Georgia Tech Procurement Assistance Center

What should contractors know about GSA’s new e-commerce portal implementation plan?

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One of the most closely monitored provisions of the 2018 National Defense Authorization Act (NDAA), Section 846, directed the General Services Administration (GSA) to create a new e-commerce portal for the sale of commercial goods.  Section 846 established delayed implementation of the new e-commerce portal, which is set to occur in phases that each require distinct action items and submissions.

  • Phase 1 requires the Office of Management and Budget (OMB), in consultation with the GSA, to create an implementation plan and schedule for carrying out the e-commerce portal program.
  • Phase 2 requires OMB and GSA to prepare recommendations for any changes to – or exemptions from – laws necessary for effective implementation of the program within one year of submitting the implementation plan and schedule contemplated under Phase 1.
  • Phase 3 requires OMB and GSA to create guidance for the e-commerce portal program within two years of submitting the implementation plan and schedule contemplated under Phase 1.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=687578

Holland & Knight’s analysis of Section 846 is available here, and the original Thornberry acquisition reform bill that started this is available here.

3rd time around: Inconsistencies persist with final DFARS commercial items rule

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On January 31, 2018, the Department of Defense (DoD) published a final rule regarding commercial item purchasing requirements.  Among other key amendments, the final rule modifies the Defense Federal Acquisition Regulation Supplement (DFARS) by:  (i) formalizing a presumption of commerciality for items that DoD previously treated as commercial; (ii) providing commercial item treatment to goods and services offered by nontraditional defense contractors; and (iii) prioritizing the types of information that the contracting officer (CO) can consider when determining price reasonableness in the absence of adequate competition.

The final rule adopts much of DoD’s August 2016 proposed rule, which itself was a revised version of a retracted August 2015 proposed version.  (This was discussed the August 2016 proposed rule on this subject(and linked to an article regarding the August 2015 version in a prior post.)  Despite receiving repeated input from industry and Congress, DoD’s final rule still provides little concrete guidance, and although these changes were made with the stated purpose of promoting consistency across purchasing components, it appears likely that inconsistencies will persist.

In particular, the final rule continues to leave the door open for individualCOs to make potentially burdensome requests for information to support the proposed pricing of commercial items.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/02/third-time-around-inconsistencies-persist-final-dfars-commercial-items-rule/

DoD checks the box for Congress but still unnecessarily burdens commercial contractors

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The Department of Defense (DoD) has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) and implementing sections of the National Defense Authorization Acts (NDAAs) for Fiscal Years 2013, 2016 and 2018. This final rule results from Congressional pressure to reduce barriers to entry for commercial contractors and streamline commercial item procurement procedures. But, while making specific changes required in the NDAAs intended to foster the DoD’s ability to purchase commercial items and services, the final rule retains unnecessary burdens that may continue to discourage commercial contractors from entering into the federal marketplace.

At the same time, DoD has issued a new “Guidebook for Acquiring Commercial Items” available here, replacing a draft version issued in February 2017. This Guidebook addresses both commercial item determinations (Part A) and pricing (Part B). This guidance will merit close scrutiny from contractors supplying commercial goods and services to DoD.

Notably, the final rule does not address changes required by the FY 2017 NDAA which, for example, required special treatment for nontraditional defense contractors supplying services, established commerciality for certain commingled items, and added preferences for commercial specifications. DoD has opened a separate DFARS case (No. 2018-D016) to address the reforms mandated by the FY 2017 NDAA, but no proposed rule has yet been issued.

Keep reading this article at: https://www.lexology.com/library/detail.aspx?g=70c7f255-f5f2-4ad4-9d63-8d60d09fcf38

For commercial item contractors, some improvements in DoD’s final rule and guidebook

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At long last, the Department of Defense (DoD) on January 31, 2018, issued its final rule regarding the procurement of commercial items. On the same day, the DoD also published an updated two-part “Commercial Item Acquisition Guidebook,” a draft of which the DoD circulated last year.

Dentons has been tracking both, including an analysis regarding the proposed rule and an earlier DFARS case that contributed to it. Although the final rule contains some beneficial elements for commercial item contractors and nontraditional defense contractors, it fails to overcome several of the barriers that deter such contractors from selling to DoD and sets the stage for possible problems down the road.

Starting with some potentially good news, it is helpful that the discussion and analysis in the final rule expressly acknowledges that the DoD considers the commercial item determination to be separate from the price reasonableness determination. This was an issue that was of particular concern in industry comments submitted in response to the DoD’s proposed rules. Moreover, the DoD’s acknowledgement of these separate inquiries is important because it also emphasizes and reinforces the avenue by which items that have not previously been sold may nonetheless qualify as commercial items if they are “of a type.” It was not long ago that the DoD was actively engaged in an effort to revise the statutory commercial item definition to remove this very concept.

Another bit of good news in the final rule relates to nontraditional defense contractors. The final rule defines a nontraditional defense contractor as an entity “that is not currently performing and has not performed any contract or subcontract for DoD that is subject to full coverage under [CAS] . . . for at least the 1-year period preceding the solicitation . . . .”  The language at DFARS 212.102 states that contracting officers may treat supplies and services provided by nontraditional defense contractors as commercial items.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=670448

GSA hears comments from industry about e-commerce portals

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As part of ongoing efforts to create an online marketplace for government purchasers, GSA officials held a public meeting January 9th to discuss potential market structures and legal requirements.

A wide range of stakeholders attended the hearing, responding to questions from GSA on issues such as how many online portals should be implemented, who should have privity of contract with the government, and whether certain federal procurement requirements should be waived for program participants.  GSA had previously published its discussion topics in a Federal Register notice on December 15, 2017.

GSA’s town hall took place as part of the implementation of Section 846 of the National Defense Authorization Act for FY 2018.  As discussed in a previous blog post, the 2018 NDAA requires GSA and OMB to develop and implement e-commerce portals for commercially available off-the-shelf (COTS) item procurements, rolling out the program under a three-phase plan.  [2018 NDAA § 846(c)(1)]  Phase I requires the development of a plan for implementing the commercial e-commerce portals program, including recommendations regarding “changes to, or exemptions from, [existing procurement] laws.”  Id.  That Phase I plan is due to Congress on March 12, 2018. Id.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/01/gsa-hears-comments-industry-e-commerce-portals/#more-7422 

New NDAA purchasing rules should benefit government shoppers, small business

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The 2018 National Defense Authorization Act (NDAA) rules governing the acquisition of commercial items should give those making relatively small purchases more choices, and small businesses more hope for getting a piece of the federal spending pie.

Since President Donald Trump signed the 2018 NDAA into law on Dec. 12, the focus has been on rules providing a three-fold increase in the micro-purchase threshold for civilian agencies from $3,000 to $10,000.

A micro-purchase, because of its relatively low value, doesn’t require competition. With few limitations, it allows contracting officers to  buy any product from any company, so long as it doesn’t exceed the $10,000 threshold.

Keep reading this article at: https://federalnewsradio.com/acquisition-policy/2018/01/new-ndaa-purchasing-rules-should-benefit-government-shoppers-small-business/

Industry struggles with ever-changing acquisition rules

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Recent studies show that the percentage of overall research and development spending sponsored by the government has dropped sharply over the last 50 years.

Whereas government funding accounted for 67 percent of R&D in 1964, it accounted for 23 percent in 2015, a 44 percent reduction. For the government, this is not a salutary development. Increasingly, “state of the art” is being defined by the commercial marketplace, without government participation and often without its access to the resulting technological advances.

One need only recall the intense media furor over the government’s inability, for months, to obtain access to the shooters’ encrypted cell phone data following the December 2015 San Bernardino terrorist attack to appreciate the consequences when the developers of advanced commercial technology eschew the federal marketplace.

The government has attempted for years to reverse this trend. In fact, the Federal Acquisition and Streamlining Act of 1994, popularly known as “FASA,” had, as one of its primary purposes, the attraction of commercial entities into the federal marketplace. The trend, however, continues.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=641658

Note: This post was originally published in the October 2017 issue of the National Defense Industrial Association’s National Defense magazine.

Which NAICS goes with this Product Service Code?

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What exactly is the function of a NAICS Code?

Not sure?

That’s interesting since so many on the industry side of government contracting have developed a significant dependency on it.

It’s true. Some companies use it as the sole basis for identifying new opportunities. Some incorporate other factors, like keywords, for example. Then there is the small segment of the government contracting community that blends NAICS Codes and Product Service Codes. Hopefully that segment continues to grow.

Product Service Code? What’s that? Looks like I opened up that can of worms again.

Actually, it wasn’t me for once. The other day someone did a search that landed them on the GovConChannel.com, our news site for small government contractors. The search phrase they entered asked the question ‘What is the NAICS for PSC Code 8145?” Well, if the answer being sought was based on activity occurring in FY2016, then the answer is there are:

Tech group calls on President-elect to assess IT vulnerabilities, lower acquisition barriers

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iticThe federal government needs to assess its IT infrastructure and address cybersecurity, modernization and assessment reform as equal, intertwined priorities, suggests the IT Alliance for Public Sector, a division of advocacy and policy organization for the Information Technology Industry Council.

In a letter sent to President-elect Donald Trump, ITAPS declares that its membership — which includes hardware, software, services and solutions companies — is dedicated to working with the new administration to improve government operations and efficiency and reduce wasteful spending on aging inventory. ITAPS hopes that a review of procurement regulations and workaround programs (Digital Services, 18F, DIUx, etc.) will ease barriers to acquiring commercial technologies.

“The federal government spent $80 billion on IT systems last year. Shockingly, 80 percent was spent maintaining costly, vulnerable IT systems that many American taxpayers would expect to see in a Smithsonian collection,” said ITAPS Senior Vice President for Public Sector Trey Hodgkins, who signed the letter to Trump.

Keep reading this article at: http://www.federaltimes.com/articles/tech-group-calls-on-trump-to-assess-it-vulnerabilities-lower-acquisition-barriers

See the full set of ITIC’s recommendations here: http://www.itic.org/dotAsset/b/b/bb2f1b1e-2a9a-4a8a-ad9a-7aa41a046e3d.pdf

DoD finalizes rule expanding contractor rights in technical data

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US DoD logoThe Department of Defense (DoD) has issued a Final Rule that gives added protections to the technical data of privately developed commercial items incorporated into major systems, including major weapon systems.

This rule implements Section 813(a) of the National Defense Authorization Act (NDAA) for Fiscal Year 2016 and modifies 10 U.S.C.§ 2321(f).

In general, a defense contractor’s assertion that a commercial item was developed exclusively at private expense is presumed to be valid, even if the contractor does not respond to a challenge notice from the Contracting Officer.  Prior to the Final Rule, however, this presumption (known as the “Commercial Rule”) did not apply to DoD’s procurement of “major systems” or “subsystems or components of major systems,” unless the technical data related to commercially available off-the-shelf (COTS) items. Thus, without the benefit of the presumption in connection with the procurement of a “major system,” contractors were required to justify their assertion that an item was developed exclusively at private expense if they wanted to restrict the Government’s rights in the underlying technical data.

This exception to the Commercial Rule is known as the “Major Systems Exception.”

Keep reading this article at: https://www.insidegovernmentcontracts.com/2016/09/dod-finalizes-rule-expanding-contractor-rights-in-technical-data-used-in-major-systems/

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