This week’s blog continues the discussion on Schedules Modernization. I was interviewed this week by Federal News Radio’s Francis Rose regarding schedules modernization; to listen click here.
At the beginning of the year the FAR & Beyond blog identified Fourteen Thoughts for 2014 with each thought subsequently being addressed in at least one blog during the year. In light of the Federal Acquisition Service’s (FAS) continuing focus on standardized labor categories as an element of Schedules Modernization, it is time to address Thought No. 6 of the Fourteen Thoughts for 2014: “Standardized labor categories: Towards coin-operated Schedule contracts for professional services.”
Standardized Labor Categories and Innovation
At a time when the Administration and the Office of Management and Budget (OMB) are seeking greater access to innovative solutions that increase Taxpayer return on investment (ROI), standardized labor categories are anti-innovation. Standardized labor categories put the lid on the private sector’s ability to deliver cutting-edge, best-in-class capabilities, services and solutions that save money for customer agencies and the American people. Quite simply, standardized labor categories, like a coin-operated vending machine, limit choice, flexibility and competition. Standardized labor categories do not leverage commercial business practices in delivering high value solutions to meet agency mission requirements. Rather, standardized labor categories force firms to reengineer business practices and processes to fit the labor formula dictated by GSA creating inefficiencies in the procurement and performance of customer service requirements.
Economies of Skills, Flexibility and Innovation
Innovation in government procurement begins with a focus on leveraging economies of skill. Schedule contracts for professional services and information technology (IT) must be structured to leverage economies of skill. That means contracts must provide flexibility at the task order level for contractors to structure complex solutions to meet complex customer agency requirements. Standardized labor categories for commercial services simply do not provide the necessary flexibility.
GSA’s Professional Services schedules and IT Schedule 70 have a wonderful opportunity to leverage economies of skill through innovation in schedule contract structures and pricing models. The Coalition applauds any effort to incorporate ODC capabilities into schedule contracts. Likewise, the Coalition believes it is time to explore the establishment of an unpriced schedule for IT and professional services, as recommended by the SARA Panel in 2007. The government has yet to take full advantage of the ongoing convergence of IT and services in the commercial marketplace. Cloud, software as a service (SAAS), as well as complex, integrated IT service solutions are driving innovation in the market. Flexibility in pricing and task order structure are keys to leveraging economies of skill for these new, cutting edge services, thereby increasing Taxpayer ROI.
The Coalition Innovation Task Force
The GSA Schedule program is in a unique position, with its statutory authority and access to the commercial marketplace, to drive access to commercial innovation in service delivery. In response to this unique opportunity, the Coalition provided GSA and OMB with a white paper on transforming IT Schedule 70 into the Commercial IT Innovation Schedule. As a next step, the Coalition will establish a “Coalition Innovation Task Force (CITF)”. The task force will develop and recommend alternatives that deliver innovative solutions to meet federal agency needs. The goal of the CITF is to harness a broad spectrum of ideas and experience to promote flexible, creative, and dare I say, innovative contracting structures. The ultimate objective is to promote effective, efficient and exceptional solutions for government and its industry partners. How can schedule contracts be restructured to leverage customer-focused supply management and service delivery? How can the government leverage “share in savings” mechanisms to support agency missions? How can cloud offerings be optimized via the Schedules program? The CITF will tackle these questions and more.
In the coming weeks you will hear more about this initiative. We look forward to inviting the participation and thought leadership of government and industry in this important effort.