Putting “Commercial” Back in Commercial Item Contracting

As GSA works to establish the “Next Generation” of the Multiple Award Schedule (MAS) program, it is a wonderful opportunity to reinvigorate commercial best practices in the federal market place. As its best, the MAS program provides access to millions of commercial services and products to customer agencies. It is the largest, most successful commercial item contracting program in the federal government. By extension, it is also the most successful socio-economic contracting program in the federal government. Yet, there is still great potential for increased utilization, opportunity and value for government, industry and the taxpayer. Understanding and leveraging commercial practices can dramatically improve the efficiency and effectiveness of the MAS program.

In particular, striking the optimum balance between the unique government requirements and standard commercial practices will increase the value of the MAS program to customer agencies. Unique government requirements that are inconsistent with commercial practice increase costs. Sometimes unique requirements are absolutely necessary to meet an agency program goal. Sometimes the goal underlying requirements can be more effectively met by adopting commercial practices. This is fundamentally why the Administration’s “Myth-Busters” campaign is so important. At a time when agencies are under significant budgetary pressure, a “Myth-Busters” government-industry dialogue will identify cost effective solutions to meeting government goals through commercial practices.

For example, GSA is currently responding to customer agency requests for additional data regarding purchasing patterns and volume. In turn GSA is looking to its MAS contractors to provide additional data. However, as the Comment of the Week has noted in prior columns, data is not a free good. Here is an opportunity for GSA to directly engage its contractors regarding commercial data collection practices, including what data commercial firms actually find productive to collect and analyze in support of their own commercial purchasing programs. To the extent MAS contractors collect and report data to customers in the commercial marketplace, GSA has an opportunity to more efficiently and effectively leverage that infrastructure in support of apparent customer demand. Moreover, through dialogue GSA can better assess the costs and benefits associated with collecting such data, as the collection costs will impact pricing.

Another “data” example is the new requirement to provide a Universal Product Code (UPC) for products under certain qualifying SINs. This requirement was rolled out as part of the electronic submission instructions for information presented via GSA Advantage!. In some industries use of UPCs may be commercial practice. In other industries there may be other more effective commercial methods of tracking and identifying services and products. A “Myth-Busters” conversation with contractors would go a long way to reducing uncertainty regarding the underlying goal and requirements for UPCs. Uncertainty costs government and industry time and money. Contractors spend time and money trying to address a new requirement that may not reflect standard commercial practice or be relevant to how they go to market. As a result, the government may be missing out on competition and lower pricing. The requirement also will have an impact on small business, potentially limiting their access to the MAS program. Already, in at least one instance, an MAS contractor was unable to upload and offer temporary price reductions due to the lack of a UPC. Apparently, UPCs are not standard commercial practice in that MAS contractor’s industry.

These are just two examples of the intersection between commercial practices and government requirements. There are many others. To GSA’s credit, thinking about the “Next Generation Schedules” provides an opportunity for GSA and its contractors to leverage commercial practices to deliver cost effective, best value solutions to customer agencies and the taxpayer. We look forward to a “Myth-Busters” dialogue on the “Next Generation!”

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