Friday Flash, 07.20.12

Comment of the Week

Over the last two weeks, three events have highlighted the need for fundamental reform of procurement processes, procedures, and regulations in order to deliver a more efficient and effective procurement system.   On July 11th,  Joe Jordan, Administrator for Federal Procurement Policy, and Dan Tangherlini, Acting Administrator of the General Services Administrator, briefed the President’s Management Advisory Board on Strategic Sourcing.  The briefing highlighted their efforts to increase strategic sourcing throughout government, and it included a discussion of plans for at least 10 new strategic sourcing initiatives over the next two years.  The stated goal is to deliver $10 billion in savings by 2014.

On July 18th, the Coalition for Government Procurement conducted a Forum on the Future of Multiple Award Contracting.  At the Forum, much of the discussion among both the government and industry panelists focused on contract duplication.  As outlined by Bloomberg Government, the number of multiple award IDIQ contracts has grown from 437 in 2006 to at least 1182 in 2012.  This growth in contract duplication is unsustainable for government and industry, and as emphasized by the panelists, ultimately increases costs to the taxpayer.

Finally, also on July 18th, Cass Sunstein, Administrator of the Office of Information and Regulatory Affairs, posted a blog on OMBlog asking the public for feedback on the Administration’s regulatory review initiative.  This initiative is pursuant to the President’s Executive Order 13,563, Improving Regulation and Regulatory Review.  In the blog, Administrator Sunstein wrote the following:

            To improve our review and make it as ambitious as possible, we are announcing today, an opportunity for members of the public to offer their ideas.  Which rules  are outdated?  Which ones are imposing unjustified costs?  Which ones can be improved or made more effective?  Submit your ideas at WhiteHouse.gov/advise. They will be given careful consideration.

In the spirit of Administrator Sunstein’s request, the Comment of the Week provides the following recommendations for a more efficient and effective procurement system:

  • Reduce contract duplication.  As evidenced by the Bloomberg Government analysis, the growth in multiple award contracts (MACs)for the same or similar services and/or products is out of control.  Each time a solicitation for a multiple award contract is issued, it means government and industry spend increasingly scarce bid and proposals and administrative funds to compete for, evaluate, and manage new contracts.  These costs ultimately are passed on to the taxpayer through higher overall contract costs and/or prices.  One approach might be to leverage the existing multiple award schedules to supplement and/or support MAC opportunities.  Certainly, this idea and others should be explored, but we should not wait.  As one erudite panelist noted, we collectively can no longer afford it!
  • Improve the requirements development process.  Improving requirements development immediately will increase competition, reduce costs, and improve outcomes for government, taxpayer and industry.   Clear, sound government requirements and commitments create the real economic incentives for contractors to compete.  Requirements development is critical to best value outcomes that save the taxpayer money.  Too often there is a focus on form (process), even to the point of duplication, over substance (requirements).  It is time to focus on the substance!
  • Put “commercial” back in commercial item contracting.  Since the bipartisan enactment of the Federal Acquisition Streamlining Act of 1994, which authorized commercial item contracting, regulation creep and growth government-unique contract terms has diluted the efficiency and effectiveness of commercial item contracting. Costly, burdensome regulations and contract terms that limit the effectiveness and/or increase the costs of commercial item contracting should be eliminated to the maximum extent practicable.  This effort includes a review of multiple award schedule terms and conditions.  Consistent with the President’s Executive Order 13,563, it is time to re-energize commercial item contracting!
  • Address data reporting.  Data is not a free good.  In response to government data reporting requirements, contractors invest in systems and infrastructures to track, collect and report the mandated data.  Too often, agencies and/or departments within agencies include unique and conflicting data reporting requirements in their contracts.  As a result, contractors make multiple investments to address these differing requirements.  Government and industry should work together to adopt efficient and effective reporting requirements to the extent the data is needed.  This effort should be ground in standard commercial practice and assure that contractor reporting will not be required for data that is already in the government’s possession.  Sound, efficient, and effective data requirements can be a win for government, taxpayers, and industry!

Over the coming weeks, we will continue to highlight each of these areas and the opportunity for fundamental improvements to our procurement system.  Finally, perhaps it is time for a comprehensive Myth-Busters summit between government and industry on how we can collectively improve the efficiency and effectiveness of the procurement system.  The Coalition is ready to host such an event.

 

Coalition Comments on SBA Rule

The Small Business Administration issued a proposed rule that implemented the authorities of the Small Business Jobs Act to set-aside contracts and orders under multiple award contracts.  SBA applies the rule to both multiple award contracts issued pursuant to FAR Part 16 and the GSA Multiple Award Schedule program.  The rule also proposed changes to reduce the impact of contract consolidation and bundling on small business.  The Coalition strongly supports efforts to increase opportunities for small business.  However, the rule as drafted may have unintended consequences on some small GSA Schedule contractors.

The rule authorizes agencies to partially set-aside or reserve contracts and orders for small business concerns on multiple award contracts.  The authority is discretionary however a contracting officer must document any decision not to exercise the authority.  If a contracting agency reserves the right to set-aside orders for small business but during the course of performance does not do so, it must document the reasons why.  Further, SBA procurement center representatives have authority to review acquisitions that are not set-aside or reserved or where the government reserved the right to set aside orders for small companies but did not do so.

In this proposed rule SBA applies its traditional eligibility criteria in determining which companies qualify as small business concerns.  A non-manufacturer must supply the product of a small manufacturer, unless SBA has waived application of the rule.  A small business must perform 50% of the cost of performance.  These criteria historically did not apply on the GSA Schedule.  We are concerned that application of these terms may be overly restrictive in a commercial item environment.  The unintended consequence of the change may be to exclude companies who have long considered themselves to be small from small business opportunities.  An interim FAR issued in November 2011, did apply these terms to GSA ordering using discretionary set-aside authority of the Small Business jobs Act.  The rule was issued apparently in anticipation of SBA’s rulemaking.

The Coalition prepared comments in response to the proposed rule. We requested that prior to issuing a final rule for either the FAR or the SBA regulations covering the GSA Schedule, the government analyze the impact of the non-manufacturer rule and the limitation on subcontracting on current GSA schedule small business contractors.

 

More Strategic Sourcing Ahead

Strategic sourcing was a main topic of discussion at the President’s Management Advisory Board meeting last week.  Both Joe Jordan, Acting Administrator of the Office of Federal Procurement Policy and Dan Tangherlini, Acting GSA Administrator, presented on the Administration’s plans to expand the use of strategic sourcing vehicles in order to achieve even greater contract savings.  According to Joe Jordan, there are concerns about decentralized and fragmented spending across agencies which results inconsistent pricing for the same item.  To improve strategic sourcing government-wide, Jordan put forth a number of proposals including:

  • Issuing agency-wide strategic sourcing vehicle use policies
  • Establishing a Strategic Sourcing Advisory Council
  • Creating a prices paid portal
  • Expanding current data capture systems to other commodities

Dan Tangherlini also presented on GSA’s plans to expand strategic sourcing.  He indicated that 10 new strategic sourcing vehicles will be established—  5 in 2013 and 5 in 2014 with the goal of achieving $10 billion in savings by 2014.  In addition, a key principle of the plan would be to enhance the visibility of spending and pricing data across the government.  During the meeting, Tangherlini acknowledged and requested feedback on some unresolved issues, such as how GSA can maximize the utilization of government-wide solutions without a mandate or direct control to do so.

At the Coalition’s forum this week on The Future of Multiple Award Contracting, Jeff Koses, Director of GSA’s Office of Acquisition Operations, provided more details on GSA’s strategic sourcing activities.  According to Koses, while a number of new Federal Strategic Sourcing Initiatives are in development, not all of them will be through GSA.  For example, a strategic sourcing vehicle for Information Sources will be released with the Library of Congress serving as the executive agent.  Given the attention that the OFPP and GSA are paying to strategic sourcing, the Coalition will engage on this issue with acquisition leadership on behalf of the membership.

 

Limited Spots Remain — 2012 Wounded Veterans Charity Golf Tournament

Only six weeks remain until the 2012 Wounded Veterans Charity Golf Tournament and players are registering quickly! Limited spots remain, so don’t get shut out! Reserve your sponsorship or foursome today to maximize your visibility and support this great event. Join us on August 29th at the Whiskey Creek Golf Club in Ijamsville, MD, for a day of golf in support of a great cause. The proceeds from the Tournament sponsor efforts to promote the hiring of returning wounded service men and women, providing the training necessary to rejoin the workforce. Last year, the Coalition was able to donate over $10,000 to Hope for Warriors and Operation Second Chance in addition to money raised for the Wounded Veterans Fund. Thanks to your generous support and participation the event was a great success, so don’t miss your chance to participate this year! Playing spaces are filling up fast, and even if you are not a golfer, a sponsorship is a great way to lend your support! Register here>>

 

GSA Assessing Use of LEED Rating System

GSA is in the process of evaluating its building rating tools used to measure high performance green buildings in accordance with the Energy Independence and Security Act of 2007.  Although GSA has used the US Green Building Council (USGBC) LEED rating system in recent years to improve energy and environmental performance across its buildings portfolio, GSA has come under political pressure to discontinue its use of the program.  At the center of the debate is proposed changes to the LEED rating system next year that discourage the use of some plastics and chemicals used in construction.   Despite concerns about the proposed chemical criteria, support for the rating system and its sustainability goals is strong based on USGBC’s broad membership- from large companies and small businesses to nonprofits and governments in the US and abroad.  USGBC has asked for the Coalition’s support for GSA’s continued use of the LEED program, and we are interested to hear member opinions on this matter.  If you have any feedback, please contact Aubrey Woolley at awoolley@thecgp.org.

 

New GSA Cloud Brokerage RFI

As Mark Day, Director of Strategic Programs in GSA’s Office of Integrated Technology Services indicated at a recent Coalition IT/Services Committee, GSA is interested in hearing from industry on cloud brokerages.  On Tuesday, GSA’s RFI was posted on FedBizOpps.gov to gather feedback on new ideas for acquisition vehicles for cloud-based storage and computing services. According to the RFI, GSA is seeking information about alternative models and/or solutions for future cloud acquisition vehicles and processes that further these goals. It goes on to explain a concept known as, “a ‘cloud broker’ or an entity that manages the use, performance and delivery of cloud services, and negotiates relationships between Cloud Providers and Cloud Consumers.”

Given Federal agencies increasing interest in migrating IT infrastructure and applications to the cloud, the objective of GSA’s RFI is to learn more about how government can further leverage the key characteristics and advantages of cloud computing to save money and increase IT efficiencies. While cloud brokerage is one idea that exists in the field, GSA reported in the RFI that on a larger scale, they are seeking innovative industry approaches to acquiring, ordering, securing, provisioning and managing advanced IT services. All sources are invited to submit information, comments, feedback and recommendations for potential development and implementation of a new acquisition vehicle and corresponding business model for acquiring cloud IT services.

 

Upcoming Changes to the Federal Workplace

With downward pressure on the Federal budget, agencies are adopting innovative means of reducing their property footprint and the workplace itself for many government employees.  Learn more about this trend at the upcoming Alternative Workplace Strategies forum on July 24th hosted by the Federal Buildings Committee.

Alternative Workplace Strategies Forum

July 24th, 10 a.m. – 12 p.m.

Mayer Brown

1999 K Street, NW, Washington, DC

The event, which is open to all members, will feature a public/private sector dialogue on alternative workplace requirements and trends in the Federal market. Commercial best practices will also be presented as a model for Federal agencies as they transition to a more flexible mobile workplace and achieve their missions in the current budget environment.

Government Speakers:

• Larry Melton, Assistant Commissioner for Facilities Management, GSA Public Buildings Service (PBS)

• Donald Bathurst, Chief Administrative Officer, Department of Homeland Security

• Bart Bush, Assistant Commissioner, Portfolio, PBS [Invited]

• Brian MacDonald, Senior Program Officer, Office of Facilities Management & Policy, Department of Health and Human Services

 

Industry Speakers:

• Chris Hood, Managing Director, Workplace Innovation, CBRE

• Jim Reidy, Director, Capital and Real Estate Transformations, Deloitte

If you would like to attend the Alternative Workplace Strategies forum, please RSVP to Roy Dicharry at rdicharry@thecgp.org.

 

Highlights from The Future of Multiple Award Contracts Forum

On Wednesday, the Coalition hosted a breakfast forum: The Future of Multiple Award Contracts featuring government and industry acquisition leaders who discussed program development, trends and growth in this $250 billion market.  In conjunction with the event, the Coalition also launched a new GWAC, MAC & Enterprise Committee to focus on these contract vehicles government-wide.

The Coalition would like to thank title sponsor Bloomberg Government, the panelists and moderators for making the forum a success!  Below are some of the highlights from the event.

Panel 1: Jon Etherton, President of Etherton & Associates; Brian Friel, Bloomberg Analyst; Tom Sisti, Director and Chief Legislative Counsel, SAP; and moderator, David Drabkin, Director, Acquisition Policy, Northrop Grumman, served on the first panel and discussed the development, growth and trends of MAC / GWAC vehicles and what these developments mean for the future. Friel of Bloomberg Government reported that for the last decade, MAC and GWAC usage has grown at an exponential rate- in the last six years alone, the number of contracts has more than doubled. Agency specific MACs have encountered the most significant growth, with the market reaching $77 B. However while this market growth is a positive trend, panelists also discussed the impacts of duplicative contracting, which slows efforts to streamline the procurement process. Sisti explained that multiple vehicles can be overwhelming for program managers, who must sort through all the options to find best-value. Etherton added that multiple vehicles make it harder for agencies to track where procurement funds are being spent. The panel also discussed the increase in sales for small businesses using MACs and GWACs, and a shift towards cost-plus contracts and away from time & materials.

Panel 2: The second panel of the Future of Multiple Award Contracting event included Robert Coen, Deputy Program Director, NIH Information Technology Acquisition and Assessment Center (NITAAC) GWAC Program, NIH CIO-SP3; Richard Blake, Technical Lead, GSA Alliant Governmentwide Acquisition Contract (GWAC); Joanne Woytek, Program Manager/CoTR, NASA SEWP and Mike Pullen, Program Manager, Deloitte Services LP as moderator. The panelists spoke to a host of issues including, contract duplication, education, industry outreach and streamlining the acquisition process.

The panelists agreed on the importance of communications with customer agencies and industry as key to an effective program.  In terms of agency outreach, Robert Coen highlighted NITAAC’s commitment to reaching out to the buying community and elevating an awareness of CIO-SP3.  Joanne Woytek also spoke to NASA SEWP’s effort to communicate with agencies about SEWP’s ability to meet almost any agency’s needs.  However, she also noted that the large scale of the contract sometimes leads agencies to think they’re better off creating their own more targeted vehicles. “People see what we do and because we do it all, they say, ‘If I could do it specifically, I could solve my problem,’ ” Woytek said. “They think, ‘I need to buy exactly this.’ We need to get the message out that they can do that through GWACs.” On industry communications, Richard Blake emphasized GSA’s commitment to engaging with both customer agencies and vendor partners and noted the ability to conduct outreach events virtually through new tools such as GSA’s Interact.

Panel 3 Highlights: The third panel included Jeff Koses, Director, Office of Acquisition Operations, GSA FAS; Mike Smith, Director, Strategic Sourcing Program Office, DHS EAGLE; Elliott Branch, Deputy Assistant Secretary, Navy (Acquisition and Procurement) in the Office of the Assistant Secretary of the Navy (Research, Development and Acquisition), US Navy SeaPort-e, and Roger Waldron, President of the Coalition, as moderator. The three panelists discussed their programs, current buying trends and future plans for multiple award contracts and enterprise contracting. Jeff Koses provided attendees with information on GSA’s new professional services vehicle, OASIS. The concept is for OASIS to be a family of vehicles, Koses said, “something that meets the needs of our agencies across a host of professional service disciplines.” With the hope of reducing duplication, GSA expects OASIS to be a large draw for government buyers.

Mike Smith with DHS indicated that an agency-specific MAC may allow for contractors to become more familiar with the agency’s needs, so procurements can be made faster, easier and cheaper. Elliot Branch spoke to the Navy’s commitment to acquisition strategy and expertise in its industrial base. “It’s important to understand how an industry (is) constituted, how they do business and what motivates their behavior…We can then formulate the right strategy to buy from that particular industry.”

Again, the Coalition is launching a new GWAC, MAC & Enterprise Committee.  Members interested in joining can contact Roy Dicharry at rdicharry@thecgp.org to be added to the group.

 

Cybersecurity Bill to Reach Senate Floor

The importance of cybersecurity in both the public and private spheres only continues to grow. This week’s developments include a renewed push on cybersecurity legislation, an op-ed from the President and more. On Monday, The Hill reported that the Senate will begin consideration of the Cybersecurity Act of 2012 (S. 2105) soon. Sen. Joe Lieberman (I-Conn.) said the bill would be taken up “by the end of next week.” Also released in the announcement were new details concerning updated language in the proposed bill. The bill will be similar to the version introduced in February but there will be some changes made to the information sharing and critical infrastructure sections. Senator Lieberman will be working with the co-sponsors Sens. Susan Collins (R-Maine), Jay Rockefeller (D-W.Va.) and Dianne Feinstein (D-Calif.) on a draft with those changes. According to the Hill, Lieberman stated that Senate Majority Leader Harry Reid (D-Nev.) assured him “definitively” that the bill would be brought to the floor by the end of next week. He also maintained the two sides are “trying to get as much agreement as we can on the two more controversial parts, information sharing and what I call standards, or performance requirements.” Lieberman also believes that the bill, while “not as good as we had, it might be good enough to get us 60 votes to pass.”

Just this morning, President Obama published an op-ed in the Wall Street Journal, urging Congress to act on a comprehensive cybersecurity strategy. The President delineated serious threats stemming from “foreign governments, criminal syndicates, and lone individuals that probe our financial, energy and public safety systems every day.” The op-ed goes onto to explain that, “Cybersecurity standards would be developed in partnership between government and industry… For the majority of critical infrastructure companies already meeting these standards, nothing more would be expected. Companies needing to upgrade their security would have the flexibility to decide how best to do so using the wide range of innovative products and services available in the marketplace.” The President urged the Senate to pass the Cybersecurity Act of 2012 and send him comprehensive legislation to sign into law.

 

GSA Launches Digital Service Innovation Center

In a blog post last Friday, GSA announced the launch of the Digital Services Innovation Center. The Center is a part of the Administration’s digital strategy released earlier this year, to develop mobile and web technology. The Digital Services Innovation Center was created to provide the digital services needed and make government data available through mobile applications. The Center is part of the Office of Citizen Services and Innovative Technologies and will focus on building a new model for governmentwide sharing. Within the next year, the Center will work to meet the White House digital strategy, making available more government information to the public than ever before.

 

Sequestration Developments

Lawmakers and industry officials continue to prepare for the possibility of sequestration cuts next year. Sequestration developments this week included, a bill passed in the House and an Armed Services hearing featuring industry executives.

On Wednesday, the House passed the Sequestration Transparency Act, which will require the Administration to release information on how the cuts will be implemented and which programs will suffer reductions. The bipartisan legislation passed with 414-2 vote, however disagreement remains between members of Congress and other government officials on the bill’s importance. Some legislators believe that this bill is a matter of transparency, while other officials, such as Jeffrey Zients and Rep. Chris Van Hollen (D- Md.) believe the focus of Congress should be on a solution.

Also on Wednesday, the House Armed Services Committee held a hearing where defense industry executives testified about the effect sequestration will have on business. The executives testified that the cuts would result in drastic and devastating effects on business. The most readily foreseeable consequence would be massive layoffs, which some companies have already notified employees of. Due to the lack of guidance and movement from Congress on a solution, companies are being forced to take preparatory actions. The industry representatives urged Congress and the Administration to reach a solution as soon as possible so that they have the information they need for proper business planning.  As long as the sequestration is in place, the industry executives indicated that from a legal perspective they need to plan for impending across the board cuts in January 2013.

 

Legal Corner

GSA Schedule Option Extensions – A Time of Risk and Opportunity

Guest Bloggers: Bill Bressette & Jeff Clayton, Baker Tilly

Many contractors don’t fully understand the disclosures that form the basis for the negotiated prices on their GSA Schedule contracts, but a company’s failure to keep those disclosures current may expose it to audit risk and financial liability when the Office of Inspector General (OIG) comes knocking. This is of critical importance at the time of option extension, when a contractor may be more likely to receive a pre-award audit of its Schedule contract. Let’s begin with a quick overview of the option extension process.

In September of 2011, GSA introduced the Option Process Ensuring iNtegrity (OPEN) for Federal Supply Schedule (FSS) contracts with the hope of streamlining the process and meeting Commisssioner Kempf’s goal of exercising options 60 days prior to contract expiration. In a nutshell, it refocuses the extension process on what it was originally intended to be—a unilateral modification that extends the contract with the same terms and conditions for another five years. It also translates into a much earlier notification letter for contractors, with notification approximately 210 days prior to option expiration and often a 45 day turnaround on the option package.

Two things are of critical importance here, 1) as a responsible GSA Schedule contractor, you will need to thoroughly review your historical pricing practices and ensure that your pricing disclosures are current, accurate, and complete, and 2) if you do find that you need to make changes to the terms and conditions of your contract you will need to accomplish those changes outside of the option exercise modification itself.  For example, if a contractor wishes to add or delete products or services, request an economic price adjustment, or offer lower prices, the contractor will likely be required to do this independent of the option exercise.  This means that what was previously a best practice recommendation is now a pragmatic and necessary step—contractors must start the review of their Schedules at least 12 months prior to option expiration and they should attempt to make any bilateral contract modifications prior to when they receive their notification letter.

Perform a Broad GSA Schedule Compliance Assessment

This is an ideal time for contractors to revisit all key areas of GSA Schedule compliance, particularly in the areas of PRC and Quarterly Sales/IFF administration. They should take the time to test the preventive and detective controls established within their systems to ensure they are working as planned. Preventive controls are typically system controls designed to ensure a company follows an established policy or procedure. One such control might consist of a required field in the order entry system that ensures sales personnel include GSA Schedule Contract information at the time of order placement. This helps to identify a GSA sale up front and gives the contractor some level of confidence in the GSA sales numbers (and consequently the IFF remittance) that are reported on a quarterly basis. Detective controls may, for example, include a periodic review of sales data to identify PRC triggering deals which may not have been reported. Detective controls are designed to ensure that the preventive controls, including policies, procedures and training, are functioning as intended.

Policies and processes should also be reviewed to make certain that they adequately address the compliance concerns within the context of a contractor’s current organizational structure and previous contract disclosures. Changes in business unit structure/operations, sales or marketing practices, and certainly changes driven by mergers and acquisitions can often render an existing policy or process ineffective. For example, a contractor may have an adequate process in place for tracking all GSA Contract sales in its current system; however, through acquisition, the company acquires a business unit with different systems that will not be integrated or migrated for some period of time. If this unit will make use of your GSA Schedule, it’s likely that your current process for identifying sales in your system may not be capturing GSA sales made through the newly acquired unit. Finally, contractors should review the efficacy their training programs and periodic internal reviews. An annual compliance review is a good way to test your policies, procedures, and training. Personnel subject to periodic training on document retention, for example, should be expected to have maintained the appropriate sales files required by your GSA Schedule contract. During an annual compliance review, validating that the policies surrounding document retention are actually achieving the desired result will do two things:  1) It will identify the gaps between policy and practice; and 2) In so doing, it will identify any weaknesses in your training program.

Conduct a Historical Pricing Review and Update GSA Pricing Disclosures

A detailed review of a company’s pricing practices during the preceding 12 months will frequently reveal that discounting policies and practices have changed, particularly if they have not been closely monitored during the contract term. We recommend that contractors not only update their Commercial Sales Practice Format (CSP-1), but that they also draft a detailed narrative carefully describing all of their standard practices as defined in written policies/procedures and the non-standard practices as revealed by the historical pricing analysis. The CSP-1 Format is a standard form in every GSA solicitation.

While the CSP-1 requires you to explain all deviations from your “standard” practices, contractors often provide just enough text to answer the question. We often recommend that a comprehensive narrative be developed and attached to the CSP-1 as a material part of the pricing disclosures. This is the place to eliminate all ambiguity surrounding what you do and don’t do when it comes to your commercial customers. We have also used the pricing narrative to eliminate any potential misinterpretation surrounding what the contractor understands the price/discount relationship to be and how the PRC compliance will be handled. This allows the contractor to disclose all pertinent information to the GSA CO and removes ambiguities that might otherwise be interpreted in a disadvantageous way in the future.

Although the compliance review and historical pricing analysis can be time consuming, the effort pales in comparison to management’s distraction and the potential financial impact of an adverse audit report from the GSA Office of Inspector General (OIG). For large contractors who are more likely to be subjected to pre-award audits, the data and analysis produced during such an internal review will help expedite the performance of the onsite portion of the audit.

Conclusion

As we have seen in several recent high profile matters brought on by the GSA OIG and Department of Justice, the cost of non-compliance with GSA Schedule contract terms and conditions can be severe. Among the more highly publicized of these is the one in which Oracle Corporation settled False Claims Act allegations by agreeing to a $199.5 million dollar settlement. All contractors, regardless of size, should be prepared for the eventuality of an audit. When the time comes to exercise the option to extend a contractor’s GSA Schedule contract, they should take the opportunity to confirm that their practices are properly disclosed and that they have an effective compliance program in place. Although the additional disclosures that result may raise questions and complicate things in the near term, it will go a long way to ensuring long term GSA Schedule contracting success.

Baker Tilly provides a wide range of government contract consulting services, including GSA Schedule proposal preparation, contract administration, compliance and audit support.  For additional information contact: Bill Bressette at 703 923 8624 or bill.bressette@bakertilly.com or Jeff Clayton at 703 923 8568 or jeff.clayton@bakertilly.com.

 

Hearing on Federal Spending Transparency

On Wednesday, the Senate Armed Services Committee held a hearing titled Show Me the Money: Improving the Transparency of Federal Spending. The purpose of the hearing was to identify the areas where government was not meeting transparency goals and discuss strategies for improving spending transparency. The hearing focused on the Digital Accountability and Transparency (DATA) Act and the witnesses’ impressions of the bill and thoughts on its design, implementation and potential for success. Sen. Mark Warner (D-Va), who originally introduced the legislation last year, stated during testimony that there is a necessity for better spending transparency, however, how that is accomplished is “open to broader debate.” Warner elaborated that government-wide standards do need to be put in place, but there may be a more cost effective way than what was outlined in the original DATA Act to do so. Danny Werfel, OMB Controller, also testified before the committee emphasizing the need for accountability, transparency and performance, including a call for standardization, uniformity and increased reliability. Werfel, who has expressed concerns about the DATA Act, concluded that the ability to reach transparency goals in a cost-effective manner is within the scope of already existing programs and laws, and that there should be a push to use the resources available to reach these goals instead of creating duplicative and wasteful programs.

 

OFPP Seeks Comments on FAPIIS

On July 18, the Office of Management and Budget’s Office of Federal Procurement Policy (OFPP) posted a notice of request for comment to the Federal Register. OFPP invites comments from the public on whether changes to current regulations and other guidance might improve contracting officers’ access to relevant information about contractor business ethics in the Federal Awardee Performance and Integrity Information System (FAPIIS). FAPIIS is designed to facilitate the Government’s ability to evaluate the business ethics of prospective contractors and ensure the Government is awarding contracts to responsible sources. OFPP has also published a full notice which provides supplementary details about what information they are looking for from the public. The Coalition plans to submit comments by September 17, 2012. If you have any feedback that you would like incorporated into our comments, please contact Carolyn Alston at calston@thecgp.org.