Thought No. 5: Closing the door on the Demand Based Model in 2013!(?)

This week it is Thought No. 5 of the Thirteen Thoughts for 2013: “Closing the door on the Demand Based Model in 2013!(?).” In 2012 the General Services Administration issued a Federal Register notice regarding its intent to implement a Demand Based Model (DBM) for the Multiple Award Schedule (MAS) program. The DBM’s goal is reduce GSA’s operation costs primarily by limiting the number of offers and contracts under the MAS program. A key feature of the DBM is GSA’s proposal to eliminate continuous open seasons and close certain schedules and/or Special Item Numbers (SINs) from receipt of new offers. In response to the Federal Register notice, the Coalition submitted comments opposing the closing of schedules for receipt of new offers. To date, GSA has not closed any schedules as part of a DBM implementation. The Coalition applauds GSA taking a step back from such an anti-competitive measure that would negatively impact opportunities for small business.

Continuous open seasons reflect fundamental faith in the commercial market place. They support opportunities for all business, small, medium and large, to bring the latest commercial solutions to the federal market. Continuous open seasons foster greater competition and innovation in the federal market which benefits customer agencies, the private sector and ultimately the American taxpayer. Indeed, GSA provides a wonderful service to customer agencies and business through the management and operation of the MAS program. It is the central federal market place for customer agencies and commercial firms to conduct business. Now that it appears that GSA is keeping the door open to new offers, it is time to focus on increasing MAS opportunities and efficiencies for customers and contractors. It is time to empower an “Opportunity Based Model!”

Here are the key features of an Opportunity Based Model for the MAS program:

  1. MAS program management should be consolidated in a single office within the Federal Acquisition Service (FAS). Currently MAS program operations are managed in no less than three business lines. By consolidating management in a single office, FAS will be able to more efficiently and effectively manage the negotiation and administration of contracts. Too often each of the acquisition centers within the separate business lines that have their own unique approach to the submission, negotiation and award of MAS contracts. This uncertainty increases costs and delays in the offer process for GSA and industry. Consolidation of management will achieve structural and operational savings for all.
  2. Update and reform the MAS pricing policy. The current pricing policy dates from about 1982 (the year I graduated from College!). It is old and outdated! The policy focuses on commercial products which made sense at the time since the majority of MAS purchases were for products. However, today services account for approximately two thirds of the purchases. Moreover, current statute and regulation require task order competitions for orders exceeding $150,000. Significant time, energy and money are spent by GSA and contractors in dealing with a policy that does not reflect current commercial practice and the market profile. Most importantly, the Price Reduction Clause limits the ability of MAS contractors to compete in the commercial market thereby limiting growth in the private sector. As an anti-competition, anti-growth provision, the PRC should be eliminated.
  3. Put “commercial” back in commercial item contracting. Over the years the number of laws, regulations and provisions applicable to commercial item contracts has grown significantly. It is time for a top down review of MAS contract provisions to identify and address terms and conditions that are inconsistent with commercial practice. Moreover, where the costs of certain terms and conditions outweigh the benefits, they should be eliminated from MAS contracts. The Coalition stands ready to support such an effort as a subject matter expert.
  4. Conduct a data summit. Data is not a free good. Data is also proprietary. Over the years FAS has asked for additional data reporting across the MAS platform. In many respects contractors are being asked to report data that the government has created. In one sense GSA is avoiding the direct cost of data collection by passing it on to contractors. These data collections increase operational costs for contractors. Increased costs that are ultimately passed on to GSA’s customers in the form of increased contract prices/costs. A summit would serve to better inform both GSA and its contractors on the role of data collection in the MAS program. What is the data being used for? What is “good” data? Are there commercial best practices for data collection and management? To the extent the data is needed and used, how can government and industry work together to make sound, strategic and efficient decisions regarding data management?
  5. Address other direct costs (ODCs) on MAS contracts. Implementing the FAR based commercial item ODC clauses would empower the MAS program to more effectively and efficiently provide commercial solutions that meet customer needs. It would increase competition and innovation in the program. It would also lead to less contract duplication as the MAS program would better meet customer agency needs thereby reducing the demand for new contract vehicles.

The Coalition looks forward to continuing the dialogue with GSA and the entire procurement community on creating greater opportunities for customer agencies and contractors through the MAS program. Please let me know your thoughts and ideas regarding an “Opportunity Based Model” for the MAS program.

Original post

Leave a Comment

Leave a comment

Leave a Reply