On February 9, 2011, the FAR Council, OMB’s Office of Information and Regulatory Affairs (OIRA), and the Office of Federal Procurement Policy (OFPP) held a meeting to establish a framework for improving the procurement rule making process. It was referred to as a “slam”—a meeting where the participants commit to sitting down and working through issues until they are resolved no matter how long it takes. Administrator Martha Johnson has held other “slams” at GSA. One was focused on FAS’s challenges in recruiting and hiring. The result was a successful hiring initiative that brought in a host of new hires for FAS’s procurement operations.
The Coalition lauds the Administrator, the FAR Council, OIRA and OFPP for tackling the rule making process. It will not be easy. By its very nature, rule making is a deliberative process that takes time. However, based on statements coming out of the “slam,” a sound framework was established for addressing unnecessary delays in the process. In particular, improved communication across the agencies and between management teams will be vital in creating a more efficient and effective process. Another key will be including counsel early in the process. My government experience taught me that including counsel early in any rule making or procurement process saves time and money—the key issues can be identified and thoughtfully addressed on the front end rather than delayed and then reworked on the back end.
So how does the rule making “slam” relate to a “grand slam for schedules?” Well, I confess that I love the “slam” management tool and would like to express my support for the rule making “slam.” There are at least four fundamental changes that would be a “grand slam” for the schedules program and take it to the next level. These four are as follows:
• Cooperative purchasing. State and local governments are under significant budgetary pressure. Allowing state and local governments to purchase from schedule contracts would save them time and money. It would be a real benefit to state and local governments and their taxpayers. It would create competition and more opportunity for schedule contractors. Of course, Congress must act to authorize cooperative purchasing. One caveat, there may be unique circumstances where cooperative purchasing may not be appropriate for a particular schedule. As such, flexibility should be included in any new law authorizing cooperative purchasing. 13
• Reform of the price reduction clause. With the impending FAR implementation of Section 863 of the 2009 National Defense Authorization Act, the “Section 803” competitive ordering procedures that currently apply to DoD’s use of the schedules program will apply government-wide. As a result, notice and opportunity to compete must be provided for all orders over $150,000 to all contractors capable of meeting the requirement or as many as practicable to reasonably ensure receipt of at least three offerors. Given the mandate for competition at the order level, the current Price Reduction Clause is no longer relevant. It increases industry and government oversight costs when pricing is being driven by competition at the order level. The compliance infrastructure costs especially hurt small businesses.
• Reinvigorate the “Corporate” or “Consolidated” schedule contract program. There are over 18,000 schedule contracts. Many contractors have multiple contracts under a single schedule. Many contractors are closing in on the 20th year of their contracts and are starting to think about submitting new offerors. Reinvigorating the “Consolidated” schedule approach would save GSA and industry contract administration costs. Companies could manage a single schedule contract rather that multiple contracts thereby reducing costs. In turn, GSA could reduce the duplication of contract oversight and administration costs. It is a win-win. It also is a green initiative—consolidation should reduce paperwork and computer processing time.
• And, of course, as discussed in the February 4th Friday Flash, address Other Direct Costs.
Addressing these four issues would be a “grand slam.” Of course the first is dependent on Congressional action, but it’s time for the other three to be “slammed.”
