GSA’s Busy 2022 Year So Far: Inflation, 876 and a New Strategy
The General Services Administration’s upcoming Spring 2022 update to its Federal Market Strategy caps off one of the busiest six months for the Federal Acquisition Service in recent memory.
It’s hard to remember a time when FAS had to deal with so many moving parts. From the long-awaited move to the Universal Entity Identification Number of the DUNS number, to the now much-maligned Polaris Small Business Government Acquisition Agreement (GWAC), to the unexpected challenges posed by inflation that affects nearly every aspects of the public and private sectors, changes and updates have come fast and furiously since January.
So, in case you missed some of the important work the GSA has been doing over the past few months, here’s a recap. It’s not exhaustive, but just highlights some of the important memos, opportunities, and things you may have missed.
Federal Market Strategy 2022
Sonny Hashmi, the FAS commissioner, continues to simplify the buying and selling experience with schedules and GWACs overseen by the organization.
To that end, the GSA announced that it would launch a new buyer experience effort based on human-centered design.
“This development will reduce the pain points that GSA buyers, suppliers and procurement professionals have mentioned in their comments,” the GSA said in an April 13 statement. “The updated buying experience will provide buyers with access to acquisition tools and market research solutions, as well as pricing documents, templates and resources to help plan purchases. purchases.”
The GSA said its goals with these information tools are typical, reducing burdens, simplifying the client agency experience, and more.
But by digging deeper, FAS is trying to address some longstanding complaints about the menu of items it offers.
“This strategy will help clarify government procurement options, qualification requirements and the process for preparing to submit a bid,” the GSA said. “In addition, the GSA is working on updating the Multiple Award Schedule (MAS) roadmap to streamline vendor onboarding processes. Federal procurement professionals have worked with industry to make it easier to register for the GSA schedule, and the GSA launched the new Vendor Assistance Center earlier this year so that all potential MAS contract holders and current people can find the information and resources they need to do business with the government.”
While specific strategy details are forthcoming, if you review what Hashmi and FAS have pursued in the Fall 2021 strategy, it’s not hard to see what’s in store.
Inflation adjustments still to come
The GSA responded fairly quickly to contractors calling for help to deal with the 7.9% inflation the country is facing.
On March 17, GSA Senior Purchasing Manager Jeff Koses and FAS Office of Policy and Compliance Assistant Commissioner Mark Lee temporarily changed the requirements for Economic Price Adjustment Contract Clauses (EPA ).
The four changes that Koses and Lee described in the memo are:
- Lowering the approval of price increases above the contract manager’s APE clause ceiling to a level above the contract manager;
- Relax time limitations on EPA increases;
- Relax limits on the number of EPA increases a contractor can request; and
- Clarify that if a contractor has removed an item from their schedule contract, the GSA will not enforce the limitation on adding the same item at a higher price.
“While EPA clauses normally act to protect the interests of the GSA, in today’s marketplace, they make it more difficult for federal agencies to acquire needed goods, services and solutions. Contractors withdraw items from federal procurement program contracts to avoid selling at a loss. This particularly hurts new entrants and small businesses, the very businesses that the president’s procurement equity initiatives are designed to support,” Koses and Lee wrote in the memo. “To ensure that the GSA is able to continue to offer a full range of products, services and solutions, the GSA must be flexible in how it enforces these EPA contract terms. Even with this added flexibility, contracting officers remain responsible for assessing price increases and can accept them, negotiate them, or remove elements of the underlying contract. »
The GSA said the memo remains in effect until September 30.
While contractors applauded the GSA’s swift action, the Coalition for Public Procurement recently raised concerns about how FAS procurement officers are implementing the memo.
“Members report that procurement officers are superimposing arbitrary information requirements (not found anywhere in the acquisition letter) on contractors’ EPA submissions, effectively capping prices at certain levels unrelated to the experiences of entrepreneurs in the marketplace,” Roger Waldron, the Coalition’s chairman, Roger Waldron, wrote in an April 1 blog post. “Furthermore, the scope of these information requirements is broad, in fact, broader than it would otherwise exist and seeks information that goes beyond the right of contracting officers to request. All in all, even if entrepreneurs had to comply with these requests for information, the administrative time associated with them would be onerous.
The challenge with one of these memos is trying to get it across to contracting officers, and then once they know it exists, ensuring consistent implementation can be another hurdle.
The fact that FAS seems to be struggling to bring down the constant changes from its contracting officers is a bit of a concern, especially since the agencies have not planned well for inflation and the impact it has on suppliers.
The Department of Defense, for example, predicted inflation of 4%. Top DoD leaders told Congress April 5 that the military is currently feeling the effects of a higher-than-expected inflation rate. However, the DoD has not published any calculations on the reduction in purchasing power.
It’s worth watching how inflation becomes a big factor over the next few months, especially as agencies have to spend 12 months of funding in six months.
Price remains a factor on schedules
A final GSA decision that may have slipped your radar came in February and was made public in March.
The GSA has decided not to use its powers to remove price as an evaluation factor when awarding a contract, provided for by Section 876 of the Defense Authorization Act of 2019, for its schedule.
After a series of listening sessions with industry and agency clients, the GSA decided to keep pricing at the contract level, versus the task order level, preserves the current value of the MAS program.
“Client agencies have expressed deep concerns about moving the price negotiation requirement from the contract level to the order level. Most agencies said this move would significantly reduce the value that MAS contracts bring to them” , wrote the GSA in a blog post on March 23. “Industry players were divided. Some acknowledged that it would save time. Others had concerns about their internal market research and the increased lead time (PALT) at the order level.”
In a white paper outlining its decision, the GSA said an integrated project team conducted six listening sessions among agencies and industry clients and compiled a list of “pros” and “cons”. as well as risks.
Among the reasons why the GSA should implement 876 clearances under the inclusive schedule program is the potential to reduce the workload of its contracting officers as well as industry support for change.
Meanwhile, the list of reasons not to implement 876 authorities was much longer. These included GSAs already ensure that prices at the contract level are competitive and that agencies can request additional discounts at the order level based on purchase volume, and procurement officers would not have to make formal, negotiated procurement, as required by FAR Part 15, at the order level.
“Early discussions with industry during the Office of Governmentwide Policy (OGP) listening sessions indicated the risk that there may be some level of industry backlash due to non-implementation of Section 876. While the IPT recognizes that, compared to client agencies, a larger portion of our industry partners are open to implementing Section 876, this initial discovery phase has produced no strong evidence that the industry would turn away from MAS if Section 876 was not implemented,” the GSA wrote. “Instead, the opposite was stated by some industry partners during the IPT interview Some expressed concern that the implementation of Section 876 would increase the burden on client agencies and deter them from using the MAS program. they would prefer to be able to develop order-level pricing, the majo erity of industry partners interviewed by the IPT recognized that there were benefits to having contract-level pricing.
The GSA has used, or plans to use, Section 876 powers for several large multiple award contracts, including awards under ASTRO, the multiple award vehicle for manned platforms. , unmanned and robotic. He is also strongly considering its use for the upcoming new service multiple award contract.
Two other points emerge from the listening session. The first is that the GSA should review the use of the price reduction clause and commercial selling practices. Both are seen as historical brakes on the program. The GSA has been working to move away from the PRC and CSP for nearly eight years, but hasn’t quite pulled the plug.
The second recommendation is the ability to manage wage determinations and service contract labor standards pricing at the work order level rather than at the contract level.