Friday Flash 06.18.21

Announcing the “2021 Summer of Compliance”

As the thermometer starts to hit the 90’s, the Coalition would like to announce that we are launching The Summer of Compliance!  While perhaps not as exciting as The Summer of Love with Jimi Hendrix, George Harrison, or Janis Joplin performing in San Francisco’s Haight-Ashbury neighborhood in 1967, understanding the latest contract compliance requirements is crucial to a successful Federal business.

Summer of Compliance

Joint Business and Regulatory Issues (BRIC) and Cyber and Supply Chain Security Committee Mtg, Jun 23

We will kick off the Summer of Compliance with a joint virtual meeting of the Business and Regulatory Issues (BRIC) and Cyber and Supply Chain Security Committees for members on Wednesday, June 23 from 12:15 – 2:00 pm EDT. The subject of this meeting will be Baselining Cybersecurity in the Changing Policy EnvironmentBob Kolasky, Assistant Director, National Risk Management Center, CISA, will provide the keynote opening to the meeting. Following his presentation, a panel of experts drawn from our community has graciously offered to provide perspectives on CMMC; Cloud and FedRAMP; and the Cybersecurity Executive Order. They include Bob Metzger, Shareholder, Rogers Joseph O’Donnell; Townsend Bourne, Partner, Sheppard Mullin; and Cheryl Davis, Senior Director for Strategic Initiatives, Oracle.

Recent cyber incidences, along with the President’s issuance of his Executive Order on Improving the Nation’s Cybersecurity, and the recent release of a White House report on supply chain vulnerabilities, signal a dynamic cybersecurity compliance environment. This joint meeting will provide Coalition Members a solid understanding of the state of play, against which, they may develop an actionable approach to provide value to customer agencies. Please contact Michael Hanafin at mhanafin@thecgp.org to RSVP.

GSA Schedules – What Every Schedule Holder Needs to Know Webinar, July 8

On July 8 from 12:00 – 1:00 pm EDT, we will be hosting a webinar: GSA Schedules – What Every Schedule Holder Needs to Know.  Our presenter will be Jason Workmaster, Member, Miller & Chevalier Chartered. This session is for anyone who administers a GSA Schedule or who uses the Schedules as a contract vehicle. Focusing on the key compliance and risk issues associated with the Schedules, the topics to be covered include:  (1) GSA Schedule pricing under both the Commercial Sales Practices (CSP) and Transactional Data Reporting (TDR) approaches; (2) the Price Reductions Clause; (3) Trade Agreements Act (TAA) compliance; (4) selling through resellers vs. holding your own Schedule; and (5) how to prepare for and respond to GSA IG audits. You can register for this webinar HERE.

Government Contracts Compliance Update: Do Your Internal Controls Address Recent Changes and Key Risks?  Webinars Part I and II: July 15 and July 22

On July 15 and July 22 from 12:00 – 1:00 pm EDT, we will be hosting a two-part webinar series, Government Contracts Compliance Update: Do Your Internal Controls Address Recent Changes and Key Risks?  Our presenters will be David Black and Eric Crusius, both Partners at Holland & Knight LLP.  FAR 52.203-13 advises Federal contractors and subcontractors to conduct periodic review of company business practices and internal controls for compliance with the “special requirements of government contracting.”  Each year, several new government contracts-related statutes, regulations, and case law developments create new obligations and compliance risk and 2020/2021 have been no different. 

David and Eric will help federal contractors issue-spot and identify key risk areas arising from government contracting that might warrant updates to their compliance programs by focusing on revised policies and procedures, tailored employee training, internal reporting and response, employee discipline, and mandatory disclosure. They will also provide a checklist of issues to consider according to business function, including: 1) operations, contract performance and subcontracting/purchasing; 2) business development; 3) enterprise-wide information technology; 4) intellectual property management; 5) human resources and employment; and 6) compliance program and internal controls. Specific changes and risks that will be addressed include the Section 889 (Chinese telecommunications products and services) prohibition; cybersecurity requirements; small business program requirements; proposal preparation; Contractor Performance Assessment Reporting System (CPARS); changes and requests for equitable adjustment (REAs); Federal Supply Schedules; gifts and gratuities; teaming agreements; subcontract flow downs; and intellectual property management. You can register for this two-part webinar (only one registration required) HERE.

We will continue to schedule additional webinars and trainings for our Summer of Compliance, including on topics such as:

  • Buy American/Domestic preferences
  • Supply Chain and third part risk management
  • Labor/service contract requirements in government contracts
  • An Update on CMMC
  • Cyber Security for Healthcare
  • The Future of Green Acquisition

We would love to hear from you! If you have further suggestions, please let us know!

 

Congratulations to Sean Nulty 

It is with mixed emotions that we announce Sean Nulty’s departure from the Coalition for Government Procurement. Starting next week, he will be joining the Gormley Group, supporting clients that seek and perform schedule contracts with the federal government.  Sean started as an intern with the Coalition in January 2016 while completing his undergraduate studies at George Washington University, where he also completed his Masters Degree in Applied Economics. He rose through the ranks at the Coalition, becoming a Program Analyst, Policy Analyst, and ultimately, Senior Market and Policy Analyst.  In addition to serving members on Committees, Sean has worked to support policy efforts, in particular, through data analysis. Though he will be missed, we congratulate Sean and wish him our best as he begins a new chapter in his career.

OMB Releases Buy America Guidance 

On June 11, the Office of Management and Budget (OMB) published a memorandum, “Increasing Opportunities for Domestic Sourcing and Reducing the Need for Waivers from Made in America Laws.” The memo provides guidance to Federal agencies on the implementation of the President’s Executive Order (EO), Ensuring the Future is Made in All of America by All of America’s Workers. The memo requires agencies to designate a Senior Accountable Official (SAO) for domestic sourcing by June 30, 2021. The SAO will be responsible for directing each agency’s management and implementation of Made in America laws. The memo recommends the SAO be an Assistant Secretary or similarly senior role within the agency. 

The SAOs will submit an initial report on each agency’s use of Made in America Laws by July 24, 2021. The reports will focus on steps the agency is taking to strengthen and diversify their domestic supplier bases. The SAOs are required to update the reports semiannually beginning on January 23, 2022. The semiannual reports will include an analysis of the agency’s spending as a result of waivers issued pursuant to the Trade Agreements Act (TAA).  

Agencies will also be required to submit Buy America waivers to the Made in America Office (MIAO) at OMB for review and approval. The MIAO intends to review the majority of waivers within three to seven days of receipt, and not more than 15 days. All approved waivers will be published on a public website that is being developed by the General Services Administration (GSA). The memo establishes the goal of having a fully functional website by early Fiscal Year 2022. 

The memo also requires agencies to identify the industries and product categories where they are currently using the majority of waivers, and to seek domestic supply and/or identify ways to encourage domestic manufacturing.   

In addition, the memo tasks the FAR Council and others within the Government to reassess existing waivers to Buy America laws like the waiver for commercial IT and the partial waiver for commercial off-the-shelf (COTS) products. 

Through these actions, the Administration intends to utilize the buying power of the Federal government to encourage more domestic supply, strengthen the US supply chain for critical products and boost the economy. 

 

GSA Awards the 8(a) STARS III GWAC

GSA released the following press release on Thursday announcing the award of the new STARS GWAC with a $50 billion ceiling and focus on emerging technologies.

WASHINGTON—The U.S. General Services Administration has awarded the first phase of the 8(a) STARS III Governmentwide Acquisition Contract (GWAC). The 8(a) STARS GWACs are known governmentwide as best-in-class, easy-to-use, streamlined procurement solutions to purchase information technology services from 8(a) prime contractors. This fourth-generation GWAC includes an even greater focus on emerging technologies as well as performance outside of the continental United States (OCONUS). The STARS III contract has a ceiling of $50 billion.  

GSA’s 8(a) STARS GWACs leverage a long-standing partnership with the Small Business Administration (SBA) to support the development of 8(a) firms and provide federal agencies a way to deliver mission-critical IT services working with small, disadvantaged businesses. STARS III will deliver opportunities to these firms and will drive progress on important public policy objectives including the President’s Executive Order 13985 On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government as we work to improve diversity, equity, inclusion and accessibility.  

“This fourth generation 8(a) GWAC represents GSA’s long-term commitment to supporting our nation’s small businesses in partnership with the U.S. Small Business Administration,” said GSA Acting Administrator Katy Kale. “STARS III will create opportunities for small disadvantaged businesses that have solid expertise in providing advanced and emerging technologies to the federal government.” 

“The 8(a) STARS GWAC program represents an inclusive opportunity for small, disadvantaged firms to compete within the federal marketplace and gain valuable experience in navigating agency requirements” said GSA Office of Small and Disadvantaged Business Utilization Associate Administrator, Exodie C. Roe, III “More than $18 billion has been awarded through GSA’s 8(a) GWACs, and many successful firms have graduated from the SBA’s 8(a) Program to compete on a larger scale. GSA joins SBA in looking forward to seeing this next-generation contract provide excellent opportunities for small, disadvantaged businesses.” 

8(a) STARS III represents GSA’s efforts to support small businesses while meeting ever-evolving agency requirements. The enhancements on this iteration of the STARS GWAC focus on meeting agency needs for emerging technologies such as artificial intelligence, blockchain, robotic process automation and more. 8(a) STARS III also incorporates a designated scope sub-area for OCONUS requirements. 

Federal Acquisition Service Commissioner, Sonny Hashmi, emphasized “GSA is rolling out this new contract vehicle in cohorts, balancing the need to provide innovative products and services that agencies require quickly, with the intent to on-board the broadest number of small businesses over time. Through this strategy, GSA can start to create an immediate positive impact to our partner agencies’ mission, while increasing opportunities for our small business partners.” 

Stakeholders are encouraged to read the award notice and list of initial awardees on SAM.gov and the 8(a) STARS III GWAC website, www.gsa.gov/stars3, for more information. Additional awards are anticipated later this calendar year following a discussion and offer revision process with remaining offerors. No task orders may be placed until GSA issues the notice to proceed for this GWAC, planned for this summer. 

Questions related to the 8(a) STARS III GWAC may be directed to S3@gsa.gov.  

 

DoD Completes Nearly One-Third of EHR Rollout 

Federal Computer Week reported that the Department of Defense’s (DoD) rollout of the Cerner Electronic Health Record (EHR) system has reached 30 percent completion. Currently, there are 42,000 active users across several states. The latest deployment of the EHR system, called Wave Carson Plus, was the largest to date, adding 10,000 users and extending across 11 states. DoD is on schedule to complete the rollout at the end of 2023.  

The next ‘go live’ deployment, known as Wave Tripler, is scheduled to take place in Hawaii at the end of September. As deployments get larger, one challenge DoD anticipates is synchronizing and standardizing operational workflows, particularly for joint facilities. DoD officials have reported that each deployment has become “less drastic,” but has offered lessons learned and ideas for improvements in training and procedures for future rollouts.   

 

IG Finds VA Medical Facilities Unaware of MSPV Emergency Contingency Plans 

On June 14, the Department of Veterans Affairs (VA) Office of Inspector General (OIG) released a report about the VA’s use of certain emergency supply strategies available through the Medical/Surgical Prime Vendor (MSPV) program. Unfortunately, the VA medical facilities reviewed in the audit were not aware of the emergency supply strategies and did not take advantage of the opportunity to access certain critical medical supplies, like personal protective equipment (PPE), during the height of the pandemic. 

All Prime Vendors are required to provide VA medical facilities with plans to ensure that there are emergency and continuous supplies for any major catastrophic event. The OIG found that all Prime Vendors under the MSPV program met the requirements of their contracts by offering VA medical facilities a no-cost option to develop a supply list in accordance with emergency procedures. The prime vendors also provided contingency plans to continue service to the VA medical facilities they support in case of an emergency.  

Despite the availability of these plans, the OIG found that none of the 16 audited VA medical centers took advantage of them because the Medical Supplies and Program Office did not make the strategies and plans known. 

Since the VA medical centers did not use the options offered by the Prime Vendors, many facilities purchased medical supplies on the open market at a higher cost. In addition, by not taking advantage of the Prime Vendors’ emergency contingency plans, the VA missed opportunities to receive critical medical supplies during the pandemic. 

The OIG recommended that the Medical Supplies Program provide the VA medical center chief logistics offices guidance on emergency and continuous supply strategies offered through the MSPV program. The OIG also recommended that the Strategic Acquisition Center’s MSPV program contracting officer provide guidance to medical facilities contracting officer representatives (CORs) on the intent of the emergency and continuous supply provisions in the MSPV contracts. The CORs should then educate facility managers about the availability of certain critical medical supplies in case of an emergency. To access the full report, click here 

 

CMMC-AB Approves First Third-Party Assessment Organization 

On June 9, Federal Computer Week reported that the Cybersecurity Maturation Model Certification Accreditation Board (CMMC-AB) has approved its first Certified Third-Party Assessment Organization (C3PAO). The C3PAO was able to pass the CMMC Level 3 assessment administered by the Defense Industrial Base Cybersecurity Assessment Center. This organization, Redspin, will be able to conduct CMMC assessments across the defense industrial base. There are currently 156 more organizations awaiting approval. Matthew Travis, CEO of the CMMC-AB, said that standing up the first C3PAO is a significant milestone, especially in light of recent cyber attacks. 

 

Updated “Return to Work” Guidance for Federal Employees and Contractors

Last week, the White House issued guidance for agencies to plan for the return of Federal employees and contractors to physical workplaces. The memo directs agencies to update their COVID-19 workplace safety plans to incorporate the latest guidance from the CDC for individuals that are fully vaccinated. Agencies should complete their planning for reentry by July 19, 2021. The reentry planning will include specifics on how and when an increased number of employees and contractors will return to the workplace. Agencies must submit a draft plan for proposed approaches to personnel policies by June 18, 2021. Agencies must also submit a draft schedule for phased reentry of personnel by July 19, 2021. 

The guidance encourages Federal employees and contractors to receive a COVID-19 vaccination, but a vaccine should not be a requirement for employees or contractors to work in-person in Federal buildings, on Federal lands, or other locations. Federal employees and contractors may voluntarily share their vaccination status, but agencies should not require the disclosure of the information.  

The guidance encourages agencies to adopt a “hybrid” work model where appropriate, including a mix of in-person onsite work, telework, remote work, and alternative work schedules. Agencies may expand the number of employees who work remotely, to remain competitive with the private sector, and the Administration expects that more employees will work in these “hybrid” offices than prior to the pandemic.  

 

DoD to Strengthen Critical Material Supply Chains 

According to Federal News Network, the DoD has said it will need at least $1 billion over the next five years in order to strengthen its supply of critical materials. This comes following the release of a report, required by the America’s Supply Chains Executive Order, which looked at supply chain issues in various departments. DoD concluded that many of its supply chains for rare earth minerals and other strategic resources are at risk. The report states that “though the Department of Defense has requirements for strategic and critical materials, the civilian economy would bear the brunt of the harm from a supply disruption event.” The report also indicated that there is a heavy reliance on countries such as China, Russia, and other adversarial powers for strategic and critical materials. The reduction of U.S. production and processing operations for rare earth minerals has contributed to the decline of the supply chains.  

The U.S. is expecting an uptick in the use of some rare earth minerals as the country begins to increase its use of green energy sources. A more hands on approach from the Government may be necessary to ensure that the U.S. has the materials it needs for the future.  

DoD suggests that the Government develop public-private partnerships to establish standards for the requalification of strategic and critical materials for reuse. DoD said that it will be using the Defense Production Act to create incentives for sustainably-produced materials and will also scale research and development around them. Additionally, DoD plans to work with global allies to strengthen the governance and transparency around critical material supply chains. 

 

GSA’s Second Draft Policy on Cloud Purchasing

This week, Federal News Network reported on GSA’s second draft cloud policy, titled Procurement of Cloud Computing on a Consumption Basis under the Federal Supply Schedule Program. Originally released in May, the draft policy would allow agencies to purchase cloud services on a consumption basis through the Schedules program. The draft policy outlines how the buying approach would work under the Schedule contract, including by not requiring the Price Reduction Clause. Agencies would be able to buy from cloud service provider pricelists and receive appropriate discounts as prices change. Additionally, agencies could incrementally fund task orders for cloud services instead of putting all of the money on one contract at a time.  

Jeff Koses, GSA’s Senior Procurement Executive, said that he believes purchasing cloud on a consumption basis will increase competition, provide more flexibility, promote cost efficiency, better support cybersecurity, and encourage more participation in the Federal Supply Schedule Program. According to GSA, this approach would also provide cost transparency without the need for additional transactional price reporting requirements for contractors.  

GSA hopes to have language in the Schedule contracts by the Fall of 2021. GSA will be analyzing metrics, including cost transparency, competition, and cybersecurity, to assess how the new model is working. According to Bloomberg Government, in fiscal year 2020, cloud purchases accounted for about seven percent of all spending on the IT Schedule. 

The Coalition sincerely appreciates GSA’s Office of Governmentwide Policy for the open dialogue with industry and the opportunity to provide comments during the drafting of the Schedules cloud policy. To access the Coalition’s comments, click here and here. 

 

FAR Proposed Rule on HUBZone Program

On June 14, the Federal Acquisition Regulation (FAR) Council released a proposed rule to amend the FAR to apply changes that the Small Business Administration (SBA) made to the Historically Underutilized Business Zone Program (HUBZone) regulations. The proposed rule updates the FAR to include changes to the program published in a SBA final rule on November 26, 2019. 

The changes include updating the definition of HUBZone small business concern and procedures for filing and removing the notification requirement. The definition of HUBZone is revised by removing the term “qualified” throughout since the definition of HUBZone makes clear it is a firm the SBA has certified as a HUBZone small business concern. Another change that is made by the proposed rule is the removal of the notification requirement. Currently, HUBZone offerors are required to be a HUBZone small business at the time of contract award and to notify the contracting officer if there are any material changes that may affect HUBZone eligibility. The SBA rule removes this requirement, as would the proposed rule when final. Comments are due on August 13, 2021. 

 

Accounting Corner: GSA announces TDR pilot program to become eligible for expansion: what this means for federal contractors 

Authored by Leo AlvarezJeff ClaytonJulia Smith and Jonathan Cornely 

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

On April 27, 2021, the General Services Administration (GSA) announced in a blog post that after favorable fiscal year 2020 pilot evaluation results, the Transactional Data Reporting (TDR) pilot program would be eligible for expansion – yet only after a clear expansion plan is developed. The TDR final rule was established by GSA on June 23, 2016, and requires participating vendors to report transaction data from orders placed against GSA’s Federal Supply Schedule (FSS) program. It has been nearly five years since the announcement of the pilot program, and it appears that GSA has been able to capture results supporting the implementation of the program over a larger scope than the original eight GSA schedule contracts chosen for the pilot. 

When it was first unveiled, GSA hailed TDR as an essential tool in understanding governmentwide purchasing behavior and allowing agencies to make smarter acquisition decisions while decreasing the overall burden to contractors. After years of data issues that rendered key program metrics incomplete and resulted in uncertainty regarding the program’s future, it appears that after the 2020 evaluation, the TDR program will be expanding. Baker Tilly has reviewed the FY 20 evaluation report and the article that follows summarizes key findings and provides some perspective on important takeaways for the government contractor community. 

FY 2020 pilot evaluation results 

While GSA’s Federal Acquisition Service (FAS) has and continues to be responsible for the operation of the TDR pilot, GSA’s Office of Government-wide Policy (OGP) was tasked with conducting the evaluation of the program. Based on performance in FY 2020, the TDR pilot was found by OGP to be meeting or exceeding targets as established by the TDR pilot evaluation plan and metrics (version 2.0). Notably, from FY 2019 to FY 2020, pilot performance was found to be either maintained or improved under all nine evaluation metrics. Each evaluation metric was weighted (1x, 2x or 3x), rated as significantly under-performing, on track to meet targets or meeting or exceeding targets, and given a respective evaluation score of low, medium or high. Different weights were assigned based on the evaluation objective the metrics were designed to meet. 

The weights and the corresponding evaluation metrics are depicted below: 

 

The four metrics with the greatest collective weight fall under the evaluation objective that sets out to “determine if TDR can fulfill the Commercial Sales Practices (CSP) and Price Reductions Clause (PRC) function while lowering industry reporting burden.” Evaluation methodology, results and takeaways for these four metrics are outlined below: 

Contract-level pricing (High) 

The contract-level pricing metric measures the quantitative percentage change in pricing for identical products on the same contract, adjusted for inflation using the Consumer Price Index (CPI). After reviewing 66 million records for items that were on contract for a year, OGP found that “FY 20 TDR contract pricing increased by 0.54%, non-TDR increased by 0.79% (0.25% higher than TDR contractors). On a CPI-U inflation adjusted basis, TDR contract pricing decreased by 0.64% while non-TDR contractor pricing decreased by 0.39%.” 

This is the third year in a row that contract-level pricing was found to be better when TDR was used as opposed to the Commercial Sales Practices construct (relying on a Most Favored Customer (MFC) pricing objective). As one of the highest weighted metrics, GSA views this evaluation as one of the key drivers of TDR’s success in reducing pricing for their federal partners. 

Data completeness (High) 

Data completeness measures the percentage of transactional data reports that include data for two fields: manufacturer name and manufacturer part number. OGP is reporting that TDR data is now 98.7% complete, an increase from 94.1% in FY 2019 and 73.6% in FY 2018. In addition to this high rate, FAS notes that they are in the process of completing additional user experience enhancements that will provide the industry with instructions that should further increase the completeness of data collected. With a near perfect data completeness rate, GSA can now make the case that TDR data is more actionable and that system validations put in place in FY 2019 have paid off. 

Reporting burden (High) 

GSA takes into consideration the participation rate of eligible contracts in the TDR pilot program and believes that an increase in the participation rate is indicative of contractors viewing TDR as a more economical and less burdensome pricing model than the CSP/PRC model. FY 2020 results reveal a participation rate of 61.3% (2,486 out of 4,053 eligible contracts), which exceeds the 60% target that was originally set. This rate is up from 56.7% in FY 2019 and 53.5% in FY 2018. 

Data usage by contracting officers (Medium) 

Of the four key metrics that are weighted the highest, data usage by contracting officers was the only metric to not exceed its target. This metric is measured by the qualitative evidence of FSS contracting officers using transactional data to negotiate contract-level pricing on TDR pilot contracts. Evaluation of this metric found that “all TDR pilot PCOs have access to data but are not making meaningful use of it,” resulting in a medium score (3 out of 6 points). 

FAS notes that there have been a limited number of individual cases that reflect successful usage of TDR data and acknowledge that there is definite room for improvement. According to FAS, best practice training for individual FSS contracting officer usage will be made available in FY 21. Due to the qualitative nature of this evaluation, it isn’t possible to draw any definitive conclusions about how frequently contracting officers are truly using the transactional data. While this evaluation is an improvement from FY 2019, where contracting officers only had access to data after completing training and requesting access, it is clear that increasing the ability of FSS contracting officers to leverage TDR data will be an emphasis of the expansion plan to be published by GSA. 

Summary 

Collectively, GSA appears to be proud of the results of the FY 2020 evaluation and is touting the program as a less burdensome alternative to the CSP/PRC pricing construct. Their recent blog post makes it clear that they believe the pilot program has successfully demonstrated the value of TDR. From GSA’s perspective, the steady progress of the pilot program has proven the potential of TDR and provides support for continued investment in the program. 

Future of TDR pilot program 

GSA acknowledges that although FY 20 evaluation results are favorable, significant improvements are still needed in order to support an expansion of TDR. FAS identifies the need for contracting officers to leverage transactional data as its key area for improvement. To address this, FAS is expected to implement an aggressive training program that will inform contracting officers on the benefits of having access to the granular pricing information that is supplied by TDR. FAS will be publishing an expansion plan that should describe this effort in greater depth and will also address the following: 

  • The ability of FSS contracting officers to leverage transactional data for price negotiations in lieu of CSP and PRC disclosures 
  • The impact of an expanded data collection on FAS’s ability to leverage the data it currently collects 
  • Impacts on current and future GSA Schedule contractors 
  • Communication to industry partners ahead of changes 
  • Training and tools for category managers that are currently not impacted by TDR 
  • Potential impacts on other FAS initiatives, such as Multiple Award Schedules (MAS) consolidation and implementation of Section 876 of the FY 2019 National Defense Authorization Act 

TDR will only become eligible for expansion once these expansion plan considerations are met. Given GSA’s stance in their blog post, it seems reasonable for contractors to expect this plan to be published and for TDR’s scope to expand. 

What this means for contractors 

TDR was established under the premise that it had the potential to centralize pricing decisions, reduce contract duplication and lower overall acquisition costs. Nearly five years since its inception, GSA believes the pilot program has been able to yield some of its desired results. While the expansion plan has yet to be published, FSS contractors should carefully consider the implications of GSA’s proposed expansion of the program. 

1. Nature of scope expansion 

Given that GSA has acknowledged TDR needs to address potential impacts of other FAS initiatives, it remains unclear how the new scope of TDR will be determined, or which additional MAS categories will be included in the program. Given that the evaluation metrics did not provide guidance on how TDR performed on FSS contracts for service providers, one would expect that the TDR program will continue to be focused on product offerings and related Special Item Numbers (SINs). Additionally, the current evaluation metrics do not provide guidance for how TDR should be assessed or applied when accounting for items with limited sales, complex bundled solutions, fixed price orders and differing terms of sale at the order level. These have always been challenges for the TDR construct and it remains to be seen if the expansion plan will seek to address these limitations. 

2. Service offerings 

Currently, the services offered under Professional Engineering Services SINs are the only professional services that are TDR-eligible. Since the evaluation metrics were silent on the effects of the program on service offerings, one could infer that GSA had issues gaining visibility into unit level hourly rates associated with TDR reported sales, given the federal government’s preference for purchasing services on a firm-fixed price basis. What this means for current TDR contractors under these SINs is unclear. This is somewhat concerning as the current version of the program may not provide a full pricing picture for these organizations going forward, potentially hampering contract negotiations. Whether or not the TDR expansion solves for this issue is an open question. From GSA’s perspective, the implementation of Section 876 from the FY 2019 National Defense Authorization Act may provide some answers for these organizations. 

3. Contract-level pricing 

Per GSA’s analysis, contract-level pricing under TDR has been more favorable for federal buyers for the past three years of the pilot program, which may be an indication that TDR vendors are feeling additional pricing pressure at the contract and/or order levels. However, one should note that no true correlation or causation may exist here. Per OGP’s evaluation, procurement contracting officers (PCOs) have not been effective in using the TDR data, so it seems difficult to conclude that the TDR data has had an impact on contract level pricing for TDR contracts. Additionally, it appears that this conclusion was based on a comparison of year-over-year pricing for GSA contracts and may not represent a measurement of which company/contract actually offered better pricing, or perhaps more important, more value. 

As FAS category managers begin to rely on the TDR data and draw conclusions from the collected transactional information, contractors should expect that FSS contracting officers will begin to use this information in establishing negotiation objectives for new contract proposals, during option exercises, when other contract modifications are executed, or even at other times during the life of the contract. There is an alternate price reductions clause [1] in TDR contracts that allows the contracting officer to ask for, or the contractor to offer, price reductions at any time during the life of the contract). 

4. Best value 

Industry observers should closely consider the emphasis on the contract level pricing evaluation metric described in the report. Measurable reductions in negotiated contract prices are seen as a benefit of the program (with the highest weight). While this is understandable, industry observers should pay attention to how GSA will evaluate this metric relative to overall value achieved. 

The concept of “best value” has long been a foundational tenet of the GSA Schedules program. Price is but one element, of many, in making a best value determination. Quality, desired performance level, total program cost and delivery speed are all examples of important considerations that often drive pricing decisions at the task order level. In our experience, GSA contracting officers have frequently had difficulty accepting the notion that many important terms and conditions specific to an individual sale can cause a contractor to offer pricing that it would not extend to other customers, under different terms and conditions. As GSA contracting officers begin to use transactional data to inform contract level pricing negotiations, contractors may find themselves in situations where they will have to articulate those unique terms and conditions. 

Additionally, while many contractors will cheer the removal of the CSP disclosure requirement and the significant level of effort and risk associated with it (for good reason), a CSP did provide a means of communicating the value delivered by a specific company and its products, services and solutions. Without the support of a current, accurate and complete CSP disclosure, GSA contractors may be left with fewer options to demonstrate their unique value proposition. 

5. Training 

While training contracting officers on how to leverage TDR data effectively is a focal point for GSA, it is important that training on how to review and interpret CSP data is not forgotten, particularly while the CSP/PRC construct is still an option for contractors. For companies still relying on this construct, contracting officers will need to be able to recognize the specific value that each company brings to the table, evidenced by the prices they command in the free and competitive commercial markets. For companies that do continue to rely on a CSP, that data should be treated with a greater weight than data captured from other companies’ pricelists (horizontal or CALC comparisons) or transactional prices, as those other companies may not serve as a good or fair basis of comparison. 

Conclusion 

With FY 20 results in hand, GSA claims that, “The TDR pilot proved it is a more effective, less burdensome alternative to legacy pricing disclosure requirements. When TDR is used, government prices are lower, the reporting burden on contractors is reduced, and small businesses generate stronger sales growth.” It is clear that GSA values the TDR program, and that some level of expansion is likely on the horizon. 

For more information on TDR, or to learn how Baker Tilly specialists can help – please contact us: 

[1] 552.238-81 Price Reductions (May 2019) (Alternate I – April 2014) applies to contracts participating in the Transactional Data Reporting (TDR) pilot. 

 

Healthcare Spotlight: Update on the MSPV Program Transition to DLA

The saga of the protests of the  VA’s planned transfer of its medical/surgical prime vendor program (MSPV) to the Defense Logistics Agency (DLA) continues.  Just yesterday, the Court of Federal Claims denied the Government’s request that the Court remand the entire matter to the agencies for their further consideration, finding that the Government had not shown it had a “substantial and legitimate” concern warranting a remand.  This indicates that the Court will continue to address the merits of the protesters’ arguments and, if it agrees with them, issue an order to the agencies directing how the agencies should address any improprieties.

Earlier this month, the Government had requested the remand and, in so doing, told the court that the agencies’ analysis on remand would include: (1) considerations under the Economy Act 31 U.S.C. § 1535; (2) considerations under the Competition in Contracting Act (CICA), 41 U.S.C. § 3301; (3) whether and to what extent any proposed transfer would have an effect on the scope of the existing DLA contracts or the MSPV 2.0 procurement; and (4) how any transfer would factor in or relate to the DLA pilot program.  Then, according to a joint filing by the parties, Medline (one of the protesters) had consented in principle to the Government’s remand request, but taken the position that a remand “will be most effective and meaningful if the agencies commit to a baseline scope of activities to occur on remand.”  Medline’s suggested list of objectives, includes:

  • An assessment of how, within the confines of CICA, the agencies may obtain the MSPV services, including an assessment of whether it is desirable to consolidate DLA, VA and OGA MSPV needs;
  • If the agencies decide that they wish to consolidate, evaluate whether, when and how to conduct a competition to meet the DLA and VA MSPV needs;
  • If the agencies decide that they wish to consolidate, and that they wish to do so using the existing DLA MSPV contract, evaluate whether such use would constitute an out of scope modification of the DLA MSPV contract;
  • If the agencies decide that they wish to consolidate, and that they wish to do so using existing DLA MSPV contract vehicles, evaluate the business case, as required by FAR Subpart 17, including a meaningful evaluation of the full VISN 20 pilot program and concrete metrics.

Concordance also informed the court that it did not object to the remand—to the extent the Government “articulates a revised remand proposal that includes the list of objectives” set forth by Medline.

Despite the general agreement on the propriety of a remand, the Court now has denied the Government’s request in a short order, but stated that it will soon issue an opinion further explaining it decision.  Stay tuned!

 

GSA Hosting Virtual Professional Services Forum 

GSA announced registration for two virtual professional services category Information Exchange Forum (IEF) round tables. The IEFs present an opportunity for industry to provide data, insight, and recommendations to GSA on issues specific to the professional services category. 

The first IEF is for small businesses and will be held on Tuesday, June 22 from 1:00 – 2:30 pm EDT. The second IEF for mid-tier and large businesses will held on Wednesday, June 23 from 11:30 am – 1 pm EDT. 

Each session will be limited to 100 participants. If you are interested in attending, please email Bounce Quarry (bounce.quarry@gsa.gov) by Monday, June 21, 2021. Please indicate your business size and which session you would like to attend. A meeting link will be provided prior to the Round Table.  

Click here for more information about the forums. 

 

VA Requests More Funding as Veterans Return to VA Hospitals 

The VA is requesting an increase in funding, reports Federal News Network. The Biden Administration has proposed $270 billion in funding for the VA for FY 2022. The VA is requesting a 15 percent increase in medical care funding, which is a 63 percent increase in funding from 2018 according to Senator Jerry Moran, Ranking Member of the Senate Veterans Affairs Committee. During the pandemic, the VA has received additional funding above its annual appropriations, $19.6 billion through the Coronavirus Aid, Relief and Economic Security (CARES) Act and $17 billion through the American Rescue Plan. The VA has not used all the funding received from the CARES Act.  

The request for increased funding does not match the numbers says Moran. There has been a 5 percent increase in the amount of outpatient visits and a 2.4 percent increase in the number of unique patients coming to the VA for health care.  

However, Secretary Denis McDonough said that veterans who have delayed medical treatment during the pandemic are now returning to the VA in droves. Between March and May of this year, there have been 16.5 million appointments within the VA system and 1.25 million appointments sent out to community providers. During March and May of 2020, the VA facilitated 9 million appointments and community providers facilitated less than 700,000 visits. This notable increase in appointments and visits have significant cost implications as the VA seeks to meet the increased demand for its services. 

 

Off the Shelf: A 2021 NDAA Update 

On June 9 on Off the Shelf, Moshe Schwartz, President of Etherton and Associates, provided an update on the 2021 National Defense Authorization Act (NDAA). 

Moshe Schwartz is a former Executive Director of the Advisory Panel on Streamlining and Codifying Acquisition Regulations. He has over 15 years of experience in acquisition policy, where he has provided analysis and legislative support to Congress on acquisition policy and industrial base issues. Schwartz has testified before Congress on various acquisition and industrial base issues.  

Schwartz discussed the key acquisition policy and budgetary priorities that are coming out of the 2021 NDAA. 

 Click here to listen to full show. 

 

IT/Services Mtg with GSA’s IT Vendor Management Office, June 22 

The IT/Services Committee will host a virtual meeting on Tuesday, June 22 at 10 am EDT with special guests from GSA’s IT Government-wide Category and the newly-established Information Technology Vendor Management Office (ITVMO). Members will learn about how the IT Government-wide Category is performing across government and what initiatives the Category has underway for FY21, as well as how the ITVMO supports agencies and industry with more effective and efficient IT acquisition. Additionally, you will also hear about new opportunities to share ideas on ways to improve government/industry collaboration.   

Established in October 2020 by the OMB under the auspices of the IT Government-wide Category and supported by GSA, NASA SEWP, and NIH/NITAAC, the ITVMO has five areas of focus: Data Analytics, IT Acquisition Subject Matter Expertise, BIC Support, SCRM Support, and Vendor Management. 

To attend this virtual meeting, please RSVP to Michael Hanafin at mhanafin@thecgp.org. 

 

Joint BRIC and Cyber and Supply Chain Meeting, June 23 

All Coalition members are invited to a joint virtual meeting of the Business and Regulatory Issues and Cyber and Supply Chain Committees on Wednesday, June 23 from 12:15 – 2:00 pm EDT. The subject of this joint meeting will be Baselining Cybersecurity in the Changing Policy Environment.

We have invited a senior official of CISA to provide a keynote opening to the meeting on “CISA’s Changed Role and Emerging Responsibilities.” Following this presentation, a panel of experts drawn from our community have graciously offered to provide their perspectives on CMMC; Cloud and FedRAMP; and the Cybersecurity Executive Order. They are: 

Bob Metzger, Shareholder, Rogers Joseph O’Donnell 

Townsend Bourne, Partner, Sheppard Mullin 

Cheryl Davis, Senior Director for Strategic Initiatives, Oracle 

Recent cyber incidences, along with the President’s issuance of his Executive Order on Improving the Nation’s Cybersecurity, and the recent release of a White House report on supply chain vulnerabilities, signal a dynamic cybersecurity compliance environment. This joint meeting will provide Coalition Members a solid understanding of the state of play, against which, they may develop an actionable approach to provide value to customer agencies. 

This joint committee meeting is only open to Coalition members. To attend this virtual meeting, please RSVP to Michael Hanafin at mhanafin@thecgp.org.  We look forward to seeing you on June 23! 

 

Annual Joseph P. Caggiano Memorial Golf Tournament, August 18 

We are excited to announce our Annual Joseph P. Caggiano Memorial Golf Tournament will take place at its normal time again this year – August 18th!  The tournament will once again be held at the beautiful Whiskey Creek Golf Club in Ijamsville, MD.

The Coalition hosts this charity tournament in honor of our good friend and colleague, Joe Caggiano, whose career in the government marketplace spanned 25 years, including serving seven years as COO of the Washington Management Group/FedSources, eight years of service in the Navy, and as a principal at Reznick Government, a business advisory firm now known as CohnReznick.

As you may recall from previous years, tournament proceeds will once again support the Coalition’s endowment for a qualified veteran concentrating their studies in the field of US Government procurement and pursuing the JD/LLM degree or the interdisciplinary Masters degree at The George Washington University. Additionally, remaining proceeds will be shared with another soon-to-be announced organization that proudly supports veterans.

Joe would be very proud to know that the Coalition has raised over $125,000 for the scholarship. We cannot thank the procurement community enough for its generosity and support in helping us support veterans and honor our dear friend’s legacy.  

Announcing The CGP Cornhole Tournament 

Not a golfer? No problem! You can still join the fun by registering for the Veranda Club and participating in a cornhole tournament. Contact Matt Cahill at mcahill@thecgp.org for more info.