Friday Flash 02.19.21

“Seeding the Schedules Cloud” – What’s the Forecast? 

“Seeding the Schedules cloud” means addressing 1980s era Multiple Award Schedule (MAS) pricing policies that limit access to 21st century commercial solutions, especially leading-edge commercial technologies, like cloud computing. By so doing, GSA can increase agency access to best value commercial products, services, and solutions.   

MAS consolidation has eliminated contracting stovepipes, duplication, and process burdens at the contract level. The next step for GSA is to streamline, reform, and enhance the underlying pricing policies governing contract negotiation, award, and compliance. Reforming these underlying pricing policies will unleash the MAS program, enhancing best value mission support by focusing on increasing commercial market access and competition at the task order level. 

Nowhere will this effort be more impactful than in the MAS program’s cloud computing offerings. The federal government is scratching the surface on cloud, with the federal market for cloud expected to grow to over $8.5 billion in the next few years according to Bloomberg Government. Cloud enables data analytics, machine learning, and AI, capabilities that are the focus of government modernization. Moreover, the pandemic has served to accelerate the commercial cloud transition and usage, with remote work and virtual offices driving demand. Given the growing demand for cloud, the MAS program has the opportunity to leverage the commercial market to deliver increased capabilities to support agency IT needs. So, pricing reform clearly is a game changer. 

For example, MAS commercial cloud capabilities are held back by the outdated, anti-competitive pricing policies, like the Price Reduction Clause (PRC) and Commercial Sales Practices (CSP) that are the basis for MAS price negotiations. The PRC and CSP are static, formulaic, catalog-driven mechanisms that limit pricing flexibility. By so doing, they restrict flexibility and competition and emphasize oversight and compliance. In contrast, the cloud pricing environment is dynamic and flexible. Pricing is driven by customer business models and frameworks, volume, and variable pricing is driven by market demand, technology, business models, and customer frameworks. These factors require flexible pricing that can react over time depending on use and market conditions. The PRC and CSP were simply not built for this kind of dynamic approach to the market. 

Negotiating cloud pricing terms consistent with the current MAS pricing policies is like trying to put a square peg in a round hole. Thus, with these current pricing policies, customers, contractors, and GSA suffer increased pricing risk and restricted access to technology solutions. It is time to waive application of the PRC and CSP for cloud computing services. Likewise, the Economic Price Adjustment clause should be waived for cloud. In their place, a flexibly priced model at the contract level should exist to enhance the ability of MAS contractors to effectively and efficiently price and deliver best value cloud solutions at the task order level.  ­­­­­­­­

Together, these changes will provide an opportunity to ensure that task order terms and conditions retain the flexibility for contractors to effectively respond to customer needs and adjust to changing market conditions in meeting those needs. The net benefit will be to streamline customer access to innovative commercial cloud solutions at the competitive task order level. For these reasons, the Coalition stands ready to work with all stakeholders on “seeding the cloud” for a best value customer forecast. 

Join the BRIC and Cyber Committees for a Joint Meeting on NDAA, New Congress, and the Biden Administration

The Business Regulatory Issues Committee (BRIC) and Cyber & Supply Chain Security Committee are hosting a joint meeting taking place virtually on March 2 at 11 am EST. Our special guest presenter will be Moshe Schwartz, President of Etherton and Associates (review his full bio here). Moshe will be discussing the following topics:

  • A review of key provisions in the FY21 NDAA and Appropriations bills
  • What’s on tap in the new Congress, including:
    • Leaders/changes
    • Additional subcommittees
    • The FY22 NDAA
    • The Biden Administration priorities
    • COVID activities to date
    • Cyber update, include Section 889 and CMMC
    • The future of Section 3610 ready state support

If you would like to attend this meeting, please RSVP to Michael Hanafin at MHanafin@thecgp.org to receive the dial-in information.

GSA Leadership Outlines Top Priorities  

On February 12, Nextgov reported on an interview with Acting General Services Administration (GSA) Administrator Katy Kale and GSA Federal Acquisition Service (FAS) Commissioner Sonny Hashmi discussing the agencies’ priorities, as well as ongoing projects. Kale shared the following four priorities for GSA: managing COVID-19; bolstering economic recovery; advancing diversity, equity, and inclusion; and tackling the climate crisis. According to Hashmi, GSA will work to ensure that it is using the buying power of the Federal Government to advance these priorities. For example, in support of the COVID-19 response, GSA is working to make personal protective equipment available to agencies. In addition, to support diversity and the economic recovery, GSA is looking for ways to support underserved communities and small businesses, as well as job creation in the American supply chain by helping agencies to procure products that are Made in America.   

Kale and Hashmi discussed the importance of technology and the value of the work being done by GSA’s Transformation Technology Services (TTS). GSA is looking to work with the Cybersecurity and Infrastructure Security Agency (CISA) to improve the Federal Risk and Authorization Management Program (FedRAMP) program and its processes.  

Kale and Hashmi also provided an update on the e-commerce pilots. In the interview, they explain that GSA is seeing encouraging signs, but more work needs to be done. The need for the commercial platforms that provide frictionless buying experience can be seen, especially during the pandemic. In the coming month, GSA expects additional large agencies to join the pilot.  

Kale and Hashmi also discussed the beta.SAM.gov transition, GSA’s plans to implement the Cybersecurity Maturity Model Certification (CMMC) into contracts, and the agency’s transition to Unique Entity Identifiers (UEI). To read the full interview, click here.  

 

DoD Signals Adjustments to CMMC

In September, the Department of Defense (DoD) issued an interim final rule for the new Cybersecurity Maturity Model Certification (CMMC) requirements which gave industry 60 days to comment on the interim rule. Since the comment period has ended, DoD decided to make some changes to the highest level of the CMMC regulation, FedScoop reported. 

According to FedScoop, “The biggest change under CMMC is that now contractors will need to get a third-party assessment for their networks” rather than relying on self-certification. DoD will also update the CMMC assessment guide which will be used by third-party CMMC assessors. Industry also made a request for reciprocity, and DoD has completed the reciprocity assessment for the Defense Contract Management Agency’s Defense Industrial Base Cybersecurity Assessment Center, Federal Computer Week reports. A guidance memo on the reciprocity assessment is awaiting signature. Finally, following the release of the NIST Special Publication 800-172 on Enhanced Security Requirements for Controlled Unclassified Information, DoD may also be working to sync CMMC levels four and five with the NIST guidance. 

Amidst these changes, DoD is requesting that contractors prepare for CMMC requirements in contracts. Since third-party assessors have not yet been named, DoD is recommending contractors start with a self-assessment, FedScoop reports. DoD is expected to have a slow rollout and only anticipates having 15 contracts with CMMC requirements in fiscal year 2021. Companies that bid on the pilot contracts that include CMMC requirements will receive priority certification. CMMC requirements are expected to be in all DoD contracts by 2025. 

 

Winter 2021 Multiple Award Schedule Quarterly Newsletter Now Available 

On February 17, the General Services Administration (GSA) announced that its Winter 2021 Multiple Award Schedule (MAS) Quarterly Newsletter is now available. The newsletter provides updates on milestones of the MAS Consolidation effort. The following updates were provided: 

  • GSA is removing all drones from MAS contracts, except those that are approved by the Department of Defense’s (DoD) Defense Innovation Unit through its Blue sUAS Program.   
  • The deadline for contractors to update their price lists and GSA Advantage catalogs to the new consolidated MAS SINS is March 31, 2021. This update is mandatory, and those who do not meet the deadline will have their catalog removed from GSA Advantage. To remain compliant, contractors must keep their files up to date, provide photos for products, and report order status for orders placed through GSA Advantage.  
  • The moratorium related to the minimum sales requirement for GSA MAS contractors has been extended through the end of March 2021, meaning that GSA will not cancel active contracts due to low sales. Contractors that have multiple contracts included in Phase III of MAS Consolidation should fill out the Phase III checklist and send the completed document to their contracting officers on all of their active contracts. 
  • As of March 8, 2021, all contractors will use FAS ID to access eOffer and eMod. FAS ID allows for contractors to access many GSA applications with one email and password. Users without an established FAS ID will need to be registered starting March 8. Users will not be able to access eOffer and eMod during March 6 and 7 due to the transition. Digital certifications will no longer be required to access these two portals after the transition is complete. 

 

GSA IT Category Grows by $3B 

Federal News Network featured an interview this week with Laura Stanton, Assistant Commissioner for the Office of Information Technology Category (ITC) at the General Services Administration (GSA). In 2020, ITC brought in more than $30 billion in revenue, an increase of more than $3.5 billion from last year. Stanton noted that agencies used GSA services including the GSA Schedules, Government-wide Acquisition Contract (GWAC), Assisted Acquisition Services (AAS), and Enterprise Infrastructure Solutions (EIS).   

So far agencies have awarded over $14 billion in orders through EIS. The deadline for agencies to transition is March 31, so GSA expects agency use of EIS to increase as the deadline approaches. The GSA programs also created $2 billion in savings and cost avoidance for customer agencies in 2020. In the interview, it was noted that the increase in agency spending was the result of agency needs when responding to the pandemic and more typical requirements.  

 

GAO Recommends Delaying Electronic Health Record Rollout at VA  

The Government Accountability Office (GAO) published a report on the progress of the Department of Veterans Affairs (VA) Electronic Health Record (EHR) implementation. GAO reviewed how the VA is making system configuration decisions, developing system capabilities, developing system interfaces, completing end user training, and resolving system test findings. GAO found that the VA has made progress in most of these areas, however the department has not yet resolved all critical severity test findings (findings which could result in system failure), and high severity test findings (findings that could result in system failure, but may have workarounds).

Specifically, 17 critical severity test findings and 361 high severity test findings remained open as of September 2020. This left the VA at risk of deploying a system that did not perform as intended, resulting in GAO recommending that the department delay the initial EHR rollout until all critical severity test findings were resolved and all high severity test findings were either resolved or had an identified workaround. There have already been some delays in the rollout of the EHR system, which are summarized by GAO in the figure below. 

                   

The VA deployed the EHR in Spokane, Washington in October 2020. At the time of this rollout, there were no critical severity test findings and 306 of the 361 high severity test findings were closed. Of the remaining high severity test findings, 47 had workarounds that were deemed acceptable by users, seven were associated with future rollouts, and one had a solution identified at the time of system deployment. GAO believes that the VA will likely identify new critical and high severity test findings as EHR rollouts continue in other locations. GAO recommends that the VA postpone deployment of the EHR system in all planned locations until any resulting critical and high severity test findings are addressed. 

 

MSPV 2.0 Briefing with the VAFeb. 23 

The Medical/Surgical Subcommittee will have its first meeting of 2021 on February 23 at 2 pm EST. We are pleased to announce that our guest speakers will be from the U.S. Department of Veterans Affairs and they will be joining us to discuss the MSPV 2.0 program. Our guest speakers will be:  

  • Rick Lemmon, Executive Director of Procurement, Office of Procurement & Logistics, VHA  
  • Katie Hulse, Director (acting), Acquisition Services 3, Medical/Surgical Prime Vendor Program, Chief, Acquisition Services 3B, VA SAC  
  • Amanda Anderson, Chief, Acquisition Services 3D, Medical / Surgical Prime Vendor Program, VA SAC  
  • Fredrick Hilliard, Lead CO, MSPV 2.0, VHA  

The VA’s briefing will cover the latest on the MSPV BPA awards and the MSPV-NG program. To RSVP to attend the virtual meeting, please email Michael Hanafin at mhanafin@thecgp.org.

 

BIC MAC MeetingFeb. 23 

The Coalition will be hosting a joint IT/Services and GWAC/MAC Committee Meeting on Tuesday, February 23 at 10 am EST. The focus of the meeting will be on GSA’s new BIC MAC contract. During this internal meeting, the Coalition will share information on the program and collect member feedback for GSA. 

GSA anticipates the release of an RFI on BIC MAC in early March, and they plan to speak to members about the acquisition strategy for BIC MAC after the RFI is released.  

If you would like to attend the meeting, please RSVP to Michael Hanafin at MHanafin@thecgp.org to receive the dial-in information. 

Webinar on Section 889: Compliance Strategies and Risk Mitigation for Commercial Contractors, Feb. 25

The Coalition is pleased to host David Fletcher and Alexander Canizares of Perkins Coie LLP for webinar on February 25 at noon EST regarding Section 889: Compliance Strategies and Risk Mitigation for Commercial Contractors. 

Section 889 of the Fiscal Year (FY) 2019 National Defense Authorization Act has imposed significant new compliance burdens on government contractors, including commercial companies. Numerous questions remain about what steps contractors can or must take to fulfill their obligations to represent, on an ongoing basis, that they do not use certain telecommunications equipment or services in any part of their business. Numerous interpretive issues in the interim rule remain unanswered. The interim rule is expected to become a final rule in 2021, highlighting the importance of a robust compliance policy and approach to enforcement risks.

This webinar will:

  • Provide a practical overview of emerging legal issues arising out of Section 889 and its impact on commercial contractors that provide goods or services to the federal government, in particular
  • Provide several steps that companies can take to stay compliant and navigate difficult issues arising out of Section 889, such as subcontractor management and the scope of the “reasonable inquiry” required under the rule
  • Highlight False Claims Act enforcement risks and other issues

Click here to register.

 

Legal Corner: Biden Leaves in Place Key Portions of Buy American Act Changes, Targets New Domestic End Product Test and Services

Authors: Jacqueline Unger and Anna Sullivan; PilieroMazza PLLC

The Legal Corner provides the legal community with an opportunity to share insights and comments on legal issues of the day. The comments herein do not necessarily reflect the views of The Coalition for Government Procurement. 

President Biden signed an executive order (EO) on January 25, 2021, titled “Ensuring the Future Is Made in All of America by All of America’s Workers.” Referring broadly to all statutes, regulations, rules, and executive orders that relate to Buy America, Buy American, or domestic sourcing requirements as “Made in America Laws,” the EO expresses the new administration’s policy that the U.S. government should maximize the use of domestic products and services and “should, whenever possible, procure goods, products, materials, and services from sources that will help American businesses compete in strategic industries and help America’s workers thrive.” This new EO was issued just days after the Federal Acquisition Regulatory Council (FAR Council) finalized a rule to increase the Buy American Act (BAA) domestic content requirements. With the EO directing significant changes to federal procurement practices under the Made in America Laws, we have highlighted key implications for government contractors below.

Strengthening BAA Domestic Content Requirements

The EO proposes significant changes to promote the enforcement of the BAA’s preference for domestic end products. The EO directs the FAR Council to, within 180 days, consider proposing for notice and public comment amendments to the Federal Acquisition Regulation (FAR) provisions implementing the BAA to replace the “component test” used to identify domestic end products and construction materials with a “value added” test. Under the new proposed test, domestic content would be measured by the value added to the product through U.S.-based production or U.S. job-supporting economic activity—though the EO does not explain how such value would be calculated.

Additionally, the EO states that the FAR Council should consider FAR amendments that would increase the numerical threshold for domestic content requirements for end products and construction materials and increase the price preferences for domestic end products and domestic construction materials. The FAR Council is also directed to promptly review any existing constraints on the extension of the Made in America Laws to information technology that is a commercial item and develop recommendations to lift these constraints to further the EO’s policy.

Importantly, the FAR Council recently published a final rule on January 19, 2021, which increases the BAA domestic content requirements and pricing preferences to implement President Trump’s EO 13881, “Maximizing Use of American-Made Goods, Products, and Materials.” The final rule makes three critical changes: (1) it increases the domestic content requirement to 55% for most products and to 95% for products consisting “wholly or predominantly” of iron or steel (or a combination of both), (2) it removes the commercially available-off-the-shelf exception for products consisting “wholly or predominantly” of iron or steel (or a combination of both), and (3) it increases price preferences for domestic products to 20% for large businesses and 30% for small businesses. This final rule applies to solicitations issued on or after February 22, 2021.

Though Biden’s EO does not invalidate this final rule, it remains to be seen whether these changes will be kept as is or further modified as a result of the new EO.

Increasing Scrutiny of Requests for Waivers of Made in America Laws

Next, Biden’s EO indicates that it may become harder to obtain a waiver of Made in American Laws in the future. The EO directs the Director of the Office of Management and Budget to establish a Made in America Office, headed by a Made in America Director. Before an agency grants a waiver, and unless the OMB Director provides otherwise, the agency will be required to provide the Made in America Director with a description of its proposed waiver and a detailed justification for the use of goods, products, or materials that have not been mined, produced, or manufactured in the U.S. The Made in America Director will review all proposed agency waivers and make a determination as to whether the waiver is justified. Any disagreements between the Director and the agency would be resolved through administrative procedures. Additionally, in order to increase transparency, the General Services Administration is to develop a public website that includes information on proposed waivers and whether those waivers are granted.

Assisting Contractors with Supplier Scouting

The EO also directs agencies to take action to identify suppliers of American-made products, which may be helpful to prime contractors looking for domestic sources for their supply chains. Pursuant to the EO, agencies are to partner with the Hollings Manufacturing Extension Partnership to conduct supplier scouting to identify American companies that can produce goods, products, and materials in the U.S. that meet the federal government’s procurement needs.

Imposing Agency Reporting Requirements

Lastly, the EO imposes new reporting requirements on agencies. It directs federal agencies to, as soon as practicable, consider “suspending, revising, or rescinding” any agency actions that are inconsistent with the aforementioned policy and to consider any additional action necessary to enforce it. More specifically, agencies are directed to submit a report to the newly created Made in America Director within the 180-day window detailing their implementation and compliance with Made in America Laws, a description of any waivers to Made in America laws, and any recommendations on how to further effectuate the EO’s policy. Agencies are thereafter to submit biannual reports on implementation and compliance with Made in America Laws, with analysis on any applicable waivers.

The EO shows the intent of the Biden Administration to prioritize American industry, but it remains to be seen how its directives will play out among federal agencies and their procurements. Contractors subject to the BAA or other Made in America Laws should be cognizant of agency implementation of the EO.

We will continue to monitor developments as they become available. If you have questions about the EO and what it could mean for your business, please contact Jackie Unger or Anna Sullivan, the authors of this blog, or another member of PilieroMazzaGovernment Contracts Group.

 

Healthcare Spotlight: Biden Signs “Sustainable Public Health Supply Chain” Executive Order

On January 21, the President signed an Executive Order (EO) to secure the supplies needed for the Federal government (and State, Local, Tribal and Territorial authorities) to respond to the COVID-19 national pandemic.  In short, the EO requires that:

  • The Secretaries of Defense, Health and Human Services, and Homeland Security take immediate inventory of the critical materials, treatments, and supplies (including personal protective equipment (PPE)) needed to combat COVID-19
    • Where shortages exist, all legal authorities available, including the Defense Production Act, should be used to fill these shortages through additional stockpiles, improving distribution systems, building market capacity or expanding the industrial base
  • The status of the Strategic National Stockpile be provided to the President
  • The Secretaries of the Defense, HHS, State, Homeland Security (and other agencies) provide:
    • An inventory of pandemic response supplies
    • An analysis of their agency’s capacity to produce, provide and distribute pandemic response supplies
    • An assessment of their agency’s procurement of such supplies and their availability on the open market
    • An assessment of any gaps and recommendations to address them
  • Depending on the above agencies’ inventory assessments, the COVID-19 Response Coordinator is to recommend to the President whether additional use of the Defense Production Act would be useful

The EO also addresses the pricing of pandemic response supplies by requiring the Secretaries of Defense, HHS, and Homeland Security to make recommendations for how to address the pricing of pandemic supplies, “including whether and how to direct the use of reasonable pricing clauses in Federal contracts.”  It also asks these agencies to assess “whether to use the GSA Schedules to facilitate State, local, Tribal, and territorial government buyers… in purchasing pandemic response supplies using Federal Supply Schedules.”

Finally, the order requires a strategy be established to design, build and sustain a long-term capability for the U.S. to manufacture supplies for future pandemics and biological threats including an analysis of the roles of the Strategic National Stockpile and other Federal and military stockpiles. Certain Tribal governments, Indian Health Service healthcare providers, Tribal health authorities and others are also to be given access to the National Stockpile. 

The Coalition will continue to follow policy developments from the current Administration and update members as new information becomes available. To access the full EO, click here.

GSA Announces New Appointees 

On February 16, the General Services Administration (GSA) announced several new appointees. 

Exodie Roe III will serve as Associate Administrator of Office of the Small Disadvantaged Business Utilization. Roe has over 15 years of congressional experience in roles such as Policy Advisor on Capitol Hill and Director of Policy and External Affairs for the Congressional Black Caucus.  

Another appointee is Laila ElGohary, who will serve as White House Liaison. ElGohary worked as the Director of Technology and Operation at the White House in the Obama Administration and has more than 10 years of experience with data and technology.  

GSA announced that Roberto Rosas will serve as Policy Advisor in the Office of Congressional and Intergovernmental Affairs. Rosas has worked in Congressional and Political Affairs at the American Institute of Certified Public Accountants, and as a Congressional Staffer on Capitol Hill.  

LeJamiel Goodall will serve as Senior Advisor to the Deputy Administrator. Goodall served most recently as Chief of Staff for the District Department of Transportation in Washington, D.C.  

Finally, GSA announced that Venecia Fernandez will serve as Policy Advisor in the Office of Congressional and Intergovernmental Affairs. Fernandez previously worked for the New York State Comptroller. See the full GSA Press Release here. 

 

Introducing the Updated FedRAMP Website 

On February 16, the General Services Administration (GSA) posted a notice that the newly revamped Federal Risk and Authorization Management Program (FedRAMP) website, fedramp.gov, has been released. FedRAMP, a Government-wide program that provides a standardized approach to security and risk assessment for cloud technologies, is a part of GSA’s Technology Transformation Services (TTS).  

The new site provides users with information on FedRAMP’s authorization process and refines the content outlining the procedures by using visuals and clear language. Additionally, expanded search and filtering capabilities make it easier for users to find documents and guidance on the site. According to the FedRAMP blog, the features on the updated website include: 

  • Authorization Process: An interactive graphic on the homepage and new pages that enable specific stakeholders to understand the different steps involved in the process based on either the Agency Authorization or the Joint Authorization Board (JAB) Authorization paths;
  • Program Basics:  A new page that explains the mission, history, goals, and legal framework of FedRAMP;
  • Documents and Templates: Documents and templates are now searchable by audience, file type, and publication date;
  • FAQs: A newly added search functionality to enable stakeholders to easily search for answers to common questions; 
  • Site notifications: An alert system notifies users when a blog has been posted or when a document or template has been updated or added; 
  • Enhanced Marketplace: Refinements to design, structure and functionality to boost accessibility and performance. 

To access the updated website, visit www.fedramp.gov. The FedRAMP program intends to use web analytics, along with user feedback, to continuously improve the functions of the site. 

 

Congress Considers Reduced Civilian Workforce at DoD

Defense News reported this week on the negotiations between the two parties on efforts to reduce the Defense budget. Even though President Biden does not plan to release his budget until April, Republican lawmakers are meeting with Democratic lawmakers to discuss the Defense budget. California Republican Representative Ken Calvert, who is the ranking member of the House Appropriations Committee’s defense subpanel, has proposed reductions in the civilian workforce as a means of reducing the defense budget, rather than reduced funding for equipment or modernization. He also believes that there needs to be continued investment into the Space Force and satellite program, as well as the creation of Columbia-class submarine and Virginia-class submarine. Calvert does not want to make cuts to procurement, but supports reducing the civilian workforce by 15 percent overall which he believes could be accomplished through attrition targeting the growth in middle management, versus firings. This could cut the number of civilian employees by 100,000 employees. 

 

AFCEA Bethesda’s 2021 Monthly Breakfast Webinar Series    

The Coalition is proud to sponsor AFCEA Bethesda’s 2021 Monthly Breakfast Webinar Series. Join AFCEA Bethesda on February 23 as federal IT security leaders discuss innovative ways to defend their infrastructures from threats. This webinar will address how organizations can implement TIC 3.0 and Zero Trust, as well as apply supply chain security, into a modern landscape where the network perimeter has become more difficult and costly to defend. Connect with speakers during the video networking session following the panel discussion. Coalition members who would like to attend, can register here.