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Friday Flash, 01.10.14

FAR and Beyond Blog

For those returning to work this week—welcome back and Happy New Year!   As you know, the Coalition is celebrating our 35th Anniversary this year!  We have a proud history of service to the acquisition community to celebrate as we continue promoting common sense in government procurement.  As we start the year I want to take this opportunity to once again thank all our members for your support!  Without you, what we do would not be possible!

Now, as promised in last week’s blog, it is on to the fourteen “predictions” for 2014.  However, rather than focusing on “predictions,” this blog will highlight 14 key procurement items that are food for thought in 2014.  Much like last year, the FAR and Beyond Blog will tackle each of these items in more depth through subsequent FAR and Beyond Blogs via the Friday Flash.  In an effort to engage the procurement community, rather than me writing all fourteen blogs, we will be inviting individuals from across the procurement community (government and industry) to address the fourteen thoughts.  Here are the 14 items that are food for thought in 2014:

  1. Show me the Money: How the federal budget will impact business development.
  2. GSA’s Strategic Plan:  Plan versus implementation.
  3. From strategic partner to supplier: Is GSA distancing itself from its contractor community?
  4. More contact, less communication: How social media is redefining contractor interaction with the government.
  5. IT Acquisition Reform: where do we go from here?
  6. Standardized labor categories: Towards coin-operated contracts for professional services.
  7. The GSA Schedules program as an Innovation portal.
  8. The follow-on Networx procurement: Time for a GSA Schedules telecommunications solution.
  9. How strategic sourcing is reshaping (eroding?) the federal market and the contractor supply chain.
  10. Low price, best price or best value: What is the value proposition for customer agencies and the American people?
  11. The President’s executive order on regulatory review: no practical impact on the Federal Acquisition Regulation, or, where has commercial item contracting gone?
  12.  Acquisition Operations and Oversight: who is minding the shop?
  13.  Human Capital Investment: Experiential Development vs. Classroom Training
  14. Where is cooperative purchasing?

The Coalition blog looks forward to a robust dialogue on each of these thoughts.

Roger Waldron




DHS Reconsidering Vendors for EAGLE II

According to the Government Accountability Office (GAO), the Department of Homeland Security (DHS) is re-evaluating proposals from protesting vendors that were not included on the seven-year, $22 billion EAGLE II procurement. Since DHS is now working with these companies, GAO notes that they will not rule on any of the pending protests.


Member Survey on LPTA

The Coalition is requesting member feedback on Low Price Technically Acceptable (LPTA) source selections in defense acquisitions for the Government Accountability Office (GAO).  GAO has reached out to the Coalition and other stakeholders as part of a study for Congress on the use of LPTA by the Department of Defense (DoD).  GAO has been tasked by Congress to assess how LPTA is being used in the source selection process by the DoD, what existing guidance exists on the use of LPTA, how the acquisition workforce is trained on LPTA, and how LPTA is being implemented under the Better Buying Power initiative.  GAO’s LPTA report is due to Congress by June 30, 2014.

GAO will be interviewing the Coalition about LPTA in defense acquisition on January 16, 2014.  To help us prepare, we are asking members to complete the LPTA Survey below.  The Coalition will use the survey results to formulate our feedback and recommendations to GAO.  As always, member responses will be for non-attribution and confidential.

Take the LPTA Member Survey now!

The LPTA survey will remain open through COB Monday, January 13.  Thank you for your participation!


Congress Nearing Completion of Appropriations Omnibus

Congress has nearly completed the appropriations omnibus that will fund the government through the end of September. The omnibus legislation includes all of the appropriations bills for the current fiscal year. According to the Associated Press, the budgets for the Pentagon and the Commerce, Justice, Agriculture, Housing and Urban Development, Veterans Affairs and Transportation departments are “virtually wrapped up.” “Our subcommittee chairmen have really done 90 percent of the work. We are now at 10 percent, but this last 10 percent, like in any negotiation, is the toughest,” Senate Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) said. The spending measure will total $1.1 trillion after $86 billion or so in DoD contingency funding is tacked on. This amount is $25 billion above fiscal year 2013, when automatic spending cuts from sequestration were in effect. Also, the appropriated spending in 2014 will be more than $30 billion below what was originally contemplated for 2013 and $46 billion below levels negotiated in the 2011 budget deal. Members should note that if Congress cannot pass the omnibus before the January 15 deadline, they will need to pass another short-term continuing resolution to stave off a government shutdown. As the Friday Flash went to press, the likelihood of a short-term resolution was increasing.


Watch Out for Standardized Labor Categories

An initiative to watch in 2014 is the standardization of professional labor categories in the General Services Administration’s Multiple Award Schedules program. An op-ed on this topic by Coalition President Roger Waldron was released this week in FCW. “The Federal Acquisition Service’s idea of standardizing labor categories for professional services would be a radical change. It means the government would establish the categories, including the specific qualifications and skills associated with each, across each professional services schedule.” The move is problematic for number of reasons. Principally, the approach values price over total value. To read the article in full members can link to it above.


Personnel Changes at GSA

This week GSA Administrator Dan Tangherlini announced a number of personnel changes within the agency.  Among those leaving GSA are Deputy Administrator Susan Brita and Chief Information Officer Casey Coleman.  Following Susan Brita’s retirement after 30 years of public service, Denise Turner Roth (City Manager for the City of Greensboro, NC) will be assuming the role of Deputy Administrator on March 14.  Sonny Hashmi, currently Deputy CIO, will serve as Acting CIO following Casey Coleman’s move to AT&T as Client Executive Vice President.  The Administrator also announced two personnel moves in Region 4 and Region 8. Erv Koehler will serve as Acting Regional Administrator for Region 4.  Scott Conner in Region 8 is leaving GSA for the next step in his career and will be replaced by Tim Horne as Acting Regional Commissioner for PBS.


GAO Study of Networx Contract

The Government Accountability Office (GAO) released a study this week of GSA’s Networx contract.  The GAO study demonstrates that contract duplication and increasing complexity has increased customer confusion and operational costs.  The results are a positive statement about why the GSA Schedules are a powerful tool for the future acquisition strategy for telecommunications services for Federal agencies.  The following charts from the GAO report provide a summary of the delays involved in the original FTS2001 contract and the resulting costs in the transition to the Networx contract.


Interview: Frank Kendall, U.S. Defense Acquisition Chief

This week, the Federal Times conducted an interview with the Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L) Frank Kendall. The interview included the recent update to the Defense Department’s acquisition manual 5000.02, ideas on affordability, budget issues, new programs and his plans for 2014. We encourage members to take a look at the interview which can be found here.


Legal Corner

GAO Issues Bid Protest Annual Report to Congress for Fiscal Year 2013

By: John E. McCarthy Jr., Partner, Crowell & Moring LLP and James G. Peyster, Counsel, Crowell & Moring LLP 

On January 2, 2014, the Government Accountability Office (GAO) provided to Congress and released to the public its Bid Protest Annual Report to Congress for Fiscal Year 2013.  Pursuant to the Competition in Contracting Act, 31 U.S.C. § 3554(e)(2), the GAO Procurement Law Division is required each year to provide a summary report to the Committee on Governmental Affairs and the Committee on Appropriations of the Senate and to the Committee on Government Reform and Oversight and the Committee on Appropriations of the House of Representatives updating Congress as to (1) the annual protest statistics, (2) any instances in which a federal agency failed to abide by a GAO recommendation in a sustained bid protest, and (3) a summary of the most prevalent grounds for sustaining protests” during the preceding year.

FY 2013 Bid Protest Statistics

            The most interesting aspect of the FY 2013 GAO report is the year-on-year protest statistics.

For the first time since 2006, the number of total protests filed at GAO dropped from the previous year, although the 2429 new protests is only 2% lower than the FY 2012 total, and it is still the second highest total in GAO’s history.

The “effective rate” for GAO protests – defined as the percentage of cases in which the protester obtains a favorable result either through written decision from GAO or voluntary agency corrective action – ticked upward slightly to 43% after having held steady at 42% for each of the previous three years.  Conversely, the total percentage of written sustained protests dropped from 18% in FY 2012 to 17% in FY 2013.  The combination of a rising effective rate and a dropping sustain rate demonstrates that agencies are perhaps being increasingly more aggressive in taking voluntary corrective action to fix legitimate problems identified by protesters.

Another trend suggested by the FY 2013 statistics is an effort by GAO to streamline the protest process.  After a recent dip, the number of cases in which outcome prediction alternative dispute resolution (ADR) was used by GAO increased by 37% from the FY 2012 figures.  Moreover, 86% of the 145 cases in which ADR was used resulted in a resolution of the protest, which represents the highest ADR success rate since 2009.

At the same time ADR figures were rebounding, GAO continued its trend of dramatically reducing the number of hearings conducted.  Only 3.3% of all protests were deemed to require a hearing in FY 2012.  This number reflects an all-time low for GAO since hearing statistics have been published in the GAO annual report, and is far below the 12% rate of hearings in FY 2009.

The combination of more voluntary corrective action, more outcome prediction ADR, and fewer hearings suggest that the protest process has perhaps become slightly more streamlined for prospective protesters.

Agency Decisions to Reject GAO Remedial Recommendations

            As required by CICA, GAO also informed Congress that on seventeen occasions an agency had declined to abide by GAO’s recommended corrective action.  But this total, which is well above historical averages, is somewhat misleading.  Sixteen of the seventeen remedial rejections relate to a single issue relating to an ongoing dispute between the Department of Veteran Affairs and GAO about the requirements of the VA to abide by the Veterans Benefits, Health Care, and Information Technology Act of 2006 (“the VA Act”), 38 U.S.C. §§ 8127-8128, before making purchases off the Federal Supply Schedule.

The VA Act requires that the VA procure goods and services from veteran-owned small businesses any time the contracting officer has a reasonable expectation that two or more veteran-owned small business concerns will submit offers and that the award can be made at a fair and reasonable price.  Since 2012, the VA has taken the position that it does not have to make this determination before it decides to make a purchase off the Federal Supply Schedule, while GAO has repeatedly concluded that 38 U.S.C. § 8127(d) requires that the veteran preference must be complied with before the VA may decide how it wants to make a purchase.  This disagreement becomes a significant issue where there are multiple veteran-owned small businesses that can do the work.  Starting in 2012, GAO has held that the VA violates the VA Act when it makes an FSS buy without first making this determination.  On 18 occasions in FY 2012 and 16 more in FY 2013, the VA has rejected GAO’s analysis.

The one instance of a rejection of a GAO corrective action remedy other than a VA Act dispute arose in the context of the Department of Housing and Urban Development’s use of a notice of funding availability (“NOFA”) for the issuance of cooperative agreements, rather than a procurement solicitation for the award of a contract.  GAO concluded that circumventing federal procurement requirements via the NOFA process was improper and contrary to the Federal Grant and Cooperative Agreement Act, 31 U.S.C. §§ 6301-6308, because the “principal purpose” of the NOFA was to obtain contract administration services for HUD’s direct benefit and use.  See Assisted Housing Services Corp., et al., B-406738 et al., August 15, 2012, 2012 CPD ¶ 236.

GAO’s Most Prevalent Grounds for Sustaining Protests

            Starting this year, CICA now requires GAO to also update Congress about the most prevalent grounds for sustaining protests in the last fiscal year.  31 U.S.C. § 3554(e)(2).  In the inaugural edition of this disclosure, GAO indicated that most prevalent reasons for sustaining protests during the 2013 fiscal year were: (1) failure to follow the solicitation evaluation criteria; (2) inadequate documentation of the record; (3) unequal treatment of offerors, and (4) unreasonable price or cost evaluation.  GAO also clarified that it was only considering actual published sustained decisions in identifying the most prevelant issues, because “Agencies need not, and do not, report any of the myriad reasons they decide to take voluntary corrective action.”


Roger Waldron Discusses the GSA Strategic Plan

On Tuesday, Roger Waldron appeared on the In Depth radio show with Francis Rose on Federal News Radio 1500 AM. Roger discusses some things that are missing in the strategic plan of the General Services Administration. To listen to the program click here.


Seeking Member Comments on GSA Strategic Plan

The General Services Administration (GSA) has released a draft of their FY2014- 2018 Strategic Plan for public comment.  The Coalition plans to submit comments on the draft and is interested in hearing member input on GSA’s draft document.  The GSA Strategic Plan currently focuses on three strategic goals: Savings, Efficiency and Service.  The Strategic Plan explains how the agency plans to meet these goals through initiatives like strategic sourcing and reducing the Federal real estate footprint.  The chart below is a summary from the draft.

The Coalition will submit its comments by January 22, 2014.  Members interested in providing input please contact Aubrey Woolley at


Webinar – Fundamentals of Ethics and Compliance

Date: Tuesday, Jan. 21st

Time: 12:30 EST

Legal and ethical conduct in the government procurement process is critical to both contractor and government employees. It protects the credibility of that process and is important to maintaining the respect and trust of employees, partners, clients, and the public.

The purpose of this Webinar is to:

  • Provide an understanding of the ethical and compliance rules that apply when dealing with customers and suppliers in the federal government marketplace
  • Emphasize to contractors and employees the importance of ethical conduct when doing business with the federal government
  • Help contractors and employees recognize ethical issues and compliance risks associated with doing business in the federal marketplace and know when to seek guidance

Topics to be covered include:

  • Bribery and Gratuities
  • Kickbacks and Contingent Fees
  • Procurement Integrity Rules
  • Organizational Conflicts of Interest

Who should attend:

  • Government-facing contractor employees (not just attorneys and compliance experts)
  • Government employees who deal with contractors.

Register here!


Webinar – The Cost-build Approach for GSA Schedule Labor Pricing

Date: Tuesday, Feb. 11th

Time: 12:30 EST

This session will address the disconnect between services contracting and the GSA contracting model. Attendees will learn about the pricing and compliance challenges services contractors face as well as best practices for mitigating potential compliance risk. Key points of discussion will include labor category mapping, pricing strategies, CSP disclosures, and obligations under the Price Reductions Clause. Additionally, this session will provide an examination of the pricing options available to services contractors who price their services commercially using a cost-build pricing approach. Attendees will gain an understanding of the fundamental issues and challenges associated with the use of cost-build rates under the Schedules.

The purpose of this webinar is to:

  • Learn about the issues stemming from the current disconnect between the GSA contracting model and services contracting.
  • Learn about labor category mapping and pricing strategies and how to effectively mitigate post-award compliance risk.
  • Learn about the cost-build approach to pricing and the many challenges faced by services contractors under this approach.

Who should attend:

  • GSA Schedule services contract holders, executives, contract administrators and sales personnel
  • GSA Schedule services Contracting Officers, Contracting Specialists
  • Legal counsel representing GSA Schedule services contract holders

Register here!


NCMA Event on Suspension and Debarment, Jan 15

Few government contracting topics have received more Congressional attention in recent months than how the Government deals with alleged contractor fraud and misconduct. Mandatory debarments, contracting exclusions, and a massive restructuring of the suspension and debarment system are just some of the items cropping up repeatedly. On January 15, 2014, the NCMA DC Chapter hosts three leading government Suspending and Debarring Officials to speak candidly about these developments and what they mean for the future of federal contracting. For more information and to register click here!

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