Last week’s FAR & Beyond blog noted that GSA’s TDR rule raises significant policy and operational questions. This week’s blog examines whether the TDR rule moves the Federal Supply Schedule (FSS) program closer to a competitive, “unpriced” contracting framework that streamlines processes, enhances access to the commercial market, and leverages competition for agency specific requirements. “Unpriced” refers to eliminating FSS contract level price negotiations and enhancing order level price competition, but the use of the term really is a misnomer, as FSS contractors, under the framework, will be required to post pricing via GSA Advantage.
The Competitive, Unpriced Schedule Concept
As you know, the Coalition for Government Procurement long has supported the adoption of a competitive FSS model that focuses on task and delivery order competitions for agency specific requirements. Such a model would eliminate the bureaucratic and time-consuming negotiation of FSS contract level prices. Instead, it would limit negotiations to key contract terms (e.g. Commercial Supplier Agreement, Warranties, Industrial Funding Fee, and subcontracting plans) while authorizing FSS contractors to post prices and rates on GSA Advantage.
The general concept originated with former Congressman Tom Davis in the late 1990’s and focused on products. In 2007, the Acquisition Advisory Panel established pursuant to section 1423 of the Services Acquisition Reform Act (SARA) embraced the concept, recommending that GSA establish a pilot Competitive Services Schedule covering professional services under IT Schedule 70. Along these lines, one of the key recommendations of the Coalition’s 2013 GSA Multiple Award Schedule Pricing White Paper reinforced this idea, supporting the idea that GSA pilot test the SARA Panel recommendation. More recently, the April 21st FAR & Beyond blog set forth a legal and contractual roadmap for an unpriced “Comprehensive, Competitive Services Schedule” for IT and professional services.
The TDR Rule and the Competitive, Unpriced Schedule Concept
The TDR rule provides an opportunity to move towards the competitive, unpriced FSS model. The rule requires that contractors report information about prices at the order level. Because of the difference in terms and conditions, this transactional data will be inadequate to evaluate contract level pricing. Specifically, the FSS contract level terms only provide for a guaranteed minimum of $2,500.00 and the opportunity to compete for future orders. Thus, they represent relative business uncertainty for vendors. In contrast, an FSS order represents a firm commitment on the part of the government to purchase products and/or services. We anticipate that TDR will demonstrate that prices at the order level are lower than at the contract level as value and price under the FSS program are driven by streamlined, efficient competition at the task and delivery order level for agency specific requirements. The TDR rule will serve to validate the proposition supporting the elimination of the bureaucratic, inefficient contract level price negotiations in favor of more efficient, effective order level competitions. This is especially true as agencies acquire complex solutions at the order level that do not provide an adequate basis for comparison. The most efficient way of driving cost out of the system, while enhancing value is by eliminating lengthy contract level negotiation in favor of relying on the use of the ordering procedures already required by FAR 8.4
Finally, the TDR rule represents a fork in the road for the FSS program. GSA could recognize that the procurement environment is ready for the creation of an open, streamlined, and efficient FSS model that focuses on task order competition. Or, GSA could revert to an “old school,” over-bureaucratized, inefficient model that emphasizes contract level pricing. The Coalition sees a tremendous opportunity here for GSA to infuse efficiency and cost savings into its process and would like to work with GSA to fashion and adopt the competitive, “unpriced” Schedule concept.