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Transforming the Federal Marketplace: Reflection at Year One

Anniversaries are a time of reflection, evaluation, and motivation. Indeed, in just a few short weeks one of our most significant anniversaries will be upon us, New Year’s Day. Each year all of us look back upon our successes, as well as our shortcomings, and make commitments to better ourselves in the New Year.

Today, December 4th, marks a significant anniversary in the procurement community. Today is the one-year anniversary of the Administrator of the Office of Federal Procurement Policy (OFPP) at the Office of Management and Budget (OMB), Anne Rung’s memorandum for all Chief Acquisition Officers and Senior Procurement Executives entitled, Transforming the Marketplace: Simplifying Federal Procurement to Improve Performance, Drive Innovation, and Increase Savings.

The memorandum, which sets forth the Administration’s vision for improving the procurement system, contained many promising themes that were welcomed by many as timely and encouraging. Many of these themes were detailed in the Far and Beyond Blog from December 12th of last year. With its first anniversary upon us, today presents a significant opportunity to reflect upon the OFPP memorandum and its impact on commercial item contracting.

In the memorandum, Rung states that:

Within 180 days of the date of this memorandum, OFPP, in consultation with the Chief Acquisition Officer Council and the FAR Council, will make recommendations to the Deputy Director for Management on specific actions that can be taken to reduce burden in commercial item acquisitions, especially for small businesses, and increase the use of effective commercial solutions and practices by the Government. In developing recommendations, OFPP will consider input provided through the Open Dialogue, as well as relevant studies of Federal acquisition, especially those that focus on FAR and agency level regulations that generate the greatest reporting burdens or impose unnecessary restrictions that keep new, innovative companies from entering the Federal marketplace. As part of this effort, OFPP and GSA will identify steps to reduce burden and barriers to entry for contractors and improve the efficiency and effectiveness of the Multiple Award Schedules Program, such as steps to improve the acquisition of order-level materials and the negotiation of end-user licensing agreements.

(Emphasis Added)

To date, however, no public disclosure of such recommendations to the Deputy Director for Management can be found. In the interest of transparency, Coalition members, as well as all of industry, welcomes the opportunity to review these recommendations and work collaboratively with OFPP to improve commercial items contracting.

Further, in developing the recommendations, the memorandum provides for the consideration of “…input provided through the Open dialogue, as well as relevant studies of Federal acquisition…” As you recall, the Coalition submitted a set of recommendations to the previous National Dialogue on procurement.  Significantly, seven Coalition recommendations made the top ten in votes from the public.  The following were the Coalition’s recommendations in the final top 10 list:

  1. Reduce Extensive Data Collection Requirements
  2. Remove the Price Reductions Clause and Reform Pricing Policies for the Multiple Award Schedules
  3. Address Burdensome Ordering Procedures for Blanket Purchasing Agreements (BPAs)
  4. Reduce Contract Duplication
  5. Increase Clarity of Intellectual Property (IP) Rights- GSA Schedules
  6. Implement Other Direct Costs (ODCs)- GSA Schedules
  7. Reduce Restrictive Experience Requirements- GSA Schedules

Collectively these recommendations will transform the GSA Schedules program into an innovation portal for government customers and commercial firms. Reducing outdated regulatory burdens and policies and improving processes would convert the Schedules to a more streamlined, efficient, and effective marketplace where customer agencies could access the latest commercial technologies, services and products. Recognizing the significance of the Coalition’s contributions to the reform recommendations, we would appreciate greater disclosures regarding the current National Dialogue so that industry may assist OFPP in reducing costs and increasing competition.

Additionally, the Coalition is deeply concerned that recent procurement activities, such as GSA’s commercial supplier agreement class deviation, the proposed Transactional Data Reporting rule, and the recent Department of Defense (DoD) proposed rule on fair and reasonable pricing; increase burdens for commercial item contracting. These burdens put up barriers to the Federal market for businesses of all sizes, especially small businesses. GSA’s class deviation undercuts the 20 year statutory and regulatory framework for commercial item contracting and raises significant questions regarding the agency’s (and the Administration’s) commitment to commercial item contracting at a time when GSA is looking to be an economic catalyst for business opportunities nationwide. Moreover, these proposed rules/policies reflect burden increases that are inconsistent with the OFPP memorandum’s goals of increasing Federal agencies’ access to commercial innovation and providing opportunities for small businesses. This blog has documented each of the aforementioned actions, as well as their ramifications, the links to which can be found below:

Fundamentally, alterations to the procurement process that increase burdens, impose unnecessary restrictions, and restrict access to the Federal market are not in the interests of customer agencies and the American people.

Anniversaries provide important moments of reflection. They are an opportunity to evaluate where one is currently, as well as where one is headed. After one year, it appears that much of the potential from last year’s OFPP memorandum is in danger of not being fully realized. Coalition members stand ready to work with OFPP, GSA, the FAR Council, and the entire procurement community on making commercial item contracting a more streamlined, efficient, and effective process for agencies, commercial firms and ultimately the American people.

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