While it is rare that people who misbehave in
the world of government procurement can go to jail, it does happen. Recent
allegations made in Oracle’s lawsuit over DOD’s JEDI procurement could, if
found to be true, result in one or more prison sentences, the jeopardization of
a major contract award for Amazon Web Services, and the end of careers for
people in both the company and DOD. If most
of this sounds familiar, it’s because it’s happened before. Former DOD acquisition chief Darleen Druyun
went to prison for her failure to recuse herself from an active procurement
that she was a part of while discussing employment with Boeing, a potential
winner of the procurement, at the same time.
The Oracle suit alleges much the same thing. Two DOD officials that were part of the JEDI
procurement are alleged to have had employment discussions with Amazon Web
Services during the conduct of the same procurement. At least one went to work for the
company. If the facts essentially follow
the Druyun precedent, this could be very bad news, not only for the
people involved, but for AWS. Druyun
served 9 months in federal prison. At
least two Boeing executives were fired.
Boeing paid a multi-million dollar fine. Many suspect that they only reason that
Boeing didn’t end up on the Excluded Parties List is that DOD relies too much
on the company. That’s not the case for
AWS, or, indeed, most other contractors.
There is a lesson here for all contractors though: Don’t recruit people to come work for you
that are involved in a current acquisition on which you are bidding. Federal rules allow for discussions in some
cases, such as when the government official recuses him or herself from the
project. Absent that, treat this issue
as a third rail – do not touch.
GSA is again asking
Congress to increase the Micro-Purchase Threshold (MPT) from $10,000 to $25,000, but this time with
the limitation that it be only for purchases made through its e-commerce portal
program and with a sunset provision after 5 years. This was among the information released last
week in the agency’s much-anticipated report to Congress on the status of its
e-commerce portal project. GSA
also stated its intent to move forward with a pilot program, initially
restricted to e-marketplace providers, and limited to items such as office
supplies and industrial products.
Other types of e-commerce systems, such as e-commerce models where a
provider purchases products from a supplier base and sells them as inventory,
would have to wait until a later phase. GSA
identified three benchmarks on how the pilot would be evaluated: 1. To
what extent is the program successfully modernizing the COTS buying experience?
2. To what extent is the program
attracting buyers and thus shifting work away from contracting officers to
allow them to focus on higher value work? And 3: To what extent can the program’s increased
transparency, both in terms of spending data visibility and access to mandatory
source and socioeconomic programs, drive better buying strategies and
decisions? Notably absent is a pricing
comparison benchmark on whether the prices paid via the e-commerce
project will be higher or lower than those available from GSA’s existing
Schedule contracts or other pricing on GSA Advantage. GSA still intends to move forward with an
RFP in the 3rd quarter of the year, with a plan to get a pilot up
and running by the end of the calendar year.
The Department of
Homeland Security is requesting $4.5 billion in additional money from Congress to handle an influx
of people crossing the southern US border. Over
$1 billion of that amount would be for operational and technology enhancements,
presenting opportunities for contractors. In addition, Congress is also contemplating a
disaster aid package to assist states impacted by last fall’s hurricanes and
this spring’s floods. DOD, too, may get
into the game with the Air Force threatening to shut down work at several air
bases if additional funding isn’t provided.
All of this means that contractors may be looking at increased
opportunities over what is already shaping up to be a significant federal third
and fourth quarter. Birchgrove
Consulting President Ray Bjorklund recently stated on the Federal News
Network’s “Off the Shelf” that agencies impacted by the partial government
shutdown had to make up for between $8-11.5 billion in spending that was placed
on hold. DOD and other agencies
also have full appropriations over last year’s levels. It is clear that there is business to be
won. GSA’s FEDSIM operation has already
stopped taking new business and other assisted service organizations are
filling their books quickly. To
use a variation on a popular commercial tag line, “What’s in your pipeline”? This is the time of year when those fuzzy
dots on your radar should be taking shape.
If you aren’t seeing action, make sure you’re looking in the right
places. We are again poised for a ride
that doesn’t end till September 30th.
Be
Prepared, Aim High, and Give Yourself Room to Compromise
are the top three of DOD’s recently-released ten rules to its contracting
officers. Whether negotiating with DOD,
GSA, or another agency, DOD’s guidance can prove helpful for contractors as
well as the government workforce. As John Chierichella of Sheppard
Mullin, the original source of the top 10 list, pointed out, it’s like the
other team sharing their playbook for all to see. The rules aren’t necessarily magical, but
more of a common-sense guide to reinforce standard business techniques. Although all are useful, we like number 7
perhaps the best. The “Say It Right” guidance is
important to remember in Washington especially, a place where many government
and industry professionals tend to talk in shades of gray with plenty
of nuance. This can help ease tense
situations and achieve compromise, but gray areas can be deadly in the
contracts world. Making sure that each
term has a specific and well understood meaning is critical to ensuring both
performance compliance. Another
one we’ve used is Use the Power of Patience (Number 9). Silence can be golden and can lead to the
other party making concessions just to fill the void. It’s amazing how well applied patience helps
you not give in to a bad deal. Whether
an experienced negotiator or newbie, the DOD rules are “must reads” for
government contractors to keep your skills sharp and understand where the
government is coming from.