GSA Schedule Contracting: Understanding the Process, Opportunities, and Pitfalls

Transcription

1 GSA Schedule Contracting: Understanding the Process, Opportunities, and Pitfalls May 6, 2015 Christopher T. Page Kaufman & Canoles Page 1

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. Page 2

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 Page 3

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 Page 4

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. Page 5

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) Page 6

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 medicalrelated products and services Page 7

8 Overview of Multiple Award Schedule Contracting Customers (per GSA Order ADM H) 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 Page 8

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 Page 9

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 Page 10

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 Page 11

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 Page 12

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 Page 13

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 Page 14

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 Page 15

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 Page 16

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 Page 17

18 Types of GSA Schedules Services available: Advertising and Marketing Financial and Business Solutions Security Solutions Facilities Maintenance Disaster Relief Page 18

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 Page 19

20 Types of GSA Schedules Supplies available: Appliances and Food Services Law Enforcement, Fire, and Security Products BROAD scope of supplies and services Page 20

21 Nuts and Bolts Characteristics: Schedules contain no specified quantities other than minimum and maximum threshold (contractspecific) 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 Page 21

22 Nuts and Bolts Characteristics: Order placement and timing in accordance with FAR and May issue order for supplies or services without Statement of Work (SOW): Orally Fax Paper Page 22

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) Page 23

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 Page 24

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 Page 25

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 Page 26

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 Page 27

28 Getting on Schedule First, determine if you have the resources and time to pursue a Schedule Contract: GSA Vendor Toolbox: 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 Page 28

29 Getting on Schedule Second, Locate the right solicitation: Which Schedule or Schedules to hold? Review descriptions of acquisition centers Analyze SINs associated with each Schedule Page 29

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 addresses of six to 20 of your customers Page 30

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 Veteranowned small businesses (SDVOSB). Page 31

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 Page 32

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 Page 33

34 Getting on Schedule Technical Proposal: Four evaluation elements Corporate experience Relevant project experience Past performance Quality control Page 34

35 Getting on Schedule Corporate Experience: Federal marketing plan Organizational size Staffing capabilities Corporate controls (accounting, risk, QM, etc.) Potential subcontractors (if applicable) Page 35

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 Page 36

37 Getting on Schedule Complete Past Performance Evaluation: Submit with Offer Available online via Open Ratings (Dun & Bradstreet) application Surveys past customers to assess work performance Specify 6-20 references Each reference ed online survey Appx. 35 day process Valid for 6 months Page 37

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 Page 38

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 Page 39

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 Page 40

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 Page 41

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 Page 42

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 Page 43

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 Page 44

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 Page 45

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! Page 46

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 Page 47

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 Page 48

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 Page 49

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 Page 50

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 Page 51

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 Page 52

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 Page 53

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 Page 54

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 Page 55

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 Page 56

57 GSA s Changing Priorities GSA s 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 Page 57

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 Page 58

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 Page 59

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 Page 60

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 Page 61

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 Page 62

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 Page 63

64 Questions? Page 64