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Tag: FSS

A Quick Dive into GSA’s Game-Changing Proposed Economic Price Adjustment Clause

The General Services Administration’s (GSA) recently proposed to revise the General Services Acquisition Regulation (GSAR) Federal Supply Schedule Economic Price Adjustment (EPA) clauses. Issued on November 16, 2023, the rule aims to align with commercial standards and practices by eliminating specific EPA requirements and introducing a standardized clause: 552.238-118, Economic Price Adjustment, Federal Supply Schedule Contracts. (Federal News Network, January 12, 2024)

This new clause mirrors the principles outlined in GSA Acquisition Letter MV-22-02 from March 2022, which temporarily suspended certain procedural limits within FSS clauses. This move provided contractors with increased flexibility in processing EPAs, responding more effectively to shifts in the commercial market. The proposed rule extends this market-driven flexibility into the GSAR. (ibid)

The EPA proposed rule is defined as the “agreed-upon procedure” for adjusting pricing throughout a contract period.” The proposed clause empowers contracting officers and contractors to negotiate the mechanism, timing, and frequency of price adjustments. This streamlined, flexible approach is poised to enhance responsiveness to market changes. (ibid)

When contract prices are based on commercial catalog pricing, adjustments can align with changes in the catalog price. Similarly, if an index determines adjustments, changes in the index can dictate price adjustments. These mechanisms, being part of the contract, underscore the proposal’s pragmatic approach. (ibid)

For the success of this flexible EPA, implementation across the FSS program is crucial. Proper training for the acquisition workforce, focusing on pricing context and accurate data usage, is paramount. The proposed rule’s success depends on aligning the FSS program with the commercial market, necessitating revisions to current policies such as Federal Acquisition Service (FAS) Policy and Procedure (PAP) 2021-05. (ibid)

The PAP, as it stands, contains contradictory guidance inconsistent with the Federal Acquisition Regulation, escalating data submission burdens on FSS contractors. To streamline the EPA process effectively, reforming, revising, and reissuing the PAP in accordance with legal and operational goals is a logical starting point. (ibid)

Beyond reducing regulatory burdens, success hinges on comprehensive training, clear guidance, and accountability. Stakeholders, including coalition members, stand ready to assist the agency in operationalizing the rule successfully. (ibid)

Questions concerning price adjustments to your current contract? Give us a call.

The Price Reduction Clause needs to go

On July 9th, the Biden administration issued the Executive Order on Promoting Competition in the American Economy. Much of the focus of the Order is on fair and open competition. One way to accomplish this is the elimination of the Price Reduction Clause (PRC). The elimination of the PRC will streamline the Federal Supply Schedule (FSS) program by removing barriers to entry into the federal marketplace. (Federal News Network July 19, 2021)

Robin Carnahan, General Services Administration Administrator, during her confirmation hearing, said, “I’ve talked to businesses that have tried to get on GSA Schedules… [T]hey’ve told me about how difficult that process is, and I’m interested in learning more about how we can streamline that.” The Price Reduction Clause elimination is a start. (ibid)

One could argue the following points to eliminate PRC:

  • The advancement of technology and the use of new purchasing practices have all but rendered the PRC obsolete.
  • The PRC can keep agencies from purchasing ground-breaking technologies from new vendors.
  • The PRC puts an undue compliance burden on small, medium, and large FSS contractors, costing them millions of dollars each year.
  • Price and value are driven by competition, at the task order level and in real-time. The PRC pre-determines contract-level pricing, often negotiating against presumed requirements from the past.
  • Compliance costs of the PRC can be detrimental to small businesses attempting to address the PRC’s complex compliance requirements.
  • The PRC is the only governmentwide contract term that can restrict contractors working with the government from competing in the commercial marketplace. This hurts jobs and economic growth. (ibid)

The elimination of the PRC will increase competition. Small businesses will more easily compete as price and value will drive task order-level competition. Without PRC’s complex compliance requirements,  small businesses will finally be able to afford to compete.

Looking to provide services to the government but the PRC has been a stumbling block? Give us a call.

 

GSA Allowing Some non-TAA Compliant Products

Demand for essential supplies during the COVID-19 pandemic has escalated to the point that GSA Senior Procurement Executive (SPE) has issued a Class Determination and Findings (D&F) that temporarily allows procurement of non-Trade Agreement Act (TAA) compliant products through the GSA Schedule contracts. Unavailability of the Federal Supply Classes found in GSA’s SPE memo dated 3 April 2020 is cited as the rationale for the change in contractor procedures. (GSA Interact, April 15, 2020)

All MAS contractors with access to products under these FSCs and able to meet the urgent need should submit a stand-alone modification request via eMod. Information and detailed instructions for submitting the modification along with required templates can be found on the GSA.gov, MAS Contractor and Modification Requirements page. (ibid)

The Federal Acquisition Service will email contractors to which the D&F may apply . If you do not receive an email or your authorized negotiator is not up to date, please contact your Procurement Contracting Officer (PCO). A PCO listing may be found by searching your contract number or company name on gsaelibrary.gsa.gov.

Are you able to meet the urgent needs of the government but do not know how to navigate the MAS Contractor and Modification Requirements? 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.

FAR 51 Deviation Authority is expired!

Here’s what you need to know.  Contracting officers were permitted to give contractors access to the Federal Supply Schedule (FSS) and GSA Global Supply Programs if appropriate, for the fulfillment of their agency requirements. They used the FAR 51 Deviation Authority vehicle for this purpose. On 23 October, the FAR 51 Deviation expired. It will no longer be used on orders placed after this date. Under Refresh 1, clause CI-FSS-056 Federal Acquisition Regulation (FAR) Part 51 Deviation Authority (Federal Supply Schedules) (Jan 2010) is deleted.

In lieu of FAR 51 Deviation, agencies may use Order Level Material (OLM) procedures to acquire other direct costs (OCDs) and material support items to meet specific order requirements. Additional information for OLMs may be found at www.gsa.gov/olm.

Many question if a contracting officer can issue a letter of authority (required by the Deviation) anytime during the life of the order, if the order or BPA was awarded on or before 23 October 2019. The short answer is yes, as long as the order was issued prior to the 23 October Deviation expiration date. However, if the BPA was awarded prior to then, and subsequent award terms were awarded after 23 October, those subsequent award terms may not use the deviation.

Wondering if you are grandfathered in and still able to take advantage of the FAR 51 Deviation Authority? Give us a call.