The GSA Business Roundtable is right around the corner! The May 22nd GSA Business Roundtable is a Myth-Busters event bringing together procurement professionals and senior executives from GSA and its industry partners for a dialogue focusing on Acting Administrator Dan Tangherlini’s new mission statement and six priorities. The mission statement and priorities can be found here. And as noted in last week’s Comment, the homework assignment for all those attending the roundtable is to review the mission statement and six priorities. Attendees should come prepared to discuss GSA priorities and practices that can increase best value outcomes for customer agencies and the American people.
Although there will be no “test” on the homework assignment, there will be plenty of opportunities to engage in a positive dialogue regarding GSA’s new mission statement and priorities. What does it mean for GSA’s government-wide procurement programs and its contractors? Are there processes that can be improved to deliver greater efficiency and effectiveness for customers and contractors? What commercial best practices for procurement can contractors share with GSA? These questions and more will be discussed during the Business Roundtable session entitled “Myth-Busters Discussion Exercise.”
The “Myth-Busters Discussion Exercise” will bring the speakers, panelists and attendees together for group discussions which the Coalition hopes will identify “Great Ideas” for improving GSA’s procurement programs and contracting vehicles. In addition to the “Myth-Busters Discussion Exercise,” the afternoon portion of the Business Roundtable will consist of breakout sessions. These breakout sessions will provide an opportunity for focused dialogues on four key GSA program areas/initiatives: (1) Leveraging Government Requirements Through Strategic Acquisition; (2) Acquisition of Services; (3) Cost Saving Strategies for the Federal Workplace: PBS and IWAC Initiatives; and (4) The IT Portfolio. More information on the agenda and the breakout sessions can be found here.
The Coalition and its membership look forward to an engaging Myth-Busters dialogue that focuses on GSA’s mission, priorities and business opportunities. See you next week!
Roger Waldron
President
GAO: Increase Strategic Sourcing of Services
The Government Accountability Office (GAO) released a report this week on commercial practices that Federal agencies can use to strategically source services—including professional services. GAO interviewed seven large commercial companies, an industry association, and consulting company as part of their research. Examples of the services that the companies purchased were information technology, professional services, customer support, warehousing, and facilities maintenance. Companies reported saving between 4 to 15% by strategically sourcing services, with the most dramatic savings in the initial years of the program. The GAO identified 5 foundational principles that these companies relied upon:
- Maintaining spend visibility
- Centralizing procurement
- Developing category strategies
- Focusing on total cost of ownership
- Regularly reviewing strategies and tactics
Based on their findings, GAO further encouraged the Federal government to use strategic sourcing as a means of achieving savings in services acquisition. The same recommendation was made in a GAO report released in September 2012. GAO estimates that “considering a savings rate of 4 percent applied to the $307 billion spent by Federal agencies on services in fiscal year 2012, [potential savings] would equate to $12 billion.”
Update: Extension on JanSan MRO Draft RFQs
GSA hosted a Pre-solicitation Industry Day this week on the upcoming Federal Strategic Sourcing Initiative (FSSI) vehicle for Janitorial/Sanitation (JanSan) products and Maintenance, Repair & Operations (MRO) products. GSA’s goal is to achieve 11% savings in the prices paid for these items and compress the pricing ranges for these frequently purchased commodities. The JanSan MRO contracts, like other FSSI BPAs, will include an Administrative Service Fee of 1.25% to fund the program in addition to the Industrial Funding Fee (IFF). While GSA also plans to increase the percentage of dollars going to small business through these contract vehicles, there were significant concerns expressed during the Pre-solicitation meeting about the impact of the FSSI vehicle on small businesses under the Schedules program. GSA intends to set-aside half of the awards under the JanSan and MRO FSSI BPAs to small business in order to help customer agencies reach their socio-economic goals. They are also considering use of reverse auctions. Slides from the industry day will be posted on GSA Interact on the FSSI JanSan and MRO Community pages.
Comments on the JanSan and MRO draft RFQs have been extended to next Friday, May 24, 2013.
NIST: New Guidelines on Federal Information Security
The National Institute of Standards and Technology (NIST) has released and an updated version of Special Publication 800-53, Security and Privacy Controls for Federal Information Systems and Organizations. The new version provides standards, recommendations, and specifications for implementing the requirements of the Federal Information Security Management Act (FISMA). According to Federal News Radio, the document contains a new section on mobility including specific access controls for mobile devices and promotes the idea of tailoring the codes for specific environments—fixed versus mobile. The updated document gives more flexibility in selecting appropriate controls, reports Government Computer News. NIST states that this “Revision 4” document seeks to provide a stable, yet flexible catalog of security controls to meet current information protection needs and the demands of future protection needs based on changing threats, requirements, and technologies. New controls based on emerging and evolving threats include Advanced Persistent Threats, supply chain risks, insider threats, application security, distributed systems, mobile and cloud computing, and developmental and operational assurance.
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.
The Latest from GSA’s Green Proving Ground
GSA’s Green Proving Ground (GPG) released new reports this week on three innovative technologies designed to improve the sustainability performance of Federal buildings. The technologies were tested to evaluate their potential to save energy, water, and reduce utility costs. The three reports released cover photovoltaic systems, condensing boilers and variable refrigerant flow. Results are available at www.gsa.gov/GPG. The GPG continues to study buildings technologies that can increase the performance of GSA’s Federal property through reduced operational costs and support the deployment of these technologies in the commercial market.
The DoD is looking at expanding its focus to include the real costs of IT business systems says a report from Federal News Radio. In a recent memo to military leaders, Deputy Chief Management Officer Beth McGrath discussed DoD’s Defense Business Systems Investment Management Process Guide. According to the memo, the FY2012 National Defense Authorization Act included significant changes to the requirements for investment review and certification of Defense Business Systems. The new changes spurred the development of an Integrated Business Framework. The process guide states that the framework “provides an overarching process to manage the department’s business operations from the creation of strategic objectives through the measurement of outcomes.”. In the budget constrained environment, the DoD believes it can save money by eliminating 99 business systems by 2015. The review board also denied more than $300 million in IT systems requests in the fiscal 2013 budget, reports Federal News Radio. It is also noted that for the fiscal 2014 budget request, DoD components will have to describe how the investment aligns with the business owners’ strategy.
Roger Waldron at Excellence in Government Event
On Monday, Coalition President Roger Waldron participated in a panel discussion with Anne Rung, GSA Chief Acquisition Officer and Senior Advisor to the Administrator and Rob Burton, Partner with Venable LLP and Former Deputy Administrator of the Office of Federal Procurement Policy. The panel entitled, Contracting: The Cost-Saving Imperative featured a discussion on the challenges Federal agencies are facing to find cost-savings across their portfolios as contract spending is coming under increased scrutiny. Anne Rung, Roger Waldron, and Rob Burton also discussed the Administration’s new directives on strategic sourcing, procurement reform, and the changing contracting environment.
Should We Protest? Recent Data from The Government Accountability Office Helps Answer the Question
By Jack Horan, Partner, McKenna Long & Aldridge LLP
Many factors go into a decision of whether to protest after a contractor finds out it was not successful in winning an order or contract:
- Did the agency make a mistake?
- How strong is my evidence?
- Did the mistake affect the award decision?
- How much will a protest cost?
- Will a protest affect my relationship with the agency?
- If I win the protest, what remedy will the General Accountability Office (“GAO”) recommend?
For a contractor to make a reasoned decision on whether to protest, including a schedule contractor competing for commercial items sales, the contractor has to have some measure on the likelihood of success of a protest. Recent data and analysis provides valuable context on GAO protest decisions that will assist contractors in making this important decision. An annual report by the GAO, GAO Bid Protest Overview, GAO-13-404SP, Feb 20, 2013, authored by Ralph White, Managing Associate General Counsel, provides useful information on the results of bid protests over the past five years. An article written by Professor Dan Gordon, Associate Dean for Government Procurement Law Studies at The George Washington University Law School, digs a little deeper into GAO’s statistics, and looks at the number of protestors that actually win the contract after protesting.
According to GAO’s Bid Protest Overview, GAO closed 2,495 bid protest cases in 2012, issuing a decision in 570 cases, or approximately 23% of the closed cases. Of those cases that go to a decision, GAO sustained 106 protests, or approximately 18.6% of the 570 decisions. “Sustained” means the GAO agreed with the protestor that the government had made a material error in the procurement, and GAO recommended that the government take action to address its error.
GAO also calculated the success rate of protests, defined by GAO as when the protestor obtains “some form of relief from the agency, as reported to GAO, either as a result of voluntary agency corrective action or our Office sustaining the protest.” By this measure, protestors achieved success in 42% of the closed protests for that year. The 2012 success rate was representative of previous years, which ranged from 42% to 45% from 2008 to 2011. In short, protestors have done fairly well over the past five years according to the GAO’s view of success, achieving either a sustained protest or voluntary corrective action in at least 42% of the cases.
In his article, Bid Protests: The Costs Are Real, But the Benefits Outweigh Them, which will appear in the Spring 2013 issue of the Public Contract Law Journal, Professor Gordon digs a little deeper into GAO’s statistics, analyzing, among other issues, the percentage of protestors that received award of the contested contract after the protest. Reviewing the protests in 2010 that were sustained, Professor Gordon was able to determine the final results in 40 cases:
- nine contracts awarded to the protester;
- 18 contracts awarded to an offeror other than the protester;
- one case where the GAO granted the specific relief (other than contract award) requested by protestor;
- three procurements cancelled; and
- nine cases where the agency did not take corrective action.
Thus, of 27 cases that ended in the award of a contract, the protestor received the contract in nine cases, or one-third of the awards. In another case, the GAO recommended, and the government provided, the relief the protestor requested. Thus, in 25% of the 40 known results, the protestor received the final result it sought – nine contract awards and a tenth case where the protestor received the relief it sought. In addition, using a broader definition of “success,” protestors received award of the contract in nine of the 31 cases where the government took corrective action of some type (or 29% of the cases).
Professor Gordon did not attempt to extrapolate his findings based on known cases to the bulk of protests where results were not known. Others have attempted an extrapolation, at least one unsuccessfully and reaching inaccurate results. See Miller, Protests rarely result in U.S. contract reversals,study shows, Washington Post, March 11, 2013, available at http://goo.gl/iSb2o (concluding that less than one percent of protests filed in 2010 resulted in award to the contractor). A reasonable extrapolation of Professor Gordon’s analysis demonstrates that protestors have been successful even by Professor Gordon’s measure. See Papson, Carey and Meier, FEATURE COMMENT: The Odds Of Winning A Contract After Protesting Are Higher Than You Think, The Government Contractor, Vol 55, No. 16 (April 24, 2013). Applying the 29% success rate of award after corrective action from Professor Gordon’s data to the total number of protests in 2010, protestors won award of the contract after 12.2% of the total protests filed in 2010 (extrapolated). In light of such factors as the strength of the protest, the level of competition for the final award, and that the government deemed another offer to be the winner in the first instance, a success rate of approximately one in eight seems reasonable.
So, what is the takeaway from all of these numbers. By any measure, protests are successful. If the measure of success is ensuring that all offerors had a fair chance of award (my personal view), GAO statistics demonstrate that protests resulted in corrective action – specifically intended to make sure the rules of the procurement are fair and legal – at least 42% of the time in the last five years. By Professor Gordon’s more narrow measure – whether the protest resulted in the protestor obtaining the contract – more than 12% of protestors achieved success in 2010. Keep in mind that both of these results are based on all of the protests filed during the respective periods – some terrible, some very strong. With experience, or the assistance of an experienced protest lawyer, these numbers provide a useful benchmark for analyzing the likelihood of success of a specific protest evaluated on the merits.
VA Seeking Comments on VOSB Guidelines
On Monday, the Department of Veterans Affairs (VA) released an advanced notice of proposed rulemaking. The Office of Small and Disadvantaged Business Utilization (OSDBU) is currently reviewing its regulations governing the VA’s Veteran-Owned Small Business (VOSB) Verification Program. OSDBU intends to improve the regulations to provide greater clarity, to streamline the program, and to encourage more VOSBs to apply for verification. By issuing this notice of proposed rulemaking, OSDBU seeks comments on how best to approach this proposed improvement. OSDBU identified specific issues for discussion including: (1) clarifying regulations; (2) clarifying guidance on ownership and control; (3) changes that could reduce the economic impact on VOSBs; (4) ways to streamline the application process; and (5) ways to improve efficiency in verification process and reduce burdens. However, OSDBU encourages the public to comment on any issue related to improving these specific regulations and the program. Comments are due on or before July 12, 2013.
GSA IT Navigation Tool
According to an FCW report, the General Services Administration is planning to unveil a new Web-based tool to help government users navigate the field of federal IT contracts. The IT Solutions Navigator Tool, slated for release this summer, will help federal data center and technology managers determine which large federal IT contracts would best suit their product and service needs. The tool will allow the user to select from seven categories: cloud computing, communications, networking, data center, hardware, security, and software. The tool searches among governmentwide acquisition contracts, Schedule 70 and network service contracts, reports FCW. The tool will “tailor” its results based on the user’s level of government (federal, state or local), IT needs and acquisition requirements.
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.