Enhancing GSA, Supplier Relationships

Guest Blogger: Carolyn Alston, Executive Vice President and General Counsel

I read with interest Steve Kempf’s, testimony before the Small Business Subcommittee on Contracting and Workforce. Kempf, who is GSA’s Commissioner for the Federal Acquisition Service (FAS) acknowledged that GSA needs greater agility, federal agencies need faster access to emerging solutions, and GSA needs to find better ways of using its work force. I was encouraged by the testimony because the Commissioner states “[a]s we look to the future FAS is developing a Supplier Relationship Management Program focused on lowering government’s cost of doing business by enhancing our relationship with our critical contractors.” The statement is encouraging because it suggests that GSA may target an area that seems to have slipped to the backburner, the relationship between business partners.

For a while the government procurement community, not just GSA, has unwaveringly focused on oversight to avoid abuses and leveraging the government’s volume to lower prices. The regulatory process has become more complex; assessment of monetary fines to enforce contract provisions is routine and we regularly see requests for proposals with large demands and few commitments. The government concerns are legitimate. Despite a heavy handed approach, however, the results do not appear to have dramatic improvements to the procurement process. If low cost, agility, access to innovation and better use of the work force are the goals, a different approach may be more effective.

A Supplier Relationship Management Program with an objective of enhancing contractor relationships may just be that way. Particularly in our current economy, some commercial enterprises have turned to supplier relationship management as a method of both enhancing performance and improving their bottom lines. Those strategies start with discussions of collaboration and strengthening supplier relationships. A contract, whether in the government or commercial market, is an agreement where each party has its own economic realities, expected outcomes and organizational integrity. The deal works best when the interest of all parties are known, understood and to the extent possible, accommodated.

GSA has been a leader in providing information on its programs to the contracting community using online systems, industry meetings and its annual Expo. We hope that any supplier relationship management program that FAS develops will provide an opportunity for GSA to now gather intelligence about the commercial market that will enhance the ability of MAS contractors to provide better and even more cost effective services to federal customers.

We believe there are significant opportunities for GSA to lower contactor cost of doing business and thereby lower the prices that the government pays. Similarly, there are opportunities for GSA to allow more rapid introduction of innovative services and products into the Schedules program. To achieve these results, there are a few items that are high on the list of contractor priorities. We hope that GSA will address these topics under the umbrella of any supplier relationship management program that it pursues. Particularly,

• Eliminate any unnecessary government unique provisions contained in its GSA Schedule contracts and BPAs. The GSA Schedule is constructed to facilitate the acquisition of commercial services and products. The ability of commercial contractors to use standard commercial terms and processes eliminates costs and improves their ability to deliver high quality products and innovative solutions. Schedule contracts that successfully integrate government requirements and commercial practices benefit federal customers and taxpayers.

• Maintain a flexible pricing policy that leverages the government’s volume while setting reasonable pricing objectives. GSA’s current Multiple Award Schedule (MAS) pricing policy has provided a platform for contract negotiations for more than 20 years. After 20 years, however, we believe it’s time for government and industry to take another look. GSA has indicated that it will reexamine the GSAR provisions on MAS pricing. The Coalition has the domain credibility that can provide an important voice for industry on this matter. In anticipation of a new rulemaking the Coalition has established a working group to review and propose changes to the policy. The objectives of the working group are to suggest MAS pricing techniques that:
  • Better reflect the current commercial market and contractor industry practices
  • Provide clarity so contractors can enhance compliance efficiently and reduce costs to taxpayer
  • Better balance the risks and rewards of government and industry
  • Accommodate services and solutions based pricing

I look forward to chairing the MAS Pricing Policy working group and will update you as the project as develops.

• Reduce contract duplication. Roger has commented on this issue several times and it remains a priority of the Coalition. Our members report that the number of times that they must compete for similar services and products continues to grow thus driving up their costs. A solution for buying “other direct costs” (ODC) would go a long way towards reducing the need for agencies to establish contracts that compete with GSA’s schedule program. An ODC solution would also enhance the ability of contractors to offer flexible and innovative solutions to federal customers. The Coalition will soon provide feedback to GSA regarding its contract duplication survey and hope that it will be useful to GSA in tackling this significant issue.

I feel privileged for the opportunity to work with Coalition members, GSA and other members of the procurement community to continuously improve the government’s premier commercial acquisition vehicle.

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