This week the President issued an Executive Order (EO) entitled “Streamlining Service Delivery and Improving Customer Service.” The EO calls on agencies to develop a Customer Service Plan to address the delivery of services to the public customer. Reading it got me thinking about the General Services Administration’s (GSA’s) Federal Supply Schedule (FSS) program and its “customers.” GSA’s direct customers are the agencies that utilize the FSS and the FSS contractors. GSA is doing a great job in training and outreach to government and industry regarding its programs. It is also doing groundbreaking work in sustainability and improving its IT systems. However, there is an opportunity to make fundamental improvements in the FSS program that would increase its value to government and industry.
Creating a more efficient and effective FSS program for customer agencies and contractors will benefit the ultimate customer, the American taxpayer. So here we go again. This may sound like a broken record (I am too old to know the digital term for “broken record”) but here are the fundamentals of a Customer Service Plan for the GSA Schedule program.
Provide an accountable yet flexible contract structure for the inclusion of materials and other direct costs (ODCs) on GSA schedule contracts. Agencies are seeking “Total Solutions” for their service requirements. These solutions typically include materials and ODCs. The inability to acquire these items on task orders limits the ability to compete requirements under the FSS. It leads to unnecessary and costly contract duplication as agencies seek other more flexible contracts—which in turn increases administrative procurement costs for both government and industry.
Talk to customer agencies and revise the current FAR 8.4 rewrite to provide greater flexibility for FSS Blanket Purchase Agreements (BPAs). The FAR 8.4 interim rule unnecessarily limits an agency’s discretion in establishing single award BPAs. The interim rule essentially applies the FAR 16.5 analytical framework for the creation of multiple award indefinite quantity indefinite delivery contracts to FSS BPAs. They are not one and the same. Compounding this issue are the rules for orders under multiple award BPAs. The rules may actually undermine some very successful agency purchasing programs that are based on FSS BPAs. For example, DoD’s Enterprise Software Initiative (ESI) has saved DoD hundreds of millions, if not billions, of dollars, utilizing a family of FSS BPAs. ESI has an effective framework for placing orders by DoD activities that could be compromised by the new rule. The VA also utilizes BPAs to achieve additional discounts for drugs supplied by its schedule contractors. These VA BPAs are also utilized by DoD to support its healthcare programs—it is a significant question as to whether these BPAs can continue to operate as structured.
Reform the Price Reduction Clause (PRC). The FAR 8.4 interim rule implementing the Section 863 competition requirements for FSS orders has created a confounding situation. The current FSS framework requires enhanced competition for government orders while restricting a company’s ability to compete for commercial, nongovernment work. Under the new FAR 8.4 agencies must compete and request price reductions for orders exceeding $150,000. The ordering rules drive additional discounts for FSS orders. However, contractors have significant disincentive from offering discounts to commercial customers. Non-government commercial price reductions can create PRC violations or otherwise lead to FSS contract price reductions that may last up to 20 years. As such, the PRC essentially limits competition, opportunity and growth in the commercial marketplace. This is troubling when you stop and realize that there are over 12,000 FSS contractors employing hundreds of thousands if not millions of Americans. It is also ironic—isn’t FSS about relying on the commercial market—not discouraging it?
So there you have it—the fundamentals of a FSS Customer Service Plan. Do you have suggestions for GSA?