Later this month, the GSA will issue a refresh to all GSA Multiple Award Schedules (MAS) to incorporate new provisions and clause updates. Even if you are already a GSA Schedule holder, keep reading – a bilateral modification will be issued for your contract.
On March 31, 2017, the United States Civilian Board of Contract Appeals (CBCA) dismissed a contractor’s claims against the Department of Veterans Affairs (VA) for a lack of jurisdiction, stating that the contractor should have secured a final decision from the General Services Administration (GSA) prior to filing its claim. According to the CBCA, since the dispute was over the terms of a GSA Schedule contract and not over contract performance, proper procedures call for a decision from the GSA Schedule contracting officer before the CBCA can weigh in on the dispute.
According to the Federal Acquisition Service (FAS) Commissioner, Tom Sharpe, the General Services Administration (GSA) remains committed to a smooth transition in implementing the final rule governing transactional data reporting, released on June 23, 2016. As we previously reported, the final rule significantly changes reporting requirements for the Federal Supply Schedules (FSS) program – requiring vendors to electronically submit monthly reports providing 11 transactional data elements, and in turn, eliminate Commercial Sales Practices (CSP) disclosures and the Price Reduction Clause (PRC).
We recently authored an article outlining the provisions and ramifications of the General Services Administration’s (GSA) final rule governing transactional data reporting, released on June 23, 2016. As the most significant change to the GSA Federal Supply Schedules (FSS) program in the last two decades, the new rule requires each vendor subject to the provisions to electronically submit monthly reports that provide 11 transactional data elements and replaces the current requirements relating to Commercial Sales Practices (CSP) disclosures and the Price Reduction Clause (PRC). While many remain skeptical of the benefits of the new rule, the GSA believes the transactional data clause will reduce the administrative burden on contractors, promote competition and transparency, and benefit small businesses that often lack the necessary resources to devote to business intelligence and development.
I provided comments for an article outlining the U.S. Supreme Court’s decision in Kingdomware, requiring the Department of Veterans Affairs (VA) to set-aside contracts and Federal Supply Schedule orders for eligible veteran-owned businesses under the Rule of Two.
The full article, “Supreme Ct. Backs Kingdomware: Vet Preference Applies to All VA Contracts,” was published by Set-Aside Alert on June 24, 2016 and is available online.
On June 23, 2016, the General Services Administration (GSA) released a final rule that will result in the most significant change to the GSA Federal Supply Schedules (FSS) program in the last two decades. 81 FR 41103 (New Rule). The New Rule introduces a transactional data reporting element to the FSS program, effectively replacing the current requirements relating to Commercial Sales Practices (CSP) disclosures and the Price Reduction Clause (PRC).
Under current FSS regulations, contractors are required to submit CSP disclosures with their initial offer for a FSS contract, which includes a broad disclosure of discounts the contractor offers to commercial customers for similar products and services. The CSP disclosures are used to identify a “tracking customer,” which consists of a customer or category of customers that will be tracked to identify pricing discounts to GSA customers. The PRC requires the contractor to monitor its ongoing commercial sales to ensure that the government receives the same price reductions given to the “tracking customer.” Through the New Rule, GSA is replacing the CSP disclosures and PRC requirements with a different method of award monitoring: transactional data reporting.
Today, one week following the Supreme Court’s unanimous decision requiring the U.S. Department of Veterans Affairs (VA) to set-aside contracts and Federal Supply Schedule (FSS) orders for eligible veteran-owned businesses under the Rule of Two, the Senate Committee on Small Business and Entrepreneurship held a hearing on how the decision will affect VA procurement going forward. Chairman David Vitter (R-LA) orchestrated the two-panel hearing alongside Senator Jeanne Shaheen (D-NH). Chairman Vitter made clear that the Senate wanted to understand how the Kingdomware decision will affect veteran-owned businesses and how to ensure that the VA is implementing the statute’s proper interpretation.
The first panel featured Thomas J. Leney, the Executive Director for the VA, and John A. Shoraka, an Associate Administrator of Government Contracting and Business Development for the U.S. Small Business Administration (SBA). Speaking on behalf of the VA, Leney stated that the VA is committed to implementing the Supreme Court’s decision and has already started its review of current procurements. According to Leney, to enforce the decision, the VA is working on creating formal rules and new policy guidelines to regulate how veteran-owned businesses are considered under the Rule of Two. The Supreme Court clarified that the Rule of Two requires setting aside contracts for every competitive VA acquisition, including FSS orders, when two or more eligible veteran-owned concerns will submit offers and an award can be made at a fair and reasonable price. While his remarks emphasized the VA’s approach moving forward, Leney struggled to respond to Senator Vitter’s inquiry into why the VA has spent years improperly applying the Rule of Two to veteran-owned small businesses. While the VA was unable to set a hard cutoff date for when it can assure that all awards will comply with the guidelines of the decision, Senator Vitter set a July 15, 2016, deadline for the VA to issue an update to the Committee to demonstrate their improved procurement methods. According to the chairman, a delay in implementing the Rule of Two would be equivalent to resisting the decision of the Supreme Court – even a three month delay would be unwarranted.
In a unanimous decision issued today, the U.S. Supreme Court held that the U.S. Department of Veterans Affairs (VA) is required to set-aside contracts for every competitive acquisition, including Federal Supply Schedule (FSS) orders, when two or more eligible veteran-owned concerns will submit offers and an award can be made at a fair and reasonable price. This ruling effectively increases the number of contracts (whether standalone or FSS orders) that will be set aside exclusively for veteran-owned small businesses (VOSBs) and service disabled veteran-owned small businesses (SDVOSBs) because the VA is statutorily prohibited from competitively awarding contracts to non-VOSB concerns when that requirement can be met.
In 2006, Congress passed the Veterans Benefits, Health Care, and Information Technology Act (VA Act), which established requirements for the VA to meet VOSB contracting goals. 38 U.S.C. §§ 8127-28 (2006). The “Rule of Two,” at Section 8127(d), requires the VA to set aside competitive contracts for VOSBs if the contracting officer has a reasonable expectation that two or more VOSBs will submit offers and that the award can be made at a fair and reasonable price.
Since 2011, the U.S. Government Accountability Office (GAO) has consistently held that the VA is statutorily required to apply the Rule of Two to any competitive acquisition. However, as the GAO issues “recommendations,” the VA has publicly disagreed with and declined to follow the GAO’s interpretation of the VA Act. Accordingly, the GAO notified Congress of the VA’s declination to follow GAO recommendations.
Confused about the VA Federal Supply Schedule? Let Tom Fuchs, Managing Director at BDO, and I help you navigate the FSS contracting rules that apply to the sale of medical devices. During our interactive webinar we’ll share our accounting and legal perspectives with you. Specific to the medical/surgical supply and equipment industry, we will review:
- Basics of the VA FSS program
- Key objectives of FSS contracts
- Subcontracting requirements
- Audits and areas of concern
The webinar will be March 1 from noon to 1:30 Eastern Standard Time. To register or learn more, visit the BDO event page. Hope you can join us!
A recent decision by the Government Accountability Office (GAO) made it clear that ordered items only need to be included on an awardee’s Federal Supply Schedule (FSS) contract at the time the order is issued, and not at an earlier date. On October 2, 2015 GAO denied a protest by AmeriGuard Security Services, Inc. over the issuance of a task order by the Department of Health and Human Services (HHS) to Paragon Systems, Inc. for guard services at multiple HHS facilities. AmeriGuard’s protest asserted that Paragon’s quotation was unacceptable because not all of the services quoted were on Paragon’s FSS contract at the time of bid submission.
HHS initially decided to award the order to Paragon based on a “best-value” evaluation, which took into account factors such as technical capability, technical approach, management approach, past performance, and price. The closing date for initial quotations was March 19, 2015, and then HHS requested revised quotations to be submitted by April 15. The agency issued the task order to Paragon on April 30, and AmeriGuard filed a timely protest alleging that not all of the services quoted were on Paragon’s FSS schedule contract by the time required. The agency advised GAO that it was taking corrective action, noting that it would verify Paragon’s eligibility for award using documentation obtained directly from GSA to confirm that Paragon had prices for all job classifications and locations by the required time. The agency proceeded to reaffirm the award to Paragon. AmeriGuard protested the reaffirmed award.
In its second protest, AmeriGuard asserted that a vendor must have prices for all job classifications and locations on its FSS contract by the closing date of the RFQ (here, by March 19). Therefore, according to AmeriGuard, Paragon’s requests to modify its FSS schedule contract on March 19 and April 21 (after both bids were submitted) should be ignored since both came after the March 19 closing date for initial quotations. HHS, on the other hand, maintained that the order was proper because Paragon’s schedule contract had been modified to include the additional items by April 30, the date of the order. GAO agreed with HHS, denying the protest and making it clear that all items ordered need only be on the vendor’s FSS contract at the time the order is issued, and not before.