GSA, DOD work to improve acquisition

Originally posted Nov. 12 at 3:44 p.m.; updated at 5:38 p.m.

(UPDATED) The Defense Department and the General Services Administration have agreed to work on 22 areas that would improve their acquisition relationship.

A working group of officials from both agencies met over the last few months to discuss areas where GSA and DOD could improve acquisition of goods and services from GSA's Federal Acquisition Service and Public Building Service.

To that end, GSA and DOD announced today that they have signed a memorandum of agreement to work on these 22 areas. The MOA also includes 24 actions DOD and GSA will take or are taking, starting as early as August and continuing permanently.

'This is very important for us and DOD,' said David Bibb, GSA's deputy administrator, in a conference call with reporters. 'It is practical and symbolic, and it demonstrates the increased level of partnership with DOD.'

Bibb said DOD requested the specific roles and responsibilities outlined in writing, and GSA was happy to oblige. He also said GSA would do the same thing for other agencies if they requested it.

Included among the 22 areas GSA and DOD will focus on are:

  • Ensuring sole-source justifications are adequate when issued by GSA for DOD or by DOD

  • Developing standardized content for interagency agreements starting in January

  • Ensuring that the price is reasonable for every contract or order

  • Ensuring oversight requirements are defined and implemented

  • Ensuring funding oversight and management are adequate

  • Ensuring DOD contracting officers review work before it is accepted by GSA

  • Ensuring pricing on GSA contract vehicles and the services they provide are the best value, starting in January and completed by September

  • Ensuring GSA's fee structure is consistent with existing guidance and that is it the lowest possible

  • Ensuring that adequate price competition is obtained

  • Ensuring requirements are stated in performance-based terms to the maximum extent practicable.

The agreement will bring definition to some ambiguous aspects of existing policy for interagency contracting, clearly establishes the line of responsibility and clarifies the rules that apply to acquisitions on behalf of DOD, Bibb said in a release.

'As partners, DOD and GSA recognize the need to collaborate on interagency acquisition requirements,' said the agreement, which was signed by GSA's chief acquisition officer Emily Murphy and DOD's director for Defense procurement and acquisition Shay Assad. 'Collectively, the two organizations have the ability and expertise to ensure that all contracting actions are done properly, in compliance with all applicable law, regulation and policy and in the best interests of the taxpayer.'

GSA and DOD came under fire from their respective inspectors general starting in 2004 for contracting irregularities that bordered on being illegal. GSA's IG found that in the former Federal Technology Service's regional offices, contracting officials had multiple violations of procurement regulations; DOD's IG found that the military bought non-IT services off IT contracts. In response to the problems, GSA launched the Get It Right campaign to fix the contracting irregularities.

Bibb said this new agreement has similarities to Get It Right, but also differences. He pointed to common training of acquisition workers and a standard way to transfer money between agencies.

Congress responded to these problems by including provisions in the fiscal 2005 DOD authorization bill that would limit the agency's use of FTS and FSS schedules until the DOD IG cleared GSA. The Defense IG has since approved DOD's continued use of GSA schedules and other acquisition services, but GSA has seen a decline in the amount of money the services spend with it.

Additionally, GSA administrator Lurita Doan sent a memo to regional administrators committing the agency to follow federal fiscal and funding policies for contracts.

'This clarifies uncertainty that has been hanging in the air,' Bibb said.

The memo said FAS and PBS will 'establish a single GSA standard for providing assisted acquisition services in developing the requirements documents'and to assist the requiring DOD activity in the preparation of any internal DOD documents necessary to obtain approval for issuing Non-Economy Act Orders to GSA.' The Economy Act, a law written in 1932 and updated in 1988, says that shared-services providers can charge customer agencies only for services provided, and cannot spend funds they do not have or extend the availability of their money by transferring it to services for another agency.

Part of the procurement problem was that GSA had been using, or at least holding on to, DOD money that had expired instead of returning it. In fiscal 2006, Bibb said, GSA returned about $600 million of expired funds to DOD.

'Most of it was contracts where DOD had transferred $50 million to us, and we spent $45 million, and the remaining $5 million wasn't returned,' Bibb explained. 'Virtually all of the old transactions were closed out and returned. Our auditor, PricewaterhouseCoopers recognized that effort.'

Bibb added the issue of not returning money was one reason GSA did not receive a clean audit opinion in 2005. But now GSA has a handle on it and received a clean audit opinion, Bibb added.

GSA also reduced the number of potential anti-deficiency violations to five from 50, Bibb said, and the agency is working with DOD on fixing those remaining ones.

With 'this MOA and ' our other actions, we are demonstrating to DOD that they can buy from us with trust in our expertise and fiscal responsibilities,' Bibb said.

This is a good thing, considering DOD use of GSA's assisted acquisition services dropped significantly in 2006. Bibb did not know the numbers immediately. He did say, however, that DOD's use of the schedules had increased last year versus 2005.

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