Federal Supply Class Review

What happens when the Defense Logistics Agency (DLA) and the General Services Administrations (GSA) get together to increase efficiencies and effectiveness of the national supply chain? You get the first Federal Supply Class (FSC) review in almost 50 years. (Defense Logistics Agency, October 9, 2019)

So why now, you ask? According to Alan Thomas, commissioner of GSA’s Federal Acquisition Service, it is to “optimize the movement of supplies to our nation’s troops and reduce duplication in the federal supply chain.”

FSC’s review involves all 600 FSCs, or about seven million items used by federal and military consumers and categorizes them by similarity. This review will reduce redundancies and improve purchasing efficiencies as well as customer readiness and responsiveness. Checks and balances will keep both organizations compliant with principles of their original agreement. (ibid)

The 1971 Supply Management Relationship Agreement between DLA and GSA gave DLA authority over supplies within assigned FSCs used by the military regardless of their use by civil agencies. GSA manages items used by federal agencies that are commercially available. Today GSA and DLA  maintain contracts with vendors delivering directly to customers. DLA forecasts demand and then supply chain representatives, vendors and DLA Distribution ensure on-time delivery worldwide.

DLA and GSA are working side by side to put together an automated tool that categorizes FSCs for analysis. The tool will produce summary-level data on all items to ultimately determine if a change in acquisition strategy might lead to improved efficiencies and effectiveness for the government, taxpayers, and customers. Both DLA and GSA must be in agreement to transfer logistics management of any items.

“Regardless of item transfer decisions, the process and tools we’ve developed in conducting this review provide an archive of information that supports FSC management determinations beyond the simple criteria identified in the 1971 agreement,” Jay Schaeufele, GSA account manager for DLA Logistics Operation’s Whole of Government Division, said. “This information is important as we navigate government and acquisition reform initiatives and evaluate potential economic efficiencies without losing vision of DLA’a first priority to warfighter readiness. (ibid)

Jeff Thurston, director of GSA’s Office of Supply Chain Management, said: “GSA’s new business model challenges us to identify new ways to serve environments where stocking product was previously the go-to solution.” (ibid)

The Commercial Platforms Program will update how commercial products are bought by federal agencies via partnerships with commercial e-platform providers. Government agencies will access commercial platforms as part of a whole-of-government approach. This approach will give agencies visibility into online spending, thus reducing supply-chain risk while providing more time for focusing on mission-oriented acquisition.

According to Laura Stanton, deputy assistant commissioner for Category Management in GSA’s Office of Information Technology Category, “this three-year proof of concept will offer federal buyers easy access to e-marketplace providers and commercial products. Additionally, agencies will have better visibility and insight on purchasing patterns to bring one-off spending under management. The Commercial Platform’s proof of concept offers a way for agencies to access commercial platforms as part of a whole-of-government approach, strengthening GSA’s commitment to maximize the government’s buying power through economies of scale.” (ibid)

GSA and DLA are consolidating purchasing, tracking, and spending analysis while taking advantage of government-wide and best-in-class acquisition vehicles. In addition, they are working together to communicate supply chain issues such as cybersecurity, fraud, and counterfeit parts while working with the military to determine optimal shipping routing.

Will this translate into possible changes to your current contract or bid? We’re available to discuss.

Strike Force vs. Collusion

The Justice Department has created a new interagency partnership to battle procurement and antitrust crimes, the Procurement Collusion Strike Force (PCSF). The PCSF is comprised of the Antitrust Division of the U.S. Department of Justice, multiple U.S. Attorneys’ Offices around the country, the Federal Bureau of Investigation (FBI), and the Inspectors General for multiple Federal agencies. (Justice.gov)

The PCSF will “deter, detect, investigate and prosecute antitrust crimes and related criminal schemes,” according to Assistant Attorney General Makan Delrahim. He feels many open investigations are related to procurement crimes. Last year alone, the federal government spent almost $500 billion on contracts for goods and services. The overcharge stemming from illegal actions can be significant not only to the government but to all taxpayers as well.  (Government Executive, November 5, 2019)

Bid-rigging is alive and real. According to the Justice Department, earlier this year five Korean oil companies were prosecuted for bid-rigging contracts to provide fuel to U.S. military bases. The PCSF uses data analytics to identify occurrences of procurement collusion. The website has a complaint form, training materials, and legal resources for anyone who believes they have witnessed suspicious activity. (ibid)

Questions about the new interagency partnership? Give us a call.

BAA TAA SBA Huh?

It appears the Buy American Act (BAA) and the Trade Agreements Act (TAA) may, under certain instances, actually reduce the federal market accessibility for US manufacturers. (Federal News Network, October 28, 2019)

In order to be considered for a small-business set-aside, end-items must be manufactured in the U.S. Or the company can qualify as a non-manufacturer (13 CFR 121.406) if:

  • The company is principally engaged in the retail or wholesale  of the product and normally sells the type of product being supplied
  • The company takes ownership of the item with its personnel, equipment or facilities consistent with industry practice and
  • The company supplies the end item of a small business manufacturer, processor or producer made in the U.S. or obtains a waiver of the requirement. (ibid)

Non-manufacturers may receive an individual waiver if the Small Business Administration (SBA) accepts the contracting officer’s determination that no small business manufacturer “reasonably can be expected to offer a product meeting the solicitation specifications.” Additionally, the SBA Administrator may provide a class waiver if she determines that no small business manufacturer “product or class of products is available to participate in the Federal procurement market.”

Of course, TAA restricts product acquisition to manufacturers in the U.S. and certain “designated countries,” (those companies that have a Free Trade Agreement with the U.S. or participate in the World Trade Organization Government Procurement Agreement (WTO GPA)). Therefore, products from non-signatory countries such as China are ineligible for award.  Per FAR 25.101(a), BAA restricts the purchase of non-domestic end-products as well. Some exceptions provide more access to foreign end-products than under the TAA; for instance, BAA makes exceptions where the domestic offer is not the low offer (FAR 25.103) as well as in certain instances of public interest for non-availability in the U.S., and at an unreasonable cost. (ibid)

TAA does not apply to small business set-asides, FAR 25.401, leaving the BAA in place. The waiver of the non-manufacturer rule for a set-aside gives a somewhat illogical result. This makes the TAA inapplicable to set-asides, and the BAA applicable to set-asides where the non-manufacturer rule has been waived. This might result in the Government purchasing an item, such as a medical/surgical product, manufactured in a non-designated country that has subsidized its price to assure the product’s selection. Therefore, the intended law restricting non-domestic products actually facilitates more access to those products. This includes products of manufacturers from non-designated countries, rather than providing controlled access over non-domestic end-products. (ibid)

Ultimately, this could harm small and non-small manufacturers producing domestically. This may also open up small business set-asides to products made in China that would otherwise be ineligible for purchase if the TAA applied. A good deal more statutory guidance and analysis are warranted. (ibid)

Do you have questions about your compliance obligations under an upcoming proposal or current contract? Give us a call.

Modernizing and Funding IT

GSA will continue IT modernization through the new fiscal year, according to Suzette Kent, Federal Chief Information Officer, and Emily Murphy, GSA Administrator. (Federal Times, October 21, 2019)

While Kent and Murphy were speaking at the American Council for Technology-Industry Advisory Imagine Nation conference, the Technology Modernization Fund (TMF), announced $8 million of funding to be made available for the Department of Agriculture and $4 million for the Equal Employment Opportunity Commission (EEOC). (TMF provides funding to agencies for IT projects.) TMF recently granted GSA $20 million for its New Pay HR system.

The EEOC will implement a Cloud-based charge and case management system while the Agriculture project will replace an outdated, manual IT system used for food inspection and certification. Both of these systems have thousands of touch points around the country. The Office of Management and Budget has said both agencies will leverage modern commercial capabilities to move their digital modifications. (ibid)

Interested in the upcoming GSA RFQ or DoA or EEOC opportunities? Give us a call.

Cybersecurity Knowledge for Free

Who should understand cybersecurity? According to the Department of Homeland Security, everyone.  Whether or not you work in IT,  a basic understanding of cybersecurity is necessary. Now, thanks to the National Security Agency (NSA) and Penn State University, you can learn online at no charge. (Federal News Network, October 11, 2019)

NSA and Penn State, as part of an undertaking directed by the Department of Homeland Security, have created an online course to educate people on cybersecurity operations, law, and policy. Geared toward non-lawyers, no technical background is required. The entire course can be taken as a whole or in modules. In addition, anyone interested in the course can teach it or take it. It is offered through the Clark Center, with a variety of other cybersecurity courses.

The course begins with an overview of the U.S. government and the legal system and how they operate, providing a legal framework around cyber operations and cybersecurity. It gives similar overviews of technology concepts, then steps into the legal foundations for modern cyber law and policy focusing on the Constitution and the Bill of Rights and their application to these concepts. 

The third and final module reviews cyber operations. This is taught as a cyber threat response framework using real-world cases to keep students engaged. Many examples are taken from actual current events and show how domestic law, national security, and technology intersect. (ibid)

Wondering if you should hone up on your cyber education? Give us a call and we can discuss it with you.