Friday Flash, 09.28.12

Comment of the Week:  Urban Myths regarding GSA’s MAS Program – Part 2

This week’s Comment shines the light on another “Urban Myth” regarding the General Services Administration’s (GSA’s) Multiple Award Schedule (MAS) program.  Contrary to the misperceptions of some in the procurement community, the MAS program includes effective mechanisms and ordering procedures for leveraging and competing customer agency recurring requirements.   Indeed, it is surprising that some in the procurement community have recognized the key attributes of the MAS program and, as a result, cling to the belief that the MAS program does not allow agencies to leverage requirements when the current Federal Strategic Sourcing Initiative (FSSI) is built on the foundation of MAS contracts, e-tools and ordering procedures.  The critical procurement tool that empowers customer agencies to leverage requirements under the MAS program is found at Federal Acquisition Regulation (FAR) 8.405-3, namely Blanket Purchase Agreements (BPAs).

FAR 8.405-3(a)(1) states that “Ordering activities may establish BPAs under any schedule to fill repetitive needs for supplies and services.  Ordering activities shall establish the BPA with schedule contractor(s) that can provide the supply or service that represents the best value.”  The establishment of MAS BPAs must be consistent with the MAS program’s streamlined competitive ordering procedures.  That means that for BPAs that exceed the simplified acquisition threshold, the customer agency must post the Request for Quote (RFQ) on e-Buy thereby providing all MAS contractors capable of meeting the BPA requirements notice and an opportunity to compete or, alternatively, provide the RFQ to as many MAS contractors as practicable to reasonably ensure receipt of at least three offers.  When notice is provided to less than all and less than three offers are received, the customer agency must document the file explaining why, despite reasonable efforts to do so, additional contractors capable of meeting the BPA requirements could not be identified.  See generally FAR 8.405-3.  In addition, FAR 8.405-4 provides that ordering activities must seek a price reduction when the BPA exceeds the simplified acquisition threshold.   As such, FAR 8.4 guidance makes clear that customer agencies can compete and leverage recurring requirements through MAS program using BPAs.

MAS BPAs make a significant positive difference in saving both time and money for customer agencies, contractors and the taxpayer.  The Air Force’s recent efforts to put in place contracts for commercial office furniture are instructive here.  The Air Force has embarked on a lengthy, complex open market competition with the goal of awarding four “commercial item” contracts for office furniture.  Under the Air Force’s acquisition approach, these four contracts will form the basis for future competitive, open market contracts for the actual delivery and installation of furniture at approximately 70 locations around the country.  Significantly, the commercial furniture to be acquired is already on MAS contracts. Therefore, under FAR 8.4 the Air Force’s commercial furniture requirements can be leveraged and competed under the MAS program, saving time and money in the acquisition process.

Although the tools are in place to successfully leverage requirements via the MAS program, the keys to a successful BPA remain requirements development and specific volume commitments on the part of customer agencies.  As the Coalition’s “Best Practices for Federal Supply Schedule BPAs” states in pertinent part that “Commercial contractors overwhelming report that they offer their best terms and prices to customers who provide the most detailed information about their requirements and usage.”  The Coalition’s “BPA Best Practices” can be found here.

Finally, the key to eliminating these “Urban Myths” is communication across the procurement community regarding the central role the MAS program can play in saving the Federal government time and money.  That’s why GSA’s MAS training and engagement with senior leadership across the Federal government regarding the value acquisition programs is more important than ever!

 

Congrats to Skip Derick on his Retirement

Today Skip Derick is retiring after a long outstanding career with General Dynamics Information Technology.  Skip has been a wonderful member and leader in the Coalition having participated as a member of the Coalition’s Board of Advisors and Committee Co-Chair.  Over the years Skip has always pursued common sense in acquisition.  Skip’s passion and commitment to excellence have made a positive difference in government contracting.  In that regard, few in industry have contributed more to the strength and success of the Schedules program than Skip!  His wisdom, dedication, and friendship will be sorely missed. Thank you Skip for being a great friend and colleague!   We wish Skip and Molly the best for a long, fun and happy retirement!

 

GSA Acting Administrator Speaks to Value of Sustainability

On September 27, GSA Acting Administrator Dan Tangherlini spoke to sustainable procurement at the National Academies of Science.  The event launched the release of a National Academies report prepared at GSA’s request on Sustainability Considerations for Procurement Tools and Capabilities.  In his comments, Tangherlini noted, “I can assure you that GSA is committed to sustainable procurement.”  He also explained that GSA is still in the process of figuring out how to get it right and that determining life cycle costs, the appropriate certifications and labels, and getting the government to realize the long term savings that sustainable solutions can deliver are extremely complex undertakings.  Tangherlini gave two examples where GSA has found that real cost savings can be achieved by taking life cycle costs into account.  The first is advanced power strips.  GSA’s Green Proving Ground found that while advanced power strips are initially more expensive, they reduce plug loads at work stations by 26 percent and nearly 50 percent in kitchens and print rooms.  “Given that plug loads account for approximately 25 percent of electricity consumed within office buildings, we are confident that this technology will result in significant savings that will outstrip its higher initial cost in the long run,” Tangherlini said.  The Acting Administrator also pointed to GSA’s Printwise program as an initiative that has delivered both environmental and fiscal benefits to the agency.  Through the Printwise education efforts, GSA estimates that they can achieve $2.7 million in savings through double-sided printing, reducing unnecessary color printing, and eliminating personal printers in the office.  Tangherlini closed his formal comments by noting, “In times such as these, with ever tightening federal budgets, it is our responsibility to make every single taxpayer dollar count and that is exactly what [sustainable] procurement helps us do.”

 

DHS Officials Speak to the Coalition

On Wednesday, nine senior-level procurement officials from the Department of Homeland Security spoke to attendees at the Coalition’s Forum entitled, “Prioritizing the Future: The DHS Strategic Plan.” The forum included an informative discussion on the DHS CPO Strategic Plan, strategic sourcing, budget outlook, sequestration, and small business among other topics. One important announcement from the DHS team included the establishment of the Industry Liaison Council, a network of 17 liaisons across the Department in order to strengthen the dialogue between government and industry while at the same time ensuring the consistency of the information that industry is receiving. DHS is also working on a number of different programs including, enhancing the value of industry days, improving the search capability of APFS, bolstering the Homeland Security acquisition workforce through the Acquisition Career Professional Program, and partnering with industry for necessary training for COs. Officials who participated included:

• Anne Terry, Director of Procurement Policy & Oversight,
• Kevin Boshears, Director Office Small Disadvantaged Business Utilization (OSDBU),
• Daniel McLaughlin, Executive Director, Office of Procurement Operations,
• Tim Shaughnessy, Technical Advisor, Chief Procurement Officer
• Michael Smith, Director, DHS Strategic Sourcing.
• Also in attendance were Robert Namejko, DHS Industry Liaison, Jose Arrieta, DHS Procurement Ombudsman, Rafael Roman, DHS Industry Liaison, and Wayde Warner, DHS Senior Procurement Analyst.

 

Deadline for EIP Nominations is Next Week – Have you Submitted Your Nominations?

The EIP Awards honor acquisition officials who have made significant strides in promoting and utilizing multiple award contracting vehicles. Awards will be given to individuals, organizations and contractors involved in procurement with GSA, VA, DHS, DoD and other government agencies. Take this opportunity to recognize an individual or organization that is deserving of an EIP Award. A list of nomination categories along with links to submit your nominations can be found here. Nominations along with a short rationale of approx. 100 words is sufficient. Nominations will be accepted through October 1. If you have any questions, please email events@thecgp.org.

2012 EIP Award Winners will be honored during the Coalition’s upcoming Fall Conference on October 24^th and 25^th at the Crystal Gateway Marriott.

AWARD CATEGORIES

Contractor Savings Award

Presented to a contractor for developing significant innovative solutions resulting in savings to the government and taxpayer through sound acquisition planning and development, and well defined contracting requirements.

Government Savings Award (Civilian)

Presented to a government agency for developing significant innovative solutions resulting in savings to the government and taxpayer through sound acquisition planning and development, and well defined contracting requirements.

Government Savings Award (DoD)

Presented to a government agency for developing significant innovative solutions resulting in savings to the government and taxpayer through sound acquisition planning and development, and well defined contracting requirements.

Myth-Busters Award (Civilian)

Presented to an individual or office for facilitating open communication between government and industry during the acquisition process and effectively breaking down communication barriers to create a collaborative procurement environment.

Myth-Busters Award (DoD)

Presented to an individual or office for facilitating open communication between government and industry during the acquisition process and effectively breaking down communication barriers to create a collaborative procurement environment.

Lifetime Acquisition Excellence Award

Presented to an individual in the procurement community for delivering best-value solutions for the taxpayer and has demonstrated a long-term commitment to improving the federal acquisition system.

Best Veteran Hiring Program (Government)

Presented to a government agency for promoting and executing a robust and successful veteran hiring program to the benefit of our brave men and women in uniform.

Best Veteran Hiring Program (Industry)

Presented to a government contractor for promoting and executing a robust and successful veteran hiring, teaming or subcontracting program to the benefit of our brave men and women in uniform.

 

UPDATE: Comment Period on GSA’s Demand-Based Model Has Been Extended

GSA has extended the comment period for the notice regarding the Demand Based Model (DBM), designed to improve the performance of Multiple Award Schedule (MAS) contracts. The Coalition submitted comments in response to GSA’s Federal Register Notice last month. Central to the DBM is the prospect of GSA eliminating continuous open seasons for selected schedule solicitations.  As stated in our comments to GSA, although the Coalition appreciates GSA’s focus on improving the overall management of the MAS program, the Coalition opposes closing schedules from new commercial offers.  The Coalition further elaborated on our concerns regarding the potential elimination of continuous open seasons on our FAR and Beyond Blog. Public comments now are due by October 25, 2012. Operational changes will become effective November 24, 2012. Please contact Carolyn Alston at calston@thecgp.org or (202) 315-1053 if you have additional input or concerns.

  

First Half of FY12: Government Cuts Consulting Contracts by 28%

Recently, the Washington Post reported that the Administration is ahead of its goal to cut back on “management support services.” For the first half of FY 2012, government spending on these contracts totaled $13.1 billion, which is a 28 percent decline from the same time period in FY 2010. Last year the Office of Management and Budget set a goal of reducing spending in these areas by 15 percent, in FY 2012 when compared to FY 2010.

 

Continuing Resolution Sent to President Obama

The Senate passed a continuing resolution (CR) in a late night session on September 22 that stretched past midnight. The vote, 62-30, cleared the way for a Presidential signature that would ensure funding for government activities and functions through March 27. The bill has been sent to President Obama and is expected to be signed into law soon. The six-month stopgap measure was passed in the final session before Congress left Washington for the campaign trail.  The $524 billion CR adheres to the requirements laid out be the Budget Control Act, which call for a $26.6 billion cut in discretionary spending from fiscal 2011.

 

GSA Tests Innovative Building Technologies to Save

The General Services Administration (GSA) evaluates technologies that reduce energy use in Federal buildings and result in cost savings through the Green Proving Ground program.  This week, GSA announced that it will test and evaluate 12 new technologies in Federal facilities as part of the program, including wireless lighting controls, LED luminaries, glazing retrofit coatings, wireless pneumatic thermostats, solar thermal collectors and water saving landscape irrigation systems.  The objective is to identify new technologies that will continue to increase the performance of GSA’s buildings by reducing operational costs and increasing environmental efficiency.  GSA would also like to assist industry in developing new technologies for the broader commercial market.  Dorothy Robyn, Commissioner of GSA’s Public Buildings Service said, “by testing the effectiveness of these technologies, GSA is finding new ways that Federal buildings across the nation can save both energy and taxpayer dollars.”

 

Alan Estevez Nominated for Senior DOD Procurement Position

On September 21, the White House announced its nomination of Alan Estevez to be the new Principal Deputy Undersecretary of Defense for Acquisition, Technology, and Logistics. Estevez currently serves as DoD’s Assistant Secretary of Defense for Logistics and Materiel Readiness. He previously served as assistant deputy undersecretary of defense for supply chain integration from 2002 to 2006. He also worked in the Office of the Secretary of Defense and the U.S. Army Strategic Logistics Agency from 1991 to 2002 and the Military Traffic Management Command from 1981 to 1990. Estevez now awaits the Senate’s approval.

 

Legal Corner 

The Budget Control Act of 2011, Sequestration, and Government Contractors

Jim Schweiter, Partner, McKenna Long & Aldridge LLP

Last August, Congress passed the Budget Control Act of 2011 (“BCA”)(Pub. L. 112-25).  This law authorized raising the debt ceiling, established caps on discretionary spending, and put a process in place to reduce the federal deficit.  The provisions to raise the debt ceiling have been triggered, so that the federal borrowing limit now stands at $16.4 trillion.  In brief, the BCA:

• Imposed caps on discretionary spending beginning in October 2011 that will generate $917 billion in savings over the next ten years.  The Department of Defense (“DOD”) portion of these savings is approximately $487 billion.
• Created a bipartisan, bicameral committee to identify up to $1.5 trillion of additional deficit reduction (the Joint Select Committee on Deficit Reduction).  This “Super Committee” failed to reach agreement.
• Required Congress to vote on a Balanced Budget Amendment to the Constitution.  The amendment failed in both houses.
• Imposed a budgetary process known as sequestration to implement a total of $1.2 trillion in automatic spending cuts through fiscal year 2021 which will begin January 2, 2013, unless Congress passes a bill which the president signs to avert such a result.

Senior Executive Branch officials, members of Congress and industry leaders all predict catastrophe if sequestration is implemented.  For companies doing business with the federal Government, it is therefore important to understand what sequestration is and how it would operate.  Congress recently passed and President Obama signed the Sequestration Transparency Act of 2012.[1]  Although this law requires the Administration to report to Congress within 30 days about how sequestration would be implemented by federal agencies, few expect this report to provide much useful detail.

Budget Sequestration

Sequestration is a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled to enforce certain budget policy goals.[2]  This process was first established in the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA).[3]  Sequestration involves the permanent cancellation of budgetary resources by a uniform percentage, which is applied to all non-exempt programs, projects and activities within a budget account[4] in order to achieve required savings.

Under the BCA, there are two situations in which sequestration could occur—

• If Congress appropriates more money in any year than is allowed under the annual discretionary spending limits established in the BCA, the automatic process of sequestration would result in the cancellation of the excess amount.  The President would issue an order canceling any excess budget authority.
• Because Congress failed to enact legislation developed by the Joint Select Committee on Deficit Reduction to reduce the deficit by at least $1.2 trillion by January 15, 2012, the BCA provides for a series of automatic spending reductions in both discretionary and direct (mandatory) spending[5] to make up for the shortfall in savings.

Sequestration is thus a budget enforcement mechanism that is intended to prevent enactment of legislation that would increase the federal deficit.  Under the BCA, the automatic sequestration procedures will affect both mandatory and discretionary spending programs, and the reductions will affect defense and non-defense spending categories equally in each of fiscal years 2013 through 2021.

Under the BCA, the Department of Defense (DoD) would have to absorb half the cuts required by sequestration, a total of $492 billion.  Non-defense accounts would absorb an equal share. Because the cut would be spread over nine years (2013-2021), both the defense and non-defense portions of the federal budget would be subject to annual reductions of about $54.7 billion.[6]

Implementation of Sequestration

The process by which sequestration would be implemented is different in 2013 than in 2014 and the out years.  In 2013, there would be across-the-board, proportional reductions in programs, projects and activities funded by annual appropriations and in non-exempt mandatory programs.[7]  In 2014 through 2021, the required sequestration cuts would be achieved by reducing the statutory spending limit specified in the law for each year.  How this “top line” cut would be implemented at the agency level would be governed by the appropriations process.   The Office of Management and Budget would direct agencies to implement cuts to available appropriations based on apportionment guidance issued pursuant to OMB Circular A-11.[8]

Sequestration would not begin until January 2, 2013, so the funding reductions would be spread over only three quarters of that fiscal year.  Appropriated funds that have been obligated to contracts are not subject to the sequestration process.  Appropriated fund balances that remain unobligated as of January 2, 2013 may be subject to sequestration.  If, as now appears likely, the federal government will be funded by continuing appropriations resolution (a “CR”)[9] during the first half of fiscal year 2013,[10] the ability of agencies to enter into new contracts, issue new task orders on existing multiple award contracts or exercise contract options that would obligate funds before sequestration begins will be constrained.  Guidance from OMB also could limit agency spending in advance of sequestration.  Because the baseline for fiscal year 2013 funding has not been established, and because there are so many variables that may affect how sequestration would be implemented, contractors of all stripes must closely examine their contracts and funding status in making judgments about how to prepare for sequestration.

Conclusion

“The president [and] the secretary of Defense said it would be catastrophic to our national defense, but we still haven’t found a way through it,”  Arizona Senator John McCain said recently about sequestration. “Everybody says it’s not going to happen, but so far, it’s going to happen.”[11]  If the worst occurs, it is imperative to understand the magnitude of the funding cuts that would occur if sequestration as provided in the Budget Control Act is implemented and for contractors to plan accordingly.

 

 

Cybersecurity Executive Order Being Prepared

As legislative efforts stall, Senate Homeland Security and Governmental Affairs Chairman Joseph Lieberman (I-Conn) is encouraging the Administration to issue an executive order regarding cybersecurity. According to NextGov, Lieberman asked President Obama in a letter on Monday, to use the “full extent of your authorities” to secure certain private networks and to strengthen information sharing between government and industry. Additionally, just last week Homeland Security Secretary Janet Napolitano spoke to the Senate Homeland Security and Governmental Affairs Committee, claiming the executive order was “close to completion.” The executive order is rumored to be aligned with the second version of the Cybersecurity Act of 2012, sponsored by Lieberman.

 

Quality Partnership Council Meeting at NeoCon East 2012

GSA’s Integrated Workplace Acquisition Center will hold its next Quality Partnership Council meeting on Tuesday, October 16, 2012 from 10:00AM to 12:00PM.  The meeting will be held at the Baltimore Convention Center in Baltimore, Maryland.  You can register for the meeting here.

 

Registration is Now Open for the 2012 Fall Training Conference!

2012 Fall Training Conference – Continuing the Dialogue

Join The Coalition on October 24 and 25 for its two day Fall Training Conference, Continuing the Dialogue.  This training conference will address acquisition policy, the federal market and Excellence in Partnership.  Thought leaders from government, industry and academia will give us their perspectives on changes that have occurred and are expected in the federal government’s $200 billion multiple awards contracting program.  Well recognized federal contracting attorneys will cover major cases affecting government contractors.  Contracting officials from all Government-wide Acquisition Contracts (GWACs) and the General Services Administration/Department of Veterans Affairs Multiple Awards Schedules programs will be present to explain their latest initiatives and to participate in break out session to discuss the specifics of their programs.  Hear how sequestration, declining budgets and strategic sourcing may affect what the government buys and how they buy it.   This training conference represents the best in communications between government and industry to improve the delivery of services to the U.S. taxpayer.  A unique aspect the conference will be the presentation of Excellence in Partnership recognitions to individuals and organizations from government and industry that have achieved significant cost savings while providing superior service or that has provided outstanding support to returning veterans.  You do not want to miss this training opportunity.

 

Small Business Forum & New CGP Committee

Increased small business utilization is a high a priority for the Federal Government.  As a result, regulatory, legislative and agency level changes that  -impact the Federal market are all possible.

On October 30, the Coalition will host a small business forum to gain insight into significant changes to the small business rules and how they will impact sales to federal agencies.

SBA Keynote:

Small Business Administration – Looking Ahead at Federal Acquisition  Priorities and Changes

A. John Shoraka, Associate Administrator of Government Contracting and Business Development, SBA

Industry Panel:

Small and Large Business Collaboration in the Federal Market – What Works and What Needs to Work Better.

Panel Moderator – Joseph Hornyak, Partner, Holland and Knight

James Connal, Vice President, Red River Computer

Tom Walker, Government Manager, Nucraft Furniture

Wayne Pizer, Vice President, L-3 National Security Solutions

Who Should Attend:

Industry                                                                                                                                 Government

Small Businesses that sell to Federal  Agencies                                                     Federal OSDBU Directors

Large businesses that subcontract to, team with,                                                Federal Buying Officials

or sells indirectly through small businesses                

 

Webinar – Beyond Commercial Item Contracting: A Two-part Primer on Negotiated Contracting Under FAR Part 15

Beyond Commercial Item Contracting:

A Two-part Primer on Negotiated Contracting Under FAR Part 15

Presented by Baker Tilly 

PART 1: FAR Part 15 vs. FAR Part 12 – A New World of Risk – October 10, 2012, 12:30 pm

In tough economic times, many commercial companies attempt to maintain or grow revenues by securing contracts with the US Federal Government.  Commercial item contracting (Part 12 of the Federal Acquisition Regulation (“FAR”) carries the least risk.  When stepping outside the commercial item arena and into the world of negotiated government contracting, unpleasant surprises await the unwary and unprepared.  Expectations of reasonable profits may ultimately yield real losses and latent liabilities. Rewards accrue to those who know beforehand what they’re getting into.  In this one-hour webinar, we will discuss:

• How the size of your company, contract value, and contract type govern the applicability of contract and regulatory compliance requirements;
• The essential prerequisites necessary to identify, manage and mitigate compliance risks successfully;
• The current state of the negotiated government contracting environment, including several hot topics every FAR Part 15 contractor must know.

Don’t miss Part 2 on November 15^th!

 

Upcoming Regulatory Comments

The Coalition regularly provides public comments on rules that impact the membership.  The following is a list of upcoming rules.  We ask that members note the proposed rule on Basic Safeguarding of Contractor Information Systems which was published in the Federal Register last week.  The Coalition plans to submit comments on this proposed rule and will provide further analysis on it in an upcoming edition of the Friday Flash.

Federal Acquisition Regulation; Basic Safeguarding of Contractor Information Systems

Proposed Rule       

Summary: DoD, GSA, and NASA are proposing to amend the FAR to add a new subpart and contract clause for the basic safeguarding of contractor information systems that contain information provided by or generated for the Government that will be resident on or transiting through contractor information systems.

Due October 23, 2012.  If you have any comments regarding this proposed rule, please contact Aubrey Woolley.

Federal Acquisition Regulation; Prioritizing Sources of Supplies and Services for Use by the Government

Proposed Rule

Summary: On September 6, a proposed rule was published to the Federal Register that corrects the preamble to a proposed rule published in the Federal Register of June 14, 2011, regarding Prioritizing Sources of Supplies and Services for Use by the Government.This document adds an Initial Regulatory Flexibility Analysis which has been determined to be necessary since the initial publication of the proposed rule. As first published, the rule amends FAR part 8, which requires Federal agencies to satisfy their requirements for supplies and services from or through a list of sources in order of priority.

Due October 9, 2012. If you have any comments regarding this proposed rule, please contact Aubrey Woolley.

Revision of Department of Homeland Security Acquisition Regulation; Contractor Billing and Subcontractor Labor Hour Rates Under Time and Materials Contracts

Notice of Proposed Rulemaking            

Summary: DHS is proposing to amend its Homeland Security Acquisition Regulation to require contracts for time and material or labor hours to include separate labor hour rates for subcontractors and a description of the method that will be used to record and bill for labor hours for both contractors and subcontractors.

Due October 22, 2012.  Please contact Carolyn Alston if you would like to contribute to the Coalition’s comments on this issue.

Department of Treasury Acquisition Regulations; Contract Clause on Minority and Women Inclusion in Contractor Workforce

Notice of Proposed Rulemaking

Summary: The Department of the Treasury is proposing to amend the Department of the Treasury Acquisition Regulation (DTAR) to include a contract clause on minority and women inclusion, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act).

Due October 22, 2012.  Please contact Carolyn Alston if you have any feedback on this notice.