GSA proposed rule raises ‘significant concerns’ over competition

March 17, 2015 by

On March 4, 2015, the General Services Administration (GSA) issued a proposed rule, GSAR Case 2013-G504, Transactional Data Reporting. The proposed rule would establish a new requirement for GSA contractors, (IT GWAC contractors, Federal Supply Schedule (FSS) Schedule contractors and other GSA contract programs, as applicable) to report transactional data at the order and Blanket Purchase Agreement (BPA) level to GSA. (Note: the VA Schedules are exempted.)

The proposed rule retains the Price Reduction Clause (PRC) but deletes the requirement to monitor a tracking customer for price reductions for FSS Schedule contractors required to report transaction data. The remainder of the PRC remains in effect. FSS Schedule contractors will still be required to submit Commercial Sales Practices (CSP) information — with the ongoing requirement to provide updates throughout the life of the contract. In addition the rule makes clear that GSA can ask for FSS Schedule contract price reductions at any time. Price reduction requests will likely be based on review of transactional data.

Keep reading this article at: http://www.federalnewsradio.com/445/3816136/GSA-proposed-rule-raises-significant-concerns-over-competition

GSA proposes price reporting requirements for Schedule, GWAC and IDIQ contracts; public comment due May 4th

March 9, 2015 by

The General Services Administration (GSA) issued a proposed rule on March 4, 2015 that responds to the contracting concept of “category management” introduced December 4, 2014 by the Office of Federal Procurement Policy (OFPP).  The OFPP concept shifts federal purchasing’s focus from managing purchases and prices individually on thousands of procurement actions by dozens of federal agencies to managing categories of purchases across the government.  To implement this concept, GSA’s proposed rule would require vendors on Federal Supply Schedule (FSS), Governmentwide Acquisition Contracts (GWACs) and Governmentwide Indefinite-Delivery, Indefinite-Quality (IDIQ) contracts to report all government transactions, including prices paid.  GSA contends the new rule is needed because the government currently lacks a mechanism that facilitates examination of prices paid by agencies on individual contracts, and this has caused pricing disparities in contracts for similar products and services.

If the proposed rule is adopted, the General Services Administration Acquisition Regulation (GSAR) would be amended to require that vendors report transaction data on individual FSS, GWAC and IDIQ contracts.  Details to be reported include unit of measure, quantity of items sold, universal product codes, prices paid per unit, and total price.  Such contracts accounted for about $39 billion in federal procurements in fiscal year 2014, according to the agency.  GSA says their existing price reduction-related monitoring requirements will be pared back to compensate for the additional reporting burden on contractors.  FSS contracts administered by the Department of Veterans Affairs would be exempt from the new rules.

In introducing the proposed rule, GSA says: “The current lack of transparency on prices paid by government customers has led to significant price variation, sometimes 300 percent or more, for identical purchases by federal agencies from the same commercial vendor as well as the unnecessary duplication of contract vehicles.”

If the proposed rule is finalized, it will go into effect immediately as a pilot program for GWAC and IDIQ contracts.  For FSS contracts, the new rule would be implemented in phases, initially involving only certain products and services in order to test the usefulness of the collected data in eliminating contract duplications and price variations.

The proposed rule also would implement a web-based Common Acquisition Platform (CAP) that GSA says will identify best-in-class contracts, best practices, and similar information.  This online marketplace also would display commercial pricing for similar products.

The proposed rule could be seen to be at odds with recommendations that were first formulated by GSA’s own Multiple Award Schedules Advisory Panel.  In 2009, the MAS Advisory Panel made 20 recommendations on how GSA could improve the Schedules program.  Prominent among the recommendations were the outright removal of the price reduction clause (PRC) from contracts for products and services and establishment of a process for ordering activities to collect and report on their purchasing, including quantity, quality, and price.  Currently, the PRC clause is included in every Schedule contract in an effort to obtain contractors’ best prices.   If contractors do not abide by this contract requirement, they risk having a whistleblower, an inspector general, or the Justice Department filing a complaint or bringing charges pursuant to the False Claims Act.  In addition, GSA presently may request a price reduction at any time during the contract period when their market analysis indicates that lower prices are being offered or paid for the same items under similar conditions.  According to data collected by the Chief Acquisition Officer’s Council, contractors regard the PRC as one of the most complicated and burdensome requirements in federal contracting, and GSA’s own estimates suggest FSS contractors spend over 860,000 hours a year (at a cost of approximately $58.5 million) on compliance with this clause.

Already, there are concerns being voiced that if GSA’s primary motive behind the proposed rule is simply to obtain lower prices, the government runs the risk of losing quality contractors who will not agree to disclose pricing data due to its sensitivity, let alone bear the new cost and administrative burdens associated with disclosure.  While there are differences of opinion among government and business leaders, GSA states that it believes that use of the proposed transactional data reporting clause could be a good alternative to the PRC, contending that the new rule will reduce administrative burden on contractors and have the effect of lowering prices to the government.

In order to sort out the issues and seek public comment, GSA is holding a public meeting and requesting comment on its proposal to amend the GSAR to include clauses that would require vendors to report transactional data from orders and prices paid by ordering activities. Interested parties may offer oral and/or written comments at GSA’s public meeting to be held on Friday, April 17, 2015, beginning at 9:00 a.m. EST.

In addition, as a part of the traditional public comment process that accompanies most proposed federal regulations, GSA is asking interested parties to submit written comments on or before Monday, May 4, 2015 to be considered in the formulation of a final rule.  Comments should be sent to: U.S. General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW., 2nd Floor, ATTN: Hada Flowers, Washington, DC 20405-0001, citing GSAR Case 2013-G504 in all correspondence. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided.

For the April 17th public meeting, attendees can attend the meeting in person at GSA’s Central Office or virtually through GSA’s Internet meeting platform, Adobe Connect.

  • In-person Attendance: Interested parties may attend the public meeting to be held in the GSA Auditorium at GSA Headquarters, located at 1800 F St. NW., Washington, DC 20405. The public is asked to pre-register by Wednesday April 1, 2015, due to security and seating limitations. To pre-register, use the following link: https://meet.gsa.gov/e5rpxxbrh14/event/event_info.html.  On-site registration check-in will begin at 8:00 a.m. EST on Friday, April 17, 2015, and the meeting will start at 9:00 a.m. EST.  Attendees must be prepared to present a form of government issued photo identification.
  • Virtual Attendance: Interested parties may also attend virtually through GSA’s Internet meeting platform, hosted by Adobe Connect. Virtual attendees must register in advance at https://meet.gsa.gov/e5rpxxbrh14/event/event_info.html.
  • Oral Public Comments: Parties wishing to make formal oral presentations at the public meeting should indicate so during the registration process. Presentations must be provided to Ms. Dana Munson by electronic mail at vog.asgnull@rasg no later than Wednesday, April 8, 2015. Time allocations for oral presentations will be limited to fifteen minutes.
  • Written Comments: All formal comments, inluding oral public comments, should be followed-up in writing and submitted to www.regulations.gov not later than Monday, May 4, 2015.  Reference should be made to GSAR Case 2013-G504.

When it comes to task order contracting, patience and strategy are needed

September 26, 2014 by

Years ago, federal agencies jumped on the indefinite delivery/indefinite quantity (IDIQ) contract bandwagon and never got off. The preference for agency-specific IDIQ contracts and government-wide acquisition contracts continues as agencies seek ways to centralize and reduce contract spending. This is especially true for IT, where more than half of spending flows through such contracting programs.

However, this is not just an IT story. The prevalence, size and complexity of task order contracts make them market-shaping now and in the future. Here are the factors involved in navigating this market:

Jockey for strategic positioning.

Don’t rely on incumbency.

Be ready for the long haul.

Perform well – then measure and share.

Engage with your agency program managers.

Find more details and read the rest of this article at: http://www.washingtonpost.com/business/capitalbusiness/deltek-when-it-comes-to-task-order-contracting-patience-and-strategy-are-needed/2014/09/19/e76d5668-3de1-11e4-9587-5dafd96295f0_story.html

GSA and Air Force partner to look at savings in GSA contracts

August 21, 2014 by

The General Services Administration and the Air Force established a working group to help identify ways to save money on enterprise-wide contracts, an Aug. 18 GSA blog post says.

The working group will look into which GSA contracts the Air Force can use to cut costs, but still complete its mission, the blog post says.

Those GSA contracting vehicles include strategic sourcing initiatives, reverse auctions, the Global Supply Special Order Program and its One Acquisition Solution for Integrated Services contracts.

Keep reading this article at: http://www.fiercegovernment.com/story/gsa-and-air-force-partner-look-savings-gsa-contracts/2014-08-20

GSA awards 95 percent of OS3 contracts

August 18, 2014 by

The General Services Administration (GSA) has awarded 95 percent of its contracts for the third iteration of the Federal Strategic Sourcing Initiative for Office Supplies, an Aug. 12 GSA statement says.

GSA issued 21 FSSI OS3 contracts, with 20 of them going to small businesses and there’s potential for more small business contracts pending further review, the emailed statement says.

FSSI OS3 is meant to save the federal government money on everyday office supplies like pens, paper and printing items by providing agencies with a list of vendors with already negotiated prices.

Keep reading this article at: http://www.fiercegovernment.com/story/gsa-awards-95-percent-os3-contracts/2014-08-12

Navy drops $2.5 billion in contracts to update shipboard networks

August 2, 2014 by

The Navy has awarded five companies eight-year contracts valued at $2.5 billion to install standardized shipboard networks.

The Space and Naval Warfare Systems Command tapped BAE Systems Technology Solutions & Services, General Dynamics C4 Systems, Global Technical Systems, Northrop Grumman Systems Corp. and Serco, Inc. for the indefinite-delivery, indefinite-quantity, firm-fixed-price, cost-plus-fixed-fee contracts for the Navy’s Consolidated Afloat Networks and Enterprise Services.

The CANES program is intended to equip every ship in the fleet with a standards-based network.

Keep reading this article at: http://www.nextgov.com/defense/2014/08/navy-drops-25-billion-contracts-update-shipboard-networks/92006

GSA awards 125 small businesses OASIS contracts

February 26, 2014 by

On Monday (Feb. 24, 2014), the U.S. General Services Administration (GSA) announced it has awarded 125 contracts to small businesses for its One Acquisition Solution for Integrated Services (OASIS) Small Business (SB) contract to companies that will provide customers with best value services for complex professional service requirements.

OASIS SB, a 100-percent small business set-aside contract, was developed in response to the Government’s need for a hybrid, government-wide acquisition vehicle.  OASIS SB will provide a streamlined solution for both commercial and non-commercial needs. OASIS SB is designed to reduce duplication of contracting efforts across the government and provide federal agencies with comprehensive, integrated professional services contract options.  The list of the 125 companies awarded contracts is available by clicking here.  

“We created OASIS SB to meet the growing demand for a hybrid, government-wide acquisition vehicle that maximizes opportunities for small businesses, stated Federal Acquisition Service (FAS) Commissioner Tom Sharpe.  “We believe that the large pool of awardees will provide government with access to highly skilled small businesses through a contract that is not only cost effective, but also efficient and streamlined for easier use by federal agencies looking to purchase complex professional services.”

OASIS SB will compliment GSA’s Multiple Award Schedules (MAS) program and provide agencies with more flexible full-service options. Notable features and benefits of OASIS and OASIS Small Business include:

  • Government-wide use
  • Access to best in class solution providers
  • On-ramp/off-ramp procedures to ensure a flexible, vibrant vendor pool
  • Integrated support for key government initiatives

GSA predicts OASIS SB will drive down costs for federal agencies, and increase efficiency by reducing the time spent on developing complex contractual instruments. OASIS SB will include a vast array of professional services contractors for agencies to choose from. In fact it  has already become the solution of choice for some government agencies. In December,  the United States Air Force committed to use OASIS SB in lieu of creating several of its own multiple-award, Indefinite Delivery/Indefinite Quantity (IDIQ) acquisition vehicles. These efforts are estimated to be worth approximately $1.4 billion per year and use of OASIS SB is projected to save the Air Force and taxpayers significant dollars and resources.

For more information visit www.gsa.gov/oasis and OASIS Industry Group on GSA Interact.

Nondisclosure of higher profit on fixed price contract does not violate False Claims Act

September 11, 2013 by

Last week, a U.S. District Court judge in Florida held that a government contractor working under a fixed-price contract is not liable under the federal False Claims Act (“FCA”) for higher than expected profits and “failing to notify the Government that the work could be performed less expensively and charged at a lower price” than the contract price.   U.S. ex rel. Prime v. Post, Buckley, Schuh & Jernigan, Inc., and Parsons Corporation, No. 10-cv-1950 (M.D. Fl. Aug. 23, 2013).

The nature of the contract was critical to the outcome of the case. In U.S. ex rel. Prime, two contractors, Post, Buckley, Schuh & Jernigan, Inc. (“PBS&J”) and Parsons, formed a joint venture for the project (the “JV”). The JV entered into a fixed price indefinite delivery/indefinite quantity contract with the Government, under which fixed price task orders would be placed. Prices on the individual task orders were lump-sum, determined in accordance with the agreed-upon labor rates multiplied by the number of days required to complete the work, and included a profit component. The labor rates and lump-sum task order prices were a product of lengthy negotiations between the JV and Government representatives. During those negotiations, which were transcribed, the Government noted the potential for the JV to increase its profit margin by injecting greater efficiency into its performance.

Keep reading this post at http://www.mckennalong.com/publications-advisories-3378.html.

Schedule contract cancellation no big deal, experts say

April 30, 2012 by

The General Services Administration’s cancellation of Oracle Inc.’s Schedule 70 IT services contract was simply because the two could not reach an agreement on terms, deciding in the end to go their separate ways, experts say.

A senior GSA official said April 20 that it was not in the government’s best interest to continue to offer Oracle’s IT services though its Schedule. GSA officials would not provide further details.

However, one day earlier a spokeswoman said the cancellation was the result of the company not meeting the terms of the contract.

Experts said they were were not surprised by of GSA’s decision, nor did they say they believed Oracle had done something terrible.

“Since GSA isn’t suggesting suspension or debarment, and because GSA is openly referring to Oracle’s other reseller and partner channels to sell its offerings, actions leading to the cancellation are probably not egregious,” said Ray Bjorklund, vice president and chief knowledge officer at Deltek’s GovWin.

Mary Davie, assistant commissioner of the Federal Acquisition Service Office’s of Integrated Technology Services, noted April 20 that agencies could still buy software and software maintenance from Oracle’s resellers that have IT Schedule 70 contracts.

As for directly working with Oracle, Davie said, “It was determined that it was not in the best interest of the government to continue the contract.”

In the meantime, Oracle has yet to comment on GSA’s action.

The cancellation takes effect May 17.

Oracle’s Schedule contract was to run from Oct. 1, 2006, to March 28, 2012. The Schedule was last updated September 30, 2011, Bjorklund said.

“One could infer that GSA and Oracle couldn’t reach agreement on the terms and conditions needed to renew or extend the contract,” he said.

A lot of procurement changes have happened since 2006 that may have arisen between the two. There may have been differences in opinion about Oracle’s interest in its proprietary data rights, payment terms or rules that affect overseas work, Bjorklund said.

In addition, experts said the decision could stem from Oracle’s inability to comply with existing contractual stipulations because the company has changed the way it conducts business since the contract was last modified.

Mark Amtower, partner of Amtower and Company, said major corporations often struggle with GSA’s demands on sales records. Companies the size of Oracle may not be able to provide all of their sales information.

“When a worldwide company like Oracle is required to provide pricing data for every product sold, it is akin to Sisyphus pushing the rock up the hill,” he said.

GSA Schedule contracts are under the Price Reduction Clause, which requires the government to get at least the same sale price as any other client.

GSA’s move came several months after Oracle agreed to pay a $200 million fine for its failure to comply with the terms and conditions of its Schedule contract.

“Now, in addition to the fine, Oracle will have to find other ways to sell to federal customers,” Larry Allen, president of Allen Federal Business Partners, wrote in his weekly ‘The Week Ahead’ newsletter.

Overall, the reaction from experts is that the cancellation won’t be a huge blow to Oracle or its sales.

Schedule 70 is not a preferred vehicle for IT, Amtower said. It has become more or less a default vehicle.

According to Amtower, Oracle’s Schedule contract accounts for less than 7 percent of total government purchases.

Oracle’s sales are coming through other contracts, such as NASA’s Solutions for Enterprise-Wide Procurements and other Defense Department indefinite-delivery, indefinite-quantity contracts.

Bjorklund said this latest action is unlikely to dampen any interest in what Oracle offers the government; nor is it any grand-scale initiative on the part of GSA.

“When parties can’t agree, it’s just time to cancel the contract and try to start over again,” he said.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week.  This article was published on Apr. 23, 2012 at http://washingtontechnology.com/Articles/2012/04/23/reaction-GSA-oracle-cancellation.aspx?s=wtdaily_240412&Page=2.

Contractor survey reflects tougher times for industry

March 7, 2012 by

Over the past year, roughly 70 percent of government contractors in a new survey saw some growth or at least no significant change in revenue from their government contracts, but government contracting still is not a booming business.

Half of more than 100 prime government contractors surveyed had revenue growth and 21 percent had relatively little change. However, 29 percent brought in less revenue, according to Grant Thornton’s 17th Annual Government Contractor Survey, released Feb. 20.

“The fact that the highest percentage of companies experienced revenue growth continues a long-term trend reported in previous surveys, indicating that government contractors are far less vulnerable than commercial companies to recessions or slow growth in the overall economy,” Grant Thornton wrote.

Thirty-one percent said they had profits of between 1 percent and 5 percent of profits. And 37 percent of companies had 6 percent and 10 percent growth compared to last year. Eight percent of companies reported profits of 15 percent or more. Only 6 percent reported breaking even or experiencing a loss.

Grant Thornton wrote that the profit rates likely result from a greater reliance on multiple-award, indefinite-delivery, indefinite-quantity (IDIQ) contracts.

“There is little doubt that the amount of true competition for task orders in many IDIQ contracts is far less than was the case before IDIQ contracts became so prevalent,” according to Grant Thornton’s analysis of the survey results. “This lessening of competition in the pursuit of [government] efficiency is likely a contributor to higher profit rates.”

Meanwhile, the 29 percent of companies getting less revenue than last year is the highest percentage reported in several surveys.

The high numbers indicate “that government efforts to reduce deficits are adversely impacting government contractor revenue,” the survey said.

Surveyors distributed questionnaires during the first half of 2011 and received responses from participating companies over the next several months. Financial and business statistics in the survey typically relate to fiscal years ended in 2010 or early 2011. They are treated as belonging to the current year in the survey.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week.  This article appeared on Feb. 24, 2012 at http://washingtontechnology.com/articles/2012/02/24/grant-thornton-survey-contractor-revenue.aspx?s=wtdaily_280212.