As we start to experience the heat and humidity for which Washington summers are famous, on neighborhood corners, we may spot some enterprising youths selling lemonade to line their pockets with spending money. What is unseen is the reality that, before undertaking this retail effort, these youngsters had to deconstruct and understand the resources and costs of the process associated with bringing to market a product they could sell at a price that would cover their costs and, in the end, leave them with some sweet moolah. They also needed information about the street corner market, in particular, whether other “businesses” (stands) existed in that market, and if so, whether product differentiation would allow them to offer something that was not perceived as merely duplicative. In other words, they had to develop a business case that allowed them to understand the costs, benefits, and risks of their undertaking.
What is true for lemonade stands is true for larger business efforts. It certainly is true for the follow-on to GSA’s OASIS program. Readers will recall that, back in April, we observed that the Services MAC approach, “largely duplicates the existing MAS program, leaving few key features that differentiate between the two programs.” We opined that:
…GSA’s ongoing development of a business case for [the Services MAC] should examine the customer agency mission support and market implications of abandoning the successful OASIS model. The business case should also examine the market and contract duplication impacts of the convergence between [the Services MAC] and the MAS program.
Just like those youths selling lemonade, GSA needs a business case to understand and demonstrate the costs, benefits, and risks of their OASIS follow-on undertaking. Indeed, one could argue that GSA should have completed its business case before proposing OASIS follow-on solutions to enhance the credibility and objectivity of any follow-on proposed, convey that the follow-on was data-driven, and avoid misperceptions about OASIS and the underpinnings of its successor.
In planning for the successor to OASIS, GSA has gone from OASIS, to OASIS follow-on, to BIC MAC, to the Services MAC, all without a business case and all leading to what is effectively the same result: a duplication of the Schedules along with the development of new support systems. The absence of that business case leaves stakeholders with no rationale for the approach selected, as they draw, correctly or not, their own conclusions for the rationale underlying the follow-on approach. One consistent and troubling perception among stakeholders is that, notwithstanding the metrics of success identified in a previous blog, GSA is walking away from the OASIS approach because it feels it was not successful. In this regard, OASIS and OASIS SB provided over $10 billion in complex professional services mission support to customer agencies in Fiscal Year 2020. Further, projections indicate that OASIS and OASIS SB will exceed $10 billion again in Fiscal Year 2021.
A business case, prepared and released to the public before the issuance of a follow-on approach, would have allayed such concerns and demonstrated that the follow-on was rooted in analysis. It would have addressed customer and industry concerns about contract and systems duplication. It would have utilized risk metrics that evaluated the puts and takes associated with the variables that drive such a complex program.
For this reason, the Coalition suggests that GSA pause the follow-on effort to allow time and resources to be dedicated to a credible business case effort. An independent, cross-functional GSA team should be pulled together to look at the OASIS program, develop a business case, and analyze the best follow-on approach without reliance on or deference to what has been proposed thus far. To proceed on the current path risks undermining the proposed solution with a business case that amounts merely to confirming a preselected approach. As always, Coalition members stand ready to assist GSA with industry input for the OASIS follow-on.
Biden Signs Executive Order on Diversity and Inclusion
On June 25, President Biden released the Executive Order (EO) on Diversity, Equity, Inclusion, and Accessibility in the Federal Workforce. The EO is designed to increase diversity training and rethink the use of salary history as a basis for pay determinations.
The Office of Personnel Management (OPM) and Office of Management and Budget (OMB) will create a strategic plan to set standards and identify strategies for enhancing diversity, equity, inclusion, and accessibility in addition to eliminating equity barriers within 150 days. The EO does not recommend that Federal agencies require chief diversity officers but does recommend looking for opportunities to establish such positions. The EO also tasks the Federal Government with recruiting more minority candidates for Government service by partnering with institutions of higher learning with concentrations of minority students and institutions that serve students with disabilities. For a summary of the EO, click here.
On June 25, the National Institute of Standards and Technology (NIST) released a white paper defining “critical software” in accordance with the Biden Administration’s May 12 Cybersecurity Executive Order (EO). According to the EO, “critical software” will be subject to additional requirements to protect national security.
“EO-critical software is defined as any software that has, or has direct software dependencies upon, one or more components with at least one of these attributes:
- is designed to run with elevated privilege or manage privileges;
- has direct or privileged access to networking or computing resources;
- is designed to control access to data or operational technology;
- performs a function critical to trust; or,
- operates outside of normal trust boundaries with privileged access.”
The white paper includes a chart with preliminary software categories considered “EO-Critical” by NIST. As a next step, the Cybersecurity and Infrastructure Security Agency (CISA) will publish a list of software categories and products that are in scope for that definition and thus subject to further requirements of the EO. The white paper also includes specific definitions of terms within the EO-Critical definition and a host of FAQs.
TMF Receives Boost from Funding Bill
Federal Computer Week reported that the House Appropriations Subcommittee on Financial Services and General Government approved a funding bill that will give the Technology Modernization Fund (TMF) a $50 million boost. The Biden Administration had sought a $500 million increase to the TMF in its fiscal year 2022 budget request. The TMF, which is managed by OMB and GSA, has a history of being trimmed by appropriators. The Trump Administration regularly sought $100 million increases, but only received about $25 million per year. The TMF recently underwent a $1 billion expansion under the American Recue Plan Act. The new funding has led to an uptick in interest and project submissions from agencies. The increase in demand for TMF may sway appropriators to increase funds even further.
According to Fedscoop, DoD said that it will address concerns that the Cybersecurity Maturity Model Certification (CMMC) program will impose extra costs on small businesses. A DoD spokesperson stated that the Department will seek ways to reduce the cost of CMMC for small businesses during the internal review of the program. Some believe that CMMC poses an unfair burden on small businesses since they have less available funds to spend on compliance costs. DoD’s response came after testimony during a House Committee on Small Business meeting last Thursday in which companies said that they were concerned about the costs. Small businesses also expressed concerns about a lack of information and clear communication about CMMC compliance.
DoD is working on addressing this issue through a public media campaign that would spread information about the program. An internal review of CMMC was ordered in March, with a focus on making improvements to DoD policies for small businesses. The review is expected to last until the Fall of 2021. The Government Accountability Office (GAO) is also reviewing the program, specifically looking at how DoD communicates with industry and the impact of CMMC on small businesses.
The Hill reported that on June 25, Senators Maggie Hassan (D-NH) and John Cornyn (R-TX) introduced legislation known as the Federal Cybersecurity Workforce Expansion Act. This bill is aimed at combatting the Government’s cyber workforce shortage. The Act would establish a cybersecurity apprenticeship program at the Cybersecurity and Infrastructure Security Agency (CISA) and would also create a program at the VA to provide veterans with cybersecurity training. The introduction of this bill comes months after several cyber attacks targeting the U.S. According to Senator Hassan, “in order to bolster our cyber defense and protect our critical infrastructure, we need to increase the number of cybersecurity professionals in the Federal Government.”
Another bipartisan bill was introduced in both the House and Senate earlier this year that would establish a program to allow cybersecurity professionals to move through multiple Federal agencies to increase their expertise. Congress is also considering legislation that could help to push back against foreign governments and cyber criminals who attack the U.S.
Ahuja Confirmed as OPM Director
OPM has its first permanent Director in fourteen months after Kiran Ahuja’s confirmation. Federal News Network reported that Vice President Kamala Harris broke a 50-50 Senate tie to confirm the appointment on June 22. Ahuja replaces Kathleen McGettigan, who has been serving on an acting basis since Biden’s Administration began.
Ahuja started her Federal career as an attorney at DoJ, served for a year as OPM Chief of Staff during the Obama Administration, and led the OPM review team during Biden’s transition. In addition, Ahuja spent six years as the Executive Director of Obama’s White House Initiative on Asian Americans and Pacific Islanders. She is the first Asian American Woman to lead OPM and the first South Asian as well.
DoD Updates Procedures for Peer Reviews
On June 30, DoD released a class deviation that updates the peer review requirements of acquisitions for supplies and services. The updated peer review requirements include increasing the threshold for preaward peer reviews of noncompetitive procurements. They also provide further guidance on actions subject to peer review. For example, Defense Pricing and Contracting (DPC) will not conduct postaward peer reviews for the acquisitions of services with a total estimated value greater than $1 billion. DPC will continue independent management reviews of contracts for services. This class deviation will be in effect until incorporated by the Defense Federal Acquisition Regulations (DFARS) or until otherwise rescinded. If you have any questions about noncompetitive peer reviews email email@example.com. For competitive peer reviews, contact firstname.lastname@example.org.
On June 24, 2021 the General Services Administration Office of Inspector General (GSA OIG) released an audit report of the current status and implementation of the Transactional Data Reporting (TDR) pilot just two months after the General Services Administration (GSA) announced that the pilot was “on track” to meet its objectives and would be eligible for expansion.
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. With the issuance of the final rule, GSA commented that the purpose of TDR is to reshape how FSS contract pricing is established, with the intent of centralizing purchasing decisions, reducing contract duplication and lowering acquisition costs.
The results of the audit offer a stark contrast to GSA’s FY 2020 evaluation of the TDR pilot, which found the program to be “meeting or exceeding targets.” GSA OIG concluded that the TDR pilot is “not meeting its intended purpose of improving taxpayer value.”
The following article summarizes GSA OIG’s findings:
TDR pilot audit report summary
GSA OIG has monitored the TDR pilot program since GSA’s Federal Acquisition Service (FAS) released the proposed rule in 2014 and included this audit in their Fiscal Year 2019 Audit Plan. The intent of this audit was to assess the TDR pilot’s current status and determine if FAS has achieved its objective of improving taxpayer value. GSA OIG performed the audit between February 2019 and June 2020. The Office of Government-wide Policy’s (OGP’s) positive FY 2020 evaluation was published after GSA OIG conducted the exit conference associated with their audit of the TDR program, but they still included their assessment of the evaluation findings within their audit report. Ultimately, GSA OIG determined that the TDR pilot was not meeting the stated objectives of the program. A summary of OIG’s findings are as follows:
TDR data is inaccurate and unreliable
GSA FAS has been collecting data from TDR pilot participants for over four years and as directed by GSA’s TDR Data Management Plan they are required to maintain data integrity and ensure the collected data is reliable, accurate and complete. Since inception, the TDR program has been plagued with data issues. While FAS has made improvements related to data completeness, GSA OIG found that they do not have adequate procedures to ensure the data input is accurate and reliable.
GSA FAS indicated that verifying the accuracy of TDR data is done during Contract Assessments (CAs) conducted by Industrial Operations Analysts (IOAs). Through interviews with IOA’s, GSA OIG found that the only inquiry regarding TDR was a simple yes or no question of whether the contractor is participating in the TDR pilot. This led GSA OIG to conclude that IOAs are unaware of their responsibility to validate the accuracy of TDR data.
FAS contracting personnel are not using TDR data
Since the TDR final rule was released in 2016, FAS has collected almost seven million lines of transactional data; however, GSA OIG concluded that FAS contracting personnel not only lacked understanding and access to the TDR data, but also that the data was not being used to affect pricing because of data quality issues. GSA OIG discovered that the required training course for FAS contracting personnel to gain access to TDR data included instruction to not utilize transaction data for any type of price analysis or market research due to the validity of the data. FAS’s current policy notes that contracting personnel should consider TDR data during price negotiations, which is a direct contradiction to GSA’s July 2018 TDR Data Management Plan training. GSA OIG notes that after their audit exit conference they were provided a September 2020 TDR Data Management Plan in which the above mentioned training is no longer necessary to access TDR data.
GSA OIG found that the vast majority of contracting personnel who administered TDR contracts not only lacked an understanding of TDR data, but either did not have access to the data, or for those that did have access, they had never actually accessed the data. Additionally, GSA did not train contracting personnel on how to use TDR data, and indicated that they expected FAS employees would know how to “apply it to their jobs.” Overall GSA OIG is “concerned that, given the data integrity issues, the TDR data could lead to erroneous conclusions and flawed decision making if it is used for pricing or buying decisions.”
Use of other FAS pricing tools
Through their interviews with contracting personnel, GSA OIG found that pricings tools such as Contract-Awarded Labor Category (CALC), GSA Advantage! and Price Point Plus Portal (4P) were used for pricing analysis and market research. This finding is concerning to GSA OIG as they have previously reported that the use of the above mentioned pricing tools has led to flawed methodologies and practices when performing pricing analysis. GSA OIG’s December 2019 report notes that “FAS contracting officers relied either solely or primarily on pricing tools to establish price reasonableness, inappropriately based pricing comparisons on labor categories that were not the “same or similar,” used inconsistent sampling methods and used an inappropriate basis to establish acceptable price ranges.”
The above findings led GSA OIG to conclude that the TDR pilot has not met its intended purpose to improve value to the taxpayers. This determination is due to unreliable and inaccurate data, lack of access to TDR data and use by contracting personnel and the use of flawed pricing tools. Throughout the audit report, GSA OIG addresses GSA’s recent FY 20 evaluation results and directly contradicts their assessment that the TDR pilot is meeting or exceeding targets.
GSA OIG recommendations and GSA response
GSA OIG is clear that they want to see the TDR program come to an end. Their recommendations to the FAS Commissioner include taking immediate action to restrict new or existing contractors from joining the TDR pilot and restrict access and use of TDR data. GSA OIG’s second recommendation goes a step further and suggests the development and implementation of an exit strategy to transition TDR contractors out of the pilot program.
The final report includes the FAS Commissioner’s response, and notes that the commissioner indicated that GSA agreed with many of the findings and that action has been or will be taken to address these issues. While the FAS Commissioner generally agreed with the findings, he disagreed with the recommendations and conclusion that the TDR pilot was not meeting its purpose. GSA OIG is clearly concerned that despite all the apparent deficiencies with the TDR pilot program, GSA FAS is determined to continue and expand the program without truly addressing the issues.
Drastically different conclusions between GSA FAS and GSA OIG
Since the inception of TDR, GSA OIG has voiced its concerns about the program. In 2015, GSA OIG provided comments to the proposed GSAR rule and has continued to provide regular assessments of the program. In addition to this current audit report, GSA OIG issued an audit report in 2018. A theme that runs through the assessments and audits is GSA OIG’s concern that TDR eliminates critical price protections for FSS contracts through the elimination of the Price Reductions Clause and Commercial Sales Practices disclosure. GSA OIG continues to criticize all aspects of the TDR pilot while GSA FAS is optimistic that the program can lead to better informed contracting personnel and reduced contractor burden. The two often agree on findings but then come to drastically different conclusions.
What should GSA Schedule contractors be thinking about following the release of the report?
- Pricing pressure on the horizon? The audit report is critical of GSA’s apparent inability to leverage the collected data in GSA Schedule contract negotiations. As GSA continues to improve its use of the information, it is possible that TDR vendors will begin seeing more aggressive pricing negotiations as GSA pushes to achieve positive value metrics and to strengthen its case for the program’s expansion.
- Work closely with contracting officers: One of the more surprising details from the audit report was the lack of understanding from contracting officers of the information collected. As TDR vendors begin encountering the use of transactional data in contract negotiations, they should be prepared to help educate these individuals on how to interpret the information so that they are not making flawed determinations. Within the context of the Schedules consolidation, where contracting officers are working more frequently with disparate market offerings, this is likely to be more important than ever..
- Increased competition: Category management defines Tier 3, Best-in-Class vehicles as contracts that feature data reporting as a key requirement. In effect, a CSP does not allow GSA to claim the schedules as Best-in-Class. Data reporting is a choice by GSA to achieve BIC status. As GSA commits to this model further in the future, the barrier to entry is lower. Contractors may find increased competition on the schedules program, which could force their attention to other more specialized vehicles. Paying close attention to the acquisition landscape, and how it changes, will be as important as ever.
- GSA OIG may shift compliance focus: The GSA Schedules may not be as fertile a noncompliance territory for the enforcement community in the future. According to the GSA OIG, Consolidation of Schedules led to the expansion of TDR without actually expanding the program. Where does the OIG go as audit matters if pricing related noncompliance matters begin to dwindle in the future? GSA contractors should be aware that other areas of GSA compliance may receive more focus (labor qualifications, Trade Agreements Act, information security, supply chain assurance, etc.).
For more information on TDR, or to learn how Baker Tilly specialists can help – please contact us:
Legal Corner: The Making of “Made in America”: White House Begins to Implement New “Buy American” Policies
The Legal Corner provides the legal 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.
Authored by: Jason Workmaster, Alex Sarria, and Elizabeth Cappiello; Miller & Chevalier
The White House recently issued a memorandum, titled “Increasing Opportunities for Domestic Sourcing and Reducing the Need for Waivers from Made in America Laws,” which provides guidance to federal agencies on the implementation of the Biden administration’s “Made in America” executive order (the E.O.). The Made in America Memo offers additional insight into the role of the newly created “Made in America Office” (MIAO) and the White House’s plans to review several longstanding waivers and exceptions to the Buy American Act (BAA). With less than one month to go before the Federal Acquisition Regulation (FAR) Council is scheduled to issue potentially major changes to the regulations governing the BAA (on or before July 25, 2021), contractors should look to the Memo for clues on where the administration’s Made in America policies are headed next.
The Made in America Executive Order
On January 25, 2021, President Biden signed the “Made in America” executive order, which contemplates a series of actions to maximize the U.S. government’s use of goods, products, and materials produced, and services offered, in the United States. Among other actions, the E.O. required the Office of Management and Budget (OMB) to establish the MIAO with the principal mission of increasing reliance on domestic supply chains and reducing the need for waivers. The E.O. also signaled the White House’s intent to: (1) reassess the continuing need for the BAA’s commercial item information technology (IT) exception and partial BAA waiver for commercial-off-the-shelf (COTS) items (Section 10) and (2) study the economic impact of BAA waivers under the Trade Agreements Act (TAA) (Section 12).
The Made in America Memo
The Made in America Memo provides additional guidance regarding the MIAO’s implementation of the E.O. and sets forth a “phased implementation approach” to help covered agencies adjust. The first step is for each covered federal agency to designate a “Senior Accountable Official,” or SAO, which will direct the agency’s compliance with Made in America Laws and interface with the MIAO. Next, the MIAO and OMB will work with SAOs across government to review “market conditions” for product categories where domestic “non-availability” determinations are most prevalent. The MIAO also will develop standardized waiver requirements, focusing first on non-availability and Jones Act waiver requests, and implement new reporting requirements designed to help the MIAO evaluate existing waiver procedures.
After this initial phase, the MIAO will initiate a series of “additional planned actions related to waivers,” several of which promise to be of great interest to U.S. government contractors. These additional actions will include assessment of unreasonable cost waivers, the commercial item IT exception to the BAA, the partial BAA waiver for COTS items, enforcement of domestic sourcing laws in federal property sales, and how to ensure agency compliance with U.S.-flag cargo preference laws. We provide additional detail on each of these initiatives below.
Senior Accountable Officials
The Memo requires each covered agency to designate a “sufficiently senior” SAO for domestic sourcing by June 30, 2021. The SAO will be in charge of implementing Made in America Laws throughout the agency. In conjunction with the MIAO, this individual also will be responsible for identifying opportunities to increase the agency’s reliance on U.S. products, materials, and services by, among other actions:
- Conducting supplier scouting via the Department of Commerce’s Manufacturing Extension Partnership (MEP) to identify U.S. companies that produce U.S.-made goods
- Participating in interagency product level reviews to explore new domestic sourcing opportunities
- Strengthening agency waiver processes
- Managing a waiver reduction strategy
Product Category Reviews
The MIAO and OMB’s Office of Federal Procurement Policy will “convene” covered agencies to review product categories where domestic non-availability determinations are most common. Leveraging category management principles, the focus of these reviews will be on the underlying market conditions supporting such determinations. Covered agencies also will share “market intelligence” to identify common challenges, coordinate multi-agency procurement strategies (where feasible), and work to stimulate industry interest in domestic sourcing. Though not specifically stated in the Memo, the starting point for such reviews could be the non-available articles listed in FAR Subpart 25.1 (Buy American Supplies) and agency-specific non-availability determinations (e.g., DFARS 225.7018-4 (Non-availability determination)).
Standardized Waiver Information
The Made in America Memo also identifies information that all covered agencies must provide the MIAO when submitting waiver requests based upon non-availability and under Section 501 of the Jones Act (also known as Merchant Marine Act of 1920 (Pub. L. No. 66-261)). Among other information, a covered agency will have to describe its market research/outreach efforts and acquisition planning (for non-availability waiver requests) and explain why a qualified vessel cannot be utilized (for Jones Act waiver requests). For transactional waiver reviews (e.g., in connection with a procurement), the MIAO will complete its review of most waiver requests within three to seven business days and no later than 15 days from the date of submission to OMB. The MIAO also plans to develop standard procedures requiring agencies to describe and publicize proposed waivers on a public website to be established by the General Services Administration (GSA) by early FY 2022.
Made in America Reporting
SAOs must submit by July 24, 2021 an initial report regarding their agency’s use and compliance with Made in America Laws. According to the Memo, these reports “should focus on proactive steps the agency is or will be taking to strengthen and diversify existing domestic supplier bases and create new opportunities where there are gaps, consistent with the purpose and policy of the [Made in America E.O.].” At a minimum, each SAO’s report must describe:
- Their agency’s implementation of, and compliance with, Made in America Laws, including the management of waivers and a description of internal management controls aimed at maximizing use of U.S. domestic sources
- Their agency’s reliance on any longstanding or nationwide waivers of Made in America Laws, including a description of whether and how such waivers are consistent with the policy goals set forth in the E.O.
- Recommendations for how to further effectuate the policy goals set forth in the E.O.
- The status and outcome of the agency’s review of any actions that are inconsistent with the policy goals set forth in the E.O.
Beginning January 23, 2022, covered agencies will be required to update their reports semi-annually. These updated reports must demonstrate progress towards growing U.S. domestic manufacturing and increasing compliance with Made in America Laws.
Up Next: Taking Aim at Longstanding BAA Exceptions and Waivers?
After completing those “initial” steps, the MIAO will take “additional planned actions related to waivers,” according to the Made in America Memo. The scope and outcome of these additional actions remains to be seen, though U.S. government contractors should pay close attention to this second phase of the White House’s Made in America strategy because it could result in a weakening or abolishment of longstanding exceptions and waivers of the BAA’s test for identifying a domestic end product or construction material. Many companies have structured their existing supply chains and BAA compliance on the availability of such exceptions and waivers. As a result, any major changes to the applicable rules could have a significant impact on contractors and the federal agencies that purchase their products.
For example, government and commercial IT contractors have long depended on the commercial item IT exception to the BAA. The Memo highlights the White House’s plan to review the continuing need for this exception, however, noting that it has been in effect for 15 years. Specifically, the MIAO will work with the FAR Council, agency IT experts, and interested stakeholders to “understand the extent to which the original purpose of the [commercial item IT] exception, or other goals of the exception, remain relevant, the impact of narrowing or lifting the exception, and the extent to which current conditions may support such narrowing or lifting to further promote Made in America policies with appropriate strategies in place to strengthen domestic IT supply chains.” Similarly, the government and many commercial item contractors have come to rely on a waiver of the BAA’s “cost of components” test for commercial off-the-shelf (COTS) items. But this partial waiver is predicated on policy justifications that may longer be applicable, according to the Memo. Therefore, the MIAO will review “the extent to which the basis of the partial waiver remains relevant, the impact of rescinding the partial waiver, and the extent to which current conditions may support rescission of the partial waiver to further promote Made in America policies with appropriate strategies in place to strengthen domestic commercial supply chains.” Finally, though not included in the list of exceptions and waivers slated for MIAO review, the Memo requires covered agencies to report on the use of BAA waivers under the TAA. It is unclear how the MIAO will use this information, but agencies and contractors that rely on such TAA waivers should closely monitor any related changes proposed by the administration, as such changes could greatly impact their approach to BAA compliance.
Since issuing the Made in America E.O. in January 2021, the White House has taken steps to follow through on President Biden’s promise to bolster U.S. domestic manufacturing. The June 2021 Made in America Memo is the latest evidence of this plan of action and comes just one month before the FAR Council is set to make potentially game-changing modifications to the FAR’s BAA regulations. We will continue to monitor and report on the developments in this critical area of compliance. In the meantime, if you have questions about the administrations Made in America initiatives, please contact one of the Miller & Chevalier attorneys listed below:
Legal Corner: GSA Federal Acquisition Service Commissioner Rejects IG Recommendation to End Transactional Data Reporting (TDR) Program
The Legal Corner provides the legal 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.
Authored by Jason Workmaster and Alex Sarria, Miller & Chevalier
Last month, as detailed in our prior advisory, the General Services Administration (GSA) announced that the Transactional Data Reporting (TDR) pilot program had exceeded target goals and that expansion of the program—which establishes an alternative to the traditional Commercial Sales Practices/Price Reductions Clause GSA Schedule pricing regime—would continue. Now, however, the GSA Inspector General (IG) has released a report on TDR, sharply criticizing the program and calling for its termination. In particular, the IG contends that TDR data are inaccurate and unreliable, and that GSA Federal Acquisition Service (FAS) contracting personnel are not utilizing the data. Indeed, in the report, the IG goes so far as to recommend that FAS:
- Take immediate action to mitigate risks associated with the TDR pilot by:
- Restricting additional contractors from opting into the TDR pilot; and
- Restricting access to, and use of, the TDR pilot data.
- Develop and implement an exit strategy for the TDR pilot and transition participating contractors out of the TDR pilot.
The FAS Commissioner, however, has rejected these recommendations. While agreeing with the IG that there are issues regarding FAS contracting personnel’s ability to access and understand the data, as well as deficiencies with certain pricing tools, the Commissioner rejected the IG’s contentions that TDR data are “inaccurate and unreliable”, and that the TDR pilot is not improving value to taxpayers. In this regard, the Commissioner pointed to various improved metrics under the program such as stronger sales growth for small businesses participating in TDR and reduced contractor reporting burdens.
The IG has requested that the FAS Commissioner reconsider his rejection of the IG’s recommendations, and it remains to be seen how this dispute will ultimately play out. Miller & Chevalier will continue to monitor any developments.
For more information, please contact:
Registration for GSA’s New Services Industry Day 2 is Now Open
GSA announced that they will be holding a second industry day for the new Services Multi-Agency Contract (MAC) on Thursday, July 22, 2021. The Services MAC is a Governmentwide contract being developed by GSA which aims to address a range of cross-category services demanded by agencies. The webinar, hosted by GSA’s Office of Professional Services and Human Capital (PSHC), will be held from 11 am to 12:30 pm EDT. It will include strategy updates, feedback on the most recent RFI, and answers to industry questions. Questions can be emailed to PSHCemail@example.com. For more information and the registration link, click here.
GAO Highlights Challenges Faced by DOD in IT Security and Acquisition
On June 23, the US Government Accountability Office (GAO) released a report outlining the challenges DoD faces in modernizing its IT development and acquisition programs. GAO found that of 22 DoD programs using a register to manage risks, GAO’s assessments of risks were higher for 10 programs, while DoD’s assessments of risk were higher for three programs. This indicates that some programs may be underreporting risks associated with IT development and acquisition.
DoD has recently taken steps to improve the management of its IT acquisitions, including the implementation of Agile software development. However, two-thirds of surveyed DoD programs reported that the Department had implemented best practices in this regard, “to only some or little to no extent”. DoD also has implemented new data sharing and transparency strategies to improve acquisitions. GAO also found that, as of February, DoD still lacked data strategies or finalized data metrics.
GAO made two recommendations to address these issues. DoD conferred with both.
Off the Shelf: Key Compliance Issues in the GSA Schedules Program
This week on Off the Shelf, Jason Workmaster of Miller & Chevalier Chartered provided an update on key compliance issues around GSA’s Schedules program, including trends in oversight and enforcement actions.
Workmaster discusses the impact of the withdrawal from Afghanistan on Government contractors, including steps contractors can take to reduce risk. He also shared insights on a fascinating Armed Services Board of Contract Appeals case addressing how and when a contractor can challenge audit findings and methodologies.
Finally, Workmaster provided the latest update on the Court of Claims bid protest involving the Department of Veterans Affairs’ (VA) Medical Surgical Prime Vendor (MSPV) program.
Click here to access the podcast.
DoD Names Acting Chief Information Security Officer
On June 25, Fedscoop reported that John Garstka will serve as Acting Chief Information Security Officer (CISO) for Acquisition and Sustainment at DoD. Garstka will be responsible for leading the integration of security and cyber efforts within the Office of the Under Secretary of Defense, working to ensure security within DoD’s technology supply chain, and ensuring the digital security of weapons systems across the services. Formerly, Garstka held leadership roles within the Office of the CISO at DoD, most recently as Director of Cyber Programs. From 2000 to 2002, he served as the Chief Technology Officer for the Joint Chiefs of Staff. Garstka also spent over a decade in the U.S. Air Force under the space division.
BRIC/Cyber Meeting Follow-Up
On June 23, the Coalition held a joint BRIC and Cyber and Supply Chain committee meeting with:
- Bob Kolasky, Assistant Director, National Risk Management Center, CISA – Keynote Speaker
- Bob Metzger, Shareholder, Roger Joseph O’Donnell
- Townsend Bourne, Partner, Sheppard Mullin
- Cheryl Davis, Senior Director for Strategic Initiatives, Oracle.
The meeting discussed the recent cyber Executive Order, Improving the Nation’s Cybersecurity; Cybersecurity Maturity Model Certification (CMMC); and Cloud and FedRAMP. Our speakers gave members a great understanding of the basics of cybersecurity compliance.
The complimentary recording from the joint committee meeting is available to members here.
July 8 – Summer of Compliance Webinar: GSA Schedules – What Every Schedule Holder Needs to Know
On July 8 from 12:00 – 1:00 pm EDT, the Coalition will host its first “Summer of Compliance” 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.
Register for this webinar HERE.
July 15 & 22 – Webinars: Government Contracts Compliance Update Parts I & II
On July 15 and July 22 from 12:00 – 1:00 pm EDT, the Coalition will host 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 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 are excited to announce that our Annual Joseph P. Caggiano Memorial Golf Tournament will take place in person again this year on August 18! 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.
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 to support veterans and honor Joe Caggiano’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 firstname.lastname@example.org for more info.