Civilian Agencies: Showing You the $$$

Fiscal year 2020 was actually good for something — Civilian agency spending. Civilian agencies spent a record $228 billion in fiscal 2020, up 17 percent from fiscal 2019. The increase can be directly attributed to the Coronavirus pandemic. (Government Executive, October 8, 2020)

According to this report, published by Bloomberg Government, Health and Human Services (HHS), Veterans Affairs, and the Department of Energy drove the increased spending. Small businesses saw a 26 percent increase, or $59.4 million spent. The Department of Defense numbers, due to security purposes, see a 90 day lag in reporting; we likely won’t see those totals before the end of the calendar year.

Here’s a quick look at the spending breakdown:

  • Health and Human Services accounted for $41.2 billion or 44  percent of the overall $33.5 billion. The bulk of the spending came from vaccines, research, ventilators, and efforts related to the pandemic.
  • Veterans Affairs came in at $33.1 billion in fiscal 2020. The spending is likely attributed to community care.
  • The Department of Energy spent upwards of $35 billion on two nuclear research labs. Of note is the fact that each lab houses “supercomputers” performing coronavirus research.
  • Small Business Administration spending went from $177 million in fiscal 2019 to over $1.5 billion in fiscal 2020. Part of this is due to an RER Solutions Inc. contract being approved for a $500 million increase without competitive bidding, as disaster recovery loan applications inundated the SBA. (ibid)

Other transaction authority contracts, which are allowed a great deal of flexibility outside of the traditional procurement limitations, are increasing year after year as well. We expect to see this continue well into the future. (ibid)

Questions about the “other transaction authority contracts” and how to take advantage of their flexibility? Give us a call.

Easier Contract Awards Paper a Silver Lining

The General Services Administration (GSA), The Department of Veterans Affairs (VA), and IRS raised the micro-purchase threshold (MPT) and the simplified acquisition threshold (SAT) last week, in response to the coronavirus relief effort This allows these agencies to expedite contract award timeframes. (Federal News Network, March 20, 2020)

As required under the 2020 Defense Authorization bill, the Defense Department raised the threshold for sole-source 8(a) contracts up to $100 million as well. The non-emergency threshold for 8(a) contracts is $22 million. (ibid)

GSA and VA have raised their MPT and SAT threshold for purchases both in and outside of the US while the IRS raised theirs for purchases within the US only, to speed up the time it takes to make contract awards.

The MPT is increased to:

  • $20,000 for contracts awarded and performed or purchases made within the U.S.
  • $30,000 for contracts awarded and performed or purchases made outside the U.S.

The SAT is increased to:

  • $750,000 for contracts performed or awarded and purchases made within the U.S.
  • $1.5 million for contracts awarded, performed or purchases made outside the U.S.

The SAT supporting contingency operations or major disaster recovery is increased to $13 million.

All thresholds, in place through at least 30 June, give agencies the ability to be nimble and make purchases quickly. They are “specific to only to support the designated National Emergency COVID-19. FAR Part 6 also provides the opportunity to expedite purchases after justifying exceptions to competition. There may also be opportunities to use existing contracts by negotiating a bilateral modification to allow for additional quantities of goods or a surge for services included in concurrent awards,” according to Angela Billups, VA’s executive director in the Office of Acquisition and Logistics and senior procurement executive. (ibid)

To track acquisition costs for the coronavirus response, the Federal Acquisition Regulations Council set up a new code in the Federal Procurement Data System, P20C. (ibid)

Jeff Koses, GSA’s senior procurement executive stated in a recent memo that local set-aside rules are not applicable because this is a national emergency and not a strictly local one. According to Koses, some exceptions that allow agencies to restrict or limit competition are:

  • phoning a reasonable number of vendors
  • obtaining “on the spot” quotes
  • keeping the period of performance brief (ibid)

The changes to the MPT and SAT were made prior to the Defense Production Act being invoked. The Defense Production Act, authorizes certain agencies providing specific products or services with relation to the coronavirus relief efforts, to move to the front of the line. However, GSA strongly advises contracting officers to verify pricing and contractor details on GSA Advantage and GSA eLibrary. (ibid)

Interested in contracting for relief efforts? Give us a call.

Federal Supply Schedules: VA=GSA????

Earlier this year the Government Accountability Office (GAO) released the report, “VA Acquisition Management: Steps Needed to Ensure Healthcare Federal Supply Schedules Remain Useful (GAO-20-132).” (Federal News Network, February 21, 2020)

The report dives into the non-pharmaceutical Federal Supply Schedules and lays out 11 recommendations, nine to the Department of Veterans Affairs and two to the General Services Administration (GSA). The report also outlines how the VA and GSA should address their contracting operations supporting veterans healthcare. (ibid)

For some background, the Veterans Administration manages nine healthcare-related Federal Supply Schedules (VA FSS) that provide medical devices as well as services. Included in the VA FSS are medical-surgical equipment, pharmaceuticals, patient mobility devices, laboratory testing, and analysis services. The VA FSS accounts for about $15.4 billion in annual purchases, the pharmaceutical schedule making up $12.6 billion, with the additional eight schedules coming in at about $2.8 billion. For the last four years, sales under the eight non-pharmaceutical schedules have been somewhat flat. (ibid)

It turns out that the VA and GSA have a few areas where they are lacking a “team” mentality. The GAO also finds there is limited guidance and training of the VA contracting staff and it seems the VA FSS and the VA’s Medical-Surgical Prime Vendor program are duplicating efforts. This means longer processing times for contract awards, contract mods and higher admin costs for the VA and industry as a whole. (ibid)

GAO recommends the following:

  1. The VA provide comprehensive FSS guidance and training to the FSS contracting staff
  2. The VA and GSA improve collaboration, including the potential use of GSA’s procurement tools to support the VA FSS
  3. The VA evaluate timeliness goals and barriers to achieving them in the contracting process
  4. The VA assess FSS and MSPV-NB duplication to resource utilization and leverage its buying power (ibid)

The Coalition’s “VA Multiple Award Schedule White Paper” gives recommendations to increase the effectiveness and efficiency of the VA FSS. The recommendations are:

  • Recognize commercial practices when possible
  • Consistency with GSA/FSS policy
  • Streamline the evaluation processes
  • Reduce contracting costs for the government as well as industry (ibid)

The white paper goes on to make specific recommendations to align the VA’s price negotiations strategy with GSA’s approach. Additionally, the white paper touches on the use of GSA’s e-Offer and e0Mod systems to streamline the procurement process. As it turns out, the VA and GSA have very different approaches to contract audit support for their FSS programs. The white paper recommends the two align with GSA’s approach. (ibid)

Will there be more opportunities to work with the VA once their processes are synced up to GSAs? Give us a call.

Veterans Affairs is Getting Cloud-y

The Department of Veterans Affairs is moving all of its new and current applications to the cloud. At the recent ACT-IAC’s Health Innovation Summit, a spokesman said, “the target is 350 applications, which is about roughly half of our portfolio, [to be] moved to the cloud by 2024.”(Fedscoop, April 10, 2019)

This announcement follows the VA’s recent move toward a modernized electronic health record and secure tele-health capabilities. Each of these actions will give veterans the ability to access their information faster and more efficiently. (ibid)

At the recent summit, an example of the importance of moving to the cloud was provided: in 2017  Hurricane Harvey left a number of Veterans Benefits Administration regional offices closed in southern Texas. VA “had just migrated some Veterans Benefits resources and materials into the cloud, and when all of those regional offices and sub-offices were shut down, every one of those rating specialists and the folks in Veterans Benefits Administration was able to continue their work without the facility being in operation.” (ibid)

The Subcommittee on Technology Modernization, within the House Veterans’ Affairs Committee continues to closely watch VA modernization efforts. As recently as last week, the House committee asked about the progress of the tool being developed to give veterans better access to non-VA community care. The representative testified that the tool will be ready by June. (ibid)

Have questions about the Department of Veterans Affairs move to the cloud? Give us a call at 301-913-5000.