FAR & Beyond: GSA’s Transactional Data Reporting Pilot: A Thoughtful Way Forward
On April 27th, GSA announced that the Transactional Data Reporting (TDR) Pilot was eligible for expansion in the Multiple Award Schedule (MAS) program. As part of the announcement, GSA provided the latest performance results for the pilot. The FY20 results showed steady progress, with data completeness, contract-level pricing, and small business metrics all exceeding targets. GSA concluded that “[w]hen TDR is used, government prices are lower, the reporting burden on contractors is reduced, and small businesses generate stronger sales growth.”
To be clear, during the initial public rule making for TDR the Coalition raised questions and concerns regarding the mechanics of the pilot. As the pilot has progressed, however, it has become apparent that TDR has had a positive impact on the MAS program. TDR reduces administrative burdens and risk on MAS contractors as compared to the outdated, anti-competitive legacy MAS pricing policies, especially the Price Reduction Clause (PRC). Reducing contract administration burdens, in turn, reduces barriers to entry for commercial firms, especially small commercial firms, providing increased competitive opportunities for contractors in meeting customer agency needs. Reducing burdens also provides customer agencies an increased level of efficient and effective access to new commercial capabilities.
Significantly, TDR aligns with the MAS statutory and regulatory competitive ordering procedures. TDR recognizes that pricing and best value are driven by competition at the order level for agency-specific requirements. Reporting data on real time, competitive transactions will assist government and industry in improving overall management operations and procurement planning. In stark contrast, the legacy pricing policies, especially the PRC, are at cross purposes with the competitive ordering procedures, focusing significant government and contractor resources on administrative oversight rather than on competition for agency requirements. The legacy MAS pricing policies are not only a costly drain on MAS’s competitive marketplace, but also a restraint of trade, restricting MAS contractors’ ability to compete in the commercial market. These costly, administrative burdens of the legacy pricing policies fall especially hard on small businesses.
As the April 27th announcement notes, work still needs to be done. Training contracting officers on price analysis and the sound, beneficial use of transactional data is critical to expansion of the pilot, and it is gratifying to see GSA’s focus in this regard. GSA will be refining and considering further the ability of MAS contracting officers to leverage TDR in lieu of the legacy pricing policies and the PRC. GSA also will consider and improve the impact of expanded data collection and GSA’s ability to leverage the data it collects. Finally, GSA will be assessing and considering the impacts of TDR on current and future MAS contractors.
GSA should be commended for its thoughtful, focused approach to TDR expansion. Coalition members look forward to working with all stakeholders on the expansion of TDR across the MAS program.
Announcing the 2021 Fall Training Conference Dates – November 17-18
Please take a moment to mark your calendar for the Coalition’s two-day virtual Fall Training Conference: “What’s Next for the Business of Government,” taking place on November 17-18. We will be utilizing the same technology as our previous two conferences and are looking forward to your participation. Stay tuned for further updates as we anticipate releasing our draft agenda next week! For sponsorship inquiries, please contact Matt Cahill at firstname.lastname@example.org or 202-315-1054.
DoD Urges Contractors to Continue CMMC Preparation
Federal Computer Week reported that the Department of Defense (DoD) wants contractors to continue to prepare for the implementation of the Cybersecurity Maturity Model Certification (CMMC) program. Contractors are currently waiting on the results of CMMC’s internal review which could lead to major program changes. All aspects of CMMC are currently being evaluated, including the program’s structure and assessment process. Recently, industry has asked DoD to be more transparent about the CMMC review. Dr. Christine Michienzi, DoD’s Chief Technology Officer for the Deputy Assistant Secretary of Defense for Industrial Policy, said that CMMC will endure and that DoD wants to receive feedback from industry so that lessons learned can be included in the review.
New Features Coming to GSA’s Vendor Support Center Site
On September 16, GSA held a Multiple Award Schedule (MAS) Office Hours providing an update on the Vendor Support Center (VSC) website. The goal of the newly designed support center is to make it a one-stop-shop for current and prospective MAS industry vendors that is intuitive to navigate, visually appealing, and easy to understand by updating and simplifying content, migrating to new technology, and recreating the contractor user journey. GSA published an RFI in November 2020 and surveyed the acquisition workforce to solicit feedback on ways to improve the VSC site. Using the input they gathered from users, GSA is making the following key improvements to the site:
- Addition of a dynamic search bar;
- Help desk and point of contact locators on the homepage;
- Three step navigation that aligns with contractor journey;
- MAS Project Center page to house special project resources;
- Update to all site content; and
- New design that aligns with other website updates such as GSA Advantage.
GSA is aiming to launch the updated site in the first quarter of fiscal year 2022. Any questions or suggestions related to the VSC website can be sent to email@example.com. Recordings of past MAS Office Hours can be found here.
GSA Announces New Professional Services SINs
On September 9, GSA announced that they added two Special Item Numbers (SINs) and revised one existing SIN under the Professional Services Category as a part of MAS Refresh #7. The new and revised SINs are:
- Financial Services Subcategory (H03): Add new SIN 524292INS – Third Party Administration of Insurance and Pension Funds. This addition is intended to align pharmacy claims processing offerings (including medical billing, coding);
- Technical and Engineering Services (Non-IT) Subcategory (H09): Add new SIN 541990 – All Other Professional, Scientific, and Technical Services (Non-IT). This addition is intended to offer professional services that do not fall neatly under other NAICS or existing SINs (e.g., support services related to intelligence, tactical exercises, emergency preparedness); and
- Environmental Services Subcategory (H02): Revise SIN 562112 – Hazardous Waste Disposal Services to allow disposal of medical and pharmaceutical waste.
According to GSA, “this refresh is in response to customer agency needs and market research which shows that solutions are already available through our vendors via the Professional Services offerings on the MAS.” See full announcement here.
Federal Employees Must be Vaccinated by November 22
Federal News Network reported that Federal employees have until November 22 to be fully vaccinated in accordance with the President’s new mandate. “Federal executive branch employees must be fully vaccinated, except in limited circumstances where an employee is legally entitled to a reasonable accommodation,” the Safer Federal Workplace Task Force said in a series of updated “model safety principles” released Monday. The task force said it’s preparing additional guidance on how agencies should implement the President’s new executive order and will issue it “soon.” Under Biden’s vaccine order for Federal contractors, the Office of Management and Budget (OMB) and the FAR Council will make vaccination a contractual requirement of doing business with the Government. See today’s Legal Corner for more details about the upcoming requirements for contractors.
This week, the General Services Administration (GSA) appointed Waldo Jaquith as Senior Advisor to the Administrator. In this role, Jaquith will coordinate the agency’s efforts to support state, local, tribal, and territorial initiatives across GSA. Jaquith previously served as Director of U.S. Open Data and worked at the White House Office of Science and Technology Policy. Most recently, he served as a Fellow at the Beeck Center for Social Innovation at Georgetown University. Jaquith was part of the Biden-Harris Transition Team.
GSA also appointed Nathan Osborn as the agency’s Speechwriter. Osborn previously served as Speechwriter at the Department of Commerce as well as the Small Business Administration (SBA). In these roles, he wrote numerous speeches, op-eds, blogs, and correspondences for the Commerce Secretary and the SBA Administrator.
Authored by Jonathan Aronie, Ryan Roberts, and Nikole Snyder; Sheppard Mullin
The Legal Corner provides the legal community with an opportunity to share insights and comments on legal issues of the day. The comments herein do not necessarily reflect the views of The Coalition for Government Procurement.
On September 9, 2021, President Biden signed an Executive Order (EO) to implement COVID-19 safety protocols for Federal service contractors. While the EO did not identify specific safety protocols, it did direct a Federal task force (the “Safer Federal Workforce Task Force,” created by Executive Order in January 2021) to issue COVID-19-related workplace safety guidance for prime contractors and subcontractors in the near future. Specifically, the Task Force is charged with issuing contractor guidance by September 24, 2021, including definitions of relevant terms, specific workplace safety protocols, and applicable exceptions.
While the announcement of the new EO was somewhat overshadowed by the President’s concurrent vaccine mandate for all Federal workers, it is of great importance to Federal contractors and subcontractors. The EO is broadly worded; and while it does NOT apply to all contractors, it will impose new compliance obligations upon many.
At the same time that President Biden announced the EO, he also announced that OSHA will be developing an emergency standard that would require employers with 100+ employees to mandate that employees be vaccinated or submit to weekly testing. Like the EO, much remains unknown about the rule.
This Client Alert answers many of the questions regarding the EO. Obviously, this is a “live event,” and much still is not known about how the EO will be implemented. The Sheppard Mullin GovCon Team will continue to watch the roll out of the new rule closely, and update this Q&A over the coming weeks.
What Does The Rule Require?
Nothing yet. But soon the Task Force will issue a number of COVID safety measures, to which prime contractors and subcontractors must adhere. We do not yet know what these safety measures will require, but we can guess, based upon the current Federal measures promulgated by the Task Force, they will cover mask wearing, physical distancing, sick leave policies, work at home policies, testing requirements, exposure protocols, meetings/events rules, and perhaps vaccinations (which, per a recent executive order, now will be required for most Federal employees). The Task Force guidance must be reviewed and approved by OMB before it goes into effect.
All that being said in annoucing the EO, President Biden seemed to tip his hand on whether the Task Force will require vaccinations as part of its guidance. During his public remarks, the President made the following statement:
- I will sign an executive order that will now require all executive branch Federal employees to be vaccinated — all. And I’ve signed another executive order that will require Federal contractors to do the same.
- If you want to work with the Federal government and do business with us, get vaccinated. If you want to do business with the Federal government, vaccinate your workforce.
The EO does not require Federal contractors to vaccinate their employees. But if the Task Force makes such a recommendation, that will change. For the moment, while all the headlines state that Federal contractors must vaccinate their workforce, this conclusion is a bit premature – if only until September 24th.
To What Contracts Does The Rule Apply?
The EO applies to contracts and contract-like instruments, which, according to the Department of Labor, means any “agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.” The DOL definition (which is expressly incorporated into the EO) includes, but is not limited to, any “mutually binding legal relationship obligating one party to furnish services (including construction) and another party to pay for them.” This would cover direct awarded competitive contracts, sole source/ limited source contracts, Government-wide acquisition contracts, other multiple award contracts (including the GSA and VA Schedules), and task orders issued under MACs.
The forthcoming clause will find its way into all “new contracts” including renewals, extensions, and option exercises. The clause will not, however, be included in contracts or subcontractors below the Simplified Acquisition Threshold, currently set at $250,000. Nor will the clause (yet) apply to grants.
In short, even with the SAT exception, contractors and subcontracts should think of the scope of the EO as very broad. The proposed definition includes almost all contracts and subcontracts at any tier, whether negotiated or advertised, including procurement actions, lease agreements, cooperative agreements, provider agreements, intergovernmental service agreements, service agreements, licenses, permits, or any other type of agreement, regardless of nomenclature, type, or particular form, and whether entered into verbally or in writing.
What Products/Services Are Covered?
Importantly, the EO covers only services; it does not cover products. Indeed, it seems the EO does not even reach all services, but rather only services covered by the SCA. It is worth noting, however, that the language of the EO is not a model of clarity in this regard. Here is specifically what the EO says the new clause will cover:
- i.Procurement contract/CLI for services, construction, or a leasehold interest in real property;
- Contract/CLI covered by the Service Contract Act;
iii. Contract/CLI for concessions, including any concessions contract excluded by DOL regulations; or
- Contract/CLI entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.
While (i) mentions “services” without an SCA limitation, we’d argue that reference is intended to cover services in the real property context. Otherwise, why would we need subsection (ii)? If (i) was meant to cover all services, (ii) would not be necessary. But we concede it’s not completely clear.
It’s also useful to note what the EO expressly does not cover. The EO does not apply to:
- Contracts/CLIs with Indian Tribes;
iii. Contracts or subcontracts whose value is equal to or less than the simplified acquisition threshold;
- Employees who perform work outside the United States or its outlying areas; or
- Subcontracts solely for the provision of products
The inclusion of (v) is telling in that it reminds us that the forthcoming clause (1) is intended to flow down to subcontractors and (2) is intended to apply to mixed products/service subcontracts.
The clause does not provide insight into if/how it will apply to technology companies providing software-as-a-service, platform-as-a-service, and other license-based cloud offerings to the Federal Government. The question could come down to whether the contractor identifies its offerings as products or services. For example, companies offering software-as-a-service may find themselves pulled into compliance with the forthcoming rule, while companies offering software as a product may avoid the rule’s application.
A similar question arises with regard to contractors offering non-labor services, such as web hosting, telecommunications services, satellite bandwidth, and the like. If these services are sold as a service, then presumably the new clause will cover the personnel supporting those services. On the other hand, where those services are sold as a product, the new clause may not apply.
Again, the EO seems to indicate that these types of non-labor services contracts would only be covered by the EO if the contract(s) at issue themselves already are covered by the SCA, even if the companies providing these non-labor services to the Federal Government consider them to be services (assuming our interpretation of subsection (i) as applying only to contracts for real property).
Interestingly, when President Biden issued the $15/hour Minimum Wage Executive Order, the White House used similarly broad language. When the DOL issued the draft Rule, however, the applicability was narrowed to contracts the principal purpose of which is to furnish services in the United States through the use of service employees. This Executive Order directly incorporated the definition of a contract from the Minimum Wage Executive Order, and therefore we would not be surprised to see a similar narrowing of scope during the rulemaking process for this EO.
Does The Rule Cover Indirect Employees?
The forthcoming clause will cover anyone “working on or in connection with” a Federal contract or subcontract. The “in connection with” language is interesting. Presumably, it is meant to cover employees beyond direct billers. While the EO does not define the term, a recent DOL regulation using the same language is instructive. DOL considers a worker performing “in connection with” a covered contract to be “any worker who is performing work activities that are necessary to the performance of a covered contract but who is not directly engaged in performing the specific services called for by the contract itself.” For example, according to DOL, a payroll clerk who processes the paychecks of a direct bill employee – though not performing directly on the contract – is performing “in connection with” the contract. Conversely, again according to DOL, a janitor who is hired to clean the bathrooms of the contractor’s building or a landscaper who is hired to cut the lawn outside the building, is not performing work necessary to the performance of the contract, and therefore, is not performing work “in connection with” such contract.
This obviously is a very broad interpretation of “in connection with.” By DOL’s definition, Finance, Accounting, and Contracts, all could fall within the scope of the forthcoming clause. Perhaps even HR personnel would be covered. This is a much broader formulation than we typically use when we consider who is supporting a Federal contract, and obviously significantly increases the reach of the internal controls/compliance program that will need to be developed to ensure compliance.
What If I Do Not Work On A Government Site?
It doesn’t matter. The rule is intended to keep contractors and subcontractors healthy in order to “promote economy and efficiency” in the procurement process. Thus, the forthcoming clause will apply to any workplace location in which an individual is working on or in connection with a Federal Government contract or contract-like instrument. The clause covers both Governed-site and Contractor-site employees. Notably, however, the clause will not cover employees performing work outside the U.S.
Does The Rule Flow Down To Subcontractors?
Yes. The forthcoming clause will flow down to subs at every tier, except “subcontracts solely for the provision of products.” Accordingly, we should expect to see the new clause added to the list of “mandatory flow downs” identified in FAR 52.212-5(e) and FAR 52.244-6. This means that, shortly, prime contractors will have to dust off their standard flow-down provisions, self-certifications, subcontracts, and vendor agreements to add a new provision.
How Will The Rule Be Implemented?
The EO will be implemented through a new FAR clause that will have to be incorporated into new solicitations and new contracts. (Remember, “new” contracts includes options, renewals, extensions, etc.) The FAR Council has until October 8, 2021 to provide policy direction to acquisition offices to hold us over until a formal rule is issued. This direction likely will encourage agencies to exercise their authority to issue FAR deviations to implement the EO until a proposed or interim rule is issued. As was the case with earlier COVID-related rules, we suspect GSA likely will be one of the first agencies to issue a deviation.
When Does The Rule Go Into Effect?
The Executive Order already is in effect, although, at the moment, it has no immediate practical implication on contractors. The first material date will be October 8, 2021, when the FAR Council will “take initial steps” to implement policy direction to acquisition offices.
What Should I Do Now?
As the issuance of the new clause is right around the corner, there are some useful steps contractors can take now to give themselves a step up once the new rule is issued. Here are a few ideas:
- Gather and review your agreements with flow-down provisions (vendor agreements, subcontracts, etc.) since you will have to update those in the near future.
- Begin identifying those employees who work “in connection with” your Federal contracts since they will be covered by any new internal controls you implement.
- Take a look at the current guidelines issued by the Safer Federal Workforce Task Force as they will give you a good sense of what the new clause will require.
- Evaluate whether your current offerings are products or services. Obviously, this will be an easy evaluation in many cases, but, as noted above, it will be a far more complicated question for some.
- Keep your eyes open for prime contractors flowing down COVID 19-related clauses in advance of the issuance of the new official clause. The Task Force rules do not yet apply to contractors.
- If you have not done so already, begin thinking about how you will implement a vaccination order. While there currently is no universal vaccine mandate in place, the President has strongly suggested there will be one for contractors soon. (And DOL is engaging in a parallel rulemaking that will require companies with 100 employees or more either to require vaccinations or test weekly, whether they are Federal contractors or not.)
- Wear a mask, avoid large crowds, keep your distance, wash your hands, and get vaccinated.
Industry Dialogue with the VA on MSPV
As mentioned in the Medical/Surgical Subcommittee meeting last Thursday, the Coalition for Government Procurement met with the VA this week regarding the MSPV program. As a next step, the VA has agreed to meet with Coalition members sometime in October and has been asked to collect member questions on the MSPV program to guide the discussion. Please send your questions to Aubrey Woolley at firstname.lastname@example.org by next Friday, Sept. 24. We will notify the Medical/Surgical Subcommittee as soon as we have a date confirmed in October for a virtual meeting with the VA.
Modernizing OPM to Lead Human Capital Governmentwide
In March, the National Academy of Public Administration released its long-awaited report on how to modernize the Office of Personnel Management (OPM), effectively closing the book on the previous Administration’s controversial plan to abolish the agency and transfer its functions to GSA and the Executive Office of the President. The report called on Congress to elevate the agency to be the leader on human capital issues across the entirety of the Federal Government—not just agencies covered by Title 5—and said OPM should shift its approach to management from one that is focused on compliance on a transactional basis to a more forward-looking, data-driven and customer-focused role.
General/Office Products Committee Mtg. with GSA Region 2: Sept. 21
The General/Office Products Committee will host a virtual meeting on Tuesday, September 21 at 10:00 am EDT with GSA’s Jeff Lau, Regional Commissioner of Northeast and Caribbean Region. GSA will provide updates on schedule consolidation in Region 2 and will also discuss current operations.
To RSVP and receive dial-in information, please contact Michael Hanafin at email@example.com.
All Member Training on GSA e-Systems, Oct. 7
The Coalition will host a training open to all members on GSA’s e-Systems 101 on Thursday, October 7. The training will be conducted by Tim Dempsey Lead Program Manager of the Operations Division in GSA’s Office of Systems Management (OSM) and Josh Royko with GSA’s
Our guest speakers will provide an extensive overview and update on the following GSA e-systems:
- GSA Advantage!
- Mass Mod System
- Vendor Product Portal
The training will also include discussion on the upcoming Unique Entity Identifier (UEI) that will replace the use of DUNS, FAS ID, Multi-Factor Authentication (MFA) and Schedule Refresh 7. To attend the virtual meeting, RSVP to Michael Hanafin at firstname.lastname@example.org.
Small Business Committee Meeting, Oct. 8
On October 8th at 10am EST, the Small Business Committee will host a meeting to discuss barriers to entry for small business when working with the DoD. We are discussing these barriers to prepare for the Coalition’s response to DoD’s request for comments released on September 8. To increase opportunities for small businesses, DoD is seeking feedback on barriers small businesses face in working with them. According to DoD’s request, the participation of dynamic, resilient, and innovative small businesses in the defense industrial base is critical to the United States’ efforts to maintain its technological superiority, military readiness, and warfighting advantage.
In furtherance of its efforts to maximize opportunities for small businesses to contribute to national security, the Department seeks public input on the barriers that small businesses face in working with the Department. This input will be used to update the Department’s Small Business Strategy led by the DoD Office of Small Business Programs. In addition, DoD is focusing on complying with recent Executive Orders, like EO 14017 “America’s Supply Chains,” to reduce entry barriers of small businesses.
The Coalition will submit comments through the Small Business Committee. If you are unable to attend the meeting, please send any input to Samantha Holt at email@example.com by COB October 8. Comments are due by October 25.
GSAR Proposed Rule: Contract Requirements for GSA Information Systems
On September 10, GSA released a proposed rule that will streamline and update requirements for contracts that include GSA information systems. This rule will eliminate repetitive and outdated provisions and clauses from the General Services Administration Acquisition Regulation (GSAR). It will provide centralized guidance to make sure there is consistency throughout GSA. The rule will also update the GSAR to align the cybersecurity requirements with GSA’s Chief Information Security Officer. Comments are due by November 9, 2021, and can be submitted here.
DoD Class Deviation: Limitations on Subcontracting for Small Business
On September 10, DoD released a class deviation that rescinds and supersedes Class Deviation 2020-O0008, Revision 2. This class deviation will be used in lieu of FAR 52.219-14, which includes revisions to the limitation on subcontracting and the nonmanufacturer rule. FAR 52.219-14 incorporates the limitations in the SBA’s final rule issued on May 31, 2016 (81 FR 34243) and the final rule issued on November 29, 2019 (84 FR 65647). The class deviation will remain in effect until incorporated in the FAR or otherwise rescinded. See the full class deviation here.
DOL Notice: Minimum Wage Rate Change for Federal Contractors Effective January 1, 2022
The Wage and Hour Division of the U.S. Department of Labor issued a notice to announce the applicable minimum wage rate for workers performing work on or in connection with Federal contracts covered by Executive Order 13658, “Establishing a Minimum Wage for Contractors.” As of January 1, 2022, the minimum wage rate that generally must be paid to workers performing work on or in connection with covered contracts will increase to $11.25 per hour, while the required minimum cash wage that generally must be paid to tipped employees performing work on or in connection with covered contracts will increase to $7.90 per hour.
Covered contracts that are entered into on or after January 30, 2022, or that are renewed or extended (pursuant to an option or otherwise) on or after January 30, 2022, will be generally subject to a higher $15.00 minimum wage rate established by Executive Order 14026 on April 27, 2021.