The House Appropriations Committee marked-up its last FY’19 spending bill early this morning, marking good progress on getting appropriations measures ready for the House floor. The Senate, meanwhile, is working on an appropriations “mini-bus” that would combine a number of smaller appropriations bills with the idea that they would be easy to pass sooner rather than later. Don’t bet on it. While the Senate may stay in session for part of this August, the House is scheduled to depart tomorrow and stay out until after Labor Day. That, combined with the traditional break for the high Jewish holidays in September, will leave less than three weeks on the legislative calendar to pass any spending bills. Appropriations watchers hold out some hope that a few spending bills, such as those for the VA and military construction, could pass before Congress adjourns for mid-term elections in October. Larger measures, especially the Department of Homeland Security bill, are, frankly, political footballs that each party would rather have to kick around during the election. Post-election, it all depends on whether Republicans feel they can promote policy changes via spending measures (technically a no, no) or, if the House changes control, punt till the next Congress comes into town in January. The good news is that you and your federal customer should be used to all of this by now. Stay tuned.
Non-Priced Schedule contracts are now definitely coming thanks to a provision in the FY’19 Defense Authorization bill that gives GSA permission to pilot such contracts. The agency has long wanted to test contracts without contract-level pricing. Industry, too, has recommended that GSA consider this approach. Service contracts seem to be a logical place to test non-priced contracts due to the complex nature of developing bids for individual RFQ’s. In addition Read more
GSA contracting officer’s may no longer rely solely on Customs and Border Protection (CBP) rulings on whether the products offered for sale on Schedule contracts meet the substantial transformation test to determine Trade Agreements Act (TAA) compliance. This is one of the developing issues in light of the Court of Federal Claims ruling in the Acetris case. The Court Read more
Federal agencies consistently spend between 6-8% of their annual acquisition budget in the last week of the fiscal year, according to a report issued recently by the Department of Treasury’s Fiscal Service Data Lab. That equated to over $35 billion of business in FY’17. That’s a good reason to postpone your vacation for another week. Year-end isn’t the only time feds spend money, according to Treasury. The week after Congress passes a Continuing Resolution also sees a spike in buying activity. Professional service spending spikes at this time, as well. Conversely, Treasury found that agency service spending decreases somewhat when Congress passes actual longer-term appropriations bills. The speculation is that such funding measures allow agencies to do better long-term planning. While Treasury’s analysis is intended primarily for federal agency use, contractors will find it useful as well. In addition to the year-end numbers, for example, Treasury also found that spending tended to ebb and spike at specific times each month. This information can be vital to contractor planning and outreach. While it is no news that spending happens at the end of the year, info on CR-related spending and monthly peaks where spending spikes enables companies to appropriately plan BD activities. Make sure that your plans are fine-tuned for the end of this FY.
The Section 846 e-commerce portal project has significant potential to be innovative, if GSA can succeed in keeping specialized contract rules and regulations to a minimum for companies that, in many cases, are already selling to federal agencies. In order to match the innovative nature of this program, the agency should consider the latest innovative acquisition strategies it is proposing to agency customers for their end of year buying as contracting approaches. One option for GSA to consider is the use of Other Transaction Authority (OTA). This authority is currently being used extensively at the Department of Defense for even large dollar acquisitions and GSA is promoting OTA use as well. It is specifically being used to attract non-traditional contractors to the federal market, just like the non-traditional companies that make up much of the e-commerce portal community. Consider that these established commercial businesses already have well-tested and accepted payment methods, anti-fraud detection and prevention methods, and the ability to highlight, or even ensure, that acquisitions are made via specific companies. The companies would easily be able to create a federal portal that meets the original intent of Congress without the added burden of specific contract clauses or other traditional government contracting requirements. GSA would be able to move quickly, as well, as OTA-based acquisitions can be done in a timely manner.
Another option to consider is the use of GSA’s new Commercial Solutions Opening pilot. This pilot provides a way for GSA to quickly establish even large dollar contracts without the use of traditional Federal Acquisition Regulation clauses. GSA’s stated goal for the CSO program is, “…to provide a streamlined approach for acquiring innovative commercial products and services.” There is perhaps no better opportunity to match an innovative and streamlined acquisition method with the innovative acquisitions that commercial e-commerce platforms provide.
Success with the Section 846 project depends on keeping contract terms to an absolute minimum. Left with the choice to sign up for new and unfamiliar burdens or maintain existing business practices, most portal providers will elect the latter. This would defeat the purpose of the original Congressional legislation and potentially make the use of e-commerce portals by individual agencies more expensive and harm mandatory and other socio-economically favored contractors.