The Next 20 Years: Strategic Considerations when Pursuing a Follow-on GSA Schedule Contract

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2 The Next 20 Years: Strategic Considerations when Pursuing a Follow-on GSA Schedule Contract Breakout Session #: F15 Presented by: Jennifer Aubel, Aronson LLC Date: July 25, 2017 Time: 4:00-5:15 p.m. 1

3 AGENDA Introduction GSA Policy Changes Impacting New Offers Disposition of Legacy Contract Best Practices for Preparing the New Offer 2

4 INTRODUCTION 3

5 A Quick Poll How many of you have products schedules? Services? How many of you are in the final option period of your contract? The final two years? 4

6 Historical Context Change from mandatory requirements contracts to IDIQ-type Federal Acquisition Streamlining Act (FASA) Price Reductions Clause, spot discounts Industrial Funding Fee (IFF) Removal of maximum order limitation Transfer of IT Schedule to FSS 1996 Clinger-Cohen Act (no cost or pricing data / CAS coverage) Contractor Teaming Arrangements 1997 Continuous Open Seasons Schedule orders count against annual small business accomplishments 1998 Worldwide coverage Governmentwide purchase cards Special ordering procedures for services 2000 Evergreen contracting 20-year maximum contract period GSA Advantage! participation becomes mandatory 5

7 When does your GSA contract expire? Contract # Ends Year Awarded Contract # Ends Year Awarded Contract # Ends Year Awarded -XXXXH XXXXQ Skipped -XXXXZ Skipped -XXXXI Skipped -XXXXR XXXAA XXXXJ XXXXS XXXBA XXXXK XXXXT XXXCA XXXXL XXXXU XXXDA XXXXM XXXXV XXXEA Skipped -XXXXN XXXXW XXXFA Skipped -XXXXO Skipped -XXXXX XXXGA XXXXP XXXXY

8 GSA POLICY CHANGES IMPACTING NEW OFFERS 7

9 Continuous Contracts Allows existing contractors to submit a new offer against the same Schedule at any time Upon award, legacy contract is frozen and may only be used to support existing orders / BPAs / proposals 8

10 Continuous Contracts Purpose of this change is to allow for duplicate contracts with the same items, but different periods of performance 9

11 Continuous Contracts All future business must be placed on new contract Legacy contract still subject to price reductions clause GSA has been inconsistent regarding whether price increases are allowed on legacy contract make sure any order s escalation is covered! 10

12 Streamlined Offers New offer process launched with the Contract Continuity Initiative in 2016 Available to existing contract holders who meet certain eligibility criteria Significantly reduces administrative and technical proposal requirements 11

13 Streamlined Offers Contractor Eligibility 1. Has existing contract under Schedule and submitting offer for same SINs 2. Annual sales average at least $25K over past five years 3. Demonstrated pattern of satisfactory past performance 12

14 Transactional Data Reporting (TDR) Pilot pricing program currently ongoing on eight Schedules Schedule SINs 58I, Professional AV ALL 72, Furnishings ALL 03FAC, Facilities ALL 51V, Hardware Superstore ALL 75, Office Supplies ALL 73, Food Service ALL 70, Information Technology 132-8, -32, -33, -34, -54, 55 PSS, Professional Services Professional Engineering 13

15 Transactional Data Reporting (TDR) Eliminates commercial sales practices disclosures and basis of award discount relationship requirements Contract pricing based on comparison to rates charged to ordering agencies, not commercial customers 14

16 Transactional Data Reporting (TDR) Participating contractors must report itemized, order-level GSA sales data on monthly basis Aggregate prices paid data will be available to GSA acquisition personnel, across federal ordering activities, and eventually the public* 15

17 Competitive Pricing Initiative GSA now uses several tools to compare contract ceiling prices across all Schedule holders Includes Formatted Pricing Tool, XSB Price Point, and Contract-Awarded Labor Category (CALC) database 16

18 Competitive Pricing Initiative Transactional data will also be used to reduce price variance among similar products and services 17

19 Competitive Pricing Initiative Don t wait for GSA to come up with its own, potentially negative, market research provide favorable rate comparisons with your proposal 18

20 DISPOSITION OF LEGACY SCHEDULE CONTRACT 19

21 Legacy Contract Orders GSA recently changed Indefinite Quantity clause in Schedule solicitations to Allows orders, including options, to extend for up to 60 months beyond contract end date 20

22 Legacy Contract Orders Does not retroactively apply to orders awarded before the clause change Pricing on any order, including options, must be in place prior to the award of an order extending beyond the legacy contract s period of performance 21

23 Blanket Purchase Agreements (BPA) Blanket Purchase Agreements (BPAs) are NOT contracts BPAs cannot extend beyond expiration date of underlying Schedule contract Contractors cannot bid on BPAs with periods of performance going past the Schedule s expiration date 22

24 Managing Upcoming GSA Opportunities Depending on Schedule type, getting new contract awarded can easily take 9-12 months Keep in mind you may not be able to increase legacy contract rates to cover escalation 23

25 Should you modify legacy contract first? Benefits of streamlined offer generally warrant making changes to existing contract prior to new offer Don t count on being able to negotiate substantially higher rates on new offer, escalate now if you can 24

26 After new contract is awarded Don t forget price reductions still apply to legacy contract Do not accept new orders against legacy contract Close out legacy contract in 72A system upon final payment 25

27 PREPARING YOUR NEW OFFER 26

28 Important Questions to Consider How much time do I have left on my current contract? Does that period of performance support known future opportunities? Do I want to participate in TDR? 27

29 Important Questions to Consider Do I qualify to submit streamlined offer? What does and does not work about my current contract? Does scope of current contract support future company and customer needs? 28

30 Important Questions to Consider How long has it been since I increased my contract rates? Are my current rates competitive with other GSA contractors? Can I take advantage of any efficiencies with the pricing analysis? 29

31 Might it be the Right Time to submit? YES Existing contract expires in <24 months Planning to bid on multiyear BPA Recently validated CSP for option or mod Existing contract s scope is fine, as-is NO Current contract badly out-of-date Have not completed competitive rate analysis Not meeting minimum sales requirement Just trying to replace badly-negotiated contract 30

32 The Offer Process Now Offers must be submitted via GSA s eoffer electronic contracting system Be aware that the required documents in eoffer don t always conform to the solicitation requirements 31

33 The Offer Process Now Proposal requirements have become more extensive in past 10 years Make sure your digital certificate is upto-date 32

34 Continuous Contracts Special Requirements Indicate offer is for continuous contracts Provide list of active submitted quotes, established BPAs, and awarded orders For each, provide ordering activity name and point of contact, RFQ/BPA/order number, dollar value, and period of performance (including options) 33

35 Continuous Contracts Special Requirements Negotiate cancellation date for legacy contract to coincide with final day of ordering period for last active order/bpa Agree not to use legacy contract for new business opportunities 34

36 Streamlined vs. Standard Offers Administrative Proposal Requirement Streamlined Standard Readiness Assessment NO Yes Pathways to Success NO Yes Previous cancellations, rejections, and pending offers* Yes Yes Financial Statements NO Yes System for Award Management Yes Yes Agent Authorization Letter* Yes Yes Small Business Subcontracting Plan* Yes Yes *May not apply to all offerors 35

37 Streamlined vs. Standard Offers Technical Proposal Requirement Streamlined Standard Factor 1 Corporate Experience NO Yes Factor 2 Past Performance NO Yes Factor 3 Quality Assurance Yes Yes Factor 4 Project Experience NO Yes 36

38 Streamlined vs. Standard Offers Pricing Proposal Pricing proposal requirements are identical for both offer types 37

39 Streamlined Offers Expect to be asked to provide information that s not required Some Contracting Officers interpret requirements to mean new offer has to be exactly the same as legacy contract 38

40 TDR vs. CSP Offers Pricing Proposal Requirement TDR CSP Price Proposal Template Yes 1 Yes Commercial Sales Practices (CSP-1) NO Yes Commercial Pricelist / Market Rates Yes Yes Supporting pricing documentation NO Yes Mechanism for future price adjustments Yes Yes Detailed price narrative NO Yes Service Contract Labor Standards* Yes Yes *May not apply to all offers 1 Excluding Most Favored Customer (MFC) disclosures 39

41 Transactional Data Reporting Many unknowns remain about how TDR will work in real life TDR database not yet available to GSA COs Negotiation approaches under TDR not consistent 40

42 Transactional Data Reporting Be prepared to provide pricing comparisons to justify proposed rates Beware the CSP in sheep s clothing 41

43 QUESTIONS? 42

44 Contact Information Jennifer N. Aubel, Principal Consultant Aronson LLC (301)