Friday Flash 12.04.20

Section 876 Implementation: Exploring the Possibilities

Blog readers will recall that, over the summer, we highlighted GSA’s issuance of an Advance Notice of Proposed Rulemaking (ANPR) regarding the implementation of Section 876, “Increasing Competition At The Task Order,” of the 2019 National Defense Authorization Act.  That section authorizes civilian agencies to award multiple award contracts for services acquired on an hourly rate basis without considering price as an evaluation factor at the contract level.  For GSA, this authorization of authority includes services pricing under the Schedules.  The Coalition filed comments on this ANPR, which can be found here.

In furtherance of the implementation of Section 876, GSA has been hosting a series of listening sessions.  GSA should be commended for holding these sessions, as they promote the exchange of information and further the collaboration between government and industry that is so helpful to improving the efficiency of the acquisition process.  This week, Coalition President Roger Waldron was privileged to participate in one such session, and he provided details on the benefits of the section, as well as what implementation should look like and implementation challenges. 

At the outset, it is important to acknowledge the benefits of Section 876.  Increasing competition at the task order level expands government access to innovation, and, by so doing, allows the government to leverage the forces of the dynamic marketplace to provide best value support/pricing to agencies and their missions.  It reduces duplicative, formulaic, and burdensome administrative activities, thus reducing barriers to market participation by firms of all sizes, including small businesses.  Also, by focusing on prices at the order level where requirements are most definitized, it enhances the realism of prices received through competition, thereby unburdening GSA contracting officers to focus on other key contract issues, like cybersecurity and supply chain assurance.  In sum, Section 876 affords government the opportunity to avoid what our friend, Steve Schooner at GW Law School, has called the “Tyranny of Low Price.”

It should be noted that the implementation of this authority has been pending for two years.  The Coalition thus believes the time is ripe for GSA to embrace Section 876​ on its own terms, i.e., for services that are priced firm, fixed; aggregate team-based; T&M; and labor hour.  All of these methodologies represent pricing based on units of time, as ​envisioned under the statute.  In implementing the section, GSA should be guided by key drivers; specifically, the approach should:

  • Be simple and understood easily by all parties
  • Leverage the success and benefits of Schedules consolidation
  • Require no price or cost submission prior to the issuance of an order
  • Eliminate the PRC
  • Best value and fair and reasonable pricing driven by competition at the order level

So too, the authority should be implemented across the spectrum of services contracting, including commercial offerings.  There is nothing to be gained by any further delay with half-steps, like piloting implementation. 

As noted in the recently released Coalition report, “Overview of Approaches to Acquisition Management Reform and Digital Transformation,” the government needs to improve market participation incentives for the industrial base in order to access the innovation necessary to address near-peer challenges in the current environment.  It can do so by addressing anti-competitive practices that could drive companies away, such as formulaic, outdated pricing regulations​, superfluous cost build evaluations​, and generally arbitrary price negotiation positions​ that serve process uniformity at the expense of needs-focused contracting, risking a commercial “brain drain” from  the Schedules.  For this reason, the Coalition believes the implementation of the Section 876 authority as discussed herein is a solution whose time has come, and we are gratified to see GSA endeavoring to make it a reality. ​

Congress Negotiates Funding Ahead of Dec 11 Deadline  

Congressional appropriators are negotiating a $1.4 trillion omnibus spending deal. The current continuing resolution (CR) funding the Government expires on December 11. Politico reported that Senate Appropriations Chairman Richard Shelby (R-AL) has raised the possibility of another CR in order to give more time for Congress to negotiate the omnibus. The CR could also include some COVID related funding in support of a vaccine, the PPP program and PPE.

 

Senators Ask How VA will Distribute COVID-19 Vaccine

Federal News Network reported that some Senate Democrats have inquired about how the Department of Veterans Affairs (VA) will distribute the COVID-19 vaccine to veterans and employees. Lawmakers are also concerned about how the VA will vaccinate front-line health care workers. The VA is working with the Center for Disease Control and Prevention (CDC) on a vaccine distribution plan. The VA medical staff has already participated in planning exercises in October to prepare for the vaccine. 

 

CMMC Pathfinder Contracts Imminent, Lack of Assessors is a Concern 

On December 3, Federal News Network reported that an announcement for the first 15 pathfinder contracts for the Department of Defense’s (DoD) Cybersecurity Maturity Model Certification (CMMC) program is approaching. These contracts will be the first real-world use of CMMC. DoD expects to name these first 15 contracts within the next few days. Additionally, two new rules that serve as precursors to the full CMMC implementation rollout took effect on Tuesday. Vendors bidding on a new contract will need to log in to a web portal, called the Supplier Performance Risk System (SPRS), and attest to which security controls in NIST Special Publication 800-171 they are currently complying with. Vendors will score themselves on the portal based on their system security plan. The second rule involves verifying vendor self scores. DoD will eventually conduct on-site audits to make sure that these scores are accurate.  

FCW reported that according to a DoD official, a lack of assessors for the CMMC program is a major concern for the agency as the rollout approaches. This concern is attributed to the fact that a portion of the audits required for some companies have to be done in person, which requires travel and contact with others. The CMMC Accreditation Board started assessor training over the summer, however the number of assessors is far below the estimated 2,000 needed. Only 50 assessors had been trained as of October. 

 

Coalition Submits Comments on CMMC  

Earlier this week, the Coalition submitted comments in response to DFARS Case 2019-D041 “Assessing Contractor Implementation of Cybersecurity Requirements.” The DFARS Case implements the Cybersecurity Maturity Model Certification (CMMC) for contractors in the Defense Industrial Base. The Coalition’s comments can be accessed here 

 

GAO Finds Areas of Improvement for Category Management 

The Government Accountability Office (GAO) published a report on the Office of Management and Budget’s (OMB) Category Management initiative. This initiative aims to create savings by improving how agencies buy commonly purchased products and services. The report analyzes the extent to which OMB has focused on agencies’ requirements definition, the extent to which agencies face challenges analyzing data, and how much agencies purchased common products and services from small businesses through Category Management.  

GAO found that OMB has primarily focused on the contracting aspects of category management in its guidance, placing less emphasis on how agencies define requirements, which could result in billions of more dollars being saved. Agencies reported that data challenges, including issues collecting, analyzing, and sharing data on their spending and prices paid, have affected their category management implementation. GAO suggested that OMB take a leadership role in addressing governmentwide data challenges.  

GAO found that small businesses received 30 percent more of annual category management obligations since 2016.  However, the number of small business vendors has decreased each year. GAO noted that OMB should improve communications with small businesses by improving training for agency employees who are responsible for small business contracting.   

 

Recordings from Fall Conference Sessions Available 

Thank you again to everyone who made the 2020 Fall Training Conference a success! In case you missed any of the sessions (or you’d like to listen to them again), recordings are now posted on the Conference website for all registered attendees.  Just log-in to the conference website to access them under “My Agenda.”  If you have any questions, please contact Michael Hanafin at mhanafin@thecgp.org.   

 

Top Service Contractors Use of Foreign Labor and Off Shoring Under Review 

On November 19, the Office of Management and Budget (OMB) released a memo that provides agency guidance on Executive Order (EO) 13940Aligning Federal Contracting and Hiring Practices with the Interests of American Workers.  Section 2(a) and (b) of the Order require agencies to review their federal contractors’ use of temporary foreign labor or off shoring practices, where contract work is moved from domestic to foreign performance. Section 2(c) of the Order requires agencies to review whether their federal hiring practices are compliant with U.S. citizenship requirements. 

According to OMB’s memo, agencies are to review the service contracts of the 25 contractors that they have the most business with from Fiscal Years 18 and 19, or the contractors that cover at least 10% of the agency’s obligations for services from the same time period, at minimum. Agencies are required to summarize the information received from contractors. The reports will also include any recommendations to improve Federal procurement and protect national security. The Office of Personnel Management (OPM), in coordination with each agency, must review the agency’s compliance with EO 11935, Citizenship Requirements for Federal Employment. For more details, see full memo here.   

 

 SAM.gov to Transition to beta.SAM.gov in April  

 The General Services Administration (GSA) announced on Interact that on April 26, 2021, the functionalities of the current SAM.gov will be integrated into beta.SAM.gov. Once integrated, the environment will be renamed SAM.gov, and the term beta will be retired. GSA will be posting regular updates about what changes to expect with the SAM.gov integration. Core data and functionality of the systems will not be changing, and there will be a new look and feel for a large portion of the site. More information and resources will be made available in the future on Interact. 

 

Legal Corner: What You Need to Know About the Presiden’ts September 22 “Divisive Ideology” Executive Order

By Sheppard Mullin’s GovCon Team*

On September 22, 2020, the President of the United States issued an Executive Order (“EO”) banning federal contractors from conducting training “based on race and sex stereotyping,” as well as training that “portrays certain races as oppressors.” The EO targets “divisive ideologies,” and explains that it became necessary “to combat a radical ideology that has infiltrated diversity training throughout American institutions.” “Federal contractors,” the EO states, “will not be permitted to inculcate such views in their employees.” In light of the extensive efforts contractors have been making to promote diversity and inclusion in their organizations, we offer the following Q&A to help navigate what is most definitely an unprecedented EO.

What Does The EO Ban?

A. The EO bans the training of “divisive concepts.” The EO defines divisive concepts to include any notions that:

(1) one race or sex is inherently superior to another race or sex;

(2) the United States is fundamentally racist or sexist;

(3) an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;

(4) an individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;

(5) members of one race or sex cannot and should not attempt to treat others without respect to race or sex;

(6) an individual’s moral character is necessarily determined by his or her race or sex;

(7) an individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex;

(8) any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex; or

(9) meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race.

The term “divisive concepts” also includes any form of race or sex “stereotyping” or any form of race or sex “scapegoating.”

While the definition does not include a comprehensive list of banned training concepts, reading between the lines, and coupling that reading with (a) the examples the White House Fact Sheet provides and (b) the terms the OMB has highlighted as “red flags,” it would appear the following concepts are likely to draw the attention of the Department of Labor:

  • Implicit or explicit bias
  • Historical underpinnings of sexism or racism
  • Affirmative action based on race or sex
  • Blame or responsibility for racism or sexism
  • The singling out of any race or sex as having received any special treatment or privileges
  • The assignment to a race or sex of a stereotype or “character traits, values, moral and ethical codes, privileges, status, or beliefs” 
  • Protecting any class of persons based on their race or sex

These concepts are most likely to draw the attention of DOL’s Office of Federal Contract Compliance Programs (“OFCCP”) if the training materials and/or communications surrounding the training include words on the DOL dirty-words list: “critical race theory,” “white privilege,” “intersectionality,” “systemic racism,” “positionality,” “racial humility,” and “unconscious bias.” According to the DOJ, “when used in the context of diversity training, these terms may help to identify the type of training prohibited by the E.O.”

Does The EO Ban All Diversity and Inclusion (“D&I”) Training?

A. No. We suspect most of a contractor’s D&I training will be unaffected by the EO. The White House Fact Sheet accompanying the EO notes that diversity training is permitted where “no one feels marginalized because of his or her race or sex.” While that admittedly is an impossibly vague and unhelpful standard, the EO itself makes clear it does not

prevent agencies, the United States Uniformed Services, or contractors from promoting racial, cultural, or ethnic diversity or inclusiveness, provided such efforts are consistent with the requirements of this order.

The EO also makes clear that “[n]othing in this order shall be construed to prohibit discussing, as part of a larger course of academic instruction, the divisive concepts [identified in the EO] in an objective manner and without endorsement.”

That being said, the EO will impact some of the initiatives some contractors currently are undertaking to provide programs that discuss diversity, inclusion, racial justice, implicit bias, and explicit bias. The EO is written very broadly and very vaguely, and likely will be read to cover some training many companies currently are providing, especially some implicit bias / unconscious bias training.

My D&I training discusses the implicit and unconscious biases all people have. Will that training be impacted by the EO?

A. Of all the training likely to be impacted by the EO, implicit/unconscious bias training is at the top of the list. Indeed, the term “unconscious bias” is on the list of OMB’s dirty words, i.e., words that “may help to identify the type of training prohibited by the E.O.”

According to DOL, unconscious or implicit bias training is banned if it suggests that people may be unconsciously biased by virtue of their race or sex. As that pretty much describes what most/all implicit bias training is about, it’s not easy to visualize what compliant implicit bias training would look like.

Here is the actual language from the DOL memorandum: 

Unconscious or implicit bias training is prohibited to the extent it teaches or implies that an individual, by virtue of his or her race, sex, and/or national origin, is racist, sexist, oppressive, or biased, whether consciously or unconsciously. Training is not prohibited if it is designed to inform workers, or foster discussion, about pre-conceptions, opinions, or stereotypes that people—regardless of their race or sex—may have regarding people who are different, which could influence a worker’s conduct or speech and be perceived by others as offensive.

Walking the line between training that is “designed to inform” and training that implies that an individual may be unconsciously biased will be no easy task. 

The task is further complicated because the rule prohibits suggesting “either that the United States is an inherently racist country or that any race or ethnicity is inherently racist.” Here again, suggesting that people are unconsciously biased against certain races comes rather close to suggesting people are inherently racist.

This background notwithstanding, there does seem to be some room to maneuver so long as one maneuvers carefully. One approach is to discuss implicit bias as something that impacts every human being, regardless of race, as opposed to a given race, sex, or ethnicity. That would not seem to run afoul of the rule as written, although it still could put up a red flag.

When Does The EO Go Into Effect, And How Will It Find Its Way Into My Contracts?

A. Much of the EO is effective immediately. For example, DOL’s compliance hotline is up and running, and as of October 7, DOL already has received and started investigating complaints against unnamed contractors. Section 4 of the EO, which requires agencies to utilize the new contract clause, however, takes effect 60 days from the date of the EO. The EO eschews the statutory rulemaking process, and therefore the contract clause can appear in new awards on this expedited timeline (60 days as opposed to 12+ months). That means, beginning November 21, 2020, Contracting Officers will be required to insert the contract clause in new contracts. The plain text of the EO does not require Contracting Officers to modify existing awards, but agencies may choose to do so nonetheless.

Interestingly, the EO does not direct the FAR Council to engage in a rulemaking to develop a new FAR clause. Instead, it directs “all Government contracting agencies” to include “in every Government contract” the specific language from Section 4. Given the lack of a new FAR clause, it’s likely contractors will see this language inserted into their contracts as an agency-level clause (though the mechanics of implementation are up to each agency).

Finally, keep in mind that while the most burdensome elements of the EO kick into effect on November 21, 2020, the DOL OFCCP maintains the right to conduct investigations into pre-November 21 activities pursuant to its existing investigative authority under EO 11246.

Does The EO Apply To Me? Who Does It Cover? Are There Any Exceptions?

A. The EO likely does apply to you. The EO states that all contracts are covered except those “exempted in a manner provided by” Section 204 of the Equal Employment Opportunity Executive Order. (E.O. 11246, Sept. 24, 1965) DOL has not released guidance on the exemptions applicable here, but under its Section 204 authority, DOL has exempted the following classes of contracts (among others) from the Equal Employment Opportunity requirements:

  1. Transactions of $10,000 or less;
  2. Contracts for work outside the United States (and performed by employees not recruited in the United States);
  3. Contracts with State or local governments; or
  4. Contractors who are religious entities.

Remember, though, if this clause makes its way into even one Federal award, it applies company-wide. Also, as discussed below, it is likely the clause will flow down to subcontractors from primes. Therefore, it’s unlikely any government contractor (whether typically a prime contractor, subcontractor, or lower tier subcontractor) will avoid its reach. Even companies that never have accepted a single Federal contract clause previously may see this prohibition soon.

Does The EO Flow Down To My Subs? Will I See It Flowed Down By My Primes?

A. Yes and yes. Prime contractors are required to include the clause in “every subcontract or purchase order” with every subcontractor and vendor. This language represents unprecedented reach for a government procurement clause. Typically, government contractors only are required to flow down contract clauses to subcontractors, not vendors; and certain subcontractors (e.g., commercial item subcontractors) only have to accept a limited number of flowdowns. Clearly, this EO was drafted to reach as many companies as possible.

How Will The Government Audit/Investigate Compliance?

A. The OFCCP has set-up a hotline (both phone and e-mail) to receive complaints alleging violations of the EO. The hotline allows for both firsthand complaints as well as third-party complaints. Upon receipt of a Complaint, the OFCCP immediately will investigate the allegations in accordance with its “standard procedures.” However, unlike other audits performed by the OFCCP, an investigation for violations of this EO likely will be fairly swift as it will be heavily focused on documents reflecting training given and/or available to employees. Additionally, it will not be as data driven as other OFCCP audits; instead, it will be focused on how the complainant subjectively feels and/or how others felt when receiving the training. 

DOL’s enforcement here likely will align with the Agency’s broader efforts to scrutinize companies’ heightened focus on diversity and inclusion programs. To get a sense of what those broader efforts look like, take a look at DOL’s actions with regard to Microsoft.

What Are The Risks Of Non-Compliance?

A. The EO establishes harsh penalties for non-compliance, and provides no way to gauge the level of due process that will be built into the penalty scheme. According to the EO, “. . . In the event of the contractor’s noncompliance with the requirements of paragraphs (1), (2), and (4), or with any rules, regulations, or orders that may be promulgated in accordance with the Executive Order of September 22, 2020, this contract may be canceled, terminated, or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts . . . .” The EO goes on to direct the OIG to conduct audits to ensure compliance with the EO’s provisions.

The EO Called for the Issuance of a Request for Information (RFI). Should I respond?

A. The EO called for the OFCCP to publish “in the Federal Register a request for information seeking information from Federal contractors, Federal subcontractors, and employees of Federal contractors and subcontractors regarding the training, workshops, or similar programming provided to employees.” The RFI went public October 22, 2020. According to the RFI, “there are no adverse legal consequences for choosing not to participate in this request for information.” The RFI gives companies and individuals until December 1, 2020 to respond.

To incentivize contractors to share their training materials with the Government, the RFI promises “compliance assistance as requested to Federal contractors and subcontractors that voluntarily submit such information or materials.” The RFI also promises that the OFCCP

will, consistent with law, exercise its enforcement discretion and not take enforcement action against Federal contractors and subcontractors that voluntarily submit information or materials in response to this request for information . . . , provided that such contractor or subcontractor promptly comes into compliance with the Executive Orders as directed by OFCCP.

However, if the Government decides a contractor’s training materials are not compliant and the contractor fails to take prompt corrective action, the “OFCCP may take enforcement action against the contractor or subcontractor if OFCCP later receives the contractor or subcontractor’s materials through a separate source, such as a neutrally scheduled audit, in connection with a complaint, or if submitted by an employee in response to this RFI.” Neither the RFI nor the underlying EO provides any standards by which the OFCCP will evaluate the materials it receives through the RFI process.

In short, in an effort to convince companies to self-disclose, the RFI creates a race to the OFCCP’s steps between employees and employers. While being the first to share training materials could prevent an enforcement action, it also could put a target on the submitter’s back. And if the contractor does not agree with the OFCCP’s recommendations, the contractor could find itself in a tough spot.

It’s hard to assess whether companies will take OFCCP up on its offer of possible “enforcement discretion” with regard to potentially violative in-house training. Making matters worse, although the EO states OFCCP will treat materials submitted as confidential per Exemption Four to the Freedom of Information Act “to the maximum extent permitted by law,” nothing precludes the DOL from taking the position that the training materials submitted do not meet the legal definition of “trade secrets and commercial or financial information” warranting protection under Exemption Four. Unfortunately, looking at the 24 comments on the RFI published to date provides no meaningful insight. Instead, rather than addressing the substantive issues of the RFI, all 24 simply complain about “critical race theory” generally, which, interestingly, is not even a term mentioned in the EO or the RFI.

CONCLUSION/PATH FORWARD

Every contractor and subcontractor currently is struggling to evaluate what to do about the Executive Order, if anything. Obviously, companies are in a tough spot here. The EO will make it harder to meet the demands of employees, customers, and other stakeholders that we all take meaningful action to right unfairness and injustice. In this complicated context, here is a list of potential steps (in no particular order) a prime contractor or subcontractor might take to mitigate risk.

  • Develop a long-term plan to review current training to identify potentially violative components.
  • Evaluate the language used to described your programs. Again, here are the terms the DOL claims will “help to identify the type of training prohibited by the E.O.”: “critical race theory,” “white privilege,” “intersectionality,” “systemic racism,” “positionality,” “racial humility,” and “unconscious bias.” While these terms are not banned, they clearly will signal a potential non-compliance to an agency reviewer.
  • Review current training and related communications to identify “red flag” words, and consider replacing those words with equally impactful, non-red-flag words. For example, consider focusing on fairness, equity, and inclusion for all rather than focusing on a specific group.
  • Review your hotline and hotline communications to incorporate language that encourages potentially aggrieved employees to notify the Company in the first instance rather than going straight to the Government. Just remember, do not suggest in any way that they do not have the right to go to the Government directly.
  • Ensure required posters are hung appropriately.
  • Ensure unions are notified appropriately.
  • Craft flow-down language for subcontractors and vendors.
  • Craft a flow-down representation for vendors delivering diversity/inclusion training through which those vendors can represent their training meets the requirement of the Executive Order.
  • Evaluate the pros and cons of responding to the OFCCP’s RFI.
  • Evaluate ongoing programs to provide opportunities to under-represented classes of employees.
  • Evaluate implicit/unconscious bias training to ensure it focuses on the inherent biases of all people as opposed to people of a certain race, gender, or ethnicity.

These steps will not eliminate risk, but they should reduce the likelihood a company ends up on the receiving end of a DOL OFCCP hunt for “divisive ideologies.”

*This article was prepared by Sheppard Mullin attorneys Jonathan Aronie, Townsend Bourne, Denise Giraudo, Fatema Merchant, Anne Perry, and Ryan Roberts. For more information, please visit us at https://www.sheppardmullin.com/governmentcontracts. NOTE to any Government official reading this article: The observations herein are offered as part of a larger academic discussion, in an objective manner, and without endorsement. No one should feel “discomfort, guilt, anguish, or any other form of psychological distress on account” of this article.

Healthcare Spotlight: Medicare Links Part B Payment Rates to International Prices: Most Favored Nation Model

By Alice Valder Curran, Beth Halpern, Stuart Langbein, Beth Roberts, Christopher H. Schott, Kathleen A.Peterson, Samantha D. Marshall, James Huang, James M. Deal, and Boyd Jackson with Hogan Lovells, LLC.

The Healthcare Corner provides the healthcare community with an opportunity to share insights and comments on healthcare issues of the day. The comments herein do not necessarily reflect the views of The Coalition for Government Procurement. 

On November 20, 2020, the U.S. Centers for Medicare & Medicaid Services (CMS) issued an interim final rule (IFR) with comment period implementing a mandatory “Most Favored Nation” demonstration model (MFN Model) to test Medicare reimbursement based on international reference prices. Comments are due no later than January 26, 2021. Initially, the Model will focus on approximately 50 Medicare Part B drugs or biologicals (collectively, drugs) with the highest spending during the preceding year, with additional drugs potentially added in subsequent years without removing a commensurate number of drugs. Part B payment will be made for such drugs based on an “MFN Price” that reflects the lowest per capita Gross Domestic Product (GDP) adjusted price of any non-US member country of the Organisation for Economic Co-Operation and Development (OECD) with a GDP per capita of at least 60 percent of the United States. CMS estimates that the Model will reduce Medicare fee-for-service spending by approximately $85.5 billion over the demonstration period.

Adopted using CMS’s demonstration authority under section 1115A of the Social Security Act, the MFN Model starts on January 1, 2021, and will operate for seven years. [1] The first four years of the Model will be a phase-in period where the MFN Price based payment methodology will be incrementally adopted in 25 percent increments over each year.

Model participants

The MFN Model applies in all states and United States territories. MFN participants consist of nearly all Medicare participating providers and suppliers that submit claims for a separately payable drug that is an MFN Model drug for a Part B enrolled Medicare beneficiary (who is not covered under Medicare Advantage or a group health plan). As noted, Model participation is mandatory and is established by a provider or supplier submitting a Part B claim for payment for an MFN drug for any such beneficiary.

The Model exempts certain, relatively small classes of providers and suppliers (e.g., prospective payment system exempt cancer and children’s hospitals), as well as participants that are granted a financial hardship exemption, but CMS notes that such financial hardship exemptions will be granted at the sole discretion of the agency.

CMS will exclude from the Model hospitals participating in CMS Innovation Center models in which payment for outpatient services is made under a fully capitated or global budget basis, such as the Maryland Total Cost of Care Model. CMS will not exclude entities participating in the Oncology Care Model but will adjust reconciliation calculations to avoid paying performance-based payments based on the MFN Model’s drug payment changes.

Click here to read the full article. 

 

FedRAMP Updating Cloud Security Requirements

FedScoop reported that the Federal Risk and Authorization Management Program (FedRAMP) program management office (PMO) is currently drafting new cloud security requirements to align with the recent guidance from the National Institute of Standards and Technology. PMO is drafting new baselines for the low-, moderate-, and high-impact security levels, which is based on NIST’s fifth revision to Special Publication 800-53. FedRAMP will release the new draft guidelines and seek feedback from agencies and cloud service providers. The public comment period could range from 90 to 120 days. 

 

GSA Updates IT Product Service Codes  

The General Services Administration announced the release of an updated Product Service Code (PSC) Manual. The manual includes 40 new codes for Information Technology and utilizes a new structure which provides data on technologies like Cloud-based services. According to GSA’s notice on Interact, the Integrated Acquisition Environment (IAE) recently deployed changes to PSCs throughout the IAE systems. These PSC changes: 

  • Activated 155 new research and development (R&D) PSCs while end-dating 721 R&D PSCs 
  • Activated 40 new information technology PSCs while end-dating 68 IT PSCs 
  • Activated two product codes–PSC 6835 (new) and PSC 6830 (revised) 
  • Renamed PSC Q901 to Healthcare Environmental Cleaning from Aseptic Housekeeping Services 

GSA also noted that updates to the PSC codes have been implemented throughout IAE systems,  including beta.SAM.gov, SAM.gov and FPDS.gov.  As a result, GSA advises users to:  

  • Utilize the new PSCs for system interfaces, APIs, extracts,  search filters, and data entry processes.   
  • Update their saved searches, search filters and followed items to reflect the updated PSC codes. 
  • Check the updated API documentation to ensure your submissions are accurate if you are a user of the PSC application programming interface (API), which provides third-party applications access to the PSC data.  

The updated PSC manual is available here 

 

Off the Shelf: The Key Issues Impacting Federal Procurement 

This week on Off the Shelf, Jeff Koses, Senior Procurement Executive at the General Services Administration (GSA), gives a comprehensive update on key policy and program initiatives impacting federal procurement. 

Koses shares the latest on the implementation of Section 889 and associated considerations/challenges moving forward for both government and industry. He also discusses GSA’s listening sessions focusing on Section 876 and its potential implementation across the GSA Multiple Award Schedule (MAS) program. 

Koses highlights the key issues, opportunities and challenges GSA is assessing as it contemplates the path forward for Section 876 implementation and shares his priorities for the acquisition workforce and the strategic investments and program reviews designed to enhance training and professional development. 

Finally, Koses discusses the cross-cutting operational and policy role GSA has played in supporting the government’s pandemic response and outlines his new role as interim chairman of the AbilityOne Commission and the continuing efforts to increase the role of Americans with disabilities in federal contracting. 

Click here to access the interview. 

 

GAO: Service Worker Wage Protection Needs to Improve 

On November 23, the Government Accountability Office (GAO) released a report analyzing enforcement of the Service Contract Act (SCA). The report found that after 5,000 compliance investigations over five years, from 2014 through 2019, there was a SCA violation in 68 percent of cases. Of the 5,000 cases, there were sixty cases that resulted in debarment. As a result of these findings, there was about $224 million paid in back wages. The Department of Labor (DoL) has encountered difficulties enforcing the SCA, including difficulty communicating with contracting agencies.  

GAO completed this review to examine (1) what available data reveal about past SCA cases, (2) what challenges DOL reports facing in enforcing the SCA, and (3) how contracting agencies implement the SCA.  

GAO made six recommendations to the DOL: 

  • The Secretary of Labor should ensure that the Administrator of the Wage and Hour Division standardizes data entry on contracting agencies associated with SCA investigations in WHISARD by providing guidance to staff on how to make these data more consistent. 
  • The Secretary of Labor should ensure that the Administrator of the Wage and Hour Division analyzes information on its enforcement actions, including compliance agreements used by WHD’s regional offices and SCA debarment processes and outcomes. 
  • The Secretary of Labor should ensure that the Administrator of the Wage and Hour Division, in collaboration with the U.S. Postmaster General, develops and implements written protocols to improve communication and collaboration between the two agencies to support SCA enforcement and implementation. In doing so, they should revisit the effectiveness of existing protocols and other methods of collaboration with USPS on SCA-related issues. 
  • The U.S. Postmaster General, in collaboration with the Administrator of the Wage and Hour Division, should develop and implement written protocols to improve communication and collaboration between the two agencies to support SCA enforcement and implementation. In doing so, they should revisit the effectiveness of existing protocols and other methods of collaboration with the Department of Labor on SCA-related issues. 
  • The Administrator of the Wage and Hour Division should take steps to ensure that the unique company identifier designated by the Federal Acquisition Regulation (currently a Data Universal Numbering System number) is included in SCA debarment records in the System for Award Management whenever appropriate and available. 
  • The Administrator of the Wage and Hour Division should develop written procedures for consistently and reliably informing the relevant contracting agency about the Wage and Hour Division’s findings in SCA investigations that identify violations. 

 

GAO Reviews Agency Disaster Response and Purchase Card Use 

On November 24, the Government Accountability Office (GAO) published a report on federal response and recovery efforts related to recent disasters. Specifically, the report examines how agencies planned for their disaster response contracting activities, the extent to which agencies assessed their contracting workforce needs, and agency fraud risk related to their use of purchase cards for disaster response. GAO selected six agencies to analyze for this study, including the U.S. Forest Service, the U.S. Army Corps of Engineers (USACE), the Coast Guard, the Department of the Interior (DOI), the Environmental Protection Agency (EPA), and the Federal Emergency Management Agency (FEMA).  

GAO found that agency plans for disaster contracting activities and assessing contracting workforce needs varied. Contracting officials at three agencies which lacked full planning, including USACE, the Coast Guard, and DOI, noted challenges executing their regular responsibilities along with disaster-related responsibilities. According to GAO, without having a plan for disaster response contracting activities, these agencies miss opportunities to ensure that they are well equipped to handle future disasters. GAO found that the six agencies collectively spent more than $20 million for 2017 and 2018 disaster response activities using purchase cards. Two agencies have not completed fraud risk profiles for their purchase card programs that align with GAO’s Fraud Risk Framework. Additionally, five agencies have not documented how their fraud risk for purchase card use may differ for disaster response, which GAO’s Fraud Risk Framework recommends managers should assess. Without assessing fraud risk for purchase card programs, or how the risks may change in a disaster response environment, agencies may not have effective internal controls to identify fraudulent actions. 

 

GSA Catalog Modernization Meeting, Dec 8 

On December 8 at 10am EST, all members are invited to attend a virtual meeting, hosted by the General/Office Products Committee, with General Services Administration’s (GSA) Josh Royko, Director, Acquisition Oversight Division, and Peter Han, Catalog Management (Detail).  

GSA will be sharing their plans to modernize GSA’s catalog management capabilities, including an overview of a new manufacturer facing portal for authoritative product content called the Verified Products Portal. 

To RSVP, please email Michael Hanafin at MHanafin@thecgp.org. Please let us know if you have any questions.