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DOD ACQUISITION PANEL RECOMMENDS CHANGES TO COMMERCIAL SOLUTION ACQUISITIONS

The Department of Defense should consider replacing commercial buying and existing simplified acquisition procedures with simplified, readily available procedures for procuring readily available products and services.  This is among the recommendations made by the DOD Section 809 panel in its “Volume 3” report released earlier this week.  This recommendation, number 35 in the full report, seems to suggest that DOD cease using existing IDIQ contracts, like GSA Schedule contracts, but it does not come right out and say so.  Schedule contracts, arguably, are simplified acquisition procedures and, additional Panel recommendations can be read as making these contracts easier to use.  Recommendations 74 & 75, for example, call for the elimination of redundant documentation requirements or superfluous approvals that add no value to the acquisition process.  This would seem to embrace recommendations made by Booz Allen Hamilton, and others, to streamline the Justification and Approval process so that blanket approvals can be given for the use of non-DOD contracts. 

Overall, the report recommends that DOD embrace a three-tiered “Dynamic Marketplace Framework” for acquisition.  The first bucket would be items that are readily available and require no customization.  Rules and regulations would be minimized for the acquisition of such solutions.  The second bucket would hold solutions that are readily available, but require some customization.  Simplified procedures would also be used to acquire these solutions, but a few more steps would be required.  Defense-unique solutions would be in the third bucket.  The acquisition of these solutions would face a more formal process, but even here the Section 809 panel recommends new rapid acquisition authorities and other flexible approaches.

For IT acquisition, the Volume 3 report recommends that DOD adopt rules to allow for the more flexible acquisition of IT on consumption-based solutions.  Such guidelines could make it easier for DOD entities to buy “as-a-service” solutions.  Recognizing the IT brain-drain in DOD, the Panel also calls for DOD to create a pilot program where it would be able to get assistance from technology consultants via an on-line talent marketplace.

Additional recommendations would limit protests under certain circumstances, with recommendation 67 eliminating the ability of a contractor to file a protest at the COFC after filing with GAO.  Similar recommendations deal with dollar levels for protests and timelines for protest resolution.

Panel Chairman David Drabkin called the Volume 3 report, “the one with the bold ideas” at a recent gathering at George Washington University Law School.  It is expected to be the final report of the Section 809 panel.  The House and Senate Armed Services Committees, along with DOD and other interested parties, will now sift through the recommendations to see which ones make into future Defense Authorization measures or DOD policy directives.  This will likely be a multi-year process.  In the meantime, the Panel has published an Executive Summary of the Volume 3 report, available here for those who want to take a more complete lookhttps://section809panel.org/volume-3-report/

AGENCY OPERATIONS EXPAND AND DECREASE AS SHUTDOWN CONTINUES

The IRS is bringing back over half of its furloughed workforce to process tax refunds while, at the same time, US Courts may shutter most of their civil operations after January 25th if no additional funds are provided by Congress.  These are just two examples of the shifting sands of federal business during a partial government shut-down.  The person you were speaking with today, may not be their next week.  Re-called workers, though, are unlikely to be available for industry meetings except when they are directly related to immediate, mission critical performance.   Indeed, meetings and travel are among the top agency activities to be curtailed as a result of the partial shut-down.  Agencies like GSA that are operating from fee-based money are even curtailing travel to ensure that funds for core operations are available for as long as possible.  All of this spells increased frustration for contractors.  Planned projects sit idly, invoices pile up, and key opportunities for communication evaporate.  The longer the partial shut-down continues, the longer it will take to unravel when everyone goes back to work, too.  No one can assume that federal business will be “business as usual” with currently closed agencies for some time. 

MAIL BAG: STATE SALES CAN IMPACT YOUR FEDERAL PRICING

Dedicated reader M. Obama of Washington D.C. writes, “My new company sells to state governments in addition to our federal business.  Our state prices are all over the map.  Could this impact our GSA federal business?”  Indeed they can, M.  Making it worse is that state reps can fail to understand why their business is your business.  When a company obtains a GSA Schedule contract it must usually tell GSA about its discounting practices, including those to state governments.  While prices that are “all over the map” can pose a challenge, taking the time to accurately tell GSA about your standard and non-standard discounts practices can mitigate that riskFurther, your company may want to recommend a Basis of Award customer class that is not state governments for purposes of complying with the Schedules Price Reductions Clause. Trying to keep track of unfettered discounting for Price Reduction Clause compliance is a nightmare and puts you at a high risk for fines and penalties from non-compliance.  Your senior management should insist on regular, thorough communication inside your company so that the GSA Schedule contracts manager knows about all of your current discounting practices, state or otherwise.  It should also be clear that fines your company pays for non-compliance will be borne equally by the federal team and whatever division caused the miscommunication.  GSA Schedule compliance is everyone’s business.

JOIN ALLEN FEDERAL IN ORLANDO AND BRING A FRIEND!

Allen Federal is debuting a new course – “Selling IT to the Federal Government” – in Orlando this March at the Federal Publications Seminars Orlando Contracts Week!  Learn all about selling IT to the feds and/or sharpen your other professional skills.  Bring a friend and get TWO classes for ONE price!  If you want total immersion, FedPubs is also offering a full week of classes at a SPECIAL DISCOUNT!.  Come get training and warm up!  See the details here:  https://www.fedpubseminars.com/Training/Orlando-Government-Contracts-Week/

CONGRESSIONAL LEADERS EXPECT LONGER SHUTDOWN

The breakdown in talks between the White House and Congressional leaders last week has left many senior Congressional members believing that the partial government shutdown could be with us for several weeks.  Both political parties seem to have substantial unity for their respective positions – at least for now.  While the House has voted on passage of individual agency spending bills, Senate leaders have said that they will not consider any measure to re-open the government until a bi-partisan deal has been worked out with the White House.  For contractors, this means that the payment on invoices already sent to closed agencies will continue to be delayed, closed agencies will not be able to have their employees travel or meet with industry, and, importantly, that employees that work on federal sites that are now closed, will not be paid via their usual charge numbers.  It is highly unlikely that contractors will receive “back pay” when closed agencies eventually re-open. Additionally, agencies that are closed, with only essential employees at work, are highly unlikely to take meetings with contractors for business development purposes.  The situation continues to shift in some “closed” agencies as well.  Those that generate their own user fees, such as the Interior Business Center, are at least somewhat open, for now.  When user-fee money is spent, however, some of those agencies may shift to closed, or reduce operations from what they are currently.  The US Courts office has announced that this is the course they are likely to follow.  Some contractors have also reported disruptions in offices that should be open as they have their FY’19 funding.

Allen Federal continues to predict that the partial shut-down will last at least until the end of January.  Financial markets, contractors, federal employees, and – importantly – those who depend on government programs such as SNAP, will begin to be seriously impacted after that time.  Once that happens, pressure will only grow on Congress to develop its own solution, with or without White House support.