The Week Ahead - March 31st, 2014

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GSA IG FINDS MANY SCHEDULE CONTRACTORS DON’T HAVE SUFFICIENT COMPLIANCE SYSTEMS

GSA’s Inspector General recommended three changes to the way the agency manages the Multiple Award Schedule program last week after finding that nearly half of all Schedule contractors lacked adequate sales monitoring and billing systems to ensure proper contract compliance. The IG recommended that FAS management: 1. Ensure contractor compliance with the Price Reductions Clause. 2. Increase attention to less-than-complete CSP submissions and 3. Work to achieve more of the cost savings recommended by IG audits. The recommendations span all three major phases of Schedule contract life – proposal preparation, contract negotiation, and post-award management. Contractors, already facing stepped-up negotiation mandates by GSA CO’s, may now also face greater offer scrutiny and, after award, may see more attention paid to their compliance programs during IOA visits. Companies not sure of whether their internal control systems measure up may want to get a tune up.

GSA TO REQUIRE DOCUMENTATION OF INTERESTED PARTY CONTACT ON SCHEDULE CONTRACTS

FAS Commissioner Tom Sharpe issued a memo recently directing contracting officers, and other GSA officials involved in the award and management of GSA Schedule contracts, to document any contact they receive from outside interested parties who inquire about the status of a contract award or try to influence a CO’s decision. The memo follows a GSA IG report from last year which cited outside pressure being put on CO’s, Center Directors, and others to award contracts on more favorable terms. The IG recommended that the agency take steps to ensure the independence of CO’s. All outside contacts will now be documented as part of the contract file. Allen Federal believes that the memo will enable those already reluctant to interact with industry to reduce contact even further, while there will be little impact on those who see industry as true partners. Ironically, the IG – often the source of much pressure on CO’s to render non-independent decisions - was left out of the memo’s coverage. A copy of the memo is available by e-mailing info@allenfederal.com.

 

BLOOMBERG SAYS MAC PRIMES FACE MORE COMPETITION, BUT FROM KNOWN PLACES

A recent Bloomberg Government report found that competition for task orders on Indefinite Delivery/Indefinite Quantity Multiple Award Contracts is increasing. The share of task and delivery orders with only one bidder dropped to 45% in fiscal 2013 from 69% in FY 2006 as more companies bid on more orders. In addition, 51% of incumbents were replaced by challengers, indicating that incumbency isn’t always the advantage it once was. Interestingly, however, Bloomberg’s analysis went on to find that, despite the recent increase in bids per order, the competitive environment remains highly concentrated. The top 1% of prime contractors, for example, won 62% of all MAC dollars in fiscal 2013 and the top 20% of contractors accounted for 97% of sales. This means that an incumbent’s most serious competitor is likely a company well known to them. With this information, incumbents can better plan for challenges during a re-compete. If you know who’s shooting at you and from where, you can do a better job of protecting yourself and coming out the winner.

 

APRIL 1st ADVANCE NOTICE

OMB TO DO AWAY WITH THE FAR: In an announcement expected April 1st that will stun the normally staid federal acquisition community, OMB Director Sylvia Burwell is poised to announce that the federal government is abolishing the Federal Acquisition Regulations. In its place will be a new regulatory construct, the Federal United Buying and Acquisition Regulations (FUBAR). “The FAR had grown stale and frankly, a little flat” said Burwell in an advance copy of her planned remarks. “Our hope is that the new system will spur innovation and risk taking. We want all agencies to be totally FUBAR by the start of the 2015 Fiscal Year”. Jeffrey Koses, Senior Procurement Executive at GSA, responded to the pending announcement with surprise saying, “Didn’t we just finish taking Y2K rules out of the FAR? I’m not sure it’s wise to drive FUBAR quickly.” Initial industry reaction, however, was favorable. “If we want innovation and new ideas in acquisition, we need to get FUBAR” said Venable LLP partner Rob Burton. “It’s time to tap the full depth of industry experience”. Australian Embassy spokesman Matilda Timekangroodown offered an international perspective with the comment, “Australia has been following the FUBAR system for years and you can see what it’s done for our government.”/p>