This week’s blog post shines the light on another “Urban Myth” regarding the General Services Administration’s (GSA’s) Multiple Award Schedule (MAS) program. Contrary to the misperceptions of some in the procurement community, the MAS program includes effective mechanisms and ordering procedures for leveraging and competing customer agency recurring requirements. Indeed, it is surprising that some in the procurement community have recognized the key attributes of the MAS program and, as a result, cling to the belief that the MAS program does not allow agencies to leverage requirements when the current Federal Strategic Sourcing Initiative (FSSI) is built on the foundation of MAS contracts, e-tools and ordering procedures. The critical procurement tool that empowers customer agencies to leverage requirements under the MAS program is found at Federal Acquisition Regulation (FAR) 8.405-3, namely Blanket Purchase Agreements (BPAs).
FAR 8.405-3(a)(1) states that “Ordering activities may establish BPAs under any schedule to fill repetitive needs for supplies and services. Ordering activities shall establish the BPA with schedule contractor(s) that can provide the supply or service that represents the best value.” The establishment of MAS BPAs must be consistent with the MAS program’s streamlined competitive ordering procedures. That means that for BPAs that exceed the simplified acquisition threshold, the customer agency must post the Request for Quote (RFQ) on e-Buy thereby providing all MAS contractors capable of meeting the BPA requirements notice and an opportunity to compete or, alternatively, provide the RFQ to as many MAS contractors as practicable to reasonably ensure receipt of at least three offers. When notice is provided to less than all and less than three offers are received, the customer agency must document the file explaining why, despite reasonable efforts to do so, additional contractors capable of meeting the BPA requirements could not be identified. See generally FAR 8.405-3. In addition, FAR 8.405-4 provides that ordering activities must seek a price reduction when the BPA exceeds the simplified acquisition threshold. As such, FAR 8.4 guidance makes clear that customer agencies can compete and leverage recurring requirements through MAS program using BPAs.
MAS BPAs make a significant positive difference in saving both time and money for customer agencies, contractors and the taxpayer. The Air Force’s recent efforts to put in place contracts for commercial office furniture are instructive here. The Air Force has embarked on a lengthy, complex open market competition with the goal of awarding four “commercial item” contracts for office furniture. Under the Air Force’s acquisition approach, these four contracts will form the basis for future competitive, open market contracts for the actual delivery and installation of furniture at approximately 70 locations around the country. Significantly, the commercial furniture to be acquired is already on MAS contracts. Therefore, under FAR 8.4 the Air Force’s commercial furniture requirements can be leveraged and competed under the MAS program, saving time and money in the acquisition process.
Although the tools are in place to successfully leverage requirements via the MAS program, the keys to a successful BPA remain requirements development and specific volume commitments on the part of customer agencies. As the Coalition’s “Best Practices for Federal Supply Schedule BPAs” states in pertinent part that “Commercial contractors overwhelming report that they offer their best terms and prices to customers who provide the most detailed information about their requirements and usage.” The Coalition’s “BPA Best Practices” can be found here.
Finally, the key to eliminating these “Urban Myths” is communication across the procurement community regarding the central role the MAS program can play in saving the Federal government time and money. That’s why GSA’s MAS training and engagement with senior leadership across the Federal government regarding the value acquisition programs is more important than ever!
I do not understand why the government is stuck in the year 1955 when it comes to procurement.
I still believe in competition. As you know there is more than one way to obtain lower prices.
Let me bring GSA up to speed and into the 21st Century
Let me give you an example :
I believe on an annual basis each company that holds a GSA Schedule Contract should be allowed to bid on each item so the government can obtain the lowest cost / highest quality per bidder.
The winning BPA GSA vendor can be rewarded with 5% of the total sales of a particular item. The other vendors would be required to match or provide a lower item price provided by the winning GSA vendor. Also, the non-winning BPA vendors cannot upload given item(s) to gsaadvantage.gov or offer given item to the government unless they can provide a lower price or match the winning vendor item price.
GSA never introduced an alternative to FSSI (Federal Strategic Sourcing Initiative). This procurement theory actually denies 17,000 companies from selling to the federal government., hence leaving only 10 or 15 companies per schedule selling items to Uncle Sam. Via Economics 101 past experiences, a handful of companies vs 10,000s of vendors will create one of these 2 scenarios :
a) price fixing and oligopolies & monopolies.
b) The government will strong arm these very few FSSI vendors companies to offer such low prices hence, forcing these FSSI vendors to sell non-trade compliant items just to compete. GSA needs to make a decision – do they want low prices or trade compliant items.
I strongly believe GSA should modify existing software to control buyers rather than eliminating competition via the FSSI procurement program. If buyer breaks protocol hence buyer would be disciplined. This software project can be done without additional funding. GSA, DoD & NASA can prioritize this software project via existing employed Software Engineers. It takes the will and priority to make this happen. Also, I am certain GSA will claim it does not have available software engineers to complete this non-funded task. GSA can simply lay-off several employees in various departments in order to fund this task and/or by putting secondary software projects on the back burner hence prioritizing this software project. This assignment should not take more than several million dollars and can be done with no additional funding.
From what I can see there are some really big holes in the procurement process.
1) Via this GAO report http://www.gao.gov/products/GAO-12-705T most purchases were made outside of GSA procurement web site http://www.gsaadvantage.gov. ; A solution to this problem would be take away the buyers PHYSICAL credit card and store the credit card information online via http://www.gsaadvantage.gov ; This also protects the credit card # and information from possibly being compromised. Again this software project can be done with no additional funding. Amazon.com is a perfect example if you want to see how this works. I know the government is not a company but I am certain GSA has great software engineers to accomplish this task via a top priority and no additional funding software project. For open market purchases buyer currently utilize fbo.gov and/or other existing procurement sites. The same projects can be accomplished via these sites.
2) An independent software company should be allowed to screen scrape information from gsaadvantage.gov to prove selected FSSI Vendors “DO NOT” offer the lowest prices/ best quality.
3) Via Vendor uploads develop back end software to monitor and reject outrageously priced items. Example a $25,000 toilet seat or $5,000 hammer. Statistical databases exist via the free market to determine low / high prices per item hence halting outrageously priced item(s) uploaded to gsaadvantage.gov. GSA software engineers would need to create software to utilize this database.
4) I believe various government buyers have different volume purchase requirements. FSSI is not a one size fits all solution. Example many government buyers have less than a $3,000 requirement. Internet purchasing may be more advantageous for this type of purchase. Example open competition via gsaadvantage.gov
5) GSA claims its employees are overworked and can no longer handle additional and/or existing vendors. All existing employee manual operations should be analyzed via GSA’s Software Engineers to automate current manual human labor. It may be possible to handle unlimited vendors and buyers once this project is completed. Each new additional GSA Human assignment should be analyzed by software engineers for possible automation. Again this can be a non-funded project as explained above.
6) I strongly believe an independent software company should be allowed to give alternative 21st Century solutions versus FSSI.
7) Reduce the number of schedule solicitations. Currently GSA claims it costs $3,000 per year, per contract to maintain each contract and numerous GSA employees. There are 40 solicitations (GSA and VA). The solicitations should be consolidated down to a handful—with a goal of a single solicitation (contractors could then choose to consolidate their contracts or maintain separate contracts depending on their business models). The current structure of the schedules often forces companies to submit multiple offers for multiple contracts when a single contract would be more efficient. Consolidating solicitations allows companies to efficiently and effectively consolidate contracts rather than having multiple contracts across schedules and business lines. This approach would provide the opportunity for contractors and GSA to reduce costs associated with seeking, obtaining and managing multiple schedule contracts. It is an opportunity to leverage contractor and GSA resources through a more efficient structure. Consolidating schedules would lead to a more efficient and effective platform for market research by customer agencies. Also all human manual work should be analyzed via GSA software engineers for automation and efficiency.
8) I have heard from the grapevine that GSA’s software is awash in horrible spaghetti software code making it virtually impossible to make necessary modifications to move this agency into the 21st century. Hiring competent small business software companies would be the logical choice to fix this problem. This can be done without additional funding via laying off various GSA employees and/or putting all secondary software projects on the back burner.
9) It is this writer’s belief FSSI is nothing similar to Corporate volume purchasing.
Example lets take Walmart. They currently have 66,000 vendors and counting each day. FSSI eliminates virtually all competition with possible oligopoly price fixing. Keep in mind all vendor prices are available via gsaadvantage.gov Giving very few companies exclusive selling rights via a long term contract and eliminating competition is not the answer. Why have 1,000s of existing GSA software programs go to waste monitoring a few vendors. GSA needs to enhance existing software to truly and easily maintain a vigorous open competitive market via existing web sites (gsaadvantage.gov and other existing procurement sites). Programmatically controlling the buyer via software is the 21st solution.