On February 28th, the Government Accountability Office (GAO) released its second annual report identifying federal programs, agencies, offices and initiatives, either within departments or governmentwide, which have duplicative goals or activities. GAO identified 51 areas where government programs may be able to achieve greater efficiencies or become more effective in providing mission services. The GAO report provides yet another opportunity to highlight the costs and burdens associated with unnecessary contract duplication. The title of GAO’s 2012 Annual Report says it all, “Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue.”
Although the GAO report does not focus directly on the federal procurement system, the report’s title is an apt description of the current federal marketplace. Too many contracts for the same or similar services and products are reducing maximum efficiency and increasing total government and industry costs, costs that are ultimately borne by the taxpayer. At a time of significant budget challenges, reducing duplicative contracts will increase the efficiency and effectiveness of the procurement system saving money for government, industry and the taxpayer. GSA’s governmentwide contracting programs, including the Multiple Award Schedules (MAS), IT GWACs, fleet management services and credit card programs, among others, provide a foundation for addressing contract duplication.
GSA has a wonderful opportunity to leverage its acquisition portfolio to reduce duplication, overlap and fragmentation in the federal marketplace. The key will be the effectiveness of GSA’s contracting programs in bringing sound, cost effective solutions to customer agencies. GSA’s $40 billion and the VA’s $10 billion MAS programs are the lynchpin. They are the most successful commercial item contracting programs in government, period.
Yet, enormous potential still remains for both programs to provide greater value to customer agencies and increased opportunities to contractors. In particular, the lack of Other Direct Costs (ODCs) on MAS contracts unnecessarily restricts the ability of contractors in offering complete solutions in response to customer agency requirements. As a result, new duplicative contracts for commercial services (services that are already on MAS contracts) are created in order to provide customer agencies with complete solutions. Providing an accountable and efficient contract framework for the inclusion of ODCs on MAS contracts and orders is an essential tactical and strategic step in addressing contract duplication.
The MAS program is positioned to accomplish this step. First, the Administrator of GSA has the statutory authority for developing the policies and procedures governing the MAS program. Second, the Federal Acquisition Regulation (FAR) commercial item clauses provide an effective, efficient and accountable framework for including materials and ODCs on MAS contracts and orders. The Coalition has addressed ODCs in previous Friday Flashes.
The Office of Federal Procurement Policy (OFPP) could take another step in reducing contract duplication. Last fall, OFPP issued a governmentwide memorandum entitled “Development, Review and Approval of Business Cases for Certain Interagency and Agency-Specific Acquisitions.” The Coalition applauded the memorandum as a good first step. Among other things the memorandum directs agencies to develop a business case when an agency specific contract or BPA would create significant overlap between the scope of the proposed acquisition and the scope of existing contracts or agreements established under FSSI, SmartBUY or an existing GWAC. However, the memorandum does not require that a business case for a new agency specific contract address overlap with pre-existing MAS contracts. The omission misses a real opportunity to reduce contract duplication. If the services or products are available via MAS contracts, agencies should use them and if not, their business case analysis should address why not. Which leads back to ODCs—well you get the point.
This month the Coalition will be sending out a survey to its members seeking feedback on the costs associated with contract duplication as part of the development of a white paper. I hope you all will participate.
Finally, I would like to take this opportunity to welcome L-3 STRATIS as our newest Keystone member!