Procurement Efficiencies Through Multiple Award Contracts

From The Acquisition Corner

As reported by Federal News Radio, The Office of Federal Procurement Policy (OFPP) is pursuing several short-term initiatives to reign in the proliferation of multiple award contracts (MACs).

“Progress has been made in improving some aspects of interagency acquisition,” said Jeff Zients, acting director of the Office of Management and Budget in its annual report to Congress on interagency contracting.

“Most agencies have advised OMB that their buying organizations are strengthening internal management controls to improve the processes used to evaluate if an interagency acquisition is likely to be beneficial as well as those to manage the roles and responsibilities each agency bears in such an arrangement. However, on other fronts, progress has been insufficient and uneven. In particular, there continues to be concern that the agencies, through both single-agency and multi-agency contracts, may be duplicating each other’s contracting efforts and creating redundant contracting capacity.”

There is no question that the explosion of MACs has created excessive waste and administrative burdens to both the government and industry. Reigning in this problem requires a two-pronged attack strategy: stop unnecessary new MACs from being created, and consolidate the ones that currently exist.

According to the report, OFPP guidance expected later this year would require agencies to prepare business cases that describe the expected need for the contract vehicle, the value that its creation would add, and the agency’s suitability to serve as an executive agent. Business cases should be mandatory for all new MACs. The focus, of course, needs to be effective resource management, not to mention a comprehensive requirements development and stakeholder analysis to ensure internal and external MAC sources are not available to meet the new requirement. OFPP guidance should also make it clear that any new MAC needs to be justified my ensuring no other vehicle can be used to execute the need. There exist few legitimate arguments, in my opinion, that can justify this explosion of MACs. What I see is continued waste through little collaboration across government and distrust in other agencies MAC products to ensure lower prices.

I believe industry would also appreciate the opportunity to cut a lot of the expensive and burdensome administration of having to compete and manage multiple MACs for similar products and services. The government has created a culture of redundancy for industry by a “Pay to Play” construct. I do not mean anything nefarious, but firms are forced to spend resources to be on multiple MACs that offer similar services. Take a look at the average website for firms that provide goods and services to the federal government, and you will see the numerous vehicles, with the subsequent overlap and redundancies.

What about small business participation and ensuring consolidation does not turn into a bundling exercise? Accountability is the answer. Ensuring small business participation and execution of small business objectives for MAC awardees is crucial to ensure small businesses can compete. Also finding ways to include small business only MACs, such as Alliant Small Business (Alliant SB), is another appropriate activity.

I am not a big believer in reinventing the wheel, but yet another government database to capture even more data that exists? Really OFPP? I believe this already exists in the Interagency Contract Directory (ICD). Not the best system in the world, but with investment and increased capability, it can be very effective so long as the interfaces and information in Federal Procurement Data Systems-Next Generation (FPDS-NG) are correct and robust.

Overall, a lot of work is needed to improve this process, but it must be done through a standardized and centralized approach. There are way too many contracts for similar products and services these days, and the government will not be able to effectively implement any consolidated, strategic sourcing without a real push by leaders across government to get on the same team and work for the taxpayers vice their own self-interests.

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Andrew Humulock

Great article. It is a simple problem, but comes with a complex solution. Agencies should already be looking at ways to “trim the fat” on their contract vehicles. How many ways are there to buy a pencil?

Jaime Gracia

It seems like creating yet another contract vehicle is the answer for new procurements, vice streamlining efforts by doing legitimate market research to help craft a well orchestrated and strategic acquisition strategy. Mandatory business cases, along with contract vehicle justification, should help alleviate this problem. Although at the end of the day, it comes down to leadership and accountability to create change