Comment of the Week – Prep for GSA Business Roundtable
“The mission of GSA is to deliver the best value in real estate, acquisition, and technology services to government and the American people.” In executing its mission GSA has identified six priorities:
- Delivering Better Value and Savings
- Serving our Partners
- Expanding Opportunities for Small Business
- Making a More Sustainable Government
- Leading with Innovation
- Building a Stronger GSA
The Coalition’s May 22nd GSA Business Roundtable will provide a Myth-Busters forum focusing on GSA’s mission and priorities. For all industry partners attending, the Coalition we will provide a little homework assignment. In the week leading up to the roundtable the Coalition will provide all attendees with the link to GSA’s website where the new mission statement and priorities can be found. The homework assignment will be to review the mission statement and priorities and come prepared to discuss how GSA and its industry partners can work together to ensure best value outcomes for customer agencies and the American people. In fact for those who wish to get a head start, here is the link.
One of the key discussion areas will be the role of the GSA Multiple Award Schedule (MAS) program in supporting customer agency missions. The MAS program accounts for approximately $50 billion in government purchases annually (GSA MAS accounts for about $39 billion and VA MAS another $10 billion). It is the largest commercial item contracting program in the federal government. It is also one of the most successful small business programs in the federal government. What accounts for its success? The program success is twofold. First, the openness to the commercial market allows customer agencies access to the latest commercial products, services, solutions and innovations (including sustainable/environmental solutions). Second, the contract and ordering structures allow customer agencies and contractors the flexibility to focus on competing and executing commercial requirements at the task order. In sum, through the MAS program, GSA provides a vital service to government and the American people by providing an open, competitive, and streamlined contracting framework for the acquisition of commercial services and products.
Moreover, there remains great untapped potential for the MAS program to efficiently and effectively deliver best value outcomes for customer agencies. Addressing “other direct costs” (ODCs) on MAS contracts would allow customer agencies to compete and acquire total commercial solutions in support of agency missions. ODCs would also be a great accelerator for growth of the MAS program and address contract duplication government-wide. Updating the pricing policies to better reflect current commercial practice and the Congressional mandate to drive pricing through the task order competition process has the potential to increase the overall efficiency and effectiveness of the contract negotiation and award process. Updating the pricing polices also provides a great opportunity to improve the consistency of contract management and negotiation across the MAS program. Updating Blanket Purchase Agreement (BPA) practices can help agencies achieve real savings—the Coalition has developed a BPA best practices statement that can be found here. Continuing to invest in key electronic platforms like GSA Advantage! and e-Buy can enhance task order competitions for both customer agencies and contractors.
In sum, the MAS program is vital to meeting GSA’s six priorities. No other GSA program has the contract structures, depth and bread of services and products, openness and flexibility to deliver:
- Deliver Better Value and Savings
- Serve GSA’s agency and vender Partners
- Expand Opportunities for Small Business
- Make a More Sustainable Government
- Lead with Innovation
- Build a Stronger GSA
We look forward to having all of our members participate in the GSA Business Roundtable on May 22 to discuss how vendors and the MAS program can meet GSA’s priorities.
Roger Waldron
President
GSA Seeking Industry Input on Cybersecurity Requirements
This week, Emile Monette, FAS Senior Advisor presented on a cybersecurity report for the White House that GSA is preparing with the Department of Defense (DoD). They are providing recommendations to the President about the feasibility of incorporating security standards into acquisition planning and contract management.
GSA and DoD are seeking industry input on the report through a RFI expected to be released next week. The Coalition is collecting member feedback on the draft RFI. Please send comments to Roger Waldron at rwaldron@thecgp.org by COB Wed., May 15.
If you have any questions, please contact Aubrey Woolley at awoolley@thecgp.org.
Government to Release More Data to Public
The President released an Executive Order (EO) on Thursday encouraging Federal agencies to release more government data to the public. In order to make this data easier to access, the Executive Order says that the default state of government information should be “machine readable.” At the same time, Federal agencies are instructed to ensure that individual privacy, confidentiality, and national security are protected.
The EO also instructs the Office of Management and Budget to release a new Open Data Policy. Once it is finalized, the Office of Federal Procurement Policy (OFPP) will work with others in government to integrate Open Data Policy requirements into Federal acquisition processes. This may include developing sample requirements language, contract language, and workforce tools for agency acquisition, information management and technology personnel. The Open Data Policy will also require that agencies assess the privacy, confidentiality, and security risks of releasing certain data at each stage of the information life cycle in order to determine what information should not be disclosed to the public.
JanSan MRO Draft RFQs Released
GSA has released draft RFQs for Janitorial/Sanitation (JanSan) products and Maintenance, Repair & Operations (MRO) products on e-Buy. The draft RFQs are being published for review in advance of the JanSan MRO Pre-solicitation Industry Day on May 15 in Crystal City. GSA plans to release the final RFQs in June and award by August 2013. GSA’s goal is to establish 10 Federal Strategic Sourcing Initiative (FSSI) BPAs in FY2013 and FY2014.
Administration Restores $5 Billion from Sequestration
The White House is recalculating how to apply sequestration for certain agencies, restoring approximately $5 billion in automatic spending cuts. Under the continuing resolution signed in March 2013, the recalculation would free up almost $4 billion for the Pentagon and another $1 billion or so for other agencies like the Department of Homeland Security and NASA, reports the Associated Press (AP). Earlier calculations were altered because a partial-year funding bill was replaced in March with a more detailed measure. According to the AP, “after administration number crunchers redid their math they were able to restore about $5 billion of the scheduled $85 billion in automatic sequestration cuts under a complicated, previously unused mechanism that dates to a 1985 budget law.”
Interim Final Rule: WOSB Set Asides
The Small Business Administration (SBA) has issued an interim final rule amending its regulations to implement Section 1697 of the National Defense Authorization Act for Fiscal Year 2013 (NDAA). Section 1697 of the NDAA removed the statutory limitation on the dollar amount of a contract that women-owned small businesses can compete for under the Women-Owned Small Business (WOSB) Program. As a result, contracting officers may now set-aside contracts under the WOSB Program at any dollar level, as long as the other requirements for a set-aside under the program are met. This rule is effective on May 7, 2013. Comments must be received on or before June 6, 2013.
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.
Join the GSA Business Roundtable, May 22
Join The Coalition for Government Procurement for a roundtable discussion of the General Services Administration’s $60 billion+ contracting portfolio.
The Business Roundtable will bring together key players from GSA and industry to discuss the agency’s evolving acquisition strategy. The discussion will focus on GSA’s recently revised Mission Statement and how that statement will affect GSA customers and industry. The GSA Administrator, the Commissioners of the GSA Federal Acquisition Service and Public Buildings Services, and the Chief Acquisition Officer will present on the GSA mission and the agency’s six priorities. Leaders of GSA acquisition and program management offices and industry will participate in interactive roundtable discussions in small groups. To view the full agenda—including breakout sessions on MAS Pricing Policy, IT, GWACs, the IWA Center and Federal buildings—and to register visit https://thecgp.org/event/gsa-business-roundtable.
GSA Business Roundtable: Call for Questions
On May 22, the Coalition is hosting a Business Roundtable with GSA leadership, including GSA Administrator Dan Tangherlini, FAS Commissioner Tom Sharpe, PBS Commissioner Dorothy Robyn, and Chief Acquisition Officer Anne Rung.
As the Coalition works with GSA to prepare for the afternoon breakout sessions, we would like to hear from members about the specific topics that you would like GSA to speak to during these small group discussions. Please submit questions or topic ideas to Aubrey Woolley at awoolley@thecgp.org.
Breakouts and GSA invited speakers:
- Leveraging Government Requirements Through Strategic Acquisition
Anne Rung, Chief Acquisition Officer- General Services Administration (GSA)
Jeff Koses, Director – Acquisition Operations, GSA
Peter Han, Acting Director – National Administrative Services and Office Supplies Acquisition Center, GSA
Tiffany Hixson, Regional Commissioner, GSA
- MAS Pricing Policy – Status Quo or time for Change
Houston Taylor, Assistant Commissioner Acquisition Operations, GSA
Bill Sisk, Acting Deputy Commissioner, GSA
Walter Eckbreth – Supply Business Line, GSA, FAS
Dennis Harrison, GSA Schedule 70
Shaloy Castle-Higgins, Director – Greater Southwest Acquisition Center
- Acquisition of Services
Geri Watson, Director, Management Services Acquisition Center
Bruce Spainhour, Director, Center for Innovation Acquisition Development
Jim Ghiloni, Director, OASIS Program Management Office
- Federal Buildings and Integrated Workplace Acquisition Center (IWAC)
Tom James, Acting Regional Commissioner, National Capital Region, PBS
Sue Labman, Director, Integrated Workplace Acquisition Center
- The IT Portfolio
Mary Davie, Assistant Commissioner – Office of Integrated Technology Services and leadership of the IT Portfolio
Kevin Youel Page, Deputy Assistant Commissioner, Integrated Technology Services at GSA
Kay Ely, Director, IT Schedule Programs, GSA
Mark Day, Director Office of Strategic Program, GSA
For more information about the event and to register, visit https://thecgp.org/event/gsa-business-roundtable.
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.