Value | The Contracting Education Academy

January 18, 2019 By AMK

Procurement director recommends regularly talking-up department’s accomplishments

Rockland County in suburban New York City has seen a big improvement in its fiscal health. Budgets in the county (2017 population: 328,868) have been quite tight.

“When I took office, the Comptroller’s Office listed Rockland as the most fiscally stressed county in the state. But in September, New York State Comptroller Thomas DiNapoli released the 2017 Fiscal Stress Monitoring System report which showed Rockland County as now having ‘Moderate Stress,’ an incredible turn around,” says Rockland County Executive Ed Day.

The proposed 2019 Rockland County budget, which outlines $709,050,000 in planned spending, has been cut to the bone. County fiscal planners had to cut departmental budgets to deal with a $13 million budget gap. Costlier health insurance premiums, increased pay in labor contracts, higher interest payments on county bonds, increased spending to rebuild the county’s infrastructure and higher costs to pay for state-mandated programs helped contribute to the shortfall.

“We are seeing 2019 county operational budgets relatively flat. There are concerns regarding sales tax revenue, due to the tariffs and how they may affect pricing and consumer confidence,” Rockland County Director of Purchasing Paul Brennan tells Coop Solutions. Brennan is both a Certified Public Procurement Officer and a Fellow of the NIGP: The Institute for Public Procurement.

Keep reading this article at: https://www.americancityandcounty.com/2018/12/12/new-york-procurement-departments-staff-grows-despite-county-budget-cuts/

January 6, 2016 By AMK

A better idea than ‘do more with less’

Now that Congress has agreed to a two-year budget framework and passed a $1.1 trillion spending bill, the federal government finally has the opportunity for budget predictability that has eluded most agencies since 2010.

The bad news is, the pressure to cut costs is not likely to lessen much despite the long-needed budget stability. Rather than the same old “do more with less” dictum, however, there is another way to look at this push: creating value.

In practice, for most government agencies, the typical annual top-down direction is to cut back overall budgets by 5 percent or 10 percent across the board, without meaningful discrimination between high-value, high-priority activities and low-value, low-priority activities.

In the commercial sector, the creation of value, coupled with an efficient cost management process, is the result of an enterprise management focus to sustain the viability of the corporation. The government’s “spend it or lose it” orientation detracts from the ability of the agency to have a meaningful approach to how and where value is created for the taxpayer.

Keep reading this article at: http://www.federaltimes.com/story/government/solutions-ideas/2015/12/23/better-idea-than-do-more-less/77803910/

January 26, 2015 By AMK

Acquisition 101: When a bargain isn’t a bargain

When my wife and I purchased our first vacuum cleaner, we selected a cheap model. It met all the specs of what we needed, did a minimally acceptable job and lasted little more than a year before it died. Not learning the lesson that buying the first vacuum should have taught us, we immediately bought another cheap vacuum to replace the first one, and it died an early death about 18 months later. We finally did learn our lesson with the third vacuum and paid slightly more for a better vacuum that has lasted six years (and counting).

Much like our predicament with the rotating vacuums, federal contracting professionals are facing increasing pressure to purchase goods and services as cheaply as possible using a method commonly referred to as “lowest price/technically acceptable” (LPTA)—even if it means minimal acceptability. This push is laudable in theory, but the reality is often higher prices and a smaller pool of quality contractors, while robbing contracting officers of any discretion to choose a solution or product that is more cost-effective in the long term.

Keep reading this article at: http://www.govexec.com/contracting/2015/01/acquisition-101-when-bargain-isnt-bargain/102672/

About the authors: Eric Crusius, a partner with Fed Nexus Law, focuses on government contracts, cybersecurity, employment law and complex litigation. Mitchell Bashur, an associate at Fed Nexus Law, also contributed to this column.

January 13, 2014 By AMK

OFPP updates rules for how agencies should analyze ways to lower costs

The Office of Federal Procurement Policy is reinvigorating the concepts of share- in-savings and lowering life-cycle costs of programs by analyzing all facets of the approach.

OFPP released the first update to Circular A-131 in more than two decades in the Federal Register on Dec. 26, 2013. The Office of Management and Budget first issued A-131 in 1988 and updated it in 1993, but since then has only offered memos encouraging its use.

A-131 promotes the use of value engineering (VE), which is an organized effort by an integrated product team to evaluate functions of systems, facilities, services and supplies with an eye toward lowering costs and maintaining performance, quality, safety and reliability.

“VE challenges agencies to continually think about their mission and functions — in the most basic terms — in order to determine if their requirements are properly defined and if they have considered the broadest possible range of alternatives to optimize value,” OFPP Administrator Joe Jordan wrote in the notice. “Most importantly, VE enables agencies to achieve greater fiscal responsibility and operate within tighter budgetary constraints. By identifying and eliminating unnecessary program and acquisition costs that do not contribute to the value, function and performance of the product or service, VE can permit programs to continue delivering the same, or an even higher, level of service for less money — a critical capability for managing in a fiscally austere environment.”

Keep reading this article at: http://www.federalnewsradio.com/517/3534771/OFPP-updates-rules-for-how-agencies-should-analyze-ways-to-lower-costs

July 31, 2013 By AMK

Interagency acquisition and GWACs explained, related resources identified

A government-wide acquisition contract (GWAC) is one form of interagency acquisition – the process by which one agency uses the contracts and/or contracting services of other agencies to obtain supplies and services.

Interagency acquisitions typically involve two government agencies: the requesting agency, which is the agency with the requirement, and the servicing agency which provides acquisition support, administers contracts for other agencies’ direct use, or both. In some cases, more than one servicing agency may be involved in an assisted acquisition.

Requesting agencies benefit from the capabilities or expertise of the servicing agency and the efficiencies and economies associated with leveraging resources and requirements. Servicing agencies benefit from the improved pricing and terms and conditions they can negotiate when consolidating, in a justified manner, other agencies’ needs with their own and among requesting agencies.

Interagency acquisitions are commonly conducted through indefinite delivery vehicles (IDVs), such as task and delivery order contracts. The structure of these vehicles is well-suited to the efficiencies and economies that agencies seek through interagency acquisitions. IDVs permit the issuance of orders for the performance of tasks or the delivery of supplies against prepositioned contracts and agreements during the term of the vehicle. The IDVs used most frequently to support interagency acquisitions are multiple award schedules (MAS), government-wide acquisition contracts (GWACs), and multi-agency contracts (MACs).

Types of Interagency Acquisitions

There are two types of interagency acquisitions: direct acquisitions and assisted acquisitions.

In a direct acquisition, the requesting agency places an order directly against the servicing agency’s IDV. The servicing agency manages the IDV but does not participate in the placement of an order.
In an assisted acquisition, the servicing agency and requesting agency enter into an interagency agreement pursuant to which the servicing agency performs acquisition activities on the requesting agency’s behalf, such as awarding a contract, task order, or delivery order. In many assisted acquisitions, the servicing agency also manages the IDV against which orders are placed. For example, the General Services Administration’s Federal Acquisition Service will typically place orders against a MAS contract or a GWAC on behalf of its requesting agencies. Sometimes, a servicing agency may find that another agency’s IDV can better serve the requesting agency’s needs, in which case two servicing agencies would be involved in the interagency acquisition.

Legal Authority

A variety of laws authorize interagency acquisitions. The Economy Act, 31 U.S.C. 1535, provides general authority to undertake interagency acquisitions that is available to agencies when more specific statutory authority does not exist.

An increasing number of interagency acquisitions are falling outside the Economy Act because many of interagency contract vehicles that are widely used today, such as the MAS and GWACs, are not governed by the Economy Act. Instead, these vehicles are governed by more specific statutory authority. For example, the MAS is governed by Title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251, et seq.) and Title 40 U.S.C. 501, Services for Executive Agencies. GWACs are authorized by section 5112(e) of the Clinger-Cohen Act (40 U.S.C. 11302(e)).

As a general matter, laws and regulations give agencies the discretion to determine whether to use an interagency acquisition.

The Office of Management and Budget (OMB) says direct acquisitions from GSA’s GWACs are “in the best interest of the government” in its June 2008 memo, Guidance for Improving the Management and Use of Interagency Acquisitions. OMB designated GSA as the Executive Agent for GSA-issued GWACs under the Clinger-Cohen Act.

The Office of Federal Procurement Policy (OFPP) also asks agencies to look to interagency contracts like GWACs first for efficiencies and cost savings in its September 2011 memo, Development, Review and Approval of Business Cases for Certain Interagency and Agency-Specific Acquisitions.

The Department of Defense issued a memo on July 14, 2011 encouraging the use of 8(a) STARS II, Alliant Small Business, and VETS to meet DoD’s small business contracting and information technology needs. Read the July 14, 2011 memo.

The Department of Navy issued a memo on April 23, 2012 emphasizing the mandatory use of the GSA Alliant/Alliant Small Business for the acquisition of IT development and support services. Read the April 23, 2012 memo.

The Office of the Secretary of Defense issued a memo on August 16, 2012, stating that the Department of Defense acquisition community is to maximize the use of all available authorities to acquire products and services from small businesses. Read the August 16, 2012 memo.

Using an Indefinite Delivery Vehicle

Before placing an order directly against another agency’s IDV, the requesting agency’s contracting officer, or other official designated in accordance with agency procedure, should ensure that an interagency acquisition is in the best interest of the government, taking into account factors such as:

Suitability – whether the IDV that would be used can satisfy the agency’s schedule, performance, and delivery requirements, including any statutory, regulatory, and policy requirements.
Value – whether the IDV’s pricing, including vehicle access fees (sometimes referred to as an “industrial funding fee”), is fair and reasonable and comparable to what the agency is likely to secure by creating its own contract, and structured to allow the agency to obtain the best value for its needs.
Expertise – whether the agency’s contracting office personnel have the appropriate experience and training to properly place an order on a timely basis, take advantage of beneficial features, such as discounts, and effectively administer the order.

GSA GWACs

GWACs were put in place by the General Services Administration to enable federal agencies to buy cost-effective and innovative solutions for information technology (IT) requirements.

GWACs provide access to IT solutions such as systems design, software engineering, information assurance, and enterprise architecture solutions. Small business set-aside GWACs also provide socioeconomic credit.

GWAC benefits

GSA promotes the use of GWACs by promoting a number of potential benefits, including:

Premier IT service providers – Access to exceptionally qualified IT service providers enabling innovative solutions at competitive prices.
Worldwide IT solutions – GSA GWACs can be used to develop IT solutions anywhere in the world.
Access to ancillary support – GWACs facilitate a total integrated solution on a single task order by providing access to ancillary support, such as products and services that are integral and necessary to an IT effort.
Savings in time and money through streamlined contracting – GWACs are pre-competed contracts offering a full range of contract types (all types of fixed-price, cost-reimbursement, labor-hour, and time-and-materials) making procurement planning easier. GWAC task orders can be issued in considerably less time than conventional open market procurements.
Scope compatibility reviews – At no cost to the agency, GSA promises to determine whether an agency’s requirement is within scope of a GWAC within two to five business days.
Support from Assisted Acquisition Services – GSA’s Assisted Acquisition Services can provide optional contracting, project management, and financial management expertise and support.

GWAC Resources

The Interagency Contract Directory (ICD) is a central repository of Indefinite Delivery Vehicles (IDV) awarded by federal agencies. The ICD assists in strategic sourcing and identifying existing contract vehicles (including those awarded to small businesses).

The “GWAC Dashboard” is located at: http://www.gsa.gov/portal/category/103435. This is an interactive tool that allows GWAC stakeholders to view and segment GWAC information to make better business decisions. Users have the ability to explore GWAC data by contract family, federal agency, and industry partner as well as build customized reports for download.

Rockland County in suburban New York City has seen a big improvement in its fiscal health. Budgets in the county (2017 population: 328,868) have been quite tight.

Now that Congress has agreed to a two-year budget framework and passed a $1.1 trillion spending bill, the federal government finally has the opportunity for budget predictability that has eluded most agencies since 2010.

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