The Coalition’s Annual Fall Training Conference provides an opportunity for government and industry leaders to address the latest in Federal procurement and work together towards a more efficient and effective procurement system for the benefit of the American taxpayer. This year’s conference, Continuing the Dialogue, was no exception. Some of the most valuable dialogue occurred during the breakout sessions that covered the broad spectrum of services and products that members offer through the MAS program. The sessions provided an opportunity for the leadership of the FAS acquisition centers to meet directly with their industry partners to discuss the latest program developments and plans to improve their programs and continue growth in the coming fiscal year.
In case you missed this year’s IT Schedule 70 breakout session, the IT Acquisition Center announced its FY2013 goal to double its annual sales to $32 billion. The Coalition has always supported Schedule 70’s objective of continued growth, providing even more opportunities for contractors to meet the needs of Federal agencies through best value technologies. The $32 billion goal may be viewed as a “moon shot” in the context of Federal budget cuts and possible sequestration in 2013. However, it’s important to consider the benefits of the IT Center setting high goals in order to make real progress in areas that will make a difference to GSA’s customer agencies, its industry partners, and ultimately the American taxpayer.
There are several cross-cutting measures that the Coalition has advocated to modernize the MAS program as a whole. The IT Center can take these measures to increase the efficiency, effectiveness and utility of its contract offerings for GSA customers:
- Allow Other Direct Costs (ODCs) for task orders. Schedule 70 contractors (and Coalition members) promote use of the schedule for Federal agencies to procure comprehensive solutions to meet their IT service requirements. However, the inability to include ODCs on task orders under the MAS program continues to be a disincentive for many customer agencies to use the program. Implementing existing regulatory authority to allow ODCs on Schedule 70 task orders will attract agencies to the MAS program that currently find it necessary to set up separate contract vehicles to purchase IT services similar to those already on the IT Schedule. Facilitating the acquisition of ODCs through Schedule 70 has the dual benefit of making the GSA program more useful to customer agencies and reducing potential government costs associated with contract duplication.
- Shorten the modification processing time to add new technologies. One of the strengths of the MAS program is continuous open seasons which allow new contract offers to be submitted at any time. Under the updated contract modification process, contractors can continually refresh offered technologies. However, getting the newest technologies to the Federal market under Schedule 70 is only as effective as the modification process is efficient. Streamlining the mod processing time to add new technologies will bring the services and products offered under Schedule 70 more in alignment with commercial offerings and the latest in innovation. A concrete first step that the IT Center could take is to address the processing time for reviewing EULAS. Despite recent efforts it is still taking far too long for contractors to upgrade/enhance their software offering. As a result, the IT Center is at significant risk of losing market share and fostering contract duplication as customer agencies look for alternatives to meet their software needs.
- Put “commercial” back into commercial contracting. The fundamental strength of the MAS program is its reliance on the commercial marketplace, which increases competition and cost effective solutions. Government unique requirements add to costs and make it difficult for companies to do business with the government. The more that the IT Acquisition Center’s policies and requirements can be aligned with commercial practices, the more companies can provide the innovative competitively-priced solutions they offer commercial customers to the Federal market under Schedule 70. Putting commercial back into commercial item contracting will increase access to the latest technologies in the commercial marketplace. It will enhance competition for customer agencies and lead to more cost effective, best value solutions to the government’s information technology needs. The IT Center is uniquely positioned in the federal marketplace to be the leader in putting commercial back into commercial item contracting.
- Consider adding a cost-reimbursement capability. Given the Department of Defense’s interest in procuring some types of services on a cost-reimbursement basis, any plan to significantly increase sales under Schedule 70 should examine this contract type and develop a solution to keep the program attractive to GSA’s biggest customer.
Over the last year the Coalition has highlighted the potential for these measures to improve the entire MAS program. The themes articulated will remain at the heart of our continuing dialogue with GSA. There has never been a better time for Government and industry to seize the opportunity to “modernize” the MAS program for the benefit of customer agencies and the U.S. taxpayer.
Manager of Policy
On Tuesday, the Department of Defense released its latest version of best practices to strengthen buying power, improve industry productivity, and provide an affordable, value-added military capability. Better Buying Power 2.0 reflects the DoD’s commitment to continuous improvement. According to the Department, the progress made since the release of the first Better Buying Power (BBP) includes:
- Affordability analysis as part of the standard Defense Acquisition Board (DAB) planning process to facilitate investment decisions;
- Should-Cost estimates as standard practice within the military Services;
- Competitive incentive contracts, services acquisitions, and small business opportunities are receiving greater attention and focus.
Many aspects of the initial Better Buying Power program are included in the new version while some additional initiatives have been added. BBP 2.0 introduces a new focus area pertaining to the acquisition workforce. BBP 2.0 initiatives are organized into seven focus areas:
• Achieve Affordable Programs
• Control Costs Throughout the Product Lifecycle
• Incentivize Productivity and Innovation in Industry and Government
• Eliminate Unproductive Processes and Bureaucracy
• Promote Effective Competition
• Improve Tradecraft in Acquisition of Services
• Improve the Professionalism of the Total Acquisition Workforce
Members may also be interested in the DoD’s Better Buying Power fact sheet posted on the DoD’s acquisition website.
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 November 28, 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 & GSA Keynote:
- A. John Shoraka, Associate Administrator of Government Contracting and Business Development, SBA
- Jiyoung Park, Associate Administrator Office for Small Business Utilization, GSA
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:
– 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
A recent GAO report on annual FY2012 bid protests puts the number of protests at the highest level since 1995. According to the report, the number of cases is up from 2,353 in FY2011 to 2,475 in FY2012, which is a five percent increase. The number of protests has steadily risen since the year 2007. 570 cases were decided in 2012 either sustaining or denying the protest. Of the 570 cases in 2012, 106 were sustained, with a sustain rate of 18.6%. For more information on the bid protests for FY2012 please link here.
The intensive, one day training workshop teaches the basics of utilizing the Multiple Award Schedules program. Over the course of the workshop you will learn how to obtain and manage your GSA schedule, market GSA contracts, comply with Federal procurement requirements, follow policy changes, and prepare for MAS audits. A highlight of the course is training on GSA’s electronic tools including eBuy, GSA Adavantage! and GSA eLibrary. Other material covered will include of structuring your contract to address the schedule compliance requirements while retaining flexibility to compete in the federal and commercial market place, as well as training on the new FAR 8.4 ordering procedures. The courses will be taught by those on the front lines of GSA schedule negotiations and contract management.
Attendees are eligible to earn up to 8 CLP credits with submission of an attendance certificate and course training packet available for pick-up after the event. REGISTER HERE!
The Coalition has recently submitted a letter on contract duplication to acquisition leadership at GSA, DoD and OFPP based on the member feedback received in response to our contract duplication survey. This issue continues to be a top priority of our members moving into 2013. We sincerely appreciate the input of those members who took the time to take the survey. The Coalition will continue the dialogue on contract duplication with GSA, DoD and OFPP as a follow-up to the letter.
For members who missed GSA Acting Administrator Dan Tangherlini’s remarks during the 2012 Fall Training Conference, GSA Expo is on for 2013. This year’s GSA Training and Expo is scheduled for May 14-16 at the Orange County Convention Center in Orlando, Florida.
Booth sales are scheduled to begin in mid-January 2013. GSA plans to post the exhibitor map in mid-December. Watch the GSA Expo Exhibitor page for this information. Members who have questions about GSA Expo may contact Steven Roberts who is the new GSA Expo Program Manager at (703) 603-8129 or firstname.lastname@example.org. The Coalition will also have Steven Roberts participate in future committee meetings to provide information about this year’s training conference.
The General Services Administration (GSA) is increasing efforts to sell underutilized federal properties with the aim to finance other building projects, reported the Federal Times. Specifically, GSA is working with its staff to prepare buildings for sale while also coordinating aggressively with other agencies to expedite the disposal process for underused properties.
GSA’s building fund has decreased significantly in recent years from $9.1 billion in 2010 to $8 billion in 2012. However, GSA is one of the few agencies that can keep proceeds from the sales of its own properties while earning fees from selling other agencies’ facilities. GSA can then use those proceeds to finance federal construction projects, building renovations and new leases.
Last fiscal year, GSA sold 79 properties for more than $37 million. This year, GSA officials and other experts anticipate GSA will exceed those numbers, having sold more than 28 properties so far this fiscal year.
Budget Sequestration, the WARN Act and Compliance Costs—Implications for Contractors
Jim Schweiter, Partner, McKenna Long & Aldridge LLP
Last August, Congress passed the Budget Control Act of 2011 (Pub. L. 112-25). This law authorized raising the debt ceiling, established caps on discretionary spending, and put in place a process known as sequestration to implement a total of $1.2 trillion in automatic spending cuts through fiscal year 2021, unless Congress passes a bill which the president signs to avert such a result. Sequestration is a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled in order to achieve compulsory deficit reduction.
Much has been written about the draconian effects sequestration will have on the programs, projects and activities of executive branch agencies. Senior executive branch officials, members of Congress and industry leaders all predict catastrophe if sequestration is implemented. In the case of government contractors, the decline in new government work caused by funding reductions, or the truncation of existing government work through contract terminations, changes, or other mechanisms, may cause employers to consider terminating or laying off employees. As a result, it is important for employers to understand their rights and obligations under the Worker Adjustment and Retraining Notification (WARN) Act.
Notification Requirements under the WARN Act
The primary purpose of the WARN Act is to require certain employers to provide at least 60 days advance notice to employees who are impacted by a “plant closing” or “mass layoff.” Each of these terms has a lengthy statutory and regulatory definition but, in brief, a “plant closing” refers to a shutdown of a site of employment resulting in an employment loss for at least 50 employees, while a “mass layoff” means a reduction in force at a single site of employment impacting at least (1) 50 employees and 33 percent of the active employees at that site, or (2) 500 employees.
As a general rule, whenever an employer foresees that 50 or more employees could lose employment at a site of employment within a 90-day period, that employer should carefully analyze whether the definition of a “plant closing” or “mass layoff” may have been met, and thus whether WARN notice requirements have been triggered. If the WARN notice requirements are triggered, the employer must provide written notice of the anticipated employment loss to (1) the affected employees (or to their representative if unionized), (2) a designated state official, and (3) the chief elected official of the unit of local government within which the layoff or plant closing will occur. If the employer provides less than 60 days’ notice before the employment action, it may be subject to paying wages and benefits to the affected employees for the portion of the 60-day period in which notice was not given, in addition to other potential penalties.
The WARN Act recognizes that plant closings and mass layoffs cannot always be anticipated months in advance, and certain exceptions to the 60-day notice requirement exist. The “unforeseeable business circumstances” exception is the relevant exception that would be associated with layoffs or plant closings resulting from the January 2, 2013 onset of sequestration. This exception encompasses a “sudden, dramatic, and unexpected action or condition outside the employer’s control.” The Labor Department’s interpretive guidance noted that although budget sequestration can be seen months in advance, the actual impact on a particular contractor may be unknown until much later. Therefore, an abrupt termination of a particular contract might qualify under the “unforeseeable business circumstances” exception. If contractors must lay off or separate their employees in less than 60 days, such announcements would be sudden and dramatic and therefore consistent with the WARN Act. According to the Labor Department, in such cases employers would not have to provide the full 60-day notice.
Contractor Costs and the WARN Act
The Office of Management and Budget (OMB) just issued new guidance that certain liability and litigation costs associated with WARN Act compliance will be allowable costs under government contracts. Under the OMB memorandum, if sequestration occurs and an agency terminates or modifies a contract which causes the contractor to order a plant closing or layoffs subject to the WARN Act’s notification requirements, and that contractor has followed the Labor Department’s guidance, then any resulting court-determined, WARN Act-based employee compensation costs, attorneys fees and other litigation costs would qualify as allowable costs which would be reimbursable by the contracting agency, regardless of the litigation outcome. Such costs would also have to be both allocable to the contract in question and reasonable in accordance with existing FAR principles.
This new OMB memorandum has prompted several large defense contractors to announce that they will not issue WARN Act notices before January 2, 2013. However, the guidance has exacerbated partisan tensions. Senators Charles Grassley (R-IA) and Kelly Ayotte (R-NH) announced jointly that they had sent a letter of inquiry “asking under what authority the administration is using to say it is okay to disregard the law,” and then promise contractors “a taxpayer funded bailout for their legal expenses if they do so.”
Regardless of the seemingly inevitable partisanship that accompanies the run up to a presidential election, there are several points about the most recent OMB memorandum for contractors to bear in mind. First, the implementation of sequestration alone does not portend layoffs or plant closings triggering WARN Act notice requirements. There must be some adverse contract action flowing from sequestration’s funding reductions which affects an employer. In addition, the OMB guidance clearly contemplates a court determination of both employee compensation costs, as well as attorneys fees and other litigation costs. However, employers may incur substantial costs associated with the publication and dissemination of WARN Act notices or employee negotiations and settlements not resulting in litigation. Under the OMB guidance, these costs would not seem to be allowable. Contractors who anticipate potential WARN Act liability should seek guidance from contracting officers about the extent to which their WARN Act-related costs will be allowable. Awareness of the OMB memorandum by DCAA and DCMA personnel will almost certainly also take time, and ignorance of the OMB guidance could complicate audits. Finally, before allowable costs may be reimbursed, the Government must have funds available to do so. If sequestration occurs, agencies may not have sufficient funding to reimburse WARN Act-related costs. Even if litigation resulted from a WARN Act dispute, the Judgment Fund would not be available for such purposes because the litigation would not involve the United States.
Prudent employers should prepare for various scenarios and have contingency plans in place to provide appropriate notice as soon as it becomes clear that a particular contract action will cause a WARN-triggering employment loss. Some companies are considering “provisional notices,” which communicate to all employees that federal budgetary issues could result in an employment loss. However, because they do not indicate which specific employees will be impacted and the specific date on which the employment loss will occur, such provisional notices may be “better than nothing” (and may show the employer’s good faith efforts to try to comply with WARN) but are still unlikely to fully satisfy the requirements of WARN. Finally, employers should be aware that several states have their own plant closing laws (sometimes referred to as “mini-WARN” statutes), and some of these laws have more stringent requirements that the federal law. Employers should thus analyze relevant state laws in states in which a significant employment loss may occur.
 Pub. L. 100-379, codified at 29 USC 2101 et. seq.
 20 C.F.R. 639.9(b)(1); see also, 29 USC 2102(b)(2).
 Department of Labor, Training and Employment Guidance Letter No. 3-12, July 30, 2012.
 Office of Management and Budget, Guidance on Allowable Contracting Costs Associated with the Worker Adjustment and Retraining Notification (WARN) Act, Memorandum for the Chief Financial Officers and Senior Procurement Executives of Executive Departments and Agencies, Sept. 28, 2012.
 Sara Sorcher, White House Moves to Head Off Sequester Layoffs, National Journal, Sept. 29, 2012, at http://www.nationaljournal.com/nationalsecurity/white-house-moves-to-head-off-sequester-layoffs-20120928.
 Senators John McCain, R-Ariz., and Lindsey Graham, R-S.C., called the guidance “politically motivated” and said they’d block any contractor payments by the Pentagon to cover failure of issuing WARN Act notices. Joyce Tsai, Partisan Debate Deepens over Layoff Notices Before Sequestration, Stars and Stripes, Oct. 5, 2012, at http://www.stripes.com/partisan-debate-deepens-over-layoff-notices-before-sequestration-1.192039.
 Letter from Senators Charles Grassley and Kelly Ayotte to Jeffrey Zients, Acting Director, Office of Management and Budget, (Oct. 1, 2012), at http://www.grassley.senate.gov/about/upload/100220121.pdf.
 31 USC 1304.
During the 2012 Fall Conference, GSA expressed interest in hearing from Coalition members about contract clauses that increase costs without adding value to the government. The Coalition is putting together a list of these contract clauses to share with GSA. Please submit your list to Carolyn Alston at email@example.com or Aubrey Woolley at firstname.lastname@example.org.
The General Services Administration (GSA) and the Treasury Department issued an RFI late last week asking vendors to provide feedback on how to improve the enterprise software licensing initiative, known as SmartBUY. GSA’s Federal Strategic Sourcing Initiative (FSSI) SmartBUY Program plans to create a new offering of large publisher Blanket Purchase Agreements (BPAs) for government-wide commercial-off-the-shelf software. GSA is inviting large publishers and resellers to submit information, feedback, and recommendations on the implementation of new FSSI SmartBUY software BPAs.
GSA’s goals for the FSSI SmartBUY single large publisher BPAs include reducing the Federal Government’s total cost of ownership of software and services, improving cross-government data sharing, and allowing federal agencies to pay only for what they use. Responses are due by December 11, 2012. For more information, please see the RFI link above.
There is one week left for members to respond to GSA’s Request for Information (RFI) on new sustainable building technologies in support of the Green Proving Ground(GPG). The GPG leverages GSA’s real estate portfolio as a “proving ground” to evaluate emerging building technologies and practices that have the potential to improve the environmental performance of GSA’s portfolio while reducing operational costs. The RFI invites industry to submit information which GSA will use in the selection process for technologies to test as part of the FY2013 GPG initiative. Selected technologies will be tested in GSA federally-owned buildings.
The Federal Buildings Committee will have a guest from PBS’ Green Proving Ground at their next meeting in January provide an overview of the program, successes to date, and the broader deployment of technologies that have been evaluated by GSA. Please watch the Friday Flash upcoming events calendar for the date to be announced.
The GSA/VA Schedule is a $50 billion contracting program that all federal agencies use to acquire commercial services and products. These multiple year, government-wide contracts cover professional services, information technology, pharmaceuticals and a vast array of commercial products.
The GSA/VA Schedule offers a huge market opportunity. Thousands of companies including both Fortune 500 companies and a vast number of small businesses have GSA/VA Schedule contracts. All federal agencies, and in some instances state agencies, can place orders against the contracts.
Of particular interest to in-house counsel, GSA/VA schedule contracts have a pricing methodology, and disclosure requirements that are unique in federal government contracting. The contracts provisions must be correctly understood, managed and monitored to assure that your company realizes anticipated profits. Failure to do so can result in significant monetary, administrative, civil and even criminal penalties.
Join the Coalition on December 5th to gain information and tools to help you understand the GSA/VA Schedule contracting program and provide insightful legal advice to your in-house client.
Click here for more information or to register for this very important training opportunity!
The Election is over, the results are in! But what does it all mean? Join the Coalition for Government Procurement as we explore the results, the ramifications and the outlook for the new Congress in 2013. Tom Davis and a panel of industry experts will analyze the results and share insights on what it all means for procurements in 2013.
The Honorable Thomas M. Davis – former 7 term Virginia Congressman and Chairman of the House Government Reform and Oversight Committee as well as the Chair of the subcommittee on Technology and Procurement Policy. He now serves as the Director of Federal Government Affairs for Deloitte & Touche LLP, where he continues his commitment to effective, common-sense solutions to government. Listen to his perspective on what happened, why it happened and what it means moving forward.
Hear from industry experts how the elections will impact Sequestration, The “Fiscal Cliff,” Business Opportunities, GWAC/MAC Procurements, and other topics.
Jon Etherton, President and owner of Etherton and Associates, Inc., a respected firm that provides services in Federal relations to clients in the defense, intelligence, aerospace and service industries. Jon Etherton has over 25 years of experience working in and with Congress as well as the Executive Branch on national security funding and policy issues.
Tom Sisti, Senior Director & Chief Legislative Counsel at SAP. In this role he provides legislative analysis and counsel to business leadership and support for SAP business team’s development and program initiatives.
December 6th, 2012
8AM – 10AM
The Tower Club
8000 Towers Crescent Drive #1700
Vienna, VA 22182