Tomorrow brings us to the Final Four and I still have a chance to win my office pool (I have Kentucky and Ohio State playing in the final Monday night). More importantly, from our perspective, it marks the end of the Coalition’s first business quarter and the beginning of the second. The first quarter has been very productive and we are extremely excited about the second quarter and the rest of the year. Here are some of the highlights thus far along with upcoming events in the second quarter.
On February 27, 2012, the Coalition submitted comments to GSA regarding the paperwork burden associated with the Price Reduction Clause (PRC). Thanks to our members and others who submitted responses to our survey questions regarding the costs associated with the PRC, we were able to provide compelling information to GSA regarding the overly burdensome and costly requirements of the PRC, especially in light of the new statutory and regulatory competition requirements for task and delivery orders under the Multiple Award Schedule (MAS) program. Our comments reflect the need for serious review and reform, if not elimination, of the PRC. Since the submission of our comments to GSA, the public comment period has been extended to April 16th. The Coalition will be supplementing our initial comments.
February was a very busy month. During the third week in February, the Coalition held another very successful MAS Basic Training Course. Thanks to participation by McKenna Long & Aldridge LLP; Washington Management Group, A Deltek Company, Xerox Corporation, HP Enterprise Services, and GSA, the MAS Basic Training course provided attendees with a grounding in the key fundamentals of the MAS program. On February 29th, the Coalition held a breakfast event featuring GSA’s David McClure and Mark Day discussing GSA’s cloud computing initiatives and FedRAMP.
In March, the Coalition welcomed L-3 STRATIS as the newest Keystone member. On March 21, the Coalition was honored to present Senators Lieberman and Collins with the Coalition’s Common Sense in Government Procurement Award. Finally, as we close out the quarter on March 29th, the Coalition submitted written testimony to the Subcommittee on Contracting Oversight, Committee on Homeland Security and Government Affairs, regarding contractor costs and insourcing versus outsourcing functions.
Looking ahead to the second quarter, the Coalition is very excited about our events. These events will bring the procurement community together to discuss key issues, challenges and trends in government contracting. First, on April 18th the Coalition will be hosting a forum focused on the nexus between MAS contract compliance and the Civil False Claim Act. This session will feature defense counsel and relator’s counsel presenting the life cycle of a mock civil False Claims Act case involving the MAS. In addition, we have invited counsel from the Department of Justice to participate and are awaiting confirmation. This event is a wonderful educational opportunity for in-house counsel, compliance officers, auditors, accountants, and contracting officers from industry and government. For more information, please visit our website.
On April 26th and 27th, the Coalition will be holding our Spring Conference. We are very fortunate to have an esteemed group of senior procurement leaders from DoD, DHS, GSA and the VA joining us for a continuing dialogue on the key procurement issues of our time. View the two day Spring Conference agenda. In addition, we are pleased to announce that Jim Ghiloni, the PMO for One Acquisition Solution for Integrated Services (OASIS) (formerly Integrations) will be speaking at our conference the afternoon of April 26th.
The Coalition kicks off May with a webinar focused on Federal Supply Schedule Option Extensions: Contractor Challenges and Best Practices presented by Baker Tilly. May also brings the GSA Expo and the Coalition’s Partnership Dinner on May 16th at the Marriot Riverwalk. Administrator Martha Johnson will be our keynote speaker. The Partnership Dinner provides a wonderful opportunity for a Myth-Busters dialogue regarding GSA’s key acquisition programs and initiatives. We are also working on having a veterans organization participate in the event. For more information, visit the Partnership Dinner page on our website. Also on May 16th, the Coalition will be holding a breakfast meeting for our Board of Advisors attending the Expo. Finally, June 14-15 will be our second MAS Basic Training Course offering of the year.
While these activities and events are on going, we continue to operate our Committees, meeting regularly to discuss and address key procurement issues. It is a testament to the commitment and engagement of you, the members, that our Committees are active and involved in key challenges facing our procurement system. At the same time, we all appreciate the willingness of our colleagues in Government, especially at GSA and VA, to engage in discussions regarding their acquisition programs. Transparency and positive dialogue between Government and industry remain the foundation upon which our system can operate more efficiently and effectively for all.
A final thought, watch for future announcements from the Coalition this quarter. The best is yet to come!
GSA’s Federal Acquisition Service (FAS) has released a new name for the program formerly known as Integrations. The new name is OASIS, or One Acquisition Solution for Integrated Services. It is a next generation contract vehicle for complex, integrated professional services with an IT component. The services considered for this vehicle are program management and consulting, professional engineering, financial, logistics and equal or ancillary IT components. According to GSA, OASIS was established to satisfy the need for a government-wide vehicle that provides complex, integrated professional services that allows for the full range of contract types at the task order level, including commercial and noncommercial requirements. GSA also anticipates that OASIS will allow agencies access to cost-reimbursement solutions, a standardized definition of labor categories, and capture detailed transactional data.
OASIS will likely be an Indefinite Delivery Indefinite Quantity, multiple award and delivery order contract with on-ramp and off-ramp provisions that also integrates strategic sourcing. Given that strategic sourcing has traditionally focused on commodities and fixed unit prices, GSA expects that applying this model to professional services will require innovation. However, GSA anticipates that the collection of transactional level data could help agencies identify which contract types provide the best value or drive cost efficiencies in services acquisition.
The Coalition looks forward to working with Jim Ghiloni and FAS as OASIS develops further. For more on OASIS, visit www.gsa.gov/oasis or http://interact.gsa.gov/group/integrations-industry-community.
In response to an invitation letter from the Senate Subcommittee on Contracting Oversight, the Coalition submitted written testimony for a hearing entitled Contractors: How Much Are They Costing the Government?, which occurred on March 29th. In the testimony, the Coalition highlighted issues in which the Government can better control the cost of contracting and improve cost-analysis when making sourcing determinations. The Coalition suggested that controlling costs through clear, well-crafted requirements will ultimately lead to better value for the Government, industry and the American taxpayer. During the hearing, Senator Claire McCaskill of Missouri declared that new OMB guidance for agencies on to how analyze the costs of insourcing versus outsourcing is expected to be released within the next 60 days.
On March 28th, a notice of request for comments on Contract Administration and Quality Assurance was published in the Federal Register. GSA is seeking comments on contract administration and quality assurance as part of its request to the Office of Management and Budget to extend the reporting requirement. The notice states that under certain contracts, GSA’s Federal Acquisition Service requires documentation from contractors to effectively monitor contractor performance and ensure that it will be able to take action should that performance be deficient. GSA currently estimates the burden as follows:
Annual Reporting Burden
Responses per respondent: 25.38.
Total Responses: 116,869.
Hours per response: .067.
Total Burden Hours: 7,830.
GSA is interested in hearing comments about whether the collection of this information is necessary and has practical utility; whether the estimate of the reporting burden is accurate; and ways that the quality, utility, and clarity of the information could be enhanced. The comment deadline is April 27, 2012. If you have any feedback on this notice, please contact Aubrey Woolley at firstname.lastname@example.org.
Jim Ghiloni, who GSA recently announced will oversee the OASIS contract, has been added to the agenda for the opening day of the Spring Conference. Jim joins previously confirmed speakers Congressman Jeff Denham (R-CA), DoD Director of Defense Pricing, Shay Assad, GSA FAS Commissioner, Steve Kempf, GSA Public Building Service Commissioner, Bob Peck, VA Office of Acquisition and Logistics Deputy Assistant Secretary, Jan Frye, and former Congressman Tom Davis.
The 2012 Spring Conference will be held April 26-27 at The Westin Tysons Corner. The two-day conference, Government Acquisition Market: How Do You Grow Your Slice of the Pie?, will focus on budget, GSA contract and federal buildings trends, and legal issues that affect your government business. To see the full two-day agenda and sponsorship opportunities visit our website. Discounted room rates at the Westin end on Monday, April 2. To reserve a room call 800.937.8461 and mention the Coalition.
A recently released Government Accountability Office (“GAO”) report cites multiple risks to federal information systems due to a reliance on the global supply chain. According to the GAO, threats from foreign intelligence services or counterfeiters seeking to exploit vulnerabilities in the supply chain could “compromise the confidentiality, integrity, or availability of an end system and the information it contains.” Among other threats to the IT supply chain, GAO cites installation of malicious logic on hardware or software, installation of counterfeit hardware or software, and the failure or disruption in the production or distribution of a critical product or service.
GAO explains that, “until comprehensive policies, procedures, and monitoring capabilities are developed, documented, and implemented, it is more likely that these national security-related departments will rely on security measures that are inadequate, ineffective, or inefficient to manage emergent information technology supply chain risks.” GAO recommends that the Departments of Energy, Justice and Homeland Security “develop and implement a monitoring capability to verify compliance with, and assess the effectiveness of, supply chain protection measures.” This is the second GAO report in recent months describing risks to the federal supply chain. On February 21st, the GAO also released a report on the DoD Supply Chain.
In False Claims Act Case Involving GSA Schedules Program, Federal District Court Issues Troubling Decision Regarding Public Disclosure Bar
By Jason Workmaster, McKenna Long & Aldridge
In a long-running civil False Claims Act (“FCA”) case, United States ex rel. Rille v. Sun Microsystems, Inc., No. 4:04-C-V00986-BRW, the U.S. District Court for the Eastern District of Arkansas recently denied a Government motion to dismiss, on public disclosure grounds, the relators’ claim that Sun had fraudulently provided inaccurate Commercial Sales Practices (“CSP”) data in support of the pricing of its General Services Administration (“GSA”) Schedule. The court’s denial of the Government’s motion is troubling for several reasons.
The Sun case began in 2004 when the relators filed their initial qui tam complaint. As relevant here, that complaint alleged that Sun participated in an industry-wide “strategic alliance” scheme that somehow resulted in violations of the requirement that a contractor be “truthful in negotiations, and … certify that the cost or pricing data they proffer to the Government is current, accurate, and complete.” The relators’ 2004 complaint did not expressly allege that Sun had “defectively priced” any particular contract, let alone that it had submitted inaccurate CSP data in connection with its GSA Schedule.
At the same time the relators were filing their initial complaint, the GSA Inspector General (“IG”) was conducting a wholly independent audit of Sun’s GSA Schedule. The IG’s findings, including allegations that Sun had defectively priced its GSA Schedule by providing inaccurate CSP data, began to be made available to Sun in 2004 and were the subject of press reports in 2005. In 2006, the relators in the Eastern District of Arkansas case amended their complaint to allege that Sun had provided GSA with inaccurate information regarding its “best pricing.”
On the basis of the above chronology, the Government moved to dismiss, on public disclosure grounds, the relators’ claim that Sun had defectively priced its GSA Schedule. The Government argued: (1) that the relators did not assert this claim until 2006; (2) by that time, the claim had been publicly disclosed; and (3) that the relators were not original sources.
The court rejected all three of the Government’s arguments. First, the court found that the 2004 qui tam complaint’s vague references to violations of the general requirement that contractors submit accurate cost or pricing data were sufficient to encompass the claim that Sun had defectively priced its GSA Schedule. This finding is disturbing as it reflects a willingness to read relators’ complaints very liberally. This has potentially negative implications for Rule 9(b) motions (in which defendants seek to have FCA complaints dismissed for failing to plead fraud with particularity) as well as for statute of limitations analysis.
Second, the court rejected the Government’s assertion that the pre-2006 disclosures constituted “public disclosures” within the meaning of the FCA. Even though the disclosures notified the public that the Government was questioning the adequacy of the CSP data Sun had submitted, the court found that those disclosures did not provide notice that the Government considered Sun’s conduct to be fraudulent. Without such disclosure, the court held, there could not be a “public disclosure” for FCA purposes. This rule—that the public disclosure must specifically assert fraud—is yet another hurdle that, if more widely adopted, would make it harder for FCA defendants to obtain dismissals.
Third, and finally, the court found that, even if the Government had shown that the relators’ defective pricing allegation regarding Sun’s GSA Schedule was based upon a public disclosure, the relators in the case were “original sources.” The court based this conclusion on relators’ knowledge of “contracts between Accenture [relator Rille’s former employer] and Sun,” as well as their possession of “hundreds of thousands of pages of documents at the onset of their qui tam cases” regarding the alleged strategic alliances. This was an extremely low bar for the relators to clear in order to show themselves to be “original sources” regarding their defective pricing claim. And, under this rule, it could be difficult for future defendants to show that a relator was not an original source.
That the court went to such lengths to disagree with the Government itselfregarding whether the public disclosure bar required dismissal of the relators’ defective pricing claim in the Sun case is a cautionary tale for future defendants seeking to rely on this tool.
Two bills were introduced in the House this week concerning cybersecurity and federal information security:
• Federal Information Security Amendments Act of 2012 (FISAA of 2012, H.R. 4257): On March 26th, Representatives Darrell Issa (R-Calif.) and Elijah Cummings (D-Md.) introduced an additional proposal to overhaul Federal information security and cybersecurity functions. In contrast to Senator Lieberman’s Cybersecurity Act of 2012, this cybersecurity proposal would place the Office of Management and Budget at the helm of government information security efforts instead of the Department of Homeland Security (“DHS”). FISAA seeks to “provide a comprehensive framework for ensuring the effectiveness of information security controls over information resources that support federal operations and assets.” A press release from Congressman Issa states, “this update to FISMA [Federal Information Security Management Act of 2002] will incorporate the last decade of technological innovation, while also addressing FISMA shortcomings realized over the past years.” There is no mention of how to secure critical infrastructure such as the electricity grid, telecommunications, or transportation systems as in previously proposed cyber legislation.
• Strengthening and Enhancing Cybersecurity by Using Research, Education, Information, and Technology Act of 2012 (SECURE IT Act of 2012, H.R. 4263): On March 27th, Representatives Mary Bono Mack (R-Calif.) and Marsha Blackburn (R-Tenn.) introduced cybersecurity legislation including provisions that mirror a Senate bill by the same name introduced by Senator McCain. The bill offers a hands-off approach to industry with regard to securing the nation’s cyberspace and critical infrastructure systems. It would not grant the DHS regulatory authority requiring companies to meet minimum security standards. As its companion in the Senate, the House version would instead incentivize information sharing between industry and the Government, while increasing legal penalties for cyber crimes.
The Management Services Center (MSC) is conducting its annual Industry Days conference. This event is available for MSC’s current contractors.
MSC invites all current MOBIS, PES, Environmental, LogWorld, Language and Consolidated contractors to attend our annual 2012 Industry Days. This year’s conference will be held in the clouds. Save travel dollars and travel time.
Just bring your coffee, donuts, virtual conference room and join us in the clouds.
Dates: Tuesday, April 24, 2012
Wednesday, April 25, 2012
Time: 8:00 AM Pacific Time to 12:30 PM Pacific Time
Some topics to be covered:
• GSA Updates
• Contract education
• BPAs, CTAs & Ordering Services
• Marketing your contract
• Question and Answer Sessions
For more information, visit the MSC Industry Day webpage at http://www.gsa.gov/portal/content/248613. Registration details will be available on the website soon.