Panel wants to increase competition for services

Industry groups say proposals add time, expense to process

The new services schedule would 'create a further dynamic marketplace. GSA could start the program by using GSA Advantage.' '

' Roger Waldron, GSA

Olivier Douliery

A public-private panel Congress mandated to improve how agencies buy services seems, to some observers, bent on returning procurement to the practices of the 1990s.

The Acquisition Advisory Panel's latest round of recommendations to the Office of Federal Procurement Policy will include bringing back to life a suggestion from the Clinger-Cohen Act of 1996: to let vendors set their own prices under a new IT schedule on the General Services Administration's Federal Supply Service. Currently, vendors must negotiate a price with GSA as part of getting on the schedule.

The panel, made up of government, industry and nonprofit acquisition experts, also recommended allowing vendors to protest task orders worth more than $5 million from multiple-award contracts and requiring all agencies to obtain at least three bids from vendors for all FSS schedule contracts.

More competition

The panel, which Congress mandated under the Services Acquisition Reform Act of 2003, has looked at a host of issues and will submit its final report to OFPP in the fall.

All of this is part of the panel's goal to increase competition and transparency, and figure out how to improve the management of interagency contracting, said Steve Charles, founder and executive vice president of the Immix Group Inc. of McLean, Va., which helps vendors get on the schedules and sell to the government.

But to the Industry Coalition, which is made up of six industry associations including the Contract Services Association of America, Information Technology Association of America and the Professional Services Council, all of Arlington, said the recommendations would make the process less flexible and add time and expense to buying services.

One panel member, who requested anonymity, said the coalition is mistaken and misses the point.

'The acquisition reforms of the '90s made buying low-dollar-value and commercial items easier, but the higher-dollar-value stuff more difficult,' the panel member said.

The panel member added that the ability to protest task orders is an important recommendation because agencies put out too many complex, multimillion-dollar orders, requiring bids'and even making awards'in a matter of weeks.

'While most of the orders placed today are compliant with the requirements of transparency and the need for assuring the public that tax dollars are being properly spent, it requires that we permit challenges to high-dollar-value orders to the protest process,' the panel member said. 'As a practical matter, this should not be a problem. In terms of slowing things down, it will, a little, and it should.'

The panel member did not agree with every recommendation the panel made.

'Some of the panel recommendations are wrong-headed and weren't supported by the members of the panel that are actually responsible for getting work done,' the panel member said. 'The new GSA schedule idea is wrong-headed and is an attempt to kill governmentwide acquisition contracts as a concept [and] vehicle. This proposal authorizes a pricing method close to cost, which schedules are otherwise not authorized to use.'

To develop the new IT services schedule, Roger Waldron, GSA's director of the Acquisition Management Center, said the contracting officer and vendor would negotiate rates, and the contractor would then load prices at their discretion.

The recommendation takes the suggestion from language in the Clinger-Cohen Act that called for a pilot program for all multiple-award IT schedules that would let the vendor establish the prices and adjust them at any time, Charles said.

Past pilot

Charles said the pilot never got underway because GSA could not prove it was meeting a requirement that at least 60 percent of all orders be placed through Federal Acquisition Computer Network (FACNET). GSA let FACNET die in the late 1990s.

But Waldron said the new services schedule would 'create a further dynamic marketplace. GSA could start the program by using GSA Advantage,' its online buying site.

Waldron added when an order is placed, the vendor would have to come up with a price proposal.

An industry executive who requested anonymity said one reason for the new schedule could be that OFPP wants to change the definition of a commercial item.

The vendor official said the new definition would exclude companies that only have government customers.

'The panel is trying to close the loophole, because the definition of a commercial item is too broad,' the official said.

But others, such as Charles, question the purpose of a schedule that doesn't have a beginning price, which is a key point to any schedule.

In addition to the recommendations that industry criticized as going too far, the panel also recognized the need for better procurement data.

The panel approved 15 recommendations to improve agency data in GSA's Federal Procurement Data System-Next Generation.

The problems with FPDS-NG are well-documented by the Government Accountability Office, lawmakers and even the panel. GAO found a lack of confidence in the data, while the panel's working group said the limited data put into the system leaves questions about how agencies competed contracts.

For instance, the Data Working Group found that 32 percent of all contracts for supplies and services were not competed in 2004; 27 percent were not competed in 2005. In services alone, agencies competed just 69 percent of the contracts, and 24 percent were considered non-competitive procurements.

The number of bids that got only one offer also saw a dramatic increase from 2000 to 2005, doubling to 20 percent in five years, the working group found.

Not full and open

'We have trouble at the order level because some contracts show up as full and open, and they shouldn't be,' said Laura Auletta, the panel's designated federal officer. 'Defense Department orders under multiple-award schedules were entered into FPDS-NG as full and open, and that is incorrect.'

David Drabkin, GSA's deputy chief acquisition officer and senior procurement executive, said the problem is that data on contracts is limited because of what agencies are required to collect.

'When we talked about setting up FPDS-NG, we talked about what data elements we wanted and what data elements agencies could actually provide,' he said. 'More data exists on these contracts, but you manually have to go find it.'

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