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Federal Contracting

GSA is going green!

GSA is off and running to make the May 27, White House deadline to deliver a plan around clean energy vehicles and green electricity. According to the executive order, GSA must deliver a plan to address clean energy vehicles and green electricity. (Federal News Network, April 28, 2021)

Sonal Kemkar Larsen, the senior adviser to the GSA administrator on climate said, “one thing that is really important to us at GSA across the board is to be looking at how we can decarbonize our entire supply chain. We procure a lot of different things: Energy, buildings, government goods, and vehicles. In all of those, we need to look at our supply chains, the manufacturers, the businesses we are working with all the way to the design and installation in all of this. There is carbon from the beginning to the end so decarbonization is going to be a big lift as we look across the supply chain. A new focus for us is to look across all aspects of procurement.” (ibid)

Under the order, GSA must address how it will attain:

  • A carbon pollution-free electricity sector by 2035
  • Clean/zero-emission vehicles for federal, state, local, and tribal government fleets, including Postal Service vehicles
  • Additional legislation required to accomplish these objectives
  • Certifying the U.S. retains the union jobs integral to and involved in managing and maintaining clean and zero-emission fleets while adding union jobs in the manufacture of the clean fleets (ibid)

Katy Kale, the acting GSA administrator, said the Federal Green Building Advisory Committee created two new task forces – the environmental justice and equity task group and the federal building decarbonization task group. (ibid)

According to Kale, “the decarbonization task group will explore opportunities for reducing greenhouse gas emission in buildings in the federal real estate portfolio through the use of renewable energy, energy efficiency, electrification, and smart building technologies. They will provide some recommendations to GSA this fall so we can begin to develop a roadmap for the decarbonization of federal buildings. The environmental justice and equity task group will improve engagement with diverse communities and key partners throughout the design, construction, operations, renewal, and occupancy. We believe this engagement will lead to increased inclusion, opportunities, and green jobs in the federal sustainability building process.” (ibid)

Kale went on to say, “when we are talking about decarbonization in building, it’s all of the things that we need to do to reduce and eliminate greenhouse gas emissions that are caused by the operation of the building. That could include replacing gas boilers with solar hot water or using ground source heat pumps. Really we need to make sure we are including every efficiency measure that we can, including using smaller, more local equipment for heating and cooling, making sure motors are high-efficiency motors, adjusting control strategies to reduce peak loads. It’s A to Z, we’ve got everything covered.” This is quite a large opportunity for GSA as 60% of its leases held are going to expire between fiscal 2019 through 2023. (ibid)

The other area of “green” opportunity for GSA is through the vehicles it manages. GSA owns and manages over 670,000 cars and trucks and manages more than 200,000 leased vehicles. As of today, GSA has a fleet of 16 types of battery-operated vehicles and 5 plug-in electric vehicles. (ibid)

According to Charlotte Phelan, the assistant commissioner of the Office of Travel, Transportation, and Logistics in the Federal Acquisition Service (FAS), “the biggest challenge that we are looking at is actually the charging infrastructure. We need to deploy electric vehicle infrastructure to make sure we are able to do large-scale vehicle deployment while also ensuring agencies are able to accomplish their mission.” Phelan expects a plan to address the charging infrastructure to be out in the coming months. (ibid)

According to Sonny Hashmi, the commissioner of the FAS, the goal is to get to zero emissions.

Are you looking to be part of GSA’s mission to decarbonize its supply chain? Give us a call.

 

 

Not everyone is sold on the Transactional Data Reporting (TDR) pilot

Almost five years ago GSA launched the Transactional Data Reporting (TDR) pilot to replace the Price Reduction Clause (PRC). GSA’s goal is to use the data received, to obtain better pricing from contractors. GSA calls TDR a success, critics are not so quick to agree. (Federal News Network May 10, 2021)

Jeff Koses, GSA’s senior procurement executive said, “GSA has successfully demonstrated the value of TDR under the existing scope of the pilot. It has shown steady progress over the past four years, met most of the pilot’s objectives in the most recent year, and has made the necessary investments to leverage TDR’s potential in the years to come. We will continue to make improvements, especially in contracting officer usage.” However, Koses made no mention of using the TDR information in 2019 or 2020 (ibid).

Some argue that TDR works on paper, but not in reality. Many contracting officers are reluctant to use the data for decision-making. One industry expert went so far as to say, “I have not experienced any negotiations based on TDR data in order to form an opinion.” Others have suggested that the data is incomplete and that GSA has no strategy to back the pilot. (ibid)

One consultant pointed out that as more companies participate in TDR, the IG’s ability to audit prices before an award is made is more difficult. She noted, “under the TDR pilot, the population of auditable contracts has ostensibly been cut in half. When you remove the major resellers and the integrators, what remains are largely professional service contractors and products companies under Schedules 84 (Law Enforcement), 71 (Furniture), and 66 (Scientific). The audit threshold for annual sales is also reduced due to the smaller pool of contracts from which the OIG is selecting. Small businesses who would never have been a blip on the OIG’s radar are now at much higher risk of pre-award audit.” (ibid)

Another complication is GSA’s move toward unpriced contracts under Section 876 of the 2018 National Defense Authorization Act. The Act makes the Price Reduction Clause as well as TDR less necessary because the burden is on vendors to provide the lowest price possible as part of contract negotiations. (ibid)

Koses said GSA will refine and consider:

  • The ability of Federal Supply Schedule contracting officers to use transactional data for price negotiations in lieu of commercial sales practices and price reduction clause disclosures
  • The impact of an expanded data collection on GSA’s ability to use the data it currently collects
  • The impact on current/future GSA schedule contract holders
  • Communication to industry partners
  • Training and tools for category managers not impacted by TDR
  • Possible impacts on other FAS initiatives such as the National Defense Authorization Act (ibid)

So when will the pilot move to production? The waters remain murky. Whether the IG will move from the production stage should be made more clear when the Inspector General report on the TDR pilot is released, in the coming weeks. Vendors should be ready to invest in systems to collect and report pricing data, should the TDR pilot go into production.

Questions concerning how to collect and report pricing data? Give us a call.

Don’t be caught non-compliant

With each new year comes a new set of sub and prime contract goals each non-small business contractor and government agency must adhere to. Agencies achieve their goals by awarding prime contracts to small businesses. Non-small business contractors who compete for contracts worth $750,000 or more ($1.5 million for construction contracts) are required to submit a small business subcontracting plan. The plan must include how a contractor will attract small businesses and ensure that those businesses actually have an opportunity to subcontract (FAR 19.702). The plan must show separate dollar and percentage goals for small businesses, those services/supplies to be subcontracted, and an explanation of how small business contracts will be secured. (JDSupra April 23, 2020)

To keep contracts in check, the federal government may intermittently audit contractors. The audits verify small business subcontracting plan s are being fulfilled. The Small Business Administration (SBA) is the lead for the evaluations, the SBA may delegate this authority to other federal agencies. Department of Defense contracts are generally evaluated by the Defense Contract Management Agency (DCMA). (ibid)

Compliance reviews are random and any contractor with a subcontracting plan can be selected for review. The government considers the following factors during compliance reviews:

  • Number and size of the contractor’s government contracts
  • Date of last compliance review
  • Most recent compliance review results
  • Importance/sensitivity of the project
  • Reporting compliance in the electronic subcontracting reporting system (ibid)

The following may be reviewed during an audit:

  • Contract files/correspondence related to the contract
  • IT systems
  • Documentation on subcontracting methods and procedures (ibid)

Once the audit is complete, a contractor can expect to receive a report on non-compliant items found and a rating based on the review. A rating can range from unsatisfactory to outstanding. No further action is necessary if a contractor receives an outstanding rating. When the rating is below satisfactory, the contractor must create a corrective action plan (CAP) within 30 days, explaining the steps they will take to become compliant. (ibid)

It is a good idea for contractors to have the required documents on hand, should they receive notice of an upcoming audit. They may include the following:

  • Small business certification paperwork
  • Subcontracting program policies
  • Any prior compliance reviews
  • Organizational charts
  • Policy letters from the company CEO verifying subcontracting program
  • Historical subcontracting reports
  • Listing of any small business conferences or trade shows attended
  • Documentation of success stories – showing contracts awarded
  • A letter identifying small business liaison officer (ibid)

Companies that are well prepared for audits and have a subcontracting plan in place will undoubtedly move through a review smoothly and quickly.

Do you have all of your ducks in a row for a possible upcoming audit? Give us a call.

 

Three DoD DFARS will soon become permanent rules

According to a recent statement by Katie Arrington, the Pentagon’s CISO for acquisition and sustainment, three Defense Federal Acquisition Regulation Supplements (DFARS) for the Department of Defense’s Cybersecurity Maturity Model Certification (CMMC) will soon be permanent rules. (MeriTalk April 15, 2021)

The CMMC program enforces cybersecurity standards in the Defense Industrial Base (DIB) supply chain. The certification requirements will be part of all DoD contract requirements by 2026. (ibid)

The soon-to-be-permanent rules are:

  • DFARS Provision 252.204.7019 requires contractors to complete self-assessments and upload them into the DoD’s Supplier Risk Performance System (SPRS)
  • DFARS Clause 252.204.7020 takes place upon contract completion, allows DoD access to systems, facility, and personnel if DoD assesses the necessity due to risk
  • DFARS Clause 252.204.7012 requires all contractors to maintain adequate security of defense information that is “processed, stored or transmitted” on their network (ibid)

According to Arrington, 300,000 contractors need to get CMMC certified within the next five years. She said, “we have thought carefully about this, and making cybersecurity foundational to acquisition wasn’t something that we just thought “Let’s do it one time.” It has to be an enduring capability.” (ibid)

Questions concerning CMMC certification? Give us a call.

 

CPARS is getting a refresh

For over a decade, the Office of Federal Procurement Policy (OFPP) has encouraged government agencies to increase their research and evaluation of contractor performance on contracts, with little effect. (Federal News Network April 12, 2021)

The general consensus is that the current Contractor Performance Assessment Reporting Systems (CPARS) is broken. Contractors and Contracting Officers feel it inaccurately rates performances while also being burdensome. For the past two years, Mike Smith, a former DHS director of strategic sourcing and now an executive vice president at GovConRx, has led an effort to rebuild CPARS. His goal, “make sure it results in good information and the information is more strategic and tactically used.” (ibid)

What are some of the problems with CPARS? Many contracting officers rate contractor performances as satisfactory because it takes too much of their time to verify exceptional or outstanding performance and too much time trying to explain why a rating might be below average or poor. (ibid)

DHS is looking to solve this problem through a pilot application of artificial intelligence (AI). DHS recently awarded contracts to five companies to demonstrate their ability to build production-ready software. User groups will view demos using software-as-a-service (SaaS). The user groups are, The departments of Commerce, Energy, Interior, Veterans Affairs, and Health and Human Services as well as GSA, NASA, the Air Force, and the U.S. Agency for International Development. The agencies gave the 5 companies in the pilot, 50,000 anonymous procurement records, to assist in training the AI. The goal is to decide which technologies will move to phase 3 in June with an actual launch in January 2022. (ibid)

GSA has some barriers to overcome too. Contracting officers must see the value in vendors providing self-assessments on certain projects. GSA senior procurement executive Jeff Koses sent a memo in February recommending the use of vendor self-assessments s one step in the overall CPARS process. The memo is a permission slip, of sorts, for contracting officers to begin asking for self-assessments as one part of the CPARS process. This should alleviate some of the burden on contracting officers.(ibid)

Mike Smith, a former DHS director of strategic sourcing and current executive vice president at GovConRX said, “you wouldn’t believe how many contracting officers refuse to take input from industry because they think they aren’t allowed to. As a contracting officer, I’d rather have a back and forth at least by midyear, if not before, so we can adjust course and have a common understanding at the end of the performance period and there are no surprises about ratings and the basis of that rating.” Most agree that good contractors will jump at the opportunity to do a self-assessment because they will finally be able to have input into the process. (ibid)

CPARS should also help small businesses. When contracting officers see the small business has done larger jobs and done them well, through a relevancy search and high CPARS, they are a lot more likely to award them a contract. This in turn helps the contracting officer make better-informed decisions through the use of data. (ibid)

Questions concerning self-assessments and the intricacies involved? Give us a call.