Ideas for saving money?

Replies to This Discussion

Permalink Reply by Peter G. Tuttle on September 16, 2009 at 9:01am

Great subject Mary - thanks. A couple of thoughts......In regards to Point (1), IMHO what will work and will be accepted by both industry and the government is an unbiased review of individual contract requirements, activities and deliverables to weed out those which may not really add much value to actual mission accomplishment. Here is a simplistic example - one thing the government requires in many contracts is monthly program status reports and meetings, even with very mature contracts/programs. Perhaps quarterly status reports would be more appropriate for less complex and more mature programs. Let's be honest - who reads the reams of program status reports anyway - the COTR? What probably won't work well is to simply "salami slice" contracts with a 7% across-the-board cut - even though this method would be quicker to achieve. Point (2) might also be addressed by an unbiased review of T&M, LH, FPLOE, CR or other types of higher risk contracts to determine if the requirements are well enough defined or stable enough to convert the contract or selected line items to fixed-price. Another simplistic example might be if a T&M contract for supplemental staff is mature enough so that the requirement is relatively stable, e.g. it's always going to be 15 FTE and the supplemental staff performs the same types of tasks day-in-day out. Negotiate w/the contractor to convert the out-years to FP and add an additional CLIN for a "lot" of hours in case you need additional unanticipated staff to support a spike in activities. Anyway, just some Wednesday morning ramblings. I look forward to seeing other opinions. Cheers.

Permalink Reply by Debbie on September 16, 2009 at 11:06am

Oh, Mary, where to start, where to start... Well, let me just start with one of my many concerns. One of the primary problems I have encountered in my contract audits are with agency Blanket Purchasing Agreements (BPAs). In particular, I believe the fact FAR 8.4 indicates that FAR 13 does not apply to BPAs issued against GSA Schedule contracts is extremely misleading and disconcerting. BPAs are defined as “a simplified method of filling anticipated repetitive needs for supplies or services by establishing charge accounts.” Of significance is the fact that BPAs are specifically addressed under the “Simplified Acquisition Methods” section of FAR. So the awarding of multi-million dollar BPAs/”charge accounts” appears to be totally contrary to the intent of FAR 13.303, in my opinion, and therefore not in the best interest of the Government. I would argue that FAR 8.4’s exclusion from FAR 13’s requirement pertains only to the competition and synopsis requirements; nothing else. In my opinion, the remainder of FAR 13 should apply to all BPAs including those against GSA Schedule contracts. I believe GAO/OFPP needs to clarify the intent of BPAs as well as the extent that FAR 13.3 applies to GSA schedule contracts.

I would also argue that many agencies are abusing the use of BPAs as a means of avoiding the fair opportunity requirements required under FAR 16.505 for IDVs. FAR must do a better job of clarifying the difference between BPAs vs. IDVs. How exactly do BPAs differ from IDVs? I also believe that agencies are using BPAs, in lieu of IDVs, as a means of avoiding the requirement to obligate the minimum guarantee amount. I also feel that BPAs are just another method agencies are using to avoid set-aside requirements of FAR 19. And NONE of the BPAs I have reviewed, including the stand-alone (non-GSA Schedule) BPAs, comply with the mandatory requirements under FAR 13.303-2(b) and -3. [And I believe FAR needs to define “numerous purchase orders” under 13.303-2(a)(3), because some COs are interpreting this to mean as little as even two or three orders per annum].

I also find it troubling that individual BPA calls/orders, including those against non-GSA Schedule BPAs, are being awarded for half a million dollar and up when FAR 13.303-5(b) states that "individual" BPA orders are limited to the "simplified" threshold of $100,000 (unless agency regs permit otherwise). I frankly do not think it is in the Government’s best interest to exclude from this “Simplified Acquisition” procedures (SAP) threshold individual BPA calls/orders for BPAs awarded against GSA Schedule contracts.

One particular BPA call issued by USDA’s Forest Service (FS) against a GSA Schedule contract was reported in FPDS-NG as “full and open competition”. On what basis can a BPA call against a GSA Schedule contract be determined full and open competition? At most, it could be a ‘follow-on order to a competed (FSS schedule) action’. The transparency and accountability of BPAs, and orders/calls placed against BPAs, is non-existent in FPDS in my opinion.

With the availability of e-Buy, GSA Advantage, FedBizOpps, email, and internet access, I feel that BPAs may have outlived their intent, need and usefulness. If it is determined that BPAs should be maintained as a viable contracting vehicle for federal agency use, I would recommend that FAR Council consider implementing the same competitive requirements that apply to fair opportunity actions under IDVs (> $30K). In the alternative, I would then recommend, at a minimum, that FAR Council consider implementing restrictions on all orders (> $100K) against GSA schedule contracts, including BPAs, similar to those recently implement under DFAR 208.405-70. I also believe there should be a ceiling limit placed on BPAs in general and I would contend that FAR never intended for "charge accounts" to be awarded for millions and multi-millions of dollars. It would seem more appropriate to award these million/multi-million dollar procurements as separate IDVs (preferably advertised on FedBizOpps rather than against a GSA Schedule contracts, especially if they include options).

Permalink Reply by Amanda Blount on September 16, 2009 at 12:34pm

WOW Debbie! Very detailed. I can see what you mean. If the use of BPAs are abused this could eventually waste tax dollars by not utilizing the correct competition and award procedures. If some COs are using the BPAs to avoid FAR 13 procedures, then yes, this may cost more money in the end. Fair and open competition may save more funds than BPAs.

Permalink Reply by Mary Davie on September 17, 2009 at 12:29am

Debbie - thanks for your comments. I think there are many ways that BPAs still serve a purpose and can be administered in a way that still provides for further competition. If you'd like to talk about specifics let me know and I'll have someone get in touch with you. There is certainly always more GSA can do to educate agencies on appropriate and innovative use of Schedules and this continues to be a focus of ours.

Permalink Reply by Dick Field on September 16, 2009 at 11:29am

I fail to see how this harangue against BPAs is on-topic. Where is the argument for dollar savings here?

Permalink Reply by Dick Field on September 16, 2009 at 11:30am

Good and productive thinking.

Permalink Reply by Amanda Blount on September 16, 2009 at 1:08pm

Mary, I love this topic! it si always fun trying to find a same or similiar item and buy it cheaper. I think it is fun to see how much money I can save compared to the appropriated amount.

Peter - I like where you are going with (1). Labor costs are the number one cost on a project, but you don't have to cut employees to save money. Small items add up. Something as small as creating, reviewing, and sending out a monthly report may take many man hours. Just eliminating the monthly report and making it a Quarterly report would save some of the dollars. The information from all the months would still get put into the report. But, as we all know, doing the project once take less time than doing it over and over.

I would like to throw something out from agencies like mine, saving some dollars can comes down to one small change; Getting the PRs into the office with plenty of lead time. When we receive a PR and it has a very small lead time, we go into frantic contracting mode. You find some vendors on GSA or CCR and you run with it. But, when someone has a nice lead time, you have the time to really shop for a good vendor. You have the time to send it out to more vendors, than just the min. vendors. It is the difference between buying milk from a Gas station because you are tired and want to go home, compared to proper shopping when you have hours to compare prices.

Plus, if you send a vendor a RFQ, with a short lead time, you may end up paying more for the goods. The vendor needs a good lead time to also find a good prices.

Last minute contracting is mostly more expensive than contracting with lead tme.

I use this example to save money, because it is so simple to use this and save money right off the top. Just like Peters idea, if we add up all the simple ideas, thy would add up to great savings, and very few people (employees) would be affected.

Permalink Reply by Peter G. Tuttle on September 16, 2009 at 1:22pm

Great comments Amanda - back in the day in the Army we used to say Proper Prior Planning Prevents .... Poor Performance. Admittedly it is a trite, somewhat descriptive phrase - but at times still appropriate. Not receiving PR packages on time (or receiving incomplete or inadequate ones) still seems to be a common complaint. The issue IMHO is symptomatic of some of the types of challenges experienced throughout the acquisition process. Maybe this group can work to solve one or two of them. Cheers.

Permalink Reply by Amanda Blount on September 16, 2009 at 8:29pm

Thnak you Peter. Maybe we can change things!

Permalink Reply by Pattie Buel on September 16, 2009 at 2:35pm

When looking at Cost savings, we need to consider the entire life-cycle cost not just the execution phase costs. As Amanda said, last minute contracting is more expensive - not only does the vendor usually come in with a higher price because they see more risk in responding to something they haven't read thoroughly but then you wind with extra time spent by the contracting staff and the COTR to fix anything that was overlooked, not clear, etc because it was rushed.

Spending the time upfront establishing a good system (even in Excel) for tracking funding, invoiced amounts, deliverables, property, etc saves time (and therefore money) when it comes around to doing close-outs on orders as well. Because every hour spent trying to track down something on an order that ended 2+ years ago is an hour not spent working today's mission.

Can't forget the cost associated with not having a well-defined requirement either.

To reduce the amount that is awarded non-competitively and/or receive only one bid, the only real strategy is to start early. Agencies should have some sort of master list of all service contracts and when they are scheduled to end and require the organizations receiving the support to provide their plan for getting future support a full 12 months before the current support ends (the plan is due 12 months out) and then measure the organization on how well they meet that plan. Starting early allows for Pre-solicitiation notices/conferences, draft RFPs to be released, Industry Days, Due Diligence sessions, etc which all generate interest and increase the likelihood of receiving more than one bid. An earlier start also ,eams the RFP can be on the street longer, and a meaningful transition period can be included.

Permalink Reply by Debbie on September 16, 2009 at 4:29pm

The bottom line to saving money is competition and, yes, Pattie, acquisition planning should always start early to maximize that competition. But invariably I find that COs/KOs are taking the easy way out by going to existing contracts like GWACs/Schedules, BPAs, MAS, IDIQs for procuring items to avoid that 45 day time-frame that is required to go out full & open (15 day pre-solicitation synopsis notice + 30 day solicitation posting and response time). So is this a result of lack of advance planning or a way to avoid having to do a full fledge procurement? I'm not sure, but my fear is that it's the latter. There may be mini-competitions being conducted on these existing IDV contracts, but it is clearly limited to certain vendors. And in the case of BPA calls/orders, I'm finding little or no competition whatsoever among the vendors on the Agreements. The vast majority are sole-source, because there is no 'fair opportunity' requirement on BPAs. However, as FAR says and we all know, "adequate price competition estalishes price reasonableness." Clearly I agree that competition is where a lot of the "savings" can be realized.

Another sore spot for me is where I see specifications/SOWs that are padded with unnecessary, and more importantly, unauthorized requirements that add nothing to the Scope of Work but yet which result in additional costs/risks for the contractor. I think Peter hit upon this in his comments about the requirement for monthly status/progress reports. The Govt. is notorious for recycling old specs/SOWs without even really reading them to see if the requirements are still applicable or, more importantly, necessary. Two of my biggest pet peeves found in SOWs/specs are NonDisclosure Agreements and Organizational Conflict of Interests statements. The Paperwork Reduction Act (PRA) is very clear that all 'collections of information' must be approved. I have YET to see a NonDisclosure Agreement that has been approved by OMB in the "inventory" or contain an OMB Control number. And none of the Organizational Conflict of Interest Statements I've seen meet the FAR 9.5 requirements. And don't even get me started on the HSPD-12 and Sensitive But Unclassified (SBU) requirements. The costs passed on to the Government, by offerors, for all these unnecessary and unauthorized requirements are astounding in my opinion.

The problem I have found with a "review" of T&M/LH contracts, Peter, is that, like CMc (construction manager as Constructor), which is an unauthorized cost-reimbursable contract, a whole lot of these contracts are being reported incorrectly in FPDS as fixed-price contracts. (GAO issued an audit report recently with this same finding.) But I agree that it certainly would at least be a starting point for review. The one way I have found to search out true T&M/LH contracts, that were erroneously reported as fixed price, is to find the final 'definitization' (referred to as "deobligation' by some agencies) modifications. The research has been extremely revealing to say the least. And a review of CR contracts as a means of saving money goes without saying. But who are we proposing to do these "reviews" and what would we do with the findings? I think it's a great idea, but I just want to make sure the findings from the "reviews" have an audience.

This is indeed a most excellent topic, Mary!

Permalink Reply by Peter G. Tuttle on September 16, 2009 at 4:50pm

Great point about who actually does the contract reviews, Debbie. I imagine that the actual reviews will fall on the usual suspects - CO and COTR and company contract administrator & PM. Even though it sounds like a worthwhile effort, both sides senior management will have to be supportive (and actually be willing to take action based on results - whatever they are) prior to any reviews commencing, else much time will be wasted with no gain. Before any detailed reviews start, senior management will have to perform analysis at a high level to narrow-in on those activities which do not contribute to mission - they may even have to redefine mission into a "core" mission in case there are lots of tangential activities, etc. I guess this can turn into sort of a chicken and egg scenario .......

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