As you know, The Coalition for Government Procurement held its 2013 Spring Training Conference, “Continuing the Dialogue, Strategic Acquisition: An Opportunity for Federal Efficiency and Commercial Business” this week. I have been gratified by the positive feedback we have received from attendees regarding the quality of the event. The positive and informative conversations among the procurement community at the Spring Training Conference validate the importance of “continuing the dialogue” regarding procurement policies, procedures, and opportunities across the federal enterprise.
Communication between and among government and industry professionals is vital to ensuring our procurement system delivers best value outcomes for customer agencies, the taxpayers and the private sector. Communication fosters understanding between government and industry that better informs decision making for everyone.
The Coalition thanks Joe Jordan, Administrator for Federal Procurement Policy; Shay Assad, Director of Pricing, Defense Procurement and Acquisition Policy; Tom Sharpe, FAS Commissioner; Iris Cooper, Executive Director, Office of Acquisition Operation, Department of Veterans Affairs; Elliot Branch, Deputy Assistant Secretary, Department of the Navy; and Michael Smith, Director of Strategic Sourcing Programs, Department of Homeland Security for participating in the Spring Training Conference. The Coalition extends our thanks to all our speakers:
Ray Bjorklund, President, BirchGrove Consulting LLP
Jon Etherton, President, Etherton and Associates, Inc.
Cameron Leuthy, Analyst, Bloomberg Government
Joe Jordan, Administrator, Office of Federal Procurement Policy
Elliott Branch, Deputy Assistant Secretary, US Department of the Navy
Michael Smith, Director of Strategic Sourcing Program Office – DHS
Iris Cooper, Executive Director, Office of Acquisition Operation, US Department of Veterans Affairs
Tom Sharpe, FAS Commissioner, General Services Administration
Jonathan Aronie, Partner, Sheppard Mullin Richter & Howe, LLP
David Dowd, Partner, Mayer Brown
Jack Horan, Partner, McKenna Long & Aldridge
Shay D. Assad, Director of Defense Pricing, Defense Procurement and Acquisition Policy
Robert Namejko, DHS Industry Liaison – DHS
Jose Arrieta, DHS Procurement Ombudsman – DHS
Jeff Koses, Director of Acquisition Operations – GSA
Mark Lee, Policy Branch Chief, MAS Program Office – GSA
Kay Ely, Director, IT Schedule Programs – GSA
Mark Day, Director, Office of Strategic Programs – GSA
Robert Coen, Acting Program Director, CIO-SP3, CIO-SP3 Small Business and ECS III GWAC Program, NITAAC
Alexandra Rouse, Program Manager for FSSI MRO – GSA
Jim Ghiloni, Director of the OASIS Program Management Office – GSA
Joanne Woytek, Program Manager, SEWP – NASA
Michael Canales, Senior Procurement Analyst – Defense Procurement and Acquisition Policy
Thank you to everyone who attended the Spring Training Conference. The Coalition truly appreciates your participation! We will continue to work harder than ever to deliver value to our membership and the procurement community as a whole! With that in mind, attendees have received a survey on the conference—please take the time to provide us with your feedback on the event. Remember communication is the key to understanding and best value!
Thank you to the members who moderated the breakout sessions. Finally, thank you to my staff! Aubrey, Athena, Roy, Denise, Sandy and Rob—great job! You guys are the best! A special thank you to Carolyn Alston for her tireless work in successfully pulling together and coordinating the agenda!
We look forward to seeing you all at the GSA Business Roundtable on May 22nd.
Thank you to all our Spring Conference Sponsors and Coalition Keystone Members!
Strategic Acquisition— An Opportunity for Federal Efficiency and Commercial Business, our 2013 Spring Training Conference, could not have been possible without the support of our Sponsors. Attendees engaged in a government-industry “Myth-busters” dialogue with acquisition leadership from the Department of Defense, Department of Veterans Affairs, General Services Administration and others about key procurement issues that impact members’ government business. Sponsorship of this event demonstrated your support of a quality training of acquisition professionals in both the public and private sectors and robust communication between government and industry with the goal of acquisition excellence.
Join your industry peers and receive this heightened exposure by becoming a sponsor for a future event! If you would like to explore sponsorship opportunities for other events, please contact Athena Oliff at aoliff@thecgp.org or 202-315-1052.
A Special Thank You to our Keystone Members!
Strategic Acquisition Insights from Spring Conference
At this year’s Spring Training Conference, members had the opportunity to dialogue with senior government acquisition leaders about the current approach to “Strategic Acquisition”— from OASIS to Schedules Modernization, the Federal Strategic Sourcing Initiative, Homeland Security’s Strategic Plan, to the Defense Department’s Better Buying Power 2.0.
As Elliott Branch, Deputy Assistant Secretary of the Navy explained, there is an opportunity for the government to take advantage of the budget crisis by having a conversation about priorities. Based on discussions from the conference, there is no one size fits all approach that Federal agencies are taking to reduce spending while meeting their missions. The Department of Homeland Security, for example, has outlined its own procurement priorities through a targeted strategic plan focusing on Quality Contracting, Quality People, Quality Program Support and Quality Industry-Government Communication. GSA’s Federal Acquisition Service (FAS) is also identifying new priorities under the leadership of FAS Commissioner Tom Sharpe. Sharpe is emphasizing improved supplier satisfaction and increased customer savings as two of his top objectives. Restructuring FAS around strategic sourcing is one way that GSA is looking to meet the needs of customer agencies in the current budget environment.
Government acquisition leaders at the conference were also open to addressing requirements that add to costs without added value to agency customers. Unique terms and conditions were discussed as one area in which more standardization could lead to reduced costs for both government and industry. Administrator of the Office of Federal Procurement Policy, Joe Jordan, described commercial software as an important area to look into to see whether unique terms and conditions may unnecessarily add to costs for the government. Director of Defense Pricing, Shay Assad, also expressed interest in hearing from Coalition members about changes in requirements that could lead to savings for the Department of Defense. The Coalition will be providing Shay Assad with this feedback as a follow-up to the conference.
Join the GSA Business Round Table, May 22
Join The Coalition for Government Procurement for a roundtable discussion of the General Services Administration’s $60 billion+ contracting portfolio. GSA oversees the business of the U.S. federal government and provides workplaces for federal employees. GSA’s recently revised mission statement and how those changes will affect GSA customers and your contract will be the focus of the event.
For more information and to register, click here.
Public Buildings Investments in President’s FY 2014 Budget
This week, GSA Acting Administrator Dan Tangherlini highlighted major investments in Federal buildings included in the President’s Budget for FY 2014. These investments are focused on three areas: 1) Investing in our Nation’s Public Buildings, 2) Making Federal Real Estate Smaller and More Efficient, 3) Investing in Border Infrastructure and Modernization.
According to GSA, their Federal buildings portfolio has forgone over $4 billion in capital improvements in past years including major repairs and maintenance. The President’s FY 2014 budget addresses this matter by restoring GSA’s authority to use incoming rent funds to meet the needs of the agency’s buildings portfolio. The budget calls for $1.3 billion in repair and maintenance, including $379 million in basic repairs.
GSA is also committed to making Federal real estate smaller and more efficient. The President’s budget includes $100 million to consolidate agencies within existing owned space in order to improve space utilization, decrease leased space, and achieve certain sustainability priorities such as increased energy and water efficiency.
Finally, the budget provides $287 million to improve border protection at two specific locations- the San Ysidro Port of Entry in Southern California and the U.S. Land Port of Entry at the Port of Laredo in Laredo, Texas.
In a GSA press release, Tangherlini highlighted the importance of these proposed investments. He said, “by investing in our public buildings, a smaller federal footprint and improved border crossing stations, GSA will not only create savings for the American people, but also assist in providing them with the most efficient and effective government possible.”
Changes Coming to GSA Interact
On Thursday, the General Services Administration (GSA) announced that in the next few days vendors will be seeing a number of significant enhancements to GSA Interact. According to GSA, “These enhancements are being made in parallel with a necessary move to the next generation of the underlying Drupal software.” The GSA Interact Team also noted that the core of the platform’s collaborative elements will remain much the same including, “the blogging, wiki, discussions, document sharing, polling and other social functionality.” GSA encourages vendors to review the links above including a slidedeck that explains the new features further.
GAO Recommendations for Acquisition Workforce Training
The Government Accountability Office (GAO) released a report on the acquisition workforce. In the report entitled, “Federal Agencies Obtain Training to Meet Requirements, but Have Limited Insight into Costs and Benefits of Training Investment,” the GAO identified the role of Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Institute (FAI) in helping agencies meet requirements, agencies’ approaches to providing training, and how agencies assess and evaluate their acquisition training. In completing the report, the GAO analyzed relevant legislation, and submitted a questionnaire to 23 federal agencies, 4 of which were to provide illustrative examples.
The GAO found that “to support efforts for the acquisition workforce to attain and maintain federal certification requirements, most agencies (17 of 23) provide the majority of their acquisition training using external sources—vendors, the FAI, the Defense Acquisition University (DAU), or other agencies.” It also noted that the Departments of Homeland Security, the Treasury, and Veterans Affairs operate their own permanent centers with dedicated resources that train the agency’s acquisition workforce. Twenty of 23 agencies identified obtaining adequate funding and 19 of 23 identified obtaining sufficient staff to manage training as challenging. Additionally, “identifying the acquisition workforce is a challenge especially when members of the workforce are involved in acquisitions as a secondary and not primary duty.” The GAO also found that training cost data that agencies collect is “not comparable and agencies have limited information on the benefits of their acquisition workforce training investments.”
GAO recommends that OFPP help ensure that agencies collect and report comparable cost data and assess the benefits of acquisition training by providing further guidance and requiring agencies to analyze course evaluations.
CIO Council Launches IT Catalog
On Tuesday, the Federal Government’s Chief Information Officers Council published a catalog of shared services with the aim of helping agencies to save money on IT services. Along with the catalog, the council released guidance on how agencies can determine which services should be shared and which other agencies they should source the service from. According to NextGov, both projects involve building a multi-disciplinary team of officials who use the service and performing a cost-benefit analysis of shifting to a shared version of the service. The guidance notes that agencies may identify opportunities for shared services during regular reviews and assessments.
Let’s Just Pretend the FAR Change Didn’t Happen
By Phil Seckman, Partner, McKenna Long & Aldridge LLP
The Federal Circuit’s recent decision in Sharp Electronics Corporation addresses a quandary familiar to federal supply schedule contractors regarding the proper contracting officer (CO) to whom the contractor must direct its contract claims to ensure jurisdiction. Sharp Corporation v. McHugh, 2013 WL 646330 (Fed. Cir. 2013). The Federal Circuit’s decision relates to a 2002 change to the Federal Acquisition Regulation (FAR) and seeks to provide contractors with certainty by announcing a so-called bright-line rule for interpreting the meaning of the disputes provision for schedule contracts. Despite the Federal Circuit’s intentions, ambiguities remain.
Prior to the 2002 FAR change, the FAR provided that “[t]he ordering office shall refer all unresolved disputes under orders to the schedule contracting officer for action under the Disputes clause of the contract.” 48 C.F.R. § 8.405-7 (2000). Because only the GSA CO had authority under the Disputes clause, it was clear before the FAR change that any contractor claim relating to an order placed under a schedule contract must be submitted to the GSA CO to ensure jurisdiction under the Contract Disputes Act (CDA). The FAR also made it clear that the ordering office was to refer any unresolved contractor claims to the GSA CO.
Then, on June 27, 2002, the FAR was amended to incorporate new policies for disputes in schedule contracts. 67 Fed. Reg. 43,514 (the final rule was effective on July 29, 2002). As the FAR councils noted when publishing the proposed rule, the change was being made to “permit the ordering office contracting officer to issue a final decision regarding disputes pertaining solely to performance of schedule orders.” 65 Fed. Reg. 79,702 (Dec. 19, 2000).
The revised regulation provides:
(a) Disputes pertaining to the performance of orders under a schedule contract. (1) Under the Disputes clause of the schedule contract, the ordering activity contracting officer may —
(i) Issue final decisions on disputes arising from performance of the order (but see paragraph (b) of this section); or
(ii) Refer the dispute to the schedule contracting officer.
(2) The ordering activity contracting officer shall notify the schedule contracting officer promptly of any final decision.
(b) Disputes pertaining to the terms and conditions of schedule contracts. The ordering activity contracting officer shall refer all disputes that relate to the contract terms and conditions to the schedule contracting officer for resolution under the Disputes clause of the contract and notify the schedule contractor of the referral.
(c) Appeals. Contractors may appeal final decisions to either the Board of Contract Appeals servicing the agency that issued the final decision or the U.S. Court of Federal Claims….
48 C.F.R. § 8.406-6 (2004) (the text from the 2002 FAR amendment was renumbered in 2004).
The plain language of this regulation establishes that when a contractor submits a claim to an ordering activity CO, it is that CO’s responsibility to determine whether a dispute relates solely to the performance of an order or, instead, pertains to the terms and conditions of the schedule contract. Thus, one might have read the regulation to mean that a contractor could submit a claim to either the ordering activity CO or the GSA CO. Then, the government would determine which CO possessed authority to issue a final decision.
While such an interpretation is certainly logical and reasonable, it is wrong. The Federal Circuit’s decision makes it clear that it is the schedule contractor, and not the CO, that is responsible for determining to whom its claims must be submitted. Failure to identify the correct CO may result in the dismissal of an appeal for lack of CDA jurisdiction. Choosing the appropriate CO is made all the more critical where a schedule contractor is nearing the CDA six-year statute of limitations.
The Sharp Electronics case involved a contractor’s certified claim requesting fees under the termination provisions of an Army order placed against a schedule contract. The contractor submitted its claim to the Army CO. Critically, the Army CO disregarded the clear responsibility under FAR 8.406-6 and ignored the claim. Thus, the 60-day CDA decision period elapsed and — in the contractor’s view — resulted in a “deemed denial.”
The contractor then appealed to the Armed Services Board of Contract Appeals (ASBCA). Sharp Elecs. Corp., ASBCA No. 57583, 12-1 B.C.A. 34,903. Both the contractor and the government believed that their dispute should be decided by the ordering agency CO. Both parties believed the dispute was based on the order contract performance and not the terms of the schedule contract. In fact, neither party raised the jurisdictional issue. The ASBCA raised the issue on its own.
The ASBCA then held that it lacked jurisdiction over the appeal because the dispute did require the interpretation of the schedule contract and, therefore, only could have been decided by the GSA CO. The contractor’s decision to submit the claim to the Army CO, combined with that CO’s failure to forward the claim, meant there had been no properly submitted claim under the CDA and, therefore, no “deemed denial” from which to appeal. Id. The fact that the regulation clearly places the responsibility upon the ordering activity CO to make a determination regarding his/her own authority to resolve the dispute and then to forward claims to the GSA schedule CO when the dispute pertains to the terms and conditions of the schedule contract did not alter the outcome.
In a split decision, the Federal Circuit affirmed the ASBCA decision finding that under FAR 8.406-6 the ordering agency CO did not have the authority to make a determination regarding the contractor’s claim because the dispute involved, at least in part, interpretation of the terms of the schedule contract. The Federal Circuit’s decision announces a so-called bright-line rule that “all disputes requiring interpretation of the schedule contract go to the [GSA] schedule CO, even if those disputes also require interpretation of the order, or involve issues of performance under the order.” See Sharp Elec., supra at *6
The Federal Circuit, in highlighting the bright-line, attempts to address the jurisdictional uncertainty under FAR 8.406-6 created by the 2002 rulemaking. As noted by the dissent, however, the Court has succeeded in, effectively, reinstituting the prior rule that all disputes relating to schedule contracts should be submitted to the GSA CO. In other words, when in doubt, contractors must submit claims to the GSA CO.
Perhaps being defensive regarding the dissent’s objections, the Court noted that under a schedule contract an ordering agency CO remains authorized to make final determinations regarding performance, the terms of an order or its modifications “as long as the dispute does not involve interpretation of the schedule contract.” The Court also states that an ordering agency CO may resolve a dispute by “applying the relevant provisions of the schedule contract “as long as their meaning is undisputed.”
Despite these statements, however, the actual effect of this holding, as the dissent properly points out, will be that most contract disputes under schedule contracts will be submitted to the GSA CO and not the ordering agency CO. Indeed, many disputes can be characterized as requiring interpretation of the schedule contract. Thus, contractors that submit claims to ordering activity COs who are inclined to disregard the claim, as did the Army CO in the Sharp case, run the risk that what seems to be a “deemed denial” is, in reality, a nullity under the CDA.
For these reasons, prudent schedule contractors will submit claims to GSA COs. GSA COs, however, typically have very little, if any, knowledge regarding the facts of a dispute that primarily relates to performance under an order and only tangentially requires the interpretation of the schedule contract. This could lead to increased denials or deemed denials of contractor claims. Nevertheless, after this decision, if a dispute may pertain to interpretation of a schedule contract terms and provisions, a schedule contractor, particularly one with a potential statute of limitations issue, will be wise to submit its certified claim to the GSA CO or risk a similar outcome.
On Tuesday, the House passed legislation aimed at strengthening the government’s network, attempting to build on the Federal Information Security Management Act (FISMA) of 2002. According to ASI Government, “the bill would establish a mechanism for stronger oversight through a focus on automated and continuous monitoring of cybersecurity threats and implementation of regular threat assessments.” Also, it would give the Office of Management and Budget responsibility for overseeing Federal Cybersecurity, and requires agencies to comply with the National Institute of Standards and Technology (NIST) security standards and develop and implement security programs under the chief information officer (CIO). Other portions of the bill require agencies to evaluate information security controls and techniques, conduct threat assessments by monitoring information systems, and report security incidents that extend beyond the control of an agency through an automated and continuous monitoring capability to the Federal Information Security Incident Center.
Contractor Tax Accountability Act
On Monday, the House approved legislation to bar federal funding for contractors who do not pay their taxes. According to ASI Government, “while the Federal Acquisition Regulation currently requires contractors to certify that they are not delinquent on their taxes, the Contracting and Tax Accountability Act (H.R. 882) would codify that regulation and aims to provide agencies with a means to verify a contractor’s certification.” Chairman of the House Oversight and Government Reform Committee Darrell Issa (R-CA) said, “The bill makes tax compliance both a prerequisite for receiving a contract or being an agent and . . . recognizes that those who do not make good on their taxes may, in fact, be seen as eligible for potential suspension or debarment.”
Join Baker Tilly government contractor advisors on April 25 at 12:30 pm as they discuss the benefits of completing a broad GSA Schedule Compliance Assessment, conducting a historical pricing and updating GSA pricing disclosures.Many contractors don’t fully understand the disclosures that form the basis for the negotiated prices on their GSA Schedule contracts, but a company’s failure to keep those disclosures current may expose it to audit risk and financial liability when the Office of Inspector General (OIG) comes knocking. All contractors, regardless of size, should be prepared for the eventuality of an audit. When the time comes to exercise the option to extend a contractor’s GSA Schedule contract, they should take the opportunity to confirm that their practices are properly disclosed and that they have an effective compliance program in place. Registration and more information!>>
Post Award Pricing Compliance Webinar
Join The Coalition and experts from Berkeley Research Group on May 21 at 12:30 pm for a discussion regarding the systems, processes and controls necessary to comply with the requirements of the PRC and other post-award pricing considerations. The presentation will provide an overview of the requirements of the PRC and common misconceptions related to the clause. In addition, we will share best practices and strategies for minimizing PRC and other pricing compliance risks. Finally, we will discuss processes, controls, roles and responsibilities typically found in effective PRC monitoring systems. Perhaps the most debated and lamented post-award pricing requirement in a GSA and VA schedule contract is the Price Reduction Clause (PRC). Despite being cited as the basis for a number of infamous civil False Claims Act settlements involving GSA and VA Schedule contracts, there is very little information available in the public domain in the form of case law, audit guidance or best practices pertaining to compliance with the clause. Registration and more information!>>
CLE Credits for In-House Counsel Training!
Continuing Legal Education (CLE) credits are now available for the Coalition’s General Services Administration (GSA) Schedule Contracting for In-House Counsel training scheduled for June 27, 2013. Attendees can earn 6 CLEs for the course with the Virginia State Bar.
GSA Schedule Contracting for In-House Counsel Training
June 27, 2013 8:00 am
McKenna Long & Aldridge LLP
1900 K St NW
Washington, DC
About the course:
This GSA Schedule Contracting for In-House Counsel training will provide information and tools to help you understand the GSA/VA Schedule contracting program and provide insightful legal advice to your in-house client.
The GSA Schedule, including the delegated VA Schedules, is a $50 billion contracting program that all federal agencies use to acquire commercial services and products. These multiple year, government-wide contracts cover professional services, information technology, pharmaceuticals, medical equipment and a vast array of commercial products.
Schedule contracts offer a huge market opportunity. Thousands of companies including both Fortune 500 companies and a vast number of small businesses have GSA/VA Schedule contracts. All federal agencies, and in some instances state agencies, can place orders against the contracts.
Of particular interest to in-house counsel, Schedule contracts have a pricing methodology, and disclosure requirements that are unique in federal government contracting. The contracts provisions must be correctly understood, managed and monitored to assure that your company realizes anticipated profits. Failure to do so can result in significant monetary, administrative, civil and even criminal penalties.