ALLEN FEDERAL BUSINESS PARTNERS

New reader S. Nicks of Los Angeles, CA writes, “Our company provides a variety of services and products to federal agencies.  Everything from Mac’s to Fleetwood guitars.  We can’t tell if we’re small or not.  Can you help?  While it can certainly be a benefit to be a small business, our experience is that some companies can really break down and cry if they think they’re suddenly large.  Being “other than small” is no reason to have your illusions of federal business shattered, though.  Right now, most businesses identify as small based on their primary NAIC’s code.  This should be the one that most closely identifies with how your company conducts most of its business.  That can change, of course, and GSA is working on a system to allow multiple NAIC’s codes to be entered as a means of identification in SAM.   If you’re a Schedule contractor with a NAIC’s code that makes you small, generally you qualify as such for business done under that Schedule.  Otherwise, you’re considered small based on the NAIC’s code used in the contract or task order your agency CO issues.  If the NAIC’s code listed matches your size, you’re small.  This is one reason why some agencies and contractors engage in “NAIC’s code shopping”, a practice that we note happens, but do not endorse.  Our bottom line advice is not to go your own way, S., but to be the best contractor you can be regardless of whether you’re large, small, or somewhere in between. 

GSA leaders must ensure that they communicate early and often with stakeholders inside their agency to ensure that the Schedules consolidation project is best-positioned for success.  This was among the recommendations shared with the agency by industry panelists during GSA’s Federal Market Industry Day held December 12^th.  Agency rank and file employees don’t always get the message on big, new changes leading to frustration, misinformation, and delays in achieving intended outcomes.  This can especially be the case when industry partners may initially have more knowledge on the change than the GSA people with whom they work.  Similarly, GSA officials must ensure that contractors with multiple contracts understand how those assets might be affected and have all of the details ironed out before multi-schedule contractors become part of the consolidation progress.  GSA officials agreed on this last point.  They stated that companies with multiple contracts will be among the last to transition.  They also reinforced the message that no changes will happen now. All sides seem to agree that GSA must also dedicate considerable resources to improving its on line Schedule resources to give buyers a better experience when seeking solutions from Schedule contracts.  Industry representatives went to call for the end of the Price Reductions Clause and a possible reduction to the Industrial Funding Fee.  Time will tell how this project works out. 

A “proof of concept” commercial e-commerce platform launch by the end of the 2019 calendar year is GSA’s aim as it works to implement a Congressional mandate to improve government access to such platforms.  This, and other details, were shared with industry at a “Phase II” discussion last week.  Based on GSA’s announced timing, a draft RFP may be issued as early as April, which would make a live RFP possible in June or July.  Right now, GSA is planning to proceed with a “commercial marketplace” concept first, as opposed to other types of e-commerce platforms. 

Several concerns were raised by industry representatives during the meeting.  One is GSA’s stated desire to require some form of pricing competition for micro-purchase level buys made via commercial platforms.  There are currently no rules requiring a “look at three pricelists” type of pricing competition and industry is concerned that instituting this requirement would effectively increase rules on all types of micro-purchases as agencies followed suit.  Congress, it should be noted, has had two opportunities to say whether it believed that extra pricing competition was needed for commercial platform buys, but has not done so.  Allen Federal recommends that companies specifically site this concern in any RFI responses or other communications with GSA.

Similarly, some in industry stated concerns over the non-applicability of the Buy American or Trade Agreements Acts.  The Coalition for Government Procurement indicated that it may call for the application of the TAA to all commercial platform purchases, citing GSA’s precedent of applying that Act at the Schedule level so that all Schedule transactions are TAA covered.  While it is likely true that the purchases made through commercial platforms, in aggregate, will exceed the TAA threshold, individual purchases will, for the foreseeable future, be at or below the Micro Purchase Threshold.  Neither Buy American, nor Trade Agreements, provisions apply to such purchases.  Congress, again, has had two opportunities to say whether the acts should apply to transactions made via commercial platforms, but has not done so.  This area is definitely worthy of more attention and discussion.

Comments on GSA’s current RFI are due on December 21^st.  We recommend a close examination of the terms and conditions, including how GSA wants to access commercial catalog information, monitor price fluctuations, and implement a funding fee mechanism.  Make sure that GSA gets your input as they move toward an eventual program launch.

Congressional leaders have passed a funding bill that will keep agencies without full-year Appropriations open until December 21^st.  This provides time to firm up potential support for a border wall as well as pet Congressional projects.  The move means that there will be no shutdown for the time being.  What happens as we near 12/21, though, is harder to predict.  Read more

Indefinite Delivery Indefinite Quantity contracts do not guarantee your company any sales.  That point was driven home last week when GSA leaders announced that they are postponing the deadline by which agencies much transition from existing telecommunications contracts to the new EIS vehicle for three years.  Contractors and others may be forgiven if they now believe that EIS stands for “Eternally In Suspension”.  Two legacy telecomm contracts, Networx and WITS, are being extended to meet current agency needs.  The move was expected, though GSA leaders were denying that it would come as recently as 2 months ago.

Contractors who “won” an EIS award must be wondering what they’ve really gained.  First, many spent well over a million dollars just to prepare for and bid on EIS.  Years of industry meetings with GSA officials took time as well.  Awardees have continued to incur costs for over the past year to bring billing and other systems into compliance in order to obtain an Authority to Operate (ATO).  That’s a lot of upfront investment for GSA to require with no expectation that these costs will be offset by EIS revenue any time soon. 

These challenges are similar to those in pretty much every large IDIQ contract scenario.  Designing, bidding, and prepping for business under such contracts often takes years and a substantial monetary investment.  The pay-off for other vehicles, like GSA’s Alliant and OASIS, is that once the contract is up and running, business flows much more quickly.

That’s not been the case with the agency’s telecomm contracts, though, and it is an open question as to whether this contract approach continues to make sense for such solutions.  Experience with Networx certainly showed GSA, and anyone else who was watching, that the model might have been outmoded then.  It took years for agencies to transition to Networx and it will now take years for them to transition from Networx.  So much for “agile acquisition”.

Large EIS prime contractors may take some comfort in the delay because many are Networx primes.  What about the smaller and medium-sized businesses, though, who aren’t represented on Networx and have been expecting EIS revenue to start flowing in the coming months?  Some are absolutely counting on this money to stay afloat.  GSA’s decision means that they may sink instead.

There’s a strong case to be made that large, stand-alone telecomm contracts are increasingly anachronistic.  The lines between “telecomm” and “tech” are blurry, if they continue to exist at all.  Moving forward, GSA leaders should consider an acquisition strategy that many of their customers already have:  Tear down large stand-alone contracts and run your acquisition through the GSA Multiple Award Schedule program.  It’s agile, comprehensive, can be used today, and is very small business friendly.