Thank you to Coalition Chairman Bill Gormley for adding his timely and insightful thoughts to last week’s Comment of the Week. April’s Comment of the Week is dedicated to the fundamental “blocking and tackling” of our procurement system. Given recent events, this week I am going to focus on the vital importance of nurturing and maintaining a highly qualified, professional acquisition workforce. I believe in the professionalism and dedication of our acquisition community and am proud to be a part of it.
In preparing for our recent “Common Sense in Government Procurement Awards” to Senators Joe Lieberman and Susan Collins, I found a quote from Senator Collins that truly struck me as the fundamental truth about our procurement system. Senator Collins observed that “no matter how many laws we pass or OMB guidance documents are issued, the effectiveness of our federal acquisition system depends on a vital human component—the acquisition workforce. “ That is why the Coalition strongly supports investment in the professional development of the acquisition workforce including training through the Federal Acquisition Institute, the Department of Veteran Affairs Acquisition Academy and the Defense Acquisition University. In addition, GSA has significantly increased their schedules training webinars and has received immensely positive feedback on these courses from customer agencies. Finally, events like the GSA Expo, with over 12,000 hours of acquisition training, play a critical role in providing the acquisition workforce with the latest information regarding new acquisition policies, procedures and best practices. The Expo training is not limited to government personnel— contractor acquisition professionals also benefit.
In the spirit of Myth-Busters, exchange programs between the government and the private sector should be expanded. Exchange programs, where government acquisition professionals spend time in the private sector and then take their experiences and lessons learned back to their agencies or departments, can dramatically improve contractual operations. The more government and industry understand each other’s operations the better they can work together to deliver best value to the taxpayer. Think of it as another form of transparency that can improve outcomes for government and its contractors! Finally, the Myth-Busters campaign should consider how to improve communication and interaction between contracting officers and program managers. Too often during the course of an acquisition engagement, communication between government contracting officers and program managers is limited. The better these two key players coordinate and work together the more likely the procurement and resulting contract will lead to a positive outcome.
The Coalition is committed to training the procurement community as a whole. For example, on April 18 we will hold a forum on the Civil False Claims Act and the key compliance requirements of the GSA schedules. It will provide attendees an opportunity to learn more about the schedules compliance requirements and the vital importance of investing in compliance programs. Our Spring Conference (April 26 and 27) provides a wonderful opportunity for government and contractor personnel to learn more about key initiatives, acquisitions and policies coming from the Department of Defense, the Department of Homeland Security, the Department of Veterans Affairs and GSA. The information and dialogue that take place at the Conference helps better inform everyone, which improves decision making. Finally, we will have a webinar on GSA Federal Supply Schedule Option Extensions on May 3. Over the coming weeks, the Coalition will take significant steps to further enhance our professional capabilities and training. Stay tuned!
On April 10, GSA Acting Administrator Dan Tangherlini posted a message on the GSA Blog. Members are encouraged to watch the video.
FAS Commissioner Steve Kempf also posted a video on GSA Expo 2012. Watch the video to learn more about this year’s conference and theme, “Right Solutions. Right now.”
The Coalition and its members welcome Linda Chero as Acting Commissioner of the Public Buildings Service. Prior to her current post, Ms. Linda Chero served as FAS regional administrator of the Mid-Atlantic Region, assistant regional administrator of the Mid-Atlantic Region, and has held several other positions within FAS. The Coalition would also like to welcome Acting Deputy Commissioner, Desa Sealy. Ms. Sealy formerly served as associate Public Buildings Service commissioner. We look forward to working with both the Acting Commissioner and the Acting Deputy Commissioner at PBS.
GSA has notified the Coalition of an upcoming update to GSA Advantage! On Monday, April 16, GSA will implement a master product record approach for search results displayed on Advantage. In response to a search, the new functionality will allow only one unique product to appear in the list of results, rather than the same product (from different contractors) appearing over and over in the results. This method is widely used as a best practice among commercial shopping websites that, like GSA, offer the same products from multiple sources. The new approach is designed to reduce the number of results returned, provide more relevant results, and help government customers find the products they are looking for more quickly. According to GSA, the changes will only affect the way users view search results. Users may also go back to the old view if they wish.
According to a Pentagon report to Congress, the Department of Defense (DoD) plans to accelerate the development and acquisition of cyberweapons. The plan was first reported by the Washington Post, which obtained a copy of the 16-page report (yet to be publically released). The Pentagon’s Cyber Command is responsible for managing a new cyberweapons database that details weapons capability. The unreleased report also describes the establishment of a Cyber Investment Management Board. The board will provide oversight of this accelerated acquisition process and ensure coordination of cyber authorities across the military and intelligence community. The strategy creates two systems for cyberweapons development, deliberate and rapid. According to the Washington Post, the rapid process will take advantage of existing or nearly completed hardware and software developed by industry and government laboratories; while the deliberate approach is designed for weapons whose use carries greater risks. Time frames for the development of cyberweapons in both programs are significantly less than conventional weapons development, which takes years. The rapid process would take from several months to only a few days, while the deliberate platform is expected to take longer than nine months. Additionally, under the rapid program some requirements ordinarily demanded would be removed. The report states that they could include some planning documents and test activities.
The Government Accountability Office (GAO) recently released a report entitled, Further Actions Needed to Improve Accountability for DoD’s Inventory of Contracted Services. While the Department of Defense (DoD) has taken steps to improve the value of their services inventory, GAO advises there is more to be done. Improvements to date include the central preparation of contract data and the increasing level of detail about services provided.
The report explains that by using the Federal Procurement Data System-Next Generation (FPDS-NG) to conduct inventory, DoD limits the utility, accuracy, and completeness of the data collected. According to GAO, the system does not identify more than one type of service purchased for each contract action, provide the number of contractor full-time equivalent personnel, or identify the requiring activity. Instead, GAO suggests that a system similar to the Army’s s Contractor Manpower Reporting Application is more effective. This system collects data reported by contractors on services performed at the contract line item level, including information on labor hours and the function and mission performed. The GAO report also stated that Army and Air Force inventory reviews identified many instances in which contractors were performing inherently governmental functions.
GAO recommends that the military develop guidance that provides for clear lines of authority, responsibility, and accountability for conducting an inventory review and that the Army and Air Force resolve known instances of contractors performing inherently governmental functions. DoD largely agreed with GAO’s recommendations.
The U.S. Department of Agriculture (USDA) released a final rule that updates the categories of Bio-Preferred products in accordance with a recent Presidential memo on Driving Innovation and Creating Jobs In Rural America through Biobased and Sustainable Product Procurement. The U.S. Department of Agriculture (USDA) is amending the Guidelines for Designating Biobased Products for Federal Procurement. The USDA is also adding 13 product categories that will be given Federal procurement preference. They are air fresheners and deodorizers; asphalt and tar removers; asphalt restorers; blast media; candles and wax melts; electronic components cleaners; floor coverings (non-carpet); foot care products; furniture cleaners and protectors; inks; packaging and insulating materials; pneumatic equipment lubricants; and wood and concrete stains. The USDA is also establishing minimum biobased contents for each of these product categories. The rule will take effect on May 4, 2012.
The Coalition is seeking member input on our contract duplication survey. The purpose of the survey is to collect data on the costs and impacts on member companies associated with duplicative government contracts for the same or similar services. Note: Members will need their Coalition Login information in order to access the survey. If you do not know your login information, please contact Chelsea Wheeler at (202) 331-0975 or email@example.com.
Please respond by COB Thurs., April 19.
Survey responses will be used to develop a white paper that will serve as the foundation for a dialogue with acquisition leadership on the impact of contract duplication.
It’s Getting Complicated – The MAS Program’s “Simplified” Acquisition Process
By Phil Seckman, Partner, McKenna Long & Aldridge
A March 2, 2012, final rule requiring competition for certain orders placed under Federal Supply Schedule (“FSS”) contracts increases the burdens on agencies before schedule orders can be placed. The trend toward increased complexity is eroding GSA’s ability to legitimately tout the MAS program as a simplified acquisition process. These developments may not all be bad for contractors, however. With increased competition, the basis for the Price Reduction Clause (PRC) is arguably similarly eroding.
The final rule implements Section 863 of the NDAA for 2009 (Pub. L. 110-417) as well as a March 4, 2009, memorandum issued by President Barack Obama, and makes changes that are reminiscent of the DOD specific changes required by the 2002 NDAA (Pub. L. 107-107 § 803). While these changes reflect the government’s commitment to the fundamental procurement policy that views competition as the best means of ensuring the government is paying fair and reasonable prices and achieving best value outcomes for each tax-payer dollar, the changes ignore that in the MAS context schedule contracts are awarded with prices that have already been found fair and reasonable, based upon the contractor’s disclosure of its commercial sales practices, and orders placed against those contracts were already considered competitive.
Under the new rule (with limited exceptions), the government must publicize each intended purchase under a multiple-award contract that will exceed the simplified acquisition threshold (including a work description and bases for selection) on e-Buy or FedBizOpps.gov. The notice must be provided either to every contractor under the multiple-award contract offering the supplies or services, or to at least “as many contractors as practicable.” See § 8.405-1(d); 16.505(b)(2)(ii)(D). If fewer than all contractors are notified, no purchase can be made unless three qualified contractors submit offers or the contracting officer determines that no additional qualified contractors can be identified. Additionally, all contractors responding to the notice must be afforded a fair opportunity to make an offer and have that offer considered by the purchaser. Id. Such consideration must be documented as part of the award decision. See § 8.405-1(f)-(g).
These FAR changes are applicable to task and delivery orders placed against multiple-award contracts–including FSS contracts and Blanket Purchase Agreements (“BPAs”) awarded under FSS contracts pursuant to FAR subpart 8.4. The changes are also applicable to indefinite-delivery/indefinite-quantity contracts awarded pursuant to subpart 16.5. They do not, however, apply to BPAs awarded pursuant to FAR part 13.
Agencies traditionally have used the schedules to expedite acquisition, free of many of the requirements of a typical procurement action (i.e., developing the statement of work, publication, competition, etc.). In response to concerns raised by the GAO in November 2000, and in recognition of the shift in federal procurement from supplies to services, a number of changes were made to FAR subpart 8.4 to establish additional procedures when the government acquired services that necessitated the development of a statement of work. See 69 Fed. Reg. 34231 (Jun. 18, 2004). These changes ensured that the MAS program’s simplified acquisition procedures for supplies and many definite scope services would be reasonably balanced against the need for additional protections for services acquisitions where a fixed price or clear scope T&M arrangement was not yet available.
In fact, the great success of the MAS program that began in the late 1990s and that has resulted in the very significant growth in procurement dollars flowing through the schedules is, in large part, a product of the ease with which acquisition outcomes could be achieved while still ensuring the government was receiving a fair and reasonable price. The March 2, 2012, final rule, however, further erodes purchaser flexibility, could prompt agencies to reassess the value proposition of using the schedules, and is very likely to increase bid protests and disputes. These outcomes are antithetical to a simplified acquisition process.
On the other hand, there is a potentially positive development from the Final Rule. The shift toward increased competition for all schedule orders over the simplified acquisition threshold gives new viability to the long-running effort to remove the Price Reduction Clause from schedule contracts.
As noted in the response to comments in the Final Rule, one of arguments advanced was that the old FAR subpart 8.4 ordering procedures and the PRC reflected the balance between competition and price reductions for orders above the maximum order threshold (MOT). Specifically, the PRC recognizes that price reduction remedies are not necessary above the MOT because competition and requests for price reductions were required by the old FAR subpart 8.4. Importantly, the new FAR subpart 8.4 ordering procedures have replaced the MOT with the simplified acquisition threshold and, as such, the PRC should be revised and, indeed, largely eliminated. Thus, Contractors and industry organizations could have a viable new basis to push for regulatory change.
In light of the Final Rule, schedule holders will be well served by carefully assessing how these new notice and competition requirements present new risks but also new opportunities to secure agency orders. The notice requirements could have significant impacts on relationships that schedule vendors have established over many years of successful contract performance. On the other hand, vendors that have traditionally not enjoyed significant market share would be wise to carefully consider how to best leverage this new opportunity to compete for agency requirements that are fulfilled through the MAS program.
The Department of Defense (DoD) released new energy efficiency initiatives on Wednesday, April 11 as a part of its “Operational Energy Strategy,” that was first released months ago to Congress. The announcements occurred at the opening of the Army’s new 30,000-square-foot Ground Systems Power and Energy Laboratory (GSPEL) at the Detroit Arsenal in Warren, Michigan. The Army and Air Force announced contracts to purchase one gigawatt each of renewable electricity from wind, solar, and geothermal sources to power domestic bases. The Navy made a similar announcement last year. By the year 2025, DoD efficiency plans include a goal of utilizing renewable energy sources for at least 25 percent of its energy needs.
The House is expected to take up the Cyber Intelligence Sharing and Protection Act of 2011 (H.R. 3523) towards the end of April. At a press conference on Tuesday, April 11, sponsor Congressman Mike Rogers and co-sponsor Congressman Dutch Ruppersberger affirmed that the bill will soon include language to satisfy the concern of civil liberties and privacy groups. The bill is based on a Defense Department (DoD) pilot program that shares information on cyber threats and vulnerabilities with industry. The DoD is set to extend the Defense Industrial Base pilot program when an interim rule is drafted. “The bill would make clear it would grant no new authority to DoD or the intelligence community to require or direct any public or private cyber efforts,” Rogers said. New provisions that are expected to be added to the bill: 1) allow for private lawsuits against the government for unlawful disclosure or use of gathered threat information and 2) grant the Department of Homeland Security a greater role in collaborating with industry.
Also on Tuesday, the Administration pushed for support of its own cybersecurity proposal and fact sheet. Howard Schmidt, the White House’s cybersecurity coordinator emphasized that any bill from Congress should include provisions that ensure the nation’s most important privately-owned critical infrastructure is as secure as possible. “If information sharing was enough, that’s all we would have asked for,” Schmidt stated. Of the cyber bills introduced thus far, the comprehensive Cybersecurity Act of 2012 introduced by Senator Joseph Lieberman (I-Conn.), is the most closely aligned with the Administration’s proposal.
In a recent report, the Administration commended the first 8 months of the Federal Prize Authority program, which offers cash incentives for private sector innovations. The program is based on the America COMPETES Reauthorization Act that gives Federal agencies the authority to conduct prize competitions to encourage innovation. The Act tasked GSA with developing a contract vehicle to provide agencies with relevant services and products to pursue these competitions. A SIN under the AIMS Schedule, 541 4G Challenges and Competitions Services, is the primary contract vehicle that federal agencies can use to market and advertise challenges with the public. According to the report, this model allows Federal agencies to benefit from innovative approaches without high-levels of risk, increase their sourcing pools, and only pay for success. NASA, the Department of Defense, and the Department of Energy, in particular, have used prize competitions to drive innovation from the private sector.
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. Registration details will be available on the website soon.