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kaufCAN.com Page 1
GSA Schedule Contracting: Understanding the Process, Opportunities,
and Pitfalls
May 6, 2015
Christopher T. Page
Kaufman & Canoles
757.259.3847
kaufCAN.com Page 2
Important Note
The contents of this presentation are intended
for general information only and should not be
construed or relied upon as legal advice nor as
a legal opinion on any specific facts or
circumstances.
kaufCAN.com Page 3
Agenda
Overview of Multiple Award Schedule (MAS)
Contracting
Nuts and bolts of GSA Schedules
Benefits of GSA Schedules
Process and timeline to obtain GSA Schedule
Potential pitfalls for unwary contractors
GSA’s changing policies and priorities
kaufCAN.com Page 4
Overview of Multiple Award
Schedule Contracting • What are “Multiple Award Schedules?”
– Multiple contractors are awarded contracts under
various schedules and compete for the customer’s
business
– Different schedule contracts cover different
categories of services and supplies
– But all are Multiple Award Schedules
kaufCAN.com Page 5
Overview of Multiple Award
Schedule Contracting • MAS Stated Objectives:
• Provide federal agencies (and other buying
concerns, including state and local governments)
with a streamlined acquisition process for
obtaining commonly used commercial services
and supplies at prices associated with volume
buying;
• aid customers to achieve the best value possible.
kaufCAN.com Page 6
Overview of Multiple Award
Schedule Contracting (cont’d) • Authorization:
– Title III of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 251 et seq.) and
– Title 40, U.S.C. 501, Services for Executive
Agencies
• Managed by:
– General Services Administration (GSA)
– Department of Veterans Affairs (VA)
kaufCAN.com Page 7
Overview of Multiple Award
Schedule Contracting • GSA manages most contracts for commercial
products and services
– Largest government – wide contracts are administered under
the GSA Schedules Program.
– GSA Administrator has statutory authority to procure and
supply personal property and non-personal services.
• VA manages the schedule contract for medical-
related products and services
kaufCAN.com Page 8
Overview of Multiple Award
Schedule Contracting • “Customers” (per GSA Order ADM 4800.2H) include:
– Executive and Federal agencies
– Most DoD
– The District of Columbia
– Mixed-ownership government corporations (FDIC)
– State and Local Governments
• Through cooperative purchasing
• Available schedules limited (includes IT, Law Enforcement,
Security)
– Government contractors authorized to spend Federal money
kaufCAN.com Page 9
Overview of Multiple Award
Schedule Contracting • These “Customers” are creatures of habit
• Given the current financial climate, they have
a mandate to do more with less:
– Decrease risk
• need companies they can trust
– Increase speed and efficiency
– Least resistance to end products/services
• Leads to the appeal of the GSA Schedules
Program
kaufCAN.com Page 10
Overview of GSA Schedules
• GSA Schedules Program achieves approximately
$50 Billion dollars in revenue every year
– (~$39 Billion for GSA and ~$10.5 for VA)
• Unfunded contract that lists the prices the Federal
(and State in some instances) government has
agreed to pay to an organization for its products or
services
• Preferred contracting vehicles for buyers:
– saves buyers time and money when they purchase products
and services
– comfort doing business with pre-approved vendors
kaufCAN.com Page 11
Overview of GSA Schedules
• 33 different GSA Schedule Contracts
• 8 different VA Schedule Contracts
• Each Schedule Contract is Indefinite delivery, Indefinite quantity
(IDIQ)
• Awarded on basis of Special Item Numbers (SIN)
– Identify broad range of commercial supplies and services
– Toilet paper to IT Systems Engineering
• 5 year base period with 3 five-year options (can total 20 years)
• No bidding required
• Contractor applies by completing “schedule” solicitation
• Government-wide contract – “marketing” to multiple agencies
through Schedule
kaufCAN.com Page 12
Overview of GSA Schedules
• Who can participate?
• Offer supplies or services found on a Schedule
• $25,000 in sales per year (or potential to achieve)
• Accept credit cards as payment
• Complete GSA Schedule Registration and
Certification
• Complete Past Performance History
kaufCAN.com Page 13
Benefits of GSA Schedules
• Holding a GSA Schedule = exposure
– 700,000 registered users
– Approximately 600,000 searches on GSA
Advantage! per work day
– More than 70,000 e-Buy RFQs per year
Source: GSA-Advantage! Statistics FY 2012
kaufCAN.com Page 14
Benefits of GSA Schedules
• Streamlined buying process benefits all
parties involved:
• No formal solicitation process = time saver
• Pre-negotiated terms and conditions
• “Fair and Reasonable” pricing
• No constraints on dollar amount – purchase at any
price (subject to micro-purchase and SAT)
• Increased visibility and credibility for vendors
• Certification process = transparency for vendors
kaufCAN.com Page 15
Benefits of GSA Schedules
• Enter into Blanket Purchase Agreements
(BPAs) – multi-agency use
• Enter into Contractor Teaming Agreements
(CTA)
– 2 or more GSA Schedule holders team to provide
comprehensive solutions
• Authorized dealer/re-seller agreements
– Others sell off your Schedule
– Selling off another company’s Schedule
kaufCAN.com Page 16
Types of GSA Schedules
• Schedule list in the GSA e-Library contains all GSA
and VA Schedules
• Generic categories of supplies and services available
under each Schedule may be viewed by clicking
Schedule number in “Source” column
• Commercial Items in MAS
– FAR 2.10(b) definition of “commercial item”
includes supplies/commodities and services.
– Very broad
kaufCAN.com Page 17
Types of GSA Schedules
• Services available (comprehensive list
available in GSA e-Library):
– Environmental
– Professional Engineering
– Logistics
– Language
– Management Consulting
– Temporary Administrative and Professional
– IT
kaufCAN.com Page 18
Types of GSA Schedules
• Services available:
– Advertising and Marketing
– Financial and Business Solutions
– Security Solutions
– Facilities Maintenance
– Disaster Relief
kaufCAN.com Page 19
Types of GSA Schedules
• Supplies available:
– Office supplies and Equipment
– Tools and Hardware
– Building and Industrial Materials
– Furniture
– Scientific Equipment
– IT Products
– Vehicles and Support Equipment
kaufCAN.com Page 20
Types of GSA Schedules
• Supplies available:
– Appliances and Food Services
– Law Enforcement, Fire, and Security Products
• BROAD scope of supplies and services
kaufCAN.com Page 21
Nuts and Bolts
• Characteristics:
– Schedules contain no specified quantities – other
than minimum and maximum threshold (contract-
specific)
– Ordering activity involved sets thresholds and
delivery dates when issuing order
– Ordering activity may add terms and conditions as
long as they do not conflict with Schedule contract
kaufCAN.com Page 22
Nuts and Bolts
• Characteristics:
– Order placement and timing in accordance with
FAR 8.405-1 and 8.405-2
– May issue order for supplies or services without
Statement of Work (SOW):
• Orally
• Fax
• Paper
kaufCAN.com Page 23
Nuts and Bolts
• Characteristics: – May issue order anytime during effective period of Schedule
Contract
– Cannot place repetitive orders for same items
• Designed to avoid exceeding Simplified Acquisition
Threshold (SAT), which is currently set at $150,000
• Orders exceeding SAT require proper competition
– Schedule users permitted to negotiate reduction from
Schedule prices at anytime
• Schedule holders (Vendors) not required to agree
– Likewise, Schedule holders may offer reduced prices (more
on process later)
kaufCAN.com Page 24
Nuts and Bolts
• Characteristics:
– Order level thresholds:
• At or below Micro-purchase threshold ($3,000) –
Customer may place order directly with Schedule holder
without competition
• Micro-purchase – SAT – Customer must survey at least
three Schedule holders and make best value
determination. Typically accomplished through review of
GSA eBuy.
• Exceeding SAT – Customer must solicit or consider
multiple sources and must seek price reductions
kaufCAN.com Page 25
Nuts and Bolts
• Characteristics:
– Contract level thresholds:
• Each Schedule Contract contains a minimum and
maximum order threshold
• Schedule holders are not required to accept orders with
value less than minimum order or greater than maximum
order thresholds
– Many Schedule holder gladly accept such orders
– Have five days from receipt of order to reject
kaufCAN.com Page 26
Nuts and Bolts
• Pricing:
– Based on contractor disclosure on Form CSP-1,
Commercial Sales Pricing Format
– Government uses form to negotiate for most
favored customer pricing
– Form must contain current, accurate, and
complete data
• Otherwise, run risk of violating Price Adjustment Clause
found in Schedule contracts or False Claims Act
kaufCAN.com Page 27
Getting on Schedule
• Process involves many steps:
– Research / due diligence
– Registration/certification
– Proposal / “Offer” submission
– Negotiation with customer
– Award
• Typically takes 3-6 months to complete
• Continuous enrollment = pursue when ready
kaufCAN.com Page 28
Getting on Schedule
• First, determine if you have the resources
and time to pursue a Schedule Contract: – GSA Vendor Toolbox: https://vsc.gsa.gov/RA/
– Business Plan
• Estimate of expected return on investment
• Marketing plan
• Analysis of dedicated personnel to administer Schedule(s)
– Market research
• Comparable products/services offered
• Which agencies to target
• Buying trends
kaufCAN.com Page 29
Getting on Schedule
• Second, Locate the right solicitation:
– www.gsa.gov/schedulesolicitations
– www.gsa.gov/elibrary
– Which Schedule or Schedules to hold?
• Review descriptions of acquisition centers
• Analyze SINs associated with each Schedule
kaufCAN.com Page 30
Getting on Schedule
• Third, get registered and certified:
– Detailed, time-consuming administrative process
– Obtain the following registrations: • DUNS (free) – Data Universal Numbering System
• SAM (free) – System for Award Management; contains all
records from Central Contractor Registration (CCR)/FedReg
and Online Representations and Certifications Application
(ORCA) and exclusion records from EPLS, active or expired
• Past Performance Evaluation (fee) - register and provide the
names and email addresses of six to 20 of your customers
kaufCAN.com Page 31
Getting on Schedule
• Fourth, determine if your company qualifies
for any special government programs:
– GSA Office of Small Business Utilization
– Some programs require an additional certification
from:
• the Small Business Administration (SBA); or
• the Veterans’ Administration (VA) for Veteran-owned
small businesses (VOSB) and service-disabled Veteran-
owned small businesses (SDVOSB).
kaufCAN.com Page 32
Getting on Schedule
• Fifth, respond to a solicitation:
– All responses to solicitations require electronic
submission at eOffer/eMod
– Read solicitation and instructions thoroughly
• incomplete offers lengthen processing time
– 3 Sections
• Administrative
• Technical
• Price
kaufCAN.com Page 33
Getting on Schedule
• Administrative: – Review FAR Sections incorporated by reference
– Review Summary of Offer
– Copy of ORCA record
– Copy of CCR record
– Submit completed Form 1449 with e-signature
– Vendor Response Document
– Submit dated copy of commercial pricelist(s) with corresponding SINs
– Submit Commercial Sales Practice Format (CSP-1) – provides further detail
regarding pricing history
– Subcontracting plan (if applicable)
– Previous rejection letters
– Other GSA Schedule Contracts held
kaufCAN.com Page 34
Getting on Schedule
• Technical Proposal:
– Four evaluation elements
• Corporate experience
• Relevant project experience
• Past performance
• Quality control
kaufCAN.com Page 35
Getting on Schedule
• Corporate Experience:
– Federal marketing plan
– Organizational size
– Staffing capabilities
– Corporate controls (accounting, risk, QM, etc.)
– Potential subcontractors (if applicable)
kaufCAN.com Page 36
Getting on Schedule
• Project Experience:
– Within last 2 years
– 2 projects identified for each SIN
– How work experience is similar to solicitation work
– Customer reference information for each identified
project
– If no/insufficient experience
• May substitute experience of key personnel and/or
predecessor companies performing work
kaufCAN.com Page 37
Getting on Schedule
• Complete Past Performance Evaluation: – Submit with Offer
– Available online via Open Ratings (Dun & Bradstreet)
application https://www.supplierriskmanager.com/ppe-
order/login
– Surveys past customers to assess work performance
– Specify 6-20 references
– Each reference emailed online survey
– Appx. 35 day process
– Valid for 6 months
kaufCAN.com Page 38
Getting on Schedule
• Quality Control Evaluation:
– Internal review processes
– Individuals tasked with reviewing projects
– Identity of subcontractors used and steps to
ensure subcontractor compliance
– Procedures for meeting urgent requirements
– How multiple task orders can be handled
kaufCAN.com Page 39
Getting on Schedule
• Price Proposal:
– Commercial Sales Practices (CSP-1 Form)
– Price Narrative
– Escalation (if applicable)
– Labor categories and descriptions
– Supporting documentation (invoices, quote
sheets)
– Professional compensation plan
– Service Contract Act Documentation
kaufCAN.com Page 40
Getting on Schedule
• Pricing (cont’d):
– Information required on CSP-1 include:
• Dollar volume of sales to public in last 12 months
• Discounts offered to commercial customers
• Customers that received the best discounts
• Policies governing pricing
• Deviations from pricing policy and concessions offered to
customers
– Government reviews data to negotiate “basis
of award customer”
kaufCAN.com Page 41
Getting on Schedule
• Pricing (cont’d):
– Industrial Funding Fee (IFF):
• GSA Schedule programs funded through IFF, which is
reflected in prices charged by Schedule holders
• Intended to reimburse GSA for administrative costs
associated with GSA Schedule programs
• Contractors collect fee as part of purchase price and
remit amounts to GSA.
• Schedule holder must pay the IFF = 0.75% of all sales
reported.
• IFF payments due quarterly after reporting of quarterly
sales
kaufCAN.com Page 42
Getting on Schedule
• Pricing (cont’d):
– Industrial Funding Fee (IFF):
• What if government customer asks contractor to bear
cost of IFF?
– Clear policy in place
– GSA cannot charge contractors a fee to run its program
– Government cannot ask contractors to absorb IFF as
negotiation technique
– Make sure you are armed with this information prior to
entering negotiation phase of process
kaufCAN.com Page 43
Getting on Schedule
• Pricing (cont’d):
– Price Narrative important to:
• Provide GSA Contracting Officer enough information to
determine prices offered are fair and reasonable
• Explain deviations from CSP (CSP-1 Form)
• Propose any economic price adjustments
kaufCAN.com Page 44
Getting on Schedule
• Economic Price Adjustments (EPAs): – Schedule holders permitted to re-negotiate or modify
Schedule prices
– Prices must remain firm for 12 months from date of award
– Thereafter, may request decrease at anytime during contract
– May request increase pursuant to the specific terms in the
Schedule
• Commercial Price Lists – equivalent
• Fixed escalations
• Market indices
– More on risks associated with EPAs later…
kaufCAN.com Page 45
Getting on Schedule
• Sixth, GSA reviews your offer: – Usually takes 30 to 120 days
– GSA Procurement Contracting Officer evaluates offer based on:
• Responsibility – healthy financial state; proper internal controls
and processes
• Responsiveness – complete and timely offer
• Scope – products/services offered match Schedule SINs
• Subcontracting plan – pertains to large businesses only (per
NAICS - revenue over $550,000/yr. = required)
• Price Analysis – “fair and reasonable” with supporting data
kaufCAN.com Page 46
Getting on Schedule
• Seventh, if necessary, a meeting is scheduled
with GSA to discuss terms and negotiate
pricing: – GSA’s goal is to create discount ratio for your Most Favored
Customer
– Must prepare Final Offer after meeting reflecting all discounts and
concessions agreed upon
– Offers routinely rejected for failure to meet evaluation criteria,
including fair and reasonable pricing • May request follow-up meeting and re-submit final offer for consideration
– If Offer accepted, then Schedule Contract awarded = ready to
do business!
kaufCAN.com Page 47
Getting on Schedule
• Schedule contract administration does NOT
stop after award
– Need dedicated team to:
• Monitor sales
• Process IFF payments
• Coordinate marketing efforts
– Know the top customers for your Schedule
– Take advantage of opportunities to attend industry
functions
• Coordinate contract modifications and audits
• Important to avoid pitfalls
kaufCAN.com Page 48
Potential Pitfalls
• Lack of Sales
– Contractor obtains schedule then year later left
wondering why sales are so low
– Possible causes:
• Prices too high – not competitive
• Delivery time
• Minimum order needs to be lowered
• Customer service
• Schedule appearance
– Product photos
– Complete and accurate descriptions of products / services
kaufCAN.com Page 49
Potential Pitfalls
• Lack of Sales (cont’d)
– Attempt to address through Schedule Modification
• Can seek modification after first year
• Shifting to electronic process – eMod system
• Modify products, prices, other terms (min.
order; delivery)
• Series of specific documents required – varies
widely by Schedule and nature of modification
kaufCAN.com Page 50
Potential Pitfalls
• Compliance Issues
– Variety of remedies available to Government
• Price reductions
• Poor performance ratings
• Cancel / terminate contract
• Civil False Claims Act
– GSA OIG Notable Cases
• Oracle - $200 million
– Material misrepresentations re: sales practices, discounts
• EMC Corp. - $128 million
– Defective pricing (inaccurate discounts); kickbacks
kaufCAN.com Page 51
Potential Pitfalls
• Compliance Issues
– Price Adjustment Clause
• Government remedy if Contractor provides inaccurate or
incomplete information in CSP Form
• CO may make forward price adjustment (reduce price)
from date of sale at issue if Contractor fails to:
– Submit current, accurate, and complete information
– Disclose changes in commercial pricelist
• May also seek repayment for overpayments (with
interest)
• Termination for Default
•
kaufCAN.com Page 52
Potential Pitfalls
• Compliance Issues
– Trade Agreements Act
• Must certify that end products are “U.S. Made or
designated country end product”
• Issue for Contractors selling IT products
– Taiwan recently acceded to World Trade Organization's
Government Procurement Agreement = TAA compliant
– China accession remains stalled
• Buy American Act not applicable to Schedule Contracts
kaufCAN.com Page 53
Potential Pitfalls
• Compliance Issues
– Price Reduction Clause
• Government’s way of monitoring Schedule pricing over
life of contract to ensure constant “most favored
customer” status
• If discounts greater than those identified in CSP Form
then Schedule prices reduced
• Price reduction relates back to date greater discount
offered
kaufCAN.com Page 54
Potential Pitfalls
• Compliance Issues – GSA’s Proposed Transactional Data Rule (GSAR Case
2013-G504)
– Proposed rule trades Price Reduction Clause for increased
reporting on contractor transactional data
• Intended to make prices paid more transparent
• Contractors report prices paid during performance of
contract
– Unit, quantity, prices paid per unit, total price
• More market intelligence for smaller businesses
• But, increased exposure for misreporting – False Claims
Act
kaufCAN.com Page 55
Potential Pitfalls
• Tips for GSA Schedule Compliance:
– Realistic Basis of Award (pricing)
• comes from sufficient initial due diligence / research
– Adhere to centrally controlled / standard pricing
structure
– Qualified support team (internal and external)
– Periodic independent compliance reviews
– Swift action if receive audit letters, subpoenas, etc.
• Contact counsel immediately
kaufCAN.com Page 56
GSA’s Changing Priorities
• Recent leadership changes at GSA
– Dan Tangherlini, Administrator of the General
Services Administration stepped down in February
2015
– Deputy Administrator Denise Turner Roth is acting
administrator
– President Obama will appoint a full-time successor
– New programs and policies will be shaped by
coming appointment
kaufCAN.com Page 57
GSA’s Changing Priorities
• GSA’s 2014-2018 Strategic Plan highlights
significant changes to the program
– “Hallways” initiative
– Consolidation of professional services schedules
– OASIS
– FSSI impact on small businesses
– Just to name a few
kaufCAN.com Page 58
Changing Priorities
• Hallways Initiative – Born out of need to reduce contractor inefficiency through
consolidation of multiple schedules:
• many contractors hold multiple schedules for professional
services - significant overlap
• each with separate negotiation and management
– 8 services schedules to be consolidated into 1 super
schedule by November 1, 2015
• MOBIS, PES, FABS, AIMS, LOGWORLD, Environmental and
Language
– Hallways could increase use of GSA schedules and bring
more business to contractors
kaufCAN.com Page 59
Changing Priorities
• OASIS and OASIS Small Business
– One Acquisition Solution for Integrated Services
– 1 contract to cover complex professional services
• Program management
• Management consulting
• Logistics
• Engineering
• Scientific
• Financial
kaufCAN.com Page 60
Changing Priorities
• OASIS and OASIS Small Business
– Offers more flexibility than traditional schedules to
satisfy complex, integrated professional services
– Full-service offering
– Multiple award IDIQ (5 yr. contract)
• Agencies submit task orders against each pool (3-5 bids
per TO)
• Receive credit toward small business goals based on
use of SB pools
kaufCAN.com Page 61
Changing Priorities
• OASIS and OASIS Small Business
– Market for all services offered equates to
approximately $60 billion per year
– Initial contracts already awarded
• 74 unrestricted across 6 pools (type of service)
• 123 to small businesses across 8 pools
– Multiple award IDIQ (5 yr. contract)
• Agencies submit task orders against each pool (3-5 bids
per TO)
• Receive credit toward small business goals based on
use of SB pools
kaufCAN.com Page 62
Changing Priorities
• OASIS and OASIS Small Business
– Air Force already committed to program: • using program to purchase $1.4 billion in systems engineering,
R&D, and other services
• “old way” would require creation of separate multiple
award IDIQ for services
• Other agencies likely to follow AF lead
– On Ramps • Contracts permit GSA to add new contractors
• GSA monitoring competition based on use of contracts
• Likely to be executed in 2019 when initial contracts end
• Possibly before
kaufCAN.com Page 63
Changing Priorities
• FSSI – Federal Strategic Sourcing Initiatives
– Allows agencies to work together to create solutions
(typically BPAs) for commonly acquired goods and services
– Highly controversial in small business community
• Current practices reducing number of small businesses doing
business with agencies
• Awards going to select few
• FY15 National Defense Authorization Act in House
– Would require GAO to issue report on FSSI impact on
small businesses
kaufCAN.com Page 64
Questions?