Georgia Tech Procurement Assistance Center

Your guide to Uncle Sam’s negotiating playbook

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If you follow professional football, you are familiar with the message generally given to an aspiring player just before he is cut – “Coach wants to see you.  Bring your playbook.”  The playbook, that step-by-step guide to on-the-field success, is something that teams guard zealously.

Not all teams, however, maintain the secrecy of their playbooks, and the U.S. Government is a case in point.  The Government actually publishes its playbook of bargaining techniques recommended for its contract negotiators.  Like the Commandments Moses brought down from Mount Sinai, the Government playbook consists of 10 Rules.  These Rules can be found in Chapter 6 of Volume 5 of the DoD’s Contract Pricing Reference Guides.  The Rules are all reasonable and, in many ways, predictable.  Because “Forewarned is forearmed,” here they are…

Continue reading at:  Sheppard Mullin’s Government Contracts and Investigations Blog

Scrapped: $24M plan to replace refrigerators on Air Force One

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The U.S. Air Force has scrapped a $24 million plan to buy new refrigerators for its presidential jets, according to Pentagon documents released Monday by Rep. Joe Coutrney.

“The Air Force, working with the White House Military Office, recently reviewed the investment for the VC-25A chiller replacement and jointly decided to terminate the effort,” Air Force Secretary Heather Wilson said in a May 29 letter to the Connecticut Democrat. The VC-25A is the Air Force designation for the two Boeing 747s that take the callsign Air Force One when the president is aboard.

In December, Wilson’s service gave Boeing a contract to swap out the VC-25As’ aging chillers, the large and highly customized refrigerators that hold an extra-large supply of food for the U.S.president and staff. Defense One first reported the deal. On Feb. 8, Courtney expressed his concerns in a letter to Wilson.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2018/06/scrapped-24m-plan-replace-refrigerators-air-force-one/148729/

Incumbents ruling less of the day in federal contracting

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The Obama administration’s push over the last eight years to inject more competition into the federal procurement process seems to have resulted in two major changes across the vendor community that are only now becoming clear.

First, the incumbent win rate dramatically dropped over the last year.

Second, contractors diversified into other markets, including state and local and commercial sectors, at a more aggressive rate than in the recent past to deal with the shrinking federal procurement pie.

“This gives a strong indication that competition is increasing and possibly driving down pricing and profit percentages on federal contracts,” stated the 2016 federal contractor survey sponsored by Grant Thornton released on May 30. “Companies should be looking at their current pricing techniques to determine if adjustments are necessary to win greater percentages of proposals.”

Keep reading this article at: https://federalnewsradio.com/reporters-notebook-jason-miller/2017/06/incumbents-ruling-less-of-the-day-in-federal-contracting/

Oracle to leave GSA schedule: A signal of broader change?

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GSA logoOracle is leaving the General Services Administration’s schedules program. It’s not going to just stop selling directly through the IT schedule, but the software giant will no longer use third-party resellers either, according to multiple sources.

Let that sink in for a second. One of the largest software vendors in the world is telling GSA, thanks, but we can live without you.

Sources said Oracle decided the GSA schedules just weren’t worth the hassle any longer — the compliance requirements, the potential and real threats of False Claims Act lawsuits and the new Transactional Data Reporting (TDR) rule, all played into this decision.

“The federal market is a very small chunk of their business and while it seems big for us, when you look at someone like Oracle’s overall business, they have to expend an exorbitant amount of resources for little payoff,” said Jennifer Aubel, a principal with Aronson Consulting, who said she wasn’t familiar with Oracle’s decision. “With the TDR and even with not having to do price reduction clause reporting, a company like Oracle would still have to do monthly reporting and there is a lot of concerns, including how GSA will keep the data secure.”

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2016/09/oracle-leave-gsa-schedule-signal-broader-change/

Redstone Arsenal contracting officer to plead guilty to obstructing federal audit

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A Huntsville, AL woman employed by the U.S. Army Contracting Command at Redstone Arsenal has agreed to plead guilty to a charge of obstructing a federal audit, the U.S. Attorney’s Office in Birmingham said last week.

Redstone ArsenalTeresa Mayberry, 54, agreed to plead to one count of obstructing an audit in 2012 by the Department of Defense Inspector General’s office related to a federal contract for providing parts to Russian-made helicopters to be flown in Afghanistan.

The U.S. Attorney’s Office described the charge in a news release.

“Mayberry created a series of false documents that she provided to (the IG) to obstruct its 2012 audit of an Army contract to purchase parts for Russian-made Mi-17 helicopters.”

Keep reading this article at: http://www.al.com/news/huntsville/index.ssf/2015/06/redstone_arsenal_contract_offi.html

Read charges here: mayberry-charges

Read plea deal here: mayberry-plea

GSA moves forward with overhaul of Multiple Award Schedules

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The General Services Administration is moving forward with its plan to overhaul the Multiple Award Schedules, putting into action recommendations from the agency’s 2010 Multiple Award Schedules Advisory Panel, says an April 13 blog post by GSA Senior Procurement Executive Jeffrey Koses.

“The $33 billion program now demands transformation in order to maintain its status as a best acquisition solution in a fast-changing marketplace,” Koses says.

The transformation will include reducing price variability, minimizing burdensome regulations and processes and introducing additional flexibilities, the GSA blog post says.

Keep reading this article at: http://www.fiercegovernment.com/story/gsa-moves-forward-overhaul-multiple-award-schedules/2015-04-13

Read GSA’s complete blog post at: http://gsablogs.gsa.gov/gsablog/2015/04/13/gsa-seeks-to-transform-the-multiple-awards-schedule-program-to-deliver-better-value/

Driving the federal government towards a ‘Low Price Regardless’ contracting model

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As part of the Federal Strategic Sourcing Initiative (FSSI), the Office of Management and Budget (OMB) and the General Services Administration (GSA) have created a Prices Paid Portal. The goal of the Prices Paid tool is to reduce total cost of ownership for goods and services by providing greater visibility on the prices agencies have paid for them.

The Prices Paid Portal is part of an ongoing effort to collect transactional data across the government. The challenge in managing pricing data is to ensure it is used to identify contracting strategies and/or terms (like volume commitments) that increase competition and deliver greater value to the American people. Unfortunately, current data management practices will likely reduce competition and value over the long term.

Sound management of pricing and procurement data requires discipline, sophistication, and, most significantly, an understanding of markets and how companies respond to competitive dynamics. Moreover, price alone is incomplete data. In order to effectively understand pricing, one must have access to and understand the underlying terms and conditions, contract commitments, market and economic forces that drive pricing. Price is only one data point in determining “total cost of ownership.” An accurate measure of “total cost of ownership” includes much more than just price. It also includes acquisition cost (i.e. how much did it cost to conduct the procurement), operational costs, maintenance costs, and disposal costs. The emphasis solely on prices paid data ignores these fundamental cost elements.

Keep reading this article at: http://www.federaltimes.com/article/20141201/BLG06/312010013

GSA issues RFP for office supplies contract

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The General Services Administration issued a request for proposals Jan. 31 for the third generation of its office supplies strategic sourcing contract.

The ability for agencies to purchase everyday supplies such as pens, paper and printing items from a single contract will save more than $155 million annually on reduced administrative costs and lower prices, according to GSA.

Proposals are due March 17.

Keep reading this article at: http://www.federaltimes.com/article/20140131/ACQ01/301310010/GSA-issues-RFP-office-supplies-contract 

Tech’s Contracting Academy to teach cost & price course in October

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The Contracting Education Academy at Georgia Tech is offering a course focusing on the Fundamentals of Cost & Price Analysis in government contracting on October 14-25, 2013.

This comprehensive, two-week course begins with an in-depth review of the market research process, and provides instruction to help students understand and analyze contractor pricing strategies.

Attendees will learn to accomplish cost-volume-profit analysis, calculate contribution margin estimates, and develop cost estimating relationships in order to accomplish an effective price analysis pursuant to FAR Subpart 15.4.

After learning the basic elements of price and cost analysis, students will build and defend a pre-negotiation objective, including a minimum and maximum pricing objective with a weighted guidelines assessment. After successfully defending their pricing objectives, the students will practice face-to-face negotiations.

This course is targeted toward new hires to the contracting career field.   For government contractors, this course also provides invaluable insights into the government contracting decision-making process.

Student performance will be assessed by graded exams on math fundamentals and applied course material as well as an exercise for student participation and completion of negotiations.

CON 170 – Fundamentals of Cost & Price Analysis is Defense Acquisition University-equivalent training that satisfies the FAC-C and DAWIA certification programs.   In addition, 7.35 CEUs are granted for successful course completion.

For more information or to register, please visit: http://www.pe.gatech.edu/courses/con-170-fundamentals-cost-and-price-analysis

How to win contracts when lowest price is the highest measure

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The lowest price technically acceptable (LPTA) acquisition strategy, which focuses on price over value, has become the dominant approach that agencies are applying to federal contracting. The accelerated transition to this strategy has been fueled by sequestration and the growing need for government to do business at a reduced cost. Contractors are still learning how to operate in this new environment, but many fear that the emphasis on lower cost labor will reduce the expertise of the work force and result in lower levels of effort.

The LPTA strategy is a step down from best value, admits Tony Constable, president, CAI/SISCo, a company that provides business development support services to industry. In a best value contract, the winning proposal is chosen based on an aggregate view about the perceived value, and that value is tempered somewhat by price. Even if the underlying contract switches from one contractor to another one, the new company could still retain much of the trained labor force. In an LPTA contract, the price—not the solution—is the primary decision criterion, and this affects labor pricing much more so than it does product pricing.

Being an incumbent contractor is the worst place to be on an LPTA bid, because the needed flexibility in labor prices requires huge salary and benefit cuts. Constable calls it the race to the bottom as it relates to labor, but he also acknowledges that the LPTA strategy is reasonable to a point depending on the work.

Keep reading this article at: http://www.afcea.org/content/?q=node/11104

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