Friday Flash 05/12/23

An Unnecessary, Counter-Productive Multiple Award Schedule Marketplace Hurdle
The General Services Administration’s (GSA’s) Acquisition Letter MV-22-02, Temporary Moratorium of Certain Limitations Contained in Certain GSA Economic Price Adjustment Contract Clauses (the acquisition letter), is a thoughtful effort to support stakeholders struggling to respond to the impact of inflation on the pricing and availability of commercial products and services via the Multiple Award Schedule (MAS) program.   The acquisition letter streamlines processes and eliminates unnecessary “hurdles” in the Economic Price Adjustment (EPA) process.  The acquisition letter supports customer agencies, GSA, and MAS contractors in addressing the inflation-driven impracticality of performance and the resulting cancellation of tens of thousands of MAS orders over the last year.

Yet, while implementation of this acquisition letter has streamlined EPA processes, it also has served to highlight unnecessary, inappropriate, and counterproductive pricing language in the MAS solicitation.  As noted in two earlier blogs, the MAS solicitation includes the following price evaluation statement:

GSA seeks to obtain the offer’s best price based on its evaluation of discounts, terms, conditions, and concessions offered to commercial customers.  However, offers that propose Most Favored Customer pricing that is not highly competitive will not be determined fair and reasonable and will not be accepted.  (Emphasis added.)

The requirements for determining fair and reasonable pricing are clearly set forth in the Federal Acquisition Regulation (FAR) and the General Services Acquisition Regulation (GSAR).  There is no reference to, or guidance in, statute or regulation regarding the use of a “highly competitive” standard in determining fair and reasonable pricing.   There is, however, guidance on determining fair and reasonable pricing based on adequate competition.  See FAR 15.404-1, generally.  The above solicitation statement introduces an unfounded, arbitrary evaluation standard for determination of fair and reasonable pricing under the MAS program.

This “highly competitive” evaluation standard is undefined. There has been no formal, public rule-making establishing this new standard.  Further, to the best of our knowledge, there is no FAS guidance to contracting officers or MAS contractors establishing the evaluation considerations and/or factors in determining whether a price is highly competitive or not. So, not only does the solicitation language lack a regulatory basis, but it is also void of any guidance to the procurement community on what it means. As such, the term constitutes a bald, new price analysis requirement that only sews confusion among stakeholders in the system, as evidenced by the lack of analytical consistency among acquisition centers in GSA.  Indeed, one FAS interpretation of the solicitation language provides that GSA policy requires the comparison of more than just commercial pricing as contracting officers are to determine the pricing not only fair and reasonable but also “highly competitive” per the solicitation.  What GSA policy?  And what does “not only fair and reasonable but also highly competitive per the solicitation” mean?

The unintended consequences of this solicitation language are significant.  The surrounding confusion regarding its meaning is creating a high rejection rate for new offers and significantly delaying contract modification processes.  It increases the cancellation issue facing FAS customers and contractors, resulting in additional cancelled customer orders.  It undercuts the implementation of Transactional Data Reporting (TDR).   Finally, it directly impacts efforts of the Office of General Supplies and Services to improve and streamline price analysis.  For all these reasons and more, the language should be deleted from the MAS solicitation.

Nothing is More “Highly Competitive” than a Competitive Award at the Order Level

Competition for agency specific requirements at the task and delivery order level drives best value and price under the MAS program.  The aggregation and definitization of agency requirements at the order level signals to the MAS marketplace that an actual business opportunity exists.  In response, contractors offer best value solutions and prices to compete and win the work.  These streamlined task and delivery order competitions set in play competitive forces which inure to the government’s benefit, such as downward pressure on prices, performance efficiencies, and the promotion of innovative solutions that the government might not access otherwise.  Plus, the solutions offered represent a real-time statement of what is available in the market at the time of the requirement, not a look back in time.

Customer agencies understand the value of task and delivery order competition for aggregated requirements.   For example, over the last three fiscal years, just over 50 percent of the dollar value of purchases under the MAS program have come through Blanket Purchase Agreements (BPAs).  BPAs are designed to aggregate agency requirements for competitive award under the MAS program.  They are a “highly competitive,” best value tool in the acquisition toolbox for customer agencies.

MAS contracts should be awarded based on fair and reasonable pricing considering relevant terms and conditions, with customer task and delivery orders awarded based on highly competitive, best value pricing in response to agency specific requirements.  That guarantees the government a market driven, best-in-class MAS pricing environment.

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GSA and its IG remain at an Impasse over TDR
Federal News Network reports that the General Services Administration’s (GSA) Inspector General (IG) has released its sixth report on Transactional Data Reporting (TDR) since 2015 in which the IG once again criticized the TDR pilot. The report accuses TDR data of being “almost entirely inaccurate, unreliable, and unusable” in price comparisons. The IG recommended that GSA “cease further expansion of TDR until the problems are corrected or the pilot is terminated” and recommended that the Federal Acquisition Service Commissioner take the following actions in the year:

1. Conduct a comprehensive assessment of all TDR data.
2. Verify the accuracy and completeness of all TDR data.
3. Implement a verification process to ensure that TDR data is accurate and complete when it is submitted by MAS contractors.
4. Require the contractors that are not submitting complete and accurate data to correct their data or suspend their contract.
5. Make the data accessible to all MAS contracting personnel; and
6. Develop a methodology for pricing using TDR data that will ensure that customer agencies [fulfill the requirements of the Competition in Contracting Act] for orders placed through MAS contracts.

GSA partially agreed with the recommendations and stated that it will consider the continuing maturity of TDR as part of any expansion decision and that GSA will continue to address data completeness, quality, and usage. The majority of GSA’s response, however, focused on the benefits of TDR, such as lowering prices, reducing reporting burdens, and supporting small businesses. Additionally, GSA noted that TDR can assist the Government in implementing policy objectives, such as supporting cyber supply chain risk management, promoting the AbilityOne program, and providing market intelligence to industry partners to ensure a healthy supply chain.

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President Biden and Congressional Leaders to Continue Debt Ceiling Talks
Leadership from both congressional chambers met with President Biden for a roughly hourlong meeting on Tuesday, May 9, to discuss the looming debt limit. Treasury Secretary Janet Yellen recently gave updated guidance that indicated the nation could default as early as June 1. The Congressional Budget Office (CBO) echoed her opinion that default could occur in early June. A default by the U.S. government would have wide-ranging and severe negative economic consequences, including a permanent shift in the perceived stability of U.S. debt and currency.

Members of both parties signaled only limited progress towards a deal after the May 9 meeting. McCarthy stated that “Everybody in this meeting reiterated the positions they were at; I didn’t see any new movement,” and did not take default off the table. Biden wouldn’t rule out a short-term deal and stated that he’s “prepared to begin a separate discussion about my budget, spending priorities, but not under the threat of default.” While both sides continue to negotiate, “discretionary spending caps and permitting overhaul as two areas of potential agreement in negotiations.” Staff began more granular discussions Tuesday while Congressional Leadership plans to meet again with Biden today, May 12.

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Government Rescinds Contractor, Employee Vaccine Mandates
On Tuesday, President Joe Biden signed an Executive Order, effective today, that officially revokes the unenforced requirement that Federal employees and contractors be vaccinated against COVID-19 and rescinds related agency policies. Previously, the White House announced on May 1 that the requirements would end with the May 11 expiration of the Federal COVID-19 Public Health Emergency. “We are in a different phase of our response to COVID-19 than we were when many of these requirements were put into place,” the Administration stated in the release, citing that “since January 2021, COVID-19 deaths have declined by 95%, and hospitalizations are down nearly 91%,” and a record number of Americans are vaccinated. The government had never enforced the vaccination mandates, created by two executive orders in 2021, due to ongoing legal challenges. The Office of Management and Budget (OMB) had started a three-step process to begin enforcement after an appeals court narrowed the scope of a nationwide injunction last fall, but OMB’s website for vaccine guidance has now been updated to emphasize that agencies should expect further guidance on winding down the mandate.

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Webinar: Domestic and Foreign Sourcing Requirements, May 25
The Coalition for Government Procurement is pleased to host a webinar on Domestic and Foreign Sourcing Requirements.  This webinar will take place on May 25 from 12:00 – 1:00 p.m. EST and will feature Covington attorneys Mike Wagner (Partner) and Jen Bentley (Associate).

Sourcing from the United States and trade agreement partners has been the subject of increased bipartisan attention in recent years, and a series of new statutes, regulations, and executive orders underscore the importance of compliance with domestic sourcing requirements.  This webinar will provide an overview of key considerations for government contractors who need to comply with various domestic content regimes.  Topics covered will include:

• The Buy American Act (“BAA”), Trade Agreements Act (“TAA”), Bipartisan Infrastructure Law’s Build America, and Buy America Act (“BABA”);
• Review of the standards for each regime;
• Process and scope of waivers and exceptions;
• Latest proposed guidance issued on BABA; and
• Best practices for managing supply chains and key developments to watch.

To register, click here.

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Webinar: Software Supply Chain Security Requirements: Are You Ready?

The Coalition for Government Procurement is pleased to host a webinar on Software Supply Chain Security Requirements. This webinar will take place on June 1, from 12:00 – 1:00 p.m. ET, and it will feature Crowell & Moring attorneys Michael Gruden, Alexander Urbelis, and Alexis Ward as they discuss the OMB’s forthcoming self-attestation requirements and deadlines approaching this summer.  Crowell will also provide practical insights into implementing the new software security standard, NIST SP 800-218, Secure Software Development Framework, required by the attestations.

To register, click here.

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Register for Imaging Committee Meeting: DLA Document Services
The Coalition’s Imaging Committee will be hosting Terra Nguyen, Director of the Defense Logistics Agency Office of Document Services. The virtual meeting will provide an update on the office’s work as well as a discussion on industry challenges and strengths for 2023. The meeting will be on June 8 at 10 AM ET. For any questions, email JSnyderwine@thecgp.org.

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Request for Feedback on Secure Software Development Attestation Form
On April 27, the Cybersecurity and Infrastructure Agency (CISA) released a draft version of its Secure Software Development Attestation Common Form for public comment. Once finalized, software producers will use this form to certify that their software meets the secure software development practices contained in the National Institute of Standards and Technology’s Secure Software Development Framework, as required by OMB Memorandum M-22-18, “Enhancing the Security of the Software Supply Chain through Secure Software Development Practices.”

The Coalition plans to submit comments regarding the self-attestation form and would appreciate input from its members. Please submit any feedback on the form by Thursday, June 8 to Ian Bell at ibell@thecgp.org. Contractors should be aware that NIST’s definition of software also applies to code built into hardware and SaaS products.

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Pentagon Reverts Progress Payment Change for Large Businesses
On Monday, the Department of Defense issued a class deviation, 2020-O010, Revision 2, Progress Payment Rates, that reverts large businesses to the pre-COVID-19 progress payment rate of 80% after it had been raised to 90% in March 2020. It retains the increased 95% rate for small businesses. The change will apply to contracts that result from solicitations issued after July 7 and will not affect existing contracts, task orders, or delivery orders.

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GAP FAC Presents Recommendations on Sustainability, Change, and Partnership
Last Thursday, the GSA Federal Advisory Committee (GAP FAC) held a public meeting to present recommendations on improving Federal acquisition to GSA leadership. First convened in September 2022, the GAP FAC is made up of experts from Federal agencies, state and local government, academia, and the private sector, and it advises GSA “on emerging acquisition issues, challenges, and opportunities to support its role as America’s buyer,” with a particular emphasis on sustainability and climate. At the meeting, the committee presented six recommendations generated by its Acquisition Workforce, Industry Partnerships, and Policy and Practice Subcommittees:

• Implement a Change Acceleration Strategy;
• Make Sustainability a Core, Foundational Capability Across the Acquisition Workforce;
• Create Acquisition Sustainability Experts through a New Sustainability Certification;
• Identify, Engage, and Onboard Innovative New Entrants;
• Sponsor maturity model for embedding sustainability and climate risk mitigation; and
• Reduce Single-Use Plastics and Packaging.

Several of the recommendations build on previous GSA efforts.  The Acquisition Workforce Subcommittee, for instance, recommended that GSA embed sustainability into the FAC-C Modernization effort it initiated in January of this year.  To reduce single-use plastics, the Policy and Practice subcommittee recommended that GSA pursue rulemaking on single-use plastics, mirroring the Advanced Notice of Proposed Rulemaking on Single-Use Plastics the agency released last year (to see the Coalition’s response, click here).

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SBA Looks to Reverse Decline of Total Small Businesses in Federal Market
In Fiscal Year 2021, $154 Billion in Federal Contracts went to Small Businesses. The total number of small businesses in the Federal marketplace, however, decreased again, reports Federal News Network. Since 2010, agencies have seen a 40% decrease in the number of small businesses receiving prime contract awards, and the number of small businesses entering the Federal marketplace, for the first time, has decreased by nearly 60%. Sam Le, Director of Policy, Planning, and Liaison within Small Business Administration’s (SBA) Office of Government Contracting and Business Development, stated that, in response to this decrease, the SBA has prioritized enrolling more companies into its small business certification programs. To support the SBA, OMB, and GSA earlier this spring launched a governmentwide procurement equity tool and supplier base dashboard to help agencies track what percentage of contract spending is going to small businesses new to Federal contracting. SBA also is taking steps to improve the customer experience of small businesses applying for the online certification necessary for the competition of sole-source and set-aside contracts. “All businesses in all of SBA’s programs have seen the online experience improve, and we’re working with agencies and with our contracting partners to make those applications even more streamlined and easier to use,” Le said.

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Pentagon CIO Wants to Examine Cloud Providers’ Infrastructure
FCW reports that while speaking at a panel at the AFCEA TechNet Cyber Conference, David McKeown, the Pentagon’s Acting Principal Deputy Chief Information Officer, stated that, following recent security incidents, the Pentagon is interested in examining the interior of Cloud Provider’s infrastructure. Currently, cloud service providers for the Department of Defense go through a “rigorous set of checks,” utilize continuous monitoring and provide recurring reports on findings to the department. In addition to these precautions, the Pentagon would like access to the contractor’s side of the cloud to examine the IP addresses with access, as well as other potential vulnerabilities.

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Administration Launches Tools to Advance Equity in Procurement
On May 8, GSA and tOMB announced the launch of two resources for Federal agencies to help with advancing equity in procurement. These resources were created earlier this spring and assist agencies with finding businesses that are new to the Federal marketplace, identifying qualified vendors, and tracking their progress toward procurement equity goals. The first resource, developed by GSA, is the Government-wide Procurement Equity Tool, which uses data from SAM.gov and FPDS.gov focused on small, disadvantaged businesses (SDBs). Agencies can use the tool to find SDBs by location, business type, NAICS code, and Product Services code. In addition, the tool can identify potential new entrants that have registered on SAM.gov, but not received a Federal award.

The second resource is the Supplier Base Dashboard which tracks the number of entities that have done business with a Federal agency, as well as their size and socio-economic status. The Dashboard also tracks the number of new, recent, and established vendors in the supplier base, as well as in market categories and subcategories of interest.

Under the Biden Administration, the Federal contract spending goal for SBDs has increased to 15 percent by 2025. These tools look to support the achievement of that goal by providing opportunities for multiple small business categories.

GSA Administrator Robin Carnahan said, “These two tools are going to help agencies make more connections with the diverse array of businesses offering their products in the federal marketplace. We’re creating a better user experience while helping ensure the government can procure the highest quality goods and services with the best value. By providing our federal partners with more information when they make procurement decisions, we’re better able to set ourselves up to achieve our contracting goals and create more equity in the marketplace for everyone.”

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GAO Report Calls for Management Improvements for VA EHR System
On May 9, GAO published a report on the Department of Veterans Affairs (VA) organizational change management activities for its Electronic Health Record Modernization (EHRM) program. To conduct the review, GAO identified eight leading change management practices and evaluated the VA’s activities against them. GAO found the VA’s change management activities were partially consistent with seven leading practices, and not consistent with one practice. These included:

• Developing a vision for change – Partially consistent
• Identifying and managing stakeholders – Partially consistent
• Communicating effectively – Partially consistent
• Assessing the readiness for change – Partially consistent
• Increasing workforce skills and competencies – Not consistent
• Identifying and addressing potential barriers to change – Partially consistent
• Establishing targets and metrics for change – Partially consistent
• Assessing the results of change – Partially consistent

GAO noted that until the VA fully implements these leading practices, future EHR deployments risk experiencing change management challenges that may hinder the effective use of the system. GAO also reviewed the results of surveys the VA conducted on user satisfaction with the EHR system and interviewed officials on user satisfaction goals. According to the surveys, most users expressed dissatisfaction with the system. Nearly 79 percent of respondents disagreed or strongly disagreed with the statement that EHR enabled quality care. During the interviews conducted by GAO, officials stated that the pharmacy-related systems module presented multiple challenges that contributed to patient safety risks. GAO also found the VA did not have established targets or goals to assess user satisfaction with the EHR system, which can be used as a basis for determining “when satisfaction has sufficiently improved for the system to be deployed at additional sites.”

Regarding the EHR system, GAO found the VA did not sufficiently identify and address system issues, including ensuring that trouble tickets were resolved within the desirable timeline. GAO noted that it is critical that system issues are resolved in a timely manner. In addition, GAO found that “although VA has assessed the system’s performance at two sites, as of January 2023, it had not conducted an independent operational assessment, as originally planned and consistent with leading practices for software verification and validation.”

The VA announced that it planned to pause future deployments of the EHR system to focus on implementing improvements at the five sites that are currently using the system. In the report, GAO made 10 recommendations to the VA to address change management, user satisfaction, trouble tickets, and independent operational assessment deficiencies. The VA agreed with all of the recommendations.

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Federal Acquisition Service Training (FAST) Conference
GSA will be holding their annual Federal Acquisition Service Training (FAST) Conference May 16 – 18, from 1:00 pm to 4:30 pm each day, with all attendance occurring virtually. Leaders from industry and government will be sharing best practices, new developments, and other updates regarding the procurement space. Sessions this year will cover supply chain risks, OAISIS+, GSA Fleet, cyber/IT innovations, automation, and a range of other topics. Attendees are also eligible for up to 9 Continuous Learning Points (CLPs). Click here to register.

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GSA Launches FAS Catalog Platform (FCP)
GSA has begun a pilot of the FAS Catalog Platform (FCP) which aims to enhance and streamline contractors’ ability to manage their product details. This Platform is set to replace the Schedule Input Program and offers a host of functionalities currently unavailable. These functionalities include automated business rules, data validations, and Compliance & Pricing Reports. It offers a shared interface with the Vendor Support Center, a Central view for Authorized Negotiators, and Automated publishing to GSA Advantage.

The current FCP pilot focuses on the Office Supplies 4th Generation Special Item Number and will run through the end of the year. This effort will be followed by a multi-year phased transition of all Multiple Award Schedule (MAS) contractors, starting with MAS product catalogs. FCP is an agile software product and will see updates as the pilot progresses. The pilot launched as the Minimum Viable Product, and GSA expects to implement the ability to manage MAS Services and MAS-based Blanket Purchase Agreements. The first users have begun processing their baseline modification and publishing their catalogs to GSA Advantage! Contractors interested in moving to FCP should fill out the FCP transition form found here.

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