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.

Update on GSA’s Schedule Consolidation

Stephanie Shutt, who is spearheading the GSA Schedule consolidation, recently spoke about the effort’s three phases. On October 1, GSA completed the first phase of the consolidation and released the new single solicitation. (Nextgov, October 9, 2019)

Phase one organizes the Multiple Award Schedule Consolidation into categories that correspond to OMB’s category management approach. This allowed GSA to work with a template instead of starting from nothing. During the Schedule review, duplicates were removed as were multiple versions of specific contract clauses. (ibid)

To date, the Schedules had been divided into service and supply subcategories or Special Item Numbers (SINs). Duplicate SINs were removed, about 600 in all. The new SINs structure is based on the North American Industry Classification System (NAICS) which many agencies already use. (ibid)

Phase two, set to begin after the new year, will focus on existing contract holders completing a mass modification to update their base terms and conditions, which will ultimately moving most current holders to the new Schedule. Updates do not apply to negotiated elements of contracts, such as warranties or periods of performance. They will, however, impact the baseline terms and conditions. Vendors will also see a relocation of SINs and have the opportunity to select SINs that previously were across separate Schedules. Look for an advanced notice regarding mass modifications from GSA in early November. (ibid)

Phase three is slated to launch in July 2020. During this time, contracting officers will assist multiple Schedule holders with more than five years remaining on their contracts to consolidate into a single contract under the new Schedule. (ibid)

Shutt stressed that vendors with one contract under MAS or multiple contract holders that see completion within the next five years will have reviewed and completed the process by signing the “mass mod” during phase two. Phase three affects only contractors with multiple contracts, especially those with more than five years remaining on the contract. Those particular contractors will receive support directly from Shutt’s team to devise a plan to funnel all products and services down to one contract. (ibid)

Questions about how these phases might affect your current contract or a current bid? Give us a call.

GSA Updating their e-Market Portal

On October 1st, GSA issued a solicitation requesting proposals from e-marketplace portal providers. The solicitation is for the initial proof of concept of the Commercial Platforms program, part of the foundation of GSA’s Federal Marketplace Strategy (FMP) to simplify federal buying and selling and how federal agencies buy commercial off-the-shelf products. Proof of concept implementation is through partnerships with many commercial e-marketplace platform providers currently offering business-to-business capabilities. This gives federal agencies greater visibility into their online spending. (GSA.gov, October 2, 2019)

GSA Administrator Emily Murphy said, “As federal procurement continues to evolve, simplifying how we purchase basic commodities will allow agencies to focus more on work that directly serves their missions. Federal agencies spent approximately $260 million using online portals last year and it is critical that we use the Commercial Platforms program to better understand and manage this.” (ibid)

The proof of concept is GSA’s kickoff for changing the way federal agencies purchase commercial products via the open market, implementing the requirement of Section 846 in the FY 18 National Defense Authorization Act (NDAA). Last year GSA conducted stakeholder outreach and market research to get a better understanding of the open market place. They determined to take small steps through an iterative program management approach to Commercial Platforms. (ibid)

Proposals are due by November 1, 2019, at 5 PM EST. (FedBizOpps.gov, October 1, 2019)

Are you wondering how the e-marketplace will affect your current contract? Do you provide B2B services in the private sector and have questions about the solicitation? Give us a call.