On Monday the Coalition provided the Federal Acquisition Service’s (FAS’s) Office of Acquisition Management with our white paper, “GSA Multiple Award Schedule Pricing: Recommendations to Embrace Regulatory and Commercial Market Changes.” The Coalition thanks all the members of the Pricing Working Group for their contributions to the white paper. It truly was a team effort. The Coalition also thanks the Office of Acquisition Management for its openness and interest in the issues, challenges and opportunities associated with reforming the Multiple Award Schedules (MAS) program’s outdated, anti-competitive pricing policies. As many of you know, the white paper effort was sparked by “Myth-Busters” discussions with the Office of Acquisition Management at our 2012 Spring Conference. The MAS program is a valuable tool for the acquisition of commercial services and products. The current pricing policy is, however, fundamentally out of sync with the statutory and regulatory requirements for competition at the task order level. Section 863 of the 2009 National Defense Authorization Act mandated robust competitive procedures for MAS task and/or delivery orders exceeding the simplified acquisition threshold ($150,000). Congress recognized that competition at the task order level for agency specific requirements drives pricing under the MAS program. Moreover, over the last decade GSA has been investing in e-tools to enhance transparency and competition at the task and delivery order level through the implementation and maintenance of eBuy (GSA’s online Request for Quotes tool).
The statutory and regulatory task/delivery order competition requirements and GSA’s investments in e-tools highlight a fundamental procurement truth—competitive pricing is driven by specific requirements and contract terms (e.g. statements of work and volume commitments). Such requirements are articulated and communicated at the task order level—and the MAS program provides a government-wide commercial marketplace for competition for and acquisition of agency mission requirements.
Most importantly, the current MAS pricing policy, as applied to contracts, restricts competition in both the commercial and federal marketplace. As explained in last week’s “FAR and Beyond” blog the treatment of subcontracts under federal prime contracts as commercial transactions for Price Reduction Clause (PRC) purposes restricts competition for agency customers and increases costs to the government and taxpayer. In the same manner, based on the applicable contract terms, the PRC also restricts the ability of a MAS contractor to compete in the commercial marketplace. It is truly time to ask whether it makes any procurement or economic sense for GSA to require that as a condition of having an MAS contract, a contractor must limit or otherwise restrict its competitive commercial activities and/or opportunities!! Can we as a nation afford a MAS pricing policy that limits commercial commerce and harms small business concerns? Reforming the MAS pricing policy can increase efficiencies, innovation and competition for all! Please take the time to review the white paper!! It was a team effort.