All federal agencies either have their budget number for FY’19 or will have it in about a month.  As we shift into the next part of the fiscal year, here are three things to focus on now:  1.Assisted Acquisition:  Does your client’s procurement shop not understand them? You’re your project require special acquisition expertise?  Whether you sell IT, professional services, or even other types of solutions, leveraging the capabilities of assisted acquisition offices can be a good way to increase your overall business and help customers in a jam.  2.  Now is the time to develop your sales leads and make sure your target agencies know your capabilities.  Acquisition actions will start coming when the weather warms up, so make sure you’re ready by developing the relationships you need and educating your customers on why your company’s solutions are the best for them.  Don’t try to be everywhere at once, but definitely don’t spend too much time in your own office.  3.  Can you tell your OTA from a BPA?  If not, you’d better learn fast.  If so, make sure you use this knowledge to your advantage by suggesting innovative acquisition methods to your client.  Finding a way to make their acquisition easy helps both the customer and your company.  Whether it’s a set-aside, IDIQ contract, OTA, or other innovative approach, be prepared to recommend the top 2-3 that you think will work best.  This is the time of the year that you set the table properly so you can eat as much as you can later.  Remember, forks on the left!

Expect further consolidation of contract methods, more centralized acquisition, and continued data collection and remittance requirements from a new Category Management memo expected soon from the Office of Federal Procurement Policy (OFPP).  OFPP leaders are serious about making further reductions in contracting overhead, which could also result in reducing the number of contractors, while better leveraging the government’s collective buying power.  For service contractors this may mean that the savings the government could not achieve via the commoditization of labor categories could occur via limited, standardized contracts.  In addition, contractors can expect to have data collection and remittance requirements in each contract so that government leaders can analyze prices paid with the ultimate goal of dramatically reducing spending.  Left unsaid, for now, is whether OFPP will attempt to actually mandate the use of specific contract methods to the exclusion of others by threatening agency budgets for those who refuse to go along.  So far, CM comes right up to the line of making specific contract use a “thou shalt”.  Agencies generally go along with the CM guidelines, but also have flexibility to do their own thing.  Removing that freedom would be a sign that OFPP believes that they can succeed where others have failed.  Don’t get stuck with obsolete contracts that drive little business.  Stay tuned for OFPP’s memo.

Sometime reader L. Gaga of New York, NY writes, “We submitted a price decrease request to our CO two weeks ago, but haven’t heard back.  Should we keep waiting?”  Interesting question, L.  In fact, we just had this in a recent Schedules class.  The short answer to your question is “no”.  There is usually no reason to wait for formal CO approval on a price decrease, especially if it is temporary or to maintain compliance with your GSA Schedule Price Reductions Clause.  The government likes lower prices.  The key is to ensure that the CO knows that the discount is temporary, if in fact it is, and when normal Schedule pricing will be restored.  On the other hand, you must wait for a price increase request to be approved.  This approval must come from the GSA CO, not a customer agency CO or GSA contract specialist.  Typically, your GSA Schedule price will lag behind your commercial prices.  This is because GSA wants to see evidence that you have billed, and been paid, on the higher amount before they will consider an increase to the Schedule price.  Many companies, though, go years without increasing Schedule prices and then expect to catch up all at once with one modification.  Schedule contracts typically don’t allow for prices to go up by more than 10% in any one year, though.  As such, we recommend setting a calendar reminder to review pricing on a regular basis or trying to “catch up” during your five year extension process.  Managing your Schedule prices properly helps your company stay in compliance.  Your boss may even exclaim, “A star is born!”

While most national media outlets focused on the border wall issue during last week’s Congressional action, the real good news for contractors is that the legislation provides full funding for DHS, State, Justice and other agencies for the remainder of the fiscal year.  That’s very good news for both contractors and agencies, both of whom had recently been nervously eying the prospect of a shutdown or a “permanent” FY’19 CR.  New project starts may now be possible by the end of March.  That’s about a month earlier than last year and a two month improvement over FY’17.  Budget analysts predict that larger or mission critical projects will still be able to move forward as planned.  It’s smaller or less needy projects that may be pushed to the side.  The compressed time frame, though, does mean that projects that go through assisted acquisition service shops will have to be initiated quickly.  Indeed, all business for the impacted agencies will have to be done in about half a year, though agencies should now be accustomed to that pace given previous year constraints.  Of course, DOD and other agencies that accounted for 70% of discretionary spending have had their funding all along.  Overall, this means that FY’19 should be better for business than the previous two. 

Studies conducted by the Coalition for Government Procurement and Navy Post Graduate School show that prices for certain goods are cheaper – sometimes substantially so, on GSA Advantage than on Amazon Business. The studies were originally reported last week by the Federal News Network.  While the price difference is not a surprise to GSA Schedule supporters, the study findings do pose challenges for GSA and potential e-commerce suppliers as they move forward the e-commerce portal project.  First, it’s obvious that “faster” doesn’t always mean “cheaper”.  Congress was perhaps under the assumption that commercial providers automatically got better deals from suppliers than did the federal government.  If that’s not the case, then a key foundation for e-commerce program is shaky.  Second, the Navy Post Graduate School report did find that buyers preferred the user experience offered by commercial platforms over GSA Advantage.  How/can does GSA work to update Advantage to match that experience?  One obvious answer would be to outsource the operation of Advantage to a third party since GSA likely lacks the funding and resources to upgrade Advantage internally. That option, however, could face internal hurdles.  Third, for potential e-commerce providers, will they be able to lower their prices to more closely match those on Advantage, or at least come close enough so that their total value proposition makes their platforms a viable acquisition method?  If Congress believes that federal agencies will spend more for items than they can get from existing acquisition sources, they may rescind the project. 

All of these issues are in play as GSA drafts a report due to Congress next month on their progress to date in meeting the existing Congressional requirement.  The report will be in the hands of a different party majority than the one that initiated the project and whether they place the same priority on it as their predecessors is unknown.  Whether and how the questions above are addressed will likely shape the future of the project.