This is the second in a series of blogs focusing on the policy and program value of TDR.
Over the last 30 years, GSA’s Multiple Award Schedule (MAS) program has evolved from exclusively focusing on static, contract-level pricing to driving pricing, performance, and best value through competition at the task and delivery order level for agency specific requirements. Over the course of this evolution, it has become apparent that the Commercial Sales Practices (CSP) and Price Reduction Clause (PRC) are relics of a bygone era.
The CSP and PRC made sense at a time when the MAS program was a closed, mandatory-for-use program, had a limited number of contractors, and contract-level pricing reigned supreme as MAS contract terms severely limited/restricted the ability of contractors to lower prices and compete for agency requirements. Today, the CSP and PRC are inconsistent with a dynamic MAS marketplace structured to drive competition and value at the task order level, and as such, can be viewed as anticompetitive.
To provide perspective on the significant evolution of the MAS program towards its present-day policy and management focus on competition, transparency, and best value at the task order level, set forth below is a chronology of the strategic and operational enhancements that have been implemented since the mid-1990’s.
The 1990’s – Pro Competition Advances
- Mandatory to Non-mandatory: Up until the mid-1990’s, the MAS program was a mandatory source for federal agencies, essentially serving as governmentwide requirements contracts. GSA modified MAS contract terms, and the Federal Acquisition Regulation (FAR) followed suit, making the MAS a non-mandatory use source. The policy goal was to establish a wholly competitive marketplace whereby customer agencies could utilize other sources if the MAS program could did not meet their needs. Since this change the MAS program has grown in customer usage and its ability to meet the unique missions of GSA’s customer agencies.
- Continuous Open Seasons: GSA expanded the timeframe for submitting new offers from 1-2 months, with a closing date for receipt (the original open season) each year, to a continuous open season model with no closing date, allowing for the submission of offers every business day of the year. Continuous open seasons eliminated a barrier to entry into the market, providing agencies ongoing access to offerings from the commercial market, and in so doing, incented small business participation, competition, and innovation. This change resulted in a significant increase in the number of contractors, including all socio-economic categories.
- Evergreen: In conjunction with continuous open seasons, GSA also modified the term of MAS contracts, allowing for a five-year base year with three five-year options. Prior to this change, MAS contracts in most cases had a one-year base term with a set of one-year option periods, for a total contract term of up to five years. This change increased contract coverage for customer agency usage.
- Streamlined Ordering Procedures (Best Value): FAR 8.4 was amended to streamline the ordering procedures allowing for competitive comparisons and pricing flexibility for contractors responding to customer agency order quantities/requirements. The revised regulations also allowed for best value trade-off decisions for orders, listing a set of factors agencies could consider when conducting trade-off analysis for order selection. The update to FAR 8.4 significantly decreased the number of separate, repetitive RFPs. It also reduced procurement cycle time from an average of 260 days to an average of approximately 30 days.
- Price discounts at the order level: The ordering procedures and underlying contract terms (Price Reduction Clause) also were modified to allow MAS contractors to offer price reductions/discounts from their MAS contract-level pricing in response to customer agency order level requirements. The revised ordering procedures and contract terms created a competitive, order-level market where none existed previously. This change prompted higher task order discounting and increased competition.
- Blanket Purchase Agreements: The revised ordering procedures and contract terms also authorized customer agencies to establish Blanket Purchase Agreements (BPAs) at the order level for recurring requirements. This new flexibility allowed agencies to leverage recurring requirements to enhance competition, pricing, and value at the order level. The establishment of BPAs significantly streamlined ordering time for recurring requirements.
- Services and solutions: The scope of the MAS contracts expanded to include commercial services and solutions, including professional services. As part of this expansion, GSA established services ordering procedures that included notice and competition requirements for customer agencies seeking quotes in response to services statements of work. This change in scope led to an increased ability for the MAS to meet customers’ agency requirements. Services now represent over 60% of MAS sales.
- GSA Advantage: GSA launched GSA Advantage, an electronic catalog hosting MAS contract items, including associated pricing, delivery terms, and product descriptions. GSA Advantage provided a new, transparent channel for customer agencies conducting market research in advance of order placement. Not only is GSA Advantage a key market research tool, but it also provides customer agencies with the ability to place orders directly with MAS contractors. The launch of GSA Advantage was the first Government e-commerce system which continues to grow every year.
- eBuy: GSA launched eBuy, an electronic Request for Quote (RFQ) tool. eBuy provides customer agencies with the ability to post RFQs seeking quotes from MAS contractors. In turn, MAS contractors can view the RFQ posting and respond directly to customer agencies with their quotes. This change increased transparency and significantly streamlined large agency requirements.
The 2000’s – Solidifying Advances in Competition
- Task/Delivery Order Competition: Congress passed legislation mandating certain competitive notice requirements for the placement of orders under the MAS program. These competition requirements were incorporated in FAR 8.4 as a comprehensive update to the MAS ordering procedures. Among the key requirements, customer agencies must provide notice and an opportunity to compete for all MAS contractors for task orders exceeding the simplified acquisition threshold or, alternatively, notice can be provided to less than all MAS contractors so long as it is provided to as many such contractors as practicable to reasonably ensure receipt of at least three offers. These competition requirements promoted acquisition transparency.
- eBuy: The comprehensive re-write of the order procedures specifically cited eBuy as a method for providing notice to all MAS contractors for purposes of task order competition. Providing notice through eBuy further increased the transparency of agency requirements.
- Blanket Purchase Agreements: The comprehensive re-write also addressed competition and notice for BPAs. This continued regulatory support for MAS BPAs transformed competition, pricing, best value at the order level. Today BPAs account for approximately half the dollar volume under the MAS program, close to $20 billion of the $40 billion in annual purchases through the program. This change significantly increased BPA competition under the MAS.
- Small Business Set-asides: Congress authorized small business set-asides at the order level, allowing customer agencies to focus market research and subsequent RFQs on small business MAS contractors. In turn, customer agencies receive credit towards their socio-economic goals for orders placed with small businesses. The authorization of set-asides at the order level promotes small businesses while enhancing agency customer access to the commercial market. The positive impact is clear: through focused competition among small businesses, the MAS program consistently exceeds 30 percent of annual purchases/spend going to small businesses. The authorization of small business set-asides increased opportunities for small business contractors.
- Order Level Materials: GSA implemented Order Level Materials (OLMs), providing MAS contractors the ability to include ancillary items as part of a total service solution in response to customer agency statements of work. OLMs enhance competition and increase efficiency by providing flexibility to include miscellaneous, non-contract items as part of an overall best value solution to meet customer requirements. The availability of OLMs streamlined buying solutions for customer agencies.
- Schedules Consolidation: Over the last four years, GSA worked with MAS contractors to consolidate their MAS contracts, eliminating unnecessary barriers to entry. Consolidating MAS schedules eliminated unnecessary, duplicative paperwork for contractors and GSA. It also promoted transparency and competition for customer agencies, reducing complexity and enhancing market research opportunities. The consolidation of the MAS enables users to have access to industry’s full line of services and products under one MAS contract.
These MAS advances/enhancements have been built upon each other, resulting in a program that is structured to deliver best value commercial services, solutions, and products through transparent competition for BPAs, task orders, and delivery orders. The updated MAS contract structures, regulations, systems, practices have created a dynamic, competitive MAS marketplace. The changes are important because customer agencies care about competition and value at the order level. Competition has driven the growth of the program. In the early 1990s, before GSA began its journey towards MAS competition, transparency and best value, the MAS program accounted for approximately $3 billion in annual purchases. In FY22, the MAS program accounted for approximately $40 billion in purchases by customer agencies. The significant growth in the program reflects the value customer agencies and MAS contractors place in flexibility, transparency, competition, and best value at the order level.
In sum, TDR responds to, and reflects, this reality. It focuses on transactions at the order level, the most relevant, actionable data for GSA, customer agencies, and MAS contractors. Although the PRC once served a predominant purpose, today, to a large extent, it simply is disconnected from the program. For this reason, GSA is correct to expand TDR as an option across the entire program to support category management, enhance competition, and deliver best value.