“You can get it good, or you can get it cheap” is a well-known saying in practically any market.  It seems like that message hasn’t reached some at GSA, though, after Federal News Network (FNN) reported recently that the agency was demanding price reductions from contract rates already approved by warranted contracting officers.  FNN stated that some companies were “bullied” into accepting decreases of as much as 40%.  Government buyers who use the Schedules should actually be concerned about this.  It means that they may end up with the “B” or “C” teams from a company when they’re seeking solutions to complex, or even mission critical, projects.  If a company can’t keep or attract good talent because its Schedule rates are too low, they’ll do one of two things:  Either stop selling through their contract entirely; or find a way to bring less expensive, less experienced workers on board specifically to work on Schedules-based projects.  Look, as taxpayers we all want the government to work hard to get good values.  No one wants to pay for a Porsche and get a Ford.  On the other hand, though, we do want reliable solutions from trusted companies.  Here’s a short memo to GSA: “You can’t have your cake and eat it, too.”  Empower your CO’s to make good decisions and inject some common sense back into the Multiple Award Schedules.  As we said recently, the canard that “Schedule prices are too high” is older than the hills.  Negotiate thoroughly, but fairly, and realize that sometimes there just isn’t more to be squeezed.

Most of the discussion around the massive SolarWinds data breach scandal has, appropriately, been focused on supply chain security.  Failure to provide adequate security can seriously jeopardize a host of potentially critical missions, something we’re still learning about here.  Selling the government security compromised solutions, however, is also a contract compliance issue.  False Claims Act cases are sure to follow.  These cases can cost companies millions in fines, legal fees, and lost productivity.  They typically take years to unravel.  Remember that the Act allows the government to collect treble damages and that it also has a criminal component should an investigation determine that a company’s action, or lack thereof, rises to that level.  The “extra point” in this specific case is that it can also land you and your company, sometimes separately, in front of a suspension or debarment official. Debarment typically has the effect of banning a company from all types of public sector business, not just federal, for three years.  You can personally be on either the suspended or debarred list.  The exposure isn’t limited to prime contractors and their personnel, either.  The Department of Justice has consistently pursued suppliers in FCA cases, some of which have had to pay 8-figure fines and sever ties with key people.  The bottom line for contractors and suppliers:  Make sure that the security solutions you’re offering are legitimate, secure, and double-checked for problems before they get to an agency customer.  Also consult with your legal team on indemnification language when even your best processes aren’t enough.  Remember, though, that even the best defenses may mean little if a problem is large enough and public enough.  Make sure your solutions are secure.

The “Rule of Two” in government contracting refers to the requirement that the government set-aside a procurement for small businesses if they find that two or more small firms are capable of doing the work.  The timing on when the rule applies is a consistent question for both small and large firms and can be equally frustrating.  A recent decision from the US Court of Federal Claims (See Tolliver Grp., Inc. v. United States, No. 20-1108C (Fed. Cl. Nov. 30, 2020) clarifies that the Rule of Two analysis applies before an agency elects to procure a requirement from a multiple-award contract (MAC) vehicle under FAR Part 16.5.  It also reinforces that there is no requirement for an agency to apply the Rule of Two prior to it electing to use FAR Part 8 FSS contracts for acquisitions.  Here, the Army wanted to use a specific MAC vehicle to make a procurement. The MAC, already in place, did not have any small businesses as prime contractors.  The Army believed that they did not have to conduct a Rule of Two analysis prior to making the buy and could simply buy via the MAC, so long as the acquisition was in-scope.  The Claims Court disagreed.  All acquisitions, except those made via GSA FSS contracts, must include a Rule of Two determination according to the Court.  The determination must be made before selecting a contract method, unless that contract method is a GSA FSS contract. This has potentially wider implications for MAC or GWAC usage as any acquisition given to a large business could be subject to scrutiny unless it was clear that a small business analysis had been part of the acquisition planning process.  This is similar in nature to the Government Accountability Office’s decision in Delex (B-400403) where that body found that IDIQ task orders must be set aside for small companies when two or more small businesses hold prime contractor status on that IDIQ.  Delex was the subject of considerable federal agency legal analysis, most of it concluding that the decision did not apply to those agencies’ IDIQ contracts.  The impact of the Claims Court ruling here, therefore, is also difficult to determine.  Smart contractors, however, should make sure that their customers conduct a small business analysis before deciding whether to use a non-Schedule IDIQ. 

The new deadline for agreeing to a catch-all FY’21 appropriations measure is December 18^th as the Senate is expected to follow the House’s lead and extend the current Continuing Resolution for one week.  House-Senate negotiators are said to be very, very close to a final spending deal.  If that happens, there will be essentially 8 months of “regular” activity as it takes a little while after a bill is signed for every spending account to be funded.  Work on a stimulus measure, however, is not as far-along.  It is notable that senior House and Senate leaders have not met directly, or even virtually, with each other to discuss the latest proposals.  This is widely believed to be a necessary step before a final stimulus is passed.  While media reports would leave listeners believing that such a package is a “done deal”, it is not and it is far from certain whether a stimulus package will be passed at all in 2020.  Importantly, no vetoes or shut-downs are being discussed.  The White House has been largely silent, at least in public, on both measures, while Congressional leaders conduct what could best be described as “customary” negotiations.  These measures will likely be the last ones passed by the current Congress.  The new 117^th Congress starts in January with a tighter House and a Senate where party control will not be known until after the January 5^th Georgia run-offs.

Discussions about how to improve, empower, challenge, engage, compel, propel, or impel the federal acquisition workforce have been around as long as there’s been an acquisition workforce.  Already, there are new proposals for the Biden Administration targeted to this crucial, but incredibly diverse, sector of government.  Stop the madness. A 2017 Federal Acquisition Institute (FAI) study found that there were between 12,400 and 13,000 civilian agency contracting officers in the 1102 series.  There are at least a third more inside DOD.  That’s well over 20,000 professionals, and that’s just counting people with the “contracting officer” designation.  There are tens of thousands of additional workers that comprise the total “acquisition workforce.”  Talk about “boiling the ocean”.  There is just no way that success is ever going to come by pushing across all fronts at once.  In order to have even a chance at (fill in your verb here) any of the acquisition workforce, efforts to do so must be focused.  They must even be limited to one or two sectors at a time.  Few successful organizations try to reinvent themselves all at once.  Most take an incremental, even compartmentalized, approach.  So, too, must efforts made at creating the type of acquisition workforce people in both government and industry envision.  Whether the effort starts with those primarily involved in weapons systems, services, or commercial item acquisition there needs to be an acknowledgement that change will start somewhere and that other sectors will be addressed on a specific timeline.  This phased approach is essentially just what GSA did in consolidating the Multiple Award Schedules.  It all got done, and done reasonably well, but it didn’t happen all at once.