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Tag: overpayment

Unpricing GSA

The Coalition for Government Procurement has been lobbying for an unpriced schedule, and Section 876 of Fiscal Year 2019 National Defense Authorization Act provides just that. It authorizes agencies, specifically GSA and its Schedules (41 USC 152) to not include price or cost as an evaluation criterion when awarding hourly rate and service contracts.  (Federal News Network, January 10, 2020)

An unpriced schedule is seen as more efficient by:

  • Allowing for evaluation against actual requirements
  • Reducing oversight activities associated with auditing of the award and the Price Reductions Clause
  • Honing competition by permitting customers to highlight speed and need for agency-specific service requirements
  • Allowing for common commercial practices in structuring contracts
  • Reducing hurdles to market entry for small businesses by allowing federal customers to leverage technology to meet end mission goals (ibid)

As we mentioned earlier in the week, GSA’s IG found that current pricing tools are resulting in insufficient price determinations. In many cases, the use of the CALC and CODCD pricing tools result in agency overpayment. The IG report stated, the “intent of the MAS Program is to leverage the government’s buying power in an effort to provide customer agencies with competitive, market-based pricing… GSA’s contracting officers are required to seek the best price granted to the contractor’s most favored commercial customer.”

The report outlines GSAM requirements that guide pricing determinations, such as requiring the government to pursue most favored customer pricing. It also defines methods that contracting officers should use to compare the terms and conditions of the MAS solicitation with those of the offeror’s commercial customers. MAS allows agencies to take advantage of the government’s purchasing power; moreover, it offers a channel for agencies to obtain commercial services and products swiftly. Per the statute, all responsible sources participate in the program, and all orders “result in the lowest overall cost alternative to meet the needs of the Federal Government (41 USC 152).” (ibid)

GSAR 538.270-1, states, “the Government recognizes that the terms and conditions of commercial sales vary and there may be legitimate reasons why the best price is not achieved.” This language actually reinforces leveraging the unpriced schedule. It highlights the complexity around contract-level pricing that is removed from government requirements reflected in a specific order. (ibid)

Federal News Network editorializes that an unpriced schedule focuses the price evaluation on actual requirements in real-time as they are being sought in the market. This type of competition, for agency-specific requirements, results in the most cost-effective, best value outcome for the agency.When resources are focused on competition, it’s a win for agencies, GSA and industry providers.

If you’re interested in learning more, give us a call.

GSA Pricing Tools, Untooling

A GSA internal watchdog has found the two comparative labor pricing tools contain flawed data and recommends GSA stop using the pricing tools. GSA however, plans to keep the current pricing tools in place for now. (FCS, January 2, 2020)

This report shows the use of discrepant data in flawed equations, thus arriving at unreliable pricing data. GSA’s Inspector General (IG) said, “the data and calculations are so flawed, they’re dulling the federal government’s buying power edge, as well as possibly resulting in the overpayment on contracts.” (ibid)

Julie Dunne, FAS Acting Commissioner, agrees with the IG that the two tools, Contract-Awarded Labor Category tool (CALC)  and Contract Operations Division Contractors Database (CODCD) used for labor pricing, are not the optimal. She also agrees about a need for pricing comparison capabilities; however, she refrains from wanting to scrap these tools in lieu of something else that might bring even greater inaccuracies. 

Dunne went on to say that without the current tools, labor pricing would be determined by individual searches via the internet resulting in more inaccuracies. She acknowledged that decisions on comparison pricing for labor have always been the judgment of FAS contracting officers. “Disallowing access to aggregated information about previously-awarded MAS contracts does not further our goal of improving pricing. Quality price analyses are the result of training, expertise and appropriate controls. FAS believes our continued focus in these areas will improve how comparative data is used in our MAS award documentation.” (ibid)

Have questions concerning your current labor pricing? Give us a call.