration (GSA) is realigning some of its internal functions in order to save an estimated $200 million over 10 years.  Finance, human resources, and IT are being restructured to achieve this objective.  GSA is adopting additional reforms in the Federal Acquisition Service and Public Buildings Service “to improve consistency across organizational units, particularly in service delivery and policy application.”

An Increasing Role for Data

The government continues to be interested in collecting and using data to improve the efficiency and effectiveness of Federal agencies.  This emphasis goes beyond Federal procurement to program management in general, and is seen as a way to measure results and ensure that staff and resources are being used effectively.  The budget also describes efforts in 2014 to share more existing data across agencies in order to save taxpayer dollars.

IT Acquisition

The Administration is focused on a “cut and reinvest” IT strategy in 2014 in order to continue investment in innovation while keeping costs down. Federal agencies are required to identify IT programs to eliminate or scale down before proposing new ones.  PortfolioStat is touted in the budget as a powerful tool for agencies to identify and eliminate duplicative technology investments and adopt shared IT services with other agencies.  In 2014, agencies have set targets to reduce commodity IT spending through 98 consolidations to achieve over $1 billion in savings.  In terms of investment, cybersecurity is one area that the government is targeting.

The President’s Budget for Fiscal Year 2014 also covers the budget and mission priorities for cabinet level departments, such as the Department of Defense and Department of Homeland Security.  For more details on these agencies, please review the budget on the White House website.


Navy Proposal for Superior Suppliers

The Department of the Navy (DoN) is requesting feedback on its proposal to establish a Superior Supplier Incentive Program (SSIP). According to a Federal Register notice, contractors that have demonstrated exemplary performance at the business unit level in the areas of cost, schedule, performance, quality, and business relations would be granted Superior Supplier Status (SSS). Contractors that achieve SSS could receive more favorable contract terms and conditions in DoN contracts. In addition to recognition of SSS at the business unit level, multi-business unit corporations that have several business units which attain SSS may receive additional recognition by the DoN at the corporate level. After the approval of the policy, the Navy will launch a pilot SSIP. Public comments are due by May 3, 2013.


OASIS Jim Ghiloni on Off the Shelf







This week on “Off the Shelf”, Jim Ghiloni, director of the OASIS Program Office at GSA, joined host and Coalition President Roger Waldron to discuss the draft solicitations for GSA’s upcoming OASIS contract.  In addition to covering some of the highlights of the draft RFPs, Ghiloni also shared-

  • the philosophy behind OASIS
  • what it will mean for contractors and the government
  • where OASIS headed
  • what customers are saying

In case you missed the show on 1500AM on Tuesday, the interview is posted online at Fed News Radio. Members will also have an opportunity to speak with Jim Ghiloni in a breakout session at next week’s Spring Conference. Registration is available here.


GAO Identifies Duplicative Programs

The Government Accountability Office (GAO) released its annual report on duplicative programs. In addition to the 2011 and 2012 reports, the April 9, 2013 report notes that GAO found 31 new areas where agencies may be able to achieve greater efficiency or effectiveness. This includes “81 actions that the executive branch or Congress could take to reduce fragmentation, overlap, or duplication, as well as other cost savings or revenue enhancement opportunities.” In the report, GAO announces the creation of GAO’s Action Tracker, a publicly accessible website containing the status of actions recommended by GAO in past reports.

According to FCW, the “2014 budget guidance from the Office of Management and Budget, cited by GAO, requires agencies to plan to consolidate duplicative or low-value IT investments.” The GAO advocates for improving the management and oversight of the governments information technology investments. It recommends that agencies adopt cloud solutions to save billions of taxpayer dollars.


Coalition Meets with DLA

The Coalition’s Imaging Equipment Committee met with Defense Logistics Agency (DLA) Document Services this week about a new initiative with the Department of Navy.  As of January 2013, Navy Chief Information Officer, Terry Halvorsen, has established a mandatory enterprise-wide policy to improve the management of the department’s imaging equipment through DLA.  The policy is designed to achieve cost savings of $200 to 300 million for the Navy and brings about 70,000 imaging devices under DLA’s management.  The Coalition appreciates DLA Document Services for engaging in a myth-buster’s dialogue with vendors about this new initiative and will continue to discuss ways to enhance service to Navy customers through the program.


DoD Increases Contractor Past Performance Reporting

On April 9, Defense Procurement and Acquisition Policy Director Richard Ginman reported that the Department of Defense (DoD) saw a 6.06% improvement from the first quarter’s Past Performance Information Retrieval System (PPIRS) compliance review. The contract count identifies contracts from the Federal Procurement Data System that meet the DoD threshold. All contracts must be registered in the Contractor Performance Assessment Reporting System. Ginman set a Department-wide goal for this fiscal year of 85%. This means that DoD must strive to meet a target of 80% by the third quarter and 85% by the end of the fiscal year.


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.


USDA Rescinds Biopreferred Rule

On April 8, the US Department of Agriculture (USDA) withdrew a final rule on the “Designation of Product Categories for Federal Procurement” published April 1, 2013. The final rulemaking was published prematurely due to an oversight in the development process.  The final rule would have amended the Guidelines for Designating Biobased Products for Federal Procurement adding eight sections within which biobased products would be given Federal procurement preference.  The USDA anticipates republishing the rulemaking in the coming months.


DoD OIG on Performance Based Payments

On April 8, the Office of Inspector General (OIG) for the Department of Defense (DoD) reported that guidance and training on performance-based payments could be improved. The OIG explained that contracting personnel did not perform adequate reviews of schedules provided by contractors and did not use expenditure data or other independent data to value events for a contract. The OIG believes that DoD guidance on the issue was inadequate or inaccurate. Recommendations to correct these issues include requiring that contracting personnel request a contractor estimate of expenditures before approving the performance-based payment schedule, updating guidance and developing a new training program.


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.


Staats Award Submissions Due by April 15!

Don’t forget to have your Procurement Round Table Staats Award submissions in by April 15! The flyer is available here:  It also includes info on downloading the application.  More information is included at the Procurement Round Table Site at

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