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Ten Tantalizing Topics Testing Procurement in the New Fiscal Year

This week marked the Autumnal Equinox, and change is in the air. The leaves are beginning to fall to the ground; the morning air is turning crisp; the days are getting shorter, all signaling that we are approaching the end of the government fiscal year. The beginning of a new fiscal year provides an opportunity for reflection, during which, we can look ahead at the issues and questions that likely will shape procurement over the coming year. With that in mind, here are 10 topics that surely will be of interest across the procurement stakeholder community:

  1. Schedules Consolidation and commercial item contracting: to be or not to be? GSA has made significant progress in updating the framework for schedule contracting to promote commercial item acquisition. Schedules consolidation will enhance competition, increase access to commercial solutions, and reduce administrative costs over the long run. At the same time, increasingly, GSA’s industry partners are perplexed by the treatment of services. GSA is limiting services under the MAS program to those priced on an hourly rate basis. This approach limits customer agency access to innovative, best value commercial solutions. Moreover, the use of cost-build negotiations for services serves as a non-commercial “double whammy,” further undermining customer agency access to best value commercial solutions. The combination of limiting services to hourly rates, combined with cost-build negotiations, is low price technically acceptable by other means. (Here we go again.)
  2. E-commerce and Section 889: a bridge too far? As GSA begins implementation of the e-commerce pilots, a foundational policy issue to be addressed will be implementation of Section 889.  Section 889 applies to the platform providers as well as the suppliers selling through the platforms.  Will suppliers certify to Section 889 for each transaction? Will the platform providers also have to certify for each transaction given that the products themselves are a substantial and essential component to such platforms? In addition, customer agencies and suppliers will be keenly interested in GSA’s efforts to ensure the platform providers comply with the President’s Executive Order on counterfeits, along with the Department of Homeland Security’s Combating Trafficking in Counterfeit and Pirated Goods.
  3. The NIH CIO-SP4: if you build it, will they come? The current acquisition strategy for NIH’s CIO-SP4 seeks to establish a single contract vehicle, specifically, a multiple award IDIQ that will include small, medium and large businesses. This approach is a fundamental change from the current CIO-SP3 program, which consists of two contract vehicles, one set-aside for small businesses, and the other open to other than small businesses. A combined contract vehicle that includes both small and other than small businesses will raise contracting challenges that likely will increase operational complexity and administrative costs, ultimately undermining small business opportunities and utility for the customer.
  4. MSPV, DMLSS, and a dashboard: enhancing transparency? The Department of Veterans Affairs (VA) is in the midst of supply chain modernization as it seeks to implement MSPV 2.0 while, over the long term, it transitions to DLA’s DMLSS logistics platform. The VA’s industry partners have appreciated the transparency and engagement around these efforts. In support of these efforts, however, a VA dashboard to track progress would serve as a key management tool with the added bonus of providing additional transparency on the details of the transition so all stakeholders can track progress and respond to the VA’s efforts. This transparency is especially critical for the VA’s industry partners as they seek to optimize business operations to evolving logistics and procurement systems.
  5. Domestic sourcing: what are the lessons learned from COVID-19? COVID-19 clearly has sharpened the focus on domestic sourcing for critical items. The challenge is complex and will require a holistic approach. Gone are the days when government demand alone would drive market behaviors and the development of key capabilities. Today, the commercial market is driving innovation.  As we look to address the issue of domestic production capability for critical items, stakeholders will be looking to a myriad of tools to address shortcomings. Procurement and government demand will be one aspect. Addressing structural issues and incentives on the supply side, however, likely will be a key focus over the long term.
  6. Other Transactions Authority (OTA): becoming a critical component of modernization? The flexibility and streamlined process associated with OTAs is driving innovation. Industry reports the increasing use of OTAs for programs of record. Our near-peer adversaries’ developmental cycle time increasingly is working to their advantage. OTAs will continue to be a vital modernization tool in the toolbox for the Department of Defense.
  7. What is the value/impact of the best-in-class process? The best-in-class designation process continues, rooted in compliance with procedural metrics rather than substantive performance outcomes. This approach risks undermining competition and hinders access to the commercial market. Outcomes matter for customer agencies and industry partners. Thus, our focus should be on the improvement of outcomes.
  8. GSA’s small business GWAC program: what are the next steps? As GSA continues planning and outreach around the acquisition strategy for its small business GWAC program, it is imperative that the agency look to streamlining the acquisition process. Streamlining the process will save GSA, customer agencies, and small businesses time and money. The small business GWAC program provides a wonderful opportunity to utilize the Section 876, Increasing Competition at the Task Order, authority to eliminate the evaluation of price at the contract award level. This approach will save time and money for all interested parties, while rightly focusing on competition at the task order level, to drive value for customer agencies.
  9. Section 876: implementation that increases competition? Speaking of Section 876, it is striking how long it has taken to implement this provision, especially considering that implementation would be a great multiplier to contracting. It would bring competition, innovation, and small business capability from the commercial market to customer agencies. Some would like to see the language applied in a restrictive manner, specifically, to arrangements expressed on a per-hour basis. Such a reading would be in error. Section 876 was written with the goal of “Increasing Competition at the Task Order Level.” It is clear, from the section language and the limited legislative history, that the section was not intended to be read in a restrictive manner, g., requiring pricing only on a “per hour” basis. In fact, doing so would wind up reducing the number of market participants under this authority to those who, in their commercial practice, fashion the pricing in a particular, limited way. Time will tell whether the government will follow the law and permit the use of commercial pricing solutions as authorized by Section 876.
  10. The post-pandemic world: what awaits us? Oftentimes, after a tragedy or cataclysmic event, people conclude, “The world will never be the same.” In the context of the pandemic, that sentiment is not mere hyperbole. As we have been distant from one-another, we have faced challenges: how to adjust our processes to meet the needs of our customers; how to mentor those in the line of succession; how to stay connected and collaborative? At the same time, we have experienced the power of the collaborative tools at our disposal and the unleashing of creativity necessitated by this challenge. This pandemic will end, and when it does, how we return to work likely will not be as it was before.

Set forth above are some thoughts to consider as the temperature drops, and you sit by the fire in the evening. We will be considering some of them and others in November, at our virtual fall conference, and we look forward to seeing you there. In the meantime, stay safe; stay healthy; and rest assured that the Coalition team remains vigilant on your behalf.

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