Monthly Archives: January 2021

GSA ISSUES RULE CLARIFYING USE OF LPTA ON NON-DOD CONTRACTS

Federal civilian agencies will only be able to use Low Priced Technically Acceptable (LPTA) contracts when “the agency can comprehensively and clearly describe the minimum requirements in terms of performance objectives…” according to a final rule published by GSA this week.  The civilian agency rule comes nearly three months after the issue of a similar Defense Federal Acquisition Regulation Supplement (DFARS) rule.  The net impact of the new rules is that the use of LPTA contracting will be allowed only in certain specific circumstances.  Agencies will have to make a determination that “technical proposals will require no, or minimal, subjective judgment by the source selection authority as to the desirability of one offeror’s proposal versus a competing proposal.”  Each rulefurther directs contracting officers to avoid, to the maximum extent practicable, using LPTA contracting when acquiring a host of services, including information technology services, cybersecurity services, systems engineering and technical assistance services, or other knowledge-based professional services.  The rules come as a result of legislation that essentially expressed Congressional concern over the perceived widespread use of LPTA contracts, sometimes to the government’s detriment.  Industry, too, had long expressed concerns that LPTA contracts were being used in a variety of areas where subjective determinations were required in order to determine which offer actually represented the best overall value to the government.  The overall intent is to ensure that LPTA contracting is used only in appropriate circumstances.  Contractors should be prepared to work with government clients to ensure that they know about both rules and encourage acquisition approaches that are appropriate to specific circumstances.

EXPECT MORE ACQUISITION INVOLVEMENT FROM BIDEN ADMINISTRATION

Government contractors should be prepared for a more activist acquisition policy agenda from the incoming Biden Administration. While this could mean interest in innovative acquisition practices and increased use of technology, it could also mean new rules.  Either way, the acquisition landscape that currently represents your business is about to change.  Democratic administrations traditionally place more emphasis on government management policy than their Republican colleagues.  This means more ideas from people that likely have substantial experience in their specific area and have specific goals they want to achieve.  Management and acquisition positions also traditionally get filled much earlier.   Experienced officials that can get in the door sooner have more time to implement their agenda.  That can cut both ways for contractors.  While some previous Democratic administration officials have wanted to keep industry at arms-length, most welcome such contact.  That’s the up-side of having officials in place who focus on specific areas others might not.  Such a focus, though, also has a potential down-side.  At least one previous OFPP Administrator, for example, took a very dim view of GSA Schedule Blanket Purchase Agreements.  It took education from inside and outside government to prevent that popular tool from being banished.  Contractors can expect to see names for OFPP and GSA administrator surface soon and it’s a bet that some will be familiar.  Make sure your company is prepared to work with the new team, whether it’s to support a beneficial change, or advise on why other ideas might cause more harm than good.

GSA IT CATEGORY FACILITATED OVER $30B IN FY’20 SPENDING

Even before the award of much-anticipated new IT contracts, such as ASTRO and StARS’s III, GSA’s IT Category was responsible for over $30 billion in IT spending last fiscal year.  That’s a 15% jump from the previous year.  Contractors need to understand the increased role GSA plays in IT acquisition, not just in terms of Multiple Award Schedule use, but what it means for how they approach the federal IT market overall.  Part of the growth is due to so many GSA IT contract vehicles being certified as “best in class” (BIC).  While use of BIC vehicles generally remains steady at 7% of government spending, the total dollars going through such vehicles rose as overall contract spending increased.  Companies are also starting to report that potential customers are looking for the BIC label when they consider a buy, potentially making such contracts an important part of a firm’s overall portfolio.  Another reason is that GSA has a wide variety of IT and IT-related contracts, including the EIS telecommunications vehicle which is starting to see more and more business as agencies face OMB pressure to modernize those solutions.  GSA’s federal IT market share is only expected to grow, not only with ASTRO and StAR’s, but with the new Polaris vehicle, expected to come on-line in early 2022, as well.  Partnering with the agency and with other contractors should be a key part of an IT contractor’s federal business.  StAR’s and Polaris, for example, are both small business set-asides, meaning that larger firms must seek out partners that will prime such vehicles in order to have viable channels that customers want when it comes to making IT procurements.  How GSA “does” IT is changing.  Contractors need to be aware of this and ensure they keep pace

AFTERMATH OF RIOTS WILL IMPACT PACE OF GOVERNMENT BUSINESS

Among the many lingering impacts of the sorry scene at the US Capitol January 6th will be a slow-down in the pace of government business, lasting at least for the next two weeks and conceivably through all of January.  It is precisely because the situation is still very much developing that contractors may see an impact.  Cabinet secretaries resigning and the departure of other key personnel are a huge distraction, if nothing else.  Disruptions to internal reporting chains, gaps in those chains, and a tendency to wait until the storm clouds clear on the part of some federal offices will further impact business.  It is a safe bet that each federal agency will also review their own internal security procedures, meaning that key people will be otherwise engaged and unavailable for contractors that want to talk about something other than security.  While progress will continue on existing projects and even planning for new acquisition vehicles, such as GSA’s Polaris, will go on, larger and newer projects may slow down until a new team is in place.  January was already lined up to be a problematic month, with the MLK Jr. holiday falling on the 18th, a holiday for at least local federal workers on January 20th, a planned women’s march soon after, and the annual Right to Life march slated for the end of the month.  It’s tough to focus on acquisition when there is a steady stream of distractions.  Be patient and focus on what may actually move forward.     

COMING SOON: ACTUAL DOLLARS IN YOUR CUSTOMERS’ ACCOUNTS

The late December passage of an omnibus appropriations package means that your federal customers should know their individual budgets for the rest of Fiscal Year 2021 by early February.  Most agencies should also have at least as much money as last year, with many having even more.  That means that its time for contractors to move discussions from the “what if” phase, to a more solid footing.  Having more specifics will help you better identify an actual business pipeline and   dedicate resources accordingly.  While there is still definitely time to have comparatively longer discussions on capabilities and new offerings, the tenor of your customer discussions should gradually shift to specifics.Now is also a good time to hone your company’s messaging.  Never underestimate the need to establish or update your company’s branding message.  You’re competing for time and attention not only with hundreds of other contractors, but with the “day jobs” of end user customers.  It can be tough to break through without a clear, topical, message and good relationships.  Remember, too, that the relationships don’t always have to be yours.  Leveraging partner relationships to develop business is an excellent way to expand your horizons.  It’s also important to always have an answer to the “how’ question.  Don’t make your prospect guess at how they can do business with you.  Provide them with 2-3 recommended acquisition options and be prepared to show why they’re a good fit for the specific circumstance.  A new administration will mean new budgets and priorities – mostly next year.  Now is the time to move ahead for FY’21.