On March 13, 2014, Defense Procurement and Acquisition Policy (DPAP) issued a class deviation to FAR 8.404(d). This deviation directed that ordering activity contracting officers are responsible for making a determination of fair and reasonable pricing when using GSA’s Federal Supply Schedules (FSS). The deviation essentially incorporates complex FAR 15.404-1 price analysis techniques into the streamlined FSS ordering procedures with the vague caveat that the complexity and circumstances of each acquisition should determine the level of detail of the analysis required.
In discussing the rationale for this deviation, DPAP has consistently focused on the variation in pricing across the FSS program. In particular, the example of a $29 stapler listed on an FSS contract has been cited by DPAP as creating a “significant” risk that Department of Defense (DoD) contracting officers will simply order the $29 stapler rather than search for a cheaper stapler on another FSS contract. For those of us of a certain age, the use of this example reminds one of the $600 toilet seat reportedly purchased by the DoD back in the 1980s. Like the toilet seat purchase, however, there is greater context that undercuts the stapler example cited by DPAP.
Putting aside the contract vehicle and accounting rules associated with the toilet seat, here, that context is the information available, the transparency of that information, and the search capabilities of GSA’s FSS electronic catalog, GSA Advantage. Recently, in an effort to reduce the ambiguity surrounding this issue, I decided to use GSA Advantage to research DPAP’s $29 stapler example. In a matter of minutes, I was able to conduct market research obtaining relative pricing information for a variety of staplers. Here is how, in three easy steps:
- First, I searched for “GSA Advantage,” landing on GSA Advantage’s front page, which includes a product search bar.
- Then, I typed in “staplers” and hit enter. Up popped a listing of general stapler models with associated pricing, pictures, and descriptions.
- Next, I clicked on a particular model. GSA Advantage then loaded a page that listed all the FSS contractors with that model in their contracts, along with the associated price, delivery time, minimum order quantity and shipping terms (e.g. FOB origin or destination).
GSA Advantage also provides the capability to limit the search based on price (e.g.search for all staplers less than $10) or by key word or term.
Most importantly, however, the staplers are listed in descending order, from the lowest priced, to the highest priced stapler. In other words, the first contractor item listed is the lowest price for that particular stapler under a schedule contract.
Can it be any simpler?
Interestingly, in this case, GSA Advantage also lists the GSA Global Supply Requisition Staplers first, regardless of its price. The Global Supply price is generally higher than the schedule contract prices because it includes a mark up to cover the costs for GSA management of its supply and depot programs. To improve the clarity of the price list, GSA should treat its own programs as it does its contractors and list the Global Supply stapler price relative to where it falls within the overall price list. Other than the Global Supply stapler, the contractor staplers are listed starting with the lowest priced stapler first, which was, at the time of my research, $4.15, not $29.00.
The information contained in GSA Advantage effectively addresses DPAP’s concerns regarding the $29 stapler by making comparative pricing information easily and readily available for review and consideration by DoD contracting officers. GSA Advantage’s depth and breadth is remarkable; there are over 47 million products and services listed and available for review by contracting officers. Moreover, GSA Advantage is supplemented by GSA’s eBuy electronic quote system, which provides all contracting officers with the ability to seek competitive quotes for task and delivery orders among all FSS contractors capable of meeting the requirement. Last fiscal year alone, over 72,000 quotes were posted on eBuy.
To the extent DPAP’s concern focuses on so called “price variability” across the FSS program, the program reflects the commercial market with its myriad of competitive pricing strategies cutting across small, medium, and large businesses. It reflects the overarching market where American citizens navigate the internet conducting market research and making millions of personal buying decisions. GSA Advantage brings that electronic market to contracting officers across government, including DoD. I am confident that when using GSA Advantage and, as appropriate, eBuy, contracting officers can make sound, best value buying decisions. Perhaps DPAP’s deviation is a teaching moment where more training and focus on the electronic tools currently available can further enhance competition and best value outcomes when using the FSS program. Training on use of these electronic tools can have a much greater impact on delivering best value for customer agencies than adding additional regulatory complexity.
Finally, continued investment in GSA Advantage, eBuy, and associated training is vital to the long term future success of the FSS program in delivering best value to customer agencies. These electronic tools provide operational capabilities reflecting GSA’s unique statutory role in providing acquisition support across the federal enterprise to both civilian agencies and the DoD. For this reason, some are concerned with what appears to be the potential erosion of GSA’s operational and strategic control of GSA Advantage and eBuy by the DoD’s FedMall project. The FedMall project essentially envisions a government-wide portal for companies seeking to do business with the Federal government, and, based on the forgoing, its procurement policy and operational implications go well beyond DoD. DoD’s mission is not GSA’s. GSA’s role in supporting the entire federal enterprise (both DoD and civilian agencies) makes it uniquely positioned, informed, and qualified to manage the strategic direction of its government programs and electronic tools.