Contract duplication is one of the central strategic acquisition challenges facing the Federal Government and its contractors. Contract duplication (i.e. many contracts for the same and/or similar services and products across the federal enterprise) unnecessarily increases government and contractor administrative, bid and proposal, and other overhead costs. These unnecessary costs are ultimately borne by the American taxpayer. Duplicative contracts create confusion and uncertainty in the federal marketplace further increasing transactional costs for all. Significantly, contract duplication also robs the economy of productive employment as contract overhead costs increase at the expense of resources dedicated to direct performance of government requirements. Finally, the proliferation of contracts across the federal enterprise, rather than enhancing competition, actually creates barriers of entry for commercial firms, especially small businesses.
As you know, this Spring and Summer the Coalition surveyed our members regarding the trends and costs associated with contract duplication. We thank those member firms who responded to our questionnaire. The feedback we have received confirms that contract duplication does needlessly increase operational and transactional costs for contractors. More troubling, a majority of respondents to our survey (over three quarters) have seen an increase in contract duplication over the last twelve months. In September, the Coalition will be providing the results of our questionnaire to the Office of Procurement Policy (OFPP), the Department of Defense (DoD), the General Services Administration (GSA), the Department of Homeland Security (DHS) and the Department of Veterans Affairs (VA).
We hope and anticipate that by sharing our survey results with OFPP, DoD, GSA, DHS, and the VA, it will promote a “Myth-Busters” dialogue focusing on the challenge of contract duplication. The time is now. Given our budgetary challenges, addressing unnecessary contract duplication is a vital, strategic imperative that the entire federal procurement community, government and industry, must address. Reducing unnecessary contract duplication costs is good for government, good for industry and is in the best interest of the taxpayer.
Contract duplication must be addressed on a strategic cross-cutting basis as well as on an operational basis. On a strategic level, OFPP’s September 29, 2011 memorandum establishing guidance for the “Development Review and Approval of Business Cases for Certain Intragency and Agency-Specific Acquisitions” is a good first step in bringing more government-wide discipline to the creation of multiple award IDIQ contracts. However, more can and should be done to reign in unnecessary contract vehicles. We look forward to a robust “Myth-Busters” dialogue that identifies additional, appropriate and strategic measures further addressing contract duplication.
On an operational level, existing contract vehicles must be structured to meet agency requirements. In particular, implementing an effective, efficient and accountable contract structure for the inclusion of “Other Direct Costs” (ODCs) on task orders under GSA’s multiple award schedule program will have a significant, positive impact on reducing contract duplication. Simply put, agencies want the ability to craft comprehensive service solutions, including ODCs, at the task order level. The inability to do so via GSA’s multiple award schedules has resulted and continues to result, in potential customer agencies creating their own contract vehicles rather than using the GSA schedules program to meet their needs. Addressing ODCs is an operational, tactical measure that can have a profound impact on the strategic direction of multiple award IDIQ contracts across the Federal Government. Implementing an ODC capability (the key FAR Clauses are already in schedule contracts) will empower GSA’s schedules program to more efficiently and effectively deliver comprehensive solutions to customer needs. In sum, implementing ODCs on the GSA schedules is a powerful operational tool that will create a positive framework for reducing unnecessary contract duplication.
Finally, on a personal note, on Wednesday the Coalition held its annual charity golf tournament supporting wounded veterans. Once again the tournament was a great success and we were able to present two worthy organizations, Operation Second Chance and Hope for the Warriors, with checks for $5,000 each. Thank you to all those who supported and/or participated in the event! Thank you to my staff for another job well done!