Comment of the Week: Post-it Note Update!
At last week’s GSA Business Roundtable, GSA leaders and Coalition members participated in a Myth-Busters Discussion exercise to “brainstorm” ideas in support of GSA Acting Administrator Dan Tangherlini’s new mission statement and six priorities. To foster dialogue and engagement, the mission statement, six priorities and post-it notes were provided to each table. Attendees were instructed to write down any ideas/recommendations/suggestions and then “post” them in the appropriate areas around the meeting room for review by all in attendance.
There were 177 post-it note ideas, recommendations and/or comments regarding GSA’s six priorities. Priority 1, Delivering Better Value and Savings (59 post-its) and Priority 2, Serving Our Partners (48 post-its) totaled well over half of the recommendations received. Among the themes were:
- Address/improve communication (i.e. messaging/marketing) to customer agencies and contractors regarding GSA’s value proposition
- Lower total acquisition cost (TAC) through streamlining the cycle time for offers and modifications, modernizing the pricing policies and improving ease of use at the task order level
- Educate customer agencies regarding small business set-asides at the task order level and the potential impact of the rules on small businesses
- Maintain continuous open season to enhance small business participation and access to innovative solutions and new products
- Implement “Other Direct Costs”
Coming out of the Roundtable, the Coalition promised to catalog the post-it notes and provide them to all the participants. A listing of the 177 post-it note ideas can be found here. The post-it note listing has been provided to GSA.
The output from the Myth-Busters Discussion exercise provides GSA and its industry partners with timely insight on key challenges and opportunities surrounding GSA’s government-wide contracting programs. These insights are especially timely considering the budget challenges facing the federal government and the corresponding role GSA can play in delivering best value solutions to meet customer agency missions while saving the taxpayer’s money.
On May 29th, Sylvia M. Burwell, Director of the Office of Management and Budget (OMB), issued a “Memorandum for the Heads of Departments and Agencies” outlining the “Fiscal Year 2015 Budget Guidance.” The memorandum provides guidance on the FY 2015 budget submissions and instructs departments and agencies that budget submissions should reflect a 5 percent reduction below the net discretionary total provided for agencies for 2015 in the 2014 budget. The memorandum further instructs that the budget submission should also include additional reductions to bring the overall submission to a level 10 percent below the net discretionary total provided for agencies for 2015 in the 2014 budget. The memorandum continues, “To help meet these targets, all agencies should look for ways to reduce fragmentation, overlap, and duplication, and increase effectiveness.” Finally, the memorandum calls on agencies to provide an updated strategic plan along with the 2015 budget submission.
Reducing unnecessary, costly contract duplication can save time and money for the federal government, contractors and the American people. GSA, as the central procurement arm of the federal government, should play a leading role in reducing unnecessary, costly contract duplication. GSA’s Multiple Award Schedule (MAS) program, IT GWACs, Fleet program, real estate management and assisted services provide a framework for cost effective shared services support to customer agencies.
As GSA works on its strategic plan for OMB, the recommendations generated from the post-it note exercise will provide insight on key opportunities to improve mission execution across each of the priorities. In sum, the post-it notes represent the best of Myth-Busters, the result of a positive, engaging dialogue between GSA and its industry partners focusing on improving procurement outcomes for government customers, the American people and industry.
By the way, the GSA Business Roundtable demonstrates that taxpayers do benefit when government and industry have an open dialogue! Thank you to all who participated in the Roundtable!
Roger Waldron
President
DoD Service Contractor Reporting
This week, the Government Accountability Office (GAO) released a report on how well the Department of Defense (DoD) is tracking contracted services. DoD is required to compile and review an inventory of activities performed by service contractors to determine the number of contractor full-time equivalents (FTEs), the functions they are performing, and whether any of the functions performed by contractor FTEs should be converted to DoD civilian employees. The Department collects data on the number of service contractors performing “inherently governmental” functions, and whose work is closely associated with inherently governmental functions, among other things.
The GAO found that DoD’s data on contractor services is not adequate for the Department to make decisions about the acquisition of services, and the right workforce mix of military, civilian, and contractor personnel. DoD is in the process of developing a department-wide system to better collect this data from contractors. Defense officials estimate that this system will be available by 2014. However, GAO expressed concern in the report that the project will not be released on time due to security, funding, and technical issues that are delaying progress. Until the system is available, DoD (with the exception of the Army) will continue to rely on the Federal Procurement Data System-Next Generation for their contracted services reports.
Register for In-House Counsel Training, June 27
Registration is open for the Coalition’s General Services Administration (GSA) Schedule Contracting for In-House Counsel training on June 27, 2013. Attendees can earn 6 Continuing Legal Education credits (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.
Registration Open for Meeting with VA NAC
On June 20, The Coalition will hold a Myth-buster’s dialogue in Chicago with the Department of Veterans Affairs (VA) National Acquisition Center (NAC). The meeting is being hosted by the Healthcare Committee and is open to all Coalition members. It will provide members a chance to discuss contract and program topics with Craig Robinson, Associate Deputy Assistant Secretary of the VA NAC, Division Directors James Booth, Bob Satterfield and Greg Madden, as well as other Senior Contracting Officers. The list of topics we plan to address includes:
- NAC priorities and goals for the program
- Strategic Sourcing and the VA Schedules
- Timeliness of processing contract actions
- Use of reverse auctions
A draft agenda of the meeting is available here. If you would like to attend, please RSVP to rdicharry@thecgp.org.
OMB Releases FY2015 Budget Guidance
The Office of Management and Budget (OMB) has directed Federal agencies to include reductions in their budget submissions for FY 2015. According to OMB’s Fiscal Year 2015 Budget Guidance released this week, budgets should be reduced by 5 to 10 percent compared to the net discretionary total provided for 2015 in the 2014 Budget. Agencies have also been directed to look for ways to reduce duplication and increase effectiveness to achieve savings. As part of ensuring that taxpayer dollars are being spent efficiently in support of agency missions, OMB is requiring that agencies update their strategic plans and explain how they plan to meet their priorities and measure progress towards their goals. Agencies should also map their 2015 Budget to their priorities outlined in the strategic plan. The deadline for agencies to submit draft strategic goals, objectives, and priorities to OMB is June 3, 2013.
Should We Protest? Recent Data from The Government Accountability Office Helps Answer the Question.
Many factors go into a decision of whether to protest after a contractor finds out it was not successful in winning an order or contract:
- Did the agency make a mistake?
- How strong is my evidence?
- Did the mistake affect the award decision?
- How much will a protest cost?
- Will a protest affect my relationship with the agency?
- If I win the protest, what remedy will the General Accountability Office (“GAO”) recommend?
For a contractor to make a reasoned decision on whether to protest, including a schedule contractor competing for commercial items sales, the contractor has to have some measure on the likelihood of success of a protest. Recent data and analysis provides valuable context on GAO protest decisions that will assist contractors in making this important decision. An annual report by the GAO, GAO Bid Protest Overview, GAO-13-404SP, Feb 20, 2013, authored by Ralph White, Managing Associate General Counsel, provides useful information on the results of bid protests over the past five years. An article written by Professor Dan Gordon, Associate Dean for Government Procurement Law Studies at The George Washington University Law School, digs a little deeper into GAO’s statistics, and looks at the number of protestors that actually win the contract after protesting.
According to GAO’s Bid Protest Overview, GAO closed 2,495 bid protest cases in 2012, issuing a decision in 570 cases, or approximately 23% of the closed cases. Of those cases that go to a decision, GAO sustained 106 protests, or approximately 18.6% of the 570 decisions. “Sustained” means the GAO agreed with the protestor that the government had made a material error in the procurement, and GAO recommended that the government take action to address its error.
GAO also calculated the success rate of protests, defined by GAO as when the protestor obtains “some form of relief from the agency, as reported to GAO, either as a result of voluntary agency corrective action or our Office sustaining the protest.” By this measure, protestors achieved success in 42% of the closed protests for that year. The 2012 success rate was representative of previous years, which ranged from 42% to 45% from 2008 to 2011. In short, protestors have done fairly well over the past five years according to the GAO’s view of success, achieving either a sustained protest or voluntary corrective action in at least 42% of the cases.
In his article, Bid Protests: The Costs Are Real, But the Benefits Outweigh Them, which will appear in the Spring 2013 issue of the Public Contract Law Journal, Professor Gordon digs a little deeper into GAO’s statistics, analyzing, among other issues, the percentage of protestors that received award of the contested contract after the protest. Reviewing the protests in 2010 that were sustained, Professor Gordon was able to determine the final results in 40 cases:
- nine contracts awarded to the protester;
- 18 contracts awarded to an offeror other than the protester;
- one case where the GAO granted the specific relief (other than contract award) requested by protestor;
- three procurements cancelled; and
- nine cases where the agency did not take corrective action.
Thus, of 27 cases that ended in the award of a contract, the protestor received the contract in nine cases, or one-third of the awards. In another case, the GAO recommended, and the government provided, the relief the protestor requested. Thus, in 25% of the 40 known results, the protestor received the final result it sought – nine contract awards and a tenth case where the protestor received the relief it sought. In addition, using a broader definition of “success,” protestors received award of the contract in nine of the 31 cases where the government took corrective action of some type (or 29% of the cases).
Professor Gordon did not attempt to extrapolate his findings based on known cases to the bulk of protests where results were not known. Others have attempted an extrapolation, at least one unsuccessfully and reaching inaccurate results. See Miller, Protests rarely result in U.S. contract reversals,study shows, Washington Post, March 11, 2013, available at http://goo.gl/iSb2o (concluding that less than one percent of protests filed in 2010 resulted in award to the contractor). A reasonable extrapolation of Professor Gordon’s analysis demonstrates that protestors have been successful even by Professor Gordon’s measure. See Papson, Carey and Meier, FEATURE COMMENT: The Odds Of Winning A Contract After Protesting Are Higher Than You Think, The Government Contractor, Vol 55, No. 16 (April 24, 2013). Applying the 29% success rate of award after corrective action from Professor Gordon’s data to the total number of protests in 2010, protestors won award of the contract after 12.2% of the total protests filed in 2010 (extrapolated). In light of such factors as the strength of the protest, the level of competition for the final award, and that the government deemed another offer to be the winner in the first instance, a success rate of approximately one in eight seems reasonable.
So, what is the takeaway from all of these numbers. By any measure, protests are successful. If the measure of success is ensuring that all offerors had a fair chance of award (my personal view), GAO statistics demonstrate that protests resulted in corrective action – specifically intended to make sure the rules of the procurement are fair and legal – at least 42% of the time in the last five years. By Professor Gordon’s more narrow measure – whether the protest resulted in the protestor obtaining the contract – more than 12% of protestors achieved success in 2010. Keep in mind that both of these results are based on all of the protests filed during the respective periods – some terrible, some very strong. With experience, or the assistance of an experienced protest lawyer, these numbers provide a useful benchmark for analyzing the likelihood of success of a specific protest evaluated on the merits.
Administration to Propose Compensation Cap
The Office of Federal Procurement Policy (OFPP) announced that the Administration will submit a legislative proposal next week to cap contractor compensation. According to a blog post by OFPP Administrator Joe Jordan, the proposed cap will be set at the salary of the President—$400,000. Next week’s proposal is the Administration’s latest attempt to limit contractor compensation, which has encountered resistance from Capitol Hill. Joe Jordan explains that the cap does not limit the salary of contractor employees, but limits the amount that the government will reimburse contractors under defense and civilian cost-reimbursement contracts. Some exceptions are expected in the White House proposal. According to Joe Jordan, it “provides for an exemption to the cap if, and only if, an agency determines such additional payment is necessary to ensure it has access to the specialized skills required to support mission requirements, such as for certain key scientists or engineers.” The Coalition will post the Administration’s proposal in the Friday Flash once it is released.
GSA: Reverse Auctions Next Step for IT
On July 1, GSA is expected to launch reverse auctions for commodity IT purchases. As expressed in a presentation acquired by Federal News Radio, “the goal of the reverse auction program is to make the buying of non-complex commodities and simple IT services more efficient and effective, drive down the total costs of acquisitions, streamline procurement time and increase savings.” The reverse auction program will reflect the lowest bid by using eBuy to run simple comparisons and rankings, amongst other factors. More information, including the aforementioned presentation by GSA’s National IT Commodity Program (NITCP), can be found in the latest “Inside the Reporter’s Notebook” by Federal News Radio’s Jason Miller.
Proposed Rule Requiring Electronic Credentials for the Submission of Modifications
On Tuesday, the General Services Administration (GSA) issued a proposed rule to amend the General Services Administration Acquisition Regulation (GSAR) to add a Modifications clause, and an Alternate I version of the clause that will require electronic submission of modifications under Federal Supply Schedule (FSS) contracts managed by GSA. The public reporting burdens associated with both the basic and Alternate I clauses are also being updated. All 19,000 FSS contractors (including 15,200 small businesses) will be required to obtain a digital certificate in order to comply with this requirement. The digital certificates will be valid for two years and cost $119 per issuance. The deadline for written comments is July 29, 2013.
GSA’s Associate Administrator of Governmentwide Policy, Kathleen Turco, is heading to the Veterans Health Administration (VHA) at the U.S. Department of Veterans Affairs. Federal News Radio reports that she will be VHA’s new Chief Financial Officer. For more details, visit www.federalnewsradio.com/217/3342636/GSAs-Turco-moving-to-VHA.
“General Dynamics Information Technology seeks an IDIQ Program Manager. The ideal candidate would have experience with Seaport-e. For immediate consideration, go to www.gdit.com/careers, click on “Job Opportunities” and enter “Job ID 211749”. General Dynamics Information Technology is an Equal Opportunity and Affirmative Action Employer.”
Flash Trivia
Last Week’s Winner: Will be announced in next week’s Friday Flash!
This Week’s Trivia: El Yunque, the only tropical rainforest in the US Parks System, is located in which US territory?
Please send your answer to Roy Dicharry at rdicharry@thecgp.org.