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Tuesday, April 2, 2019

ACHIEVING AND UTILIZING A GSA SCHEDULE


I. INTRODUCTION

Your small business is established in the federal government contracting sector. You have become a member of the government contracting community by registering with System for Award Management (SAM). You have proposed, negotiated and have been awarded your first government contract(s) and have a successful past performance history with the government in selling your products and/or services.

On several occasions open solicitations or procurement activities have referenced a ," GSA Schedule", as a qualification criteria or as a venue by which to buy items or services you can supply. This article will discuss the GSA schedule program, how to apply for and negotiate a schedule for your company and how to utilize it as a sales and marketing tool.

II. THE GENERAL SERVICES ADMINISTRATION (GSA)

From the GSA Web site:

"Founded in 1949, GSA serves as a centralized procurement and property management agency for the federal government. GSA manages more than one-fourth of the government’s total procurement dollars and influences the management of $500 billion in federal assets, including 8,300 government-owned or leased buildings and 205,000 vehicles. GSA helps preserve our past and define our future, as a steward of more than 420 historic properties, and as manager of USA.gov, the official portal to federal government information and services. GSA’s mission to provide superior workplaces, expert technology solutions, acquisition services, purchasing and E-Gov travel solutions and management policies, at best value, allows federal agencies to focus on their core missions.

GSA’s Disaster and Emergency Operations Vendor Profile form puts small businesses on the government’s radar so they do not miss out on federal contract opportunities in a time of disaster. More than 1,500 small businesses have used the online form to identify themselves."

Putting it simply the GSA is a federal government buying agency. It performs many buying-related activities which you can read about at the GSA Web Site:

http://www.gsa.gov/portal/category/100000

GSA is empowered to accept procurement requirements from all other federal agencies, locate and source qualified bidders and negotiate pricing for supplies and services on behalf of the government. Although all federal agencies perform procurement themselves that is peculiar to their individual domains, a vast number of products and services, particularly those common among agencies, are procured by the GSA. Over the last 10 years the GSA has sought to establish economies of scale through volume buying.

III. THE GSA CONTRACTING PROCESS

To equitably compete and pre-position terms, conditions and pricing for supplies and services, the GSA divides what it procures among various commodities and services lists with generic schedule designators. The agency also assigns procurement contracting officers to each schedule who conduct regular open advertising against the schedules through solicitation. The schedule numbers and contracting officers are listed at the following web site:


Each open solicitation for a generic schedule is published at FEDBIZOPPS, the portal for all federal government solicitations over $25k. The open solicitations contain details, specifications, terms, conditions and pricing instructions for the specific items on the schedule. Contractors prepare proposals in response to the open solicitations and submit them to the schedule contracting officer. The proposals are audited and negotiated like any other federal procurement. The term of the negotiated schedule is usually multi-year and can be as long as 5 years in duration so being able to develop and hold your pricing for the period of performance is a key factor.

Upon completion of negotiation, a specific supplier is granted a company-unique schedule identifying number under the applicable generic GSA schedule. The pricing, terms, conditions and validity duration are set for the specific company and the schedule number is unique to the firm. The company schedule is then authorized by the GSA for publication on the web for use in subsequent proposals to government agencies. The company GSA schedule is listed at the GSA Advantage Web Site and becomes part of the data base which government buyers can search.

Granting a GSA schedule to a company does not constitute a sale of goods and services. It simply establishes the pricing and the contract vehicle for readily buying from that company by a federal agency. A GSA Schedule saves time and effort for the buyer and it can be presented by the seller at his web site as an expedient way to get under contract with a federal agency. The agency places the order through the GSA. The GSA adds a small fee to the price of an item or service which the contractor collects from buying agency and pays to the GSA. The fee funds continued GSA operations and services. Under competitive conditions, sellers are authorized to offer discounts from their GSA schedules in the proposals to prospective agencies. State governments are also allowed to buy off GSA schedules.

Federal agencies can put in place blanket purchase agreements (BPA's) through the GSA with specific companies for long term buying. GSA also conducts Government Wide Acquisition Contracts (GWAC's) for IT and other technologies. Recent examples of a GSA GWACS for large and small business are the Alliant and Alliant SB Programs.

IV. BASIC STEPS TO APPLYING FOR AND NEGOTIATING A GSA SCHEDULE:

A. Register Your Company in the Central Contractor Registration (CCR) Data Base
If you are not familiar with this process please utilize for guidance the menu item at this site on registering your small business for federal government contracting:

http://www.smalltofeds.com/2006/12/registering-your-small-business-for.html


B. Obtain Your "Open Ratings", Evaluation

Open Ratings is a service run by Dunn and Bradstreet that the GSA uses. It out sources what would have to be done by the GSA Staff in terms of initial past performance ratings in response to GSA Schedule Applications. Here is a web site to learn more about it:

Open Ratings


The site explains the process and shows some sample reports.

C. Locate your Generic GSA Schedule:

Examine the major generic schedules listed and determine the best match for the products and services your company offers. Note the name and contact information for the contracting officer designated for the schedule. Also note the open solicitation link to the FEDBIZOPPS. Carefully review the solicitation completely and determine that you can comply with the specifications, terms and conditions and requirements in the document.

D. Contact the Schedule Contracting Officer with Your Statement of Intent and a Concise Capabilities Statement

This is where the marketing phase of the process begins. It is best to contact the contracting officer with a statement of capabilities (CAPE). Your CAPE should be brief, concise and electronic. It should highlight the information in IV.A., B. and C. above and the management, technical and past performance elements of your products and services. Establish by letter (preferably electronic by email) your intent to submit a proposal for a GSA schedule to the contracting officer. Also confirm your anticipated proposal delivery date by telephone if possible and confirm by email. Highlight your CAPE as a qualification criterion for a company schedule award under the generic schedule you are proposing against.

E. Carefully Prepare and Submit Your GSA Schedule Proposal

Respond to each requirement carefully and in the order presented in the open solicitation. Pay particular attention to the requirements for cost and pricing data presentation. Utilize for guidance the menu items on proposal preparation and negotiation at this site. Understand that your proposal may be audited, particularly for previous pricing history related to your products and services. The contracting officer may negotiate with you the final pricing make-up of your products and services based on audit results and history. Since GSA schedules are in the public domain it is worthwhile to examine the reports available through the GSA web site on previous awards for the same or similar products or services. In addition, most companies who have GSA schedules post them at their web sites so you can get some insights into competitor pricing by looking at the fully loaded rates and their respective escalation from year to year by going to the sites and analyzing the rates located there.

F. Schedule Award

When you are awarded your GSA Schedule it should be prominently displayed at your web site and contained in your marketing literature. You can offer it to prospective federal and state customers and you can discount from it under competitive conditions. Please read the terms and conditions regarding required sales necessary on your schedule for it to remain in effect. Within a specified time frame it is necessary to have a designated dollar value of sales activity or your schedule will automatically become inactive.

Carefully follow the directions in your schedule contract for collecting the GSA fee from your agency customers as a function of pricing quotations and payment. The fee is calculated as a designated percentage over and above that which your schedule prices display. It must be collected by you as a function of your quotation to your customer.

SUMMARY

In addition to featuring your schedule prominently at your web site, your GSA rates should be included in your market literature and your schedule number should be included as a reference in your new business proposals. A GSA schedule permits a quick ordering process for your federal and state clients. In your dealings with prime contractors to which you aspire to subcontract you can reference your schedule as valid pricing which they can readily include in their proposals to government agencies. A GSA schedule facilitates teaming with other synergistic small companies in proposing large scale efforts.

Keep in mind that obtaining a GSA schedule does not guarantee new business will come to you. Very few companies await government agencies to find them by searching the GSA data base. Most small businesses actively market their schedule to targeted agencies as an expedient way to contract with them or as a qualification criterion for new business awards.

  

Monday, April 1, 2019

KNOW YOUR OPTIONS FOR GOVERNMENT CONTRACT DISPUTES AND APPEALS



REQUESTS FOR EQUITABLE ADJUSTMENT (REA)

ALTERNATIVE DISPUTE RESOLUTION (ADR)

CLAIMS

I.  INTRODUCTION

The Federal Acquisition Regulation (FAR) contains provisions for contractors and the government to resolve contract disputes.  The disputes often arise due to events during performance, many times surfacing weaknesses in the original contract work definition, technical parameters, schedule factors or related terms and conditions that can lead to change implications effecting cost, schedule and delivery.

In short, when the understanding the parties thought they had at negotiation and execution of the contract is in dispute, there must be a resolution. 

These conditions open the baseline of the contract to further clarification and negotiation. The FAR recognizes that a fair and equitable process is necessary to settle disputes and re-establish a mutually agreeable contract baseline.

 II. GENERAL CONSIDERATIONS

Contract baseline management has been discussed previously in the following article:


The above article offers six (6) rules of thumb:

1. KNOW - The contract value and its ceiling amount
2. KNOW - The incurred cost to date and commitments
3. KNOW - The scope of work and whether or not your current efforts are supporting it or some other objectives
4. KNOW - The estimated cost at completion based on where you are at today
5. KNOW - Your customer and who among the customer population is prone to direct out of scope effort.
6. KNOW - WHEN TO SAY "NO" to "Scope Creep" and say it officially in writing to the contracting officer specified in your contract.

The remainder of this article will discuss the three most common processes that contract disputes undergo when the baseline is in dispute and selecting the best method considering the circumstances that exist on the contract. 


III. REQUESTS FOR EQUITABLE ADJUSTMENT (REA)

An REA is most often the first and the least formal step undertaken by a contractor when there has been a clear and recognizable departure from the contract baseline in terms of events that warrant cost, schedule, technical performance or terms and conditions parameter modification.  It does not start the formal claims process under FAR with associated interest implications.

Submitted in the form of a proposal for contract change, the REA cites the "Before and After" conditions of the contract baseline and the details regarding the delta.  Implicit in the submission are actual cost records, documents regarding government actions and guidance, an estimate of the new baseline impact in terms of cost, schedule or technical modifications to the agreement and a request for contract change. 

The government agency may approve or deny the proposal, further negotiate the details with the contractor and may or may not modify the contact.  The following article is an excellent guide to use and preparation of REA’s:


IV. ALTERNATIVE DISPUTE RESOLUTION (ADR)

ADR takes advance planning on the part of the government agency and the contractor.  Not every government contracting office chooses to place an ADR clause in contacts they execute.  Not every contractor is willing to accept one at contract award.

ADR is intended to be an alternative to the REA and formal claims process, whereby the government and the contractor agree in advance to place an ADR clause in the contract and subject any dispute that arises to the ADR process for resolution.  

Below is a quote from the FAR on the use of ADR:

33.214  Alternative dispute resolution (ADR)
(a) The objective of using ADR procedures is to increase the opportunity for relatively inexpensive and expeditious resolution of issues in controversy. Essential elements of ADR include—
(1) Existence of an issue in controversy;
(2) A voluntary election by both parties to participate in the ADR process;
(3) An agreement on alternative procedures and terms to be used in lieu of formal litigation; and
(4) Participation in the process by officials of both parties who have the authority to resolve the issue in controversy.
(b) If the contracting officer rejects a contractor’s request for ADR proceedings, the contracting officer shall provide the contractor a written explanation citing one or more of the conditions in 5 U.S.C. 572(b) or such other specific reasons that ADR procedures are inappropriate for the resolution of the dispute. In any case where a contractor rejects a request of an agency for ADR proceedings, the contractor shall inform the agency in writing of the contractor’s specific reasons for rejecting the request.
(c) ADR procedures may be used at any time that the contracting officer has authority to resolve the issue in controversy. If a claim has been submitted, ADR procedures may be applied to all or a portion of the claim. When ADR procedures are used subsequent to the issuance of a contracting officer’s final decision, their use does not alter any of the time limitations or procedural requirements for filing an appeal of the contracting officer’s final decision and does not constitute a reconsideration of the final decision.
(d) When appropriate, a neutral person may be used to facilitate resolution of the issue in controversy using the procedures chosen by the parties.
(e) The confidentiality of ADR proceedings shall be protected consistent with 5 U.S.C. 574.
(f)(1) A solicitation shall not require arbitration as a condition of award, unless arbitration is otherwise required by law. Contracting officers should have flexibility to select the appropriate ADR procedure to resolve the issues in controversy as they arise.
(2) An agreement to use arbitration shall be in writing and shall specify a maximum award that may be issued by the arbitrator, as well as any other conditions limiting the range of possible outcomes.
(g) Binding arbitration, as an ADR procedure, may be agreed to only as specified in agency guidelines. Such guidelines shall provide advice on the appropriate use of binding arbitration and when an agency has authority to settle an issue in controversy through binding arbitration.”

V. CONTRACT CLAIMS

A formal contract claim is a significant step in the relationship with your customer.  It acknowledges that the REA and ADR (if applicable to the contract) processes have not been effective in resolving the dispute and refers the matter to a formal claim which has the potential for adjudication.  It also starts the interest clock in terms of government payment liability in the event the agency loses the claim during adjudication. 

Below are the major clauses regarding formal contact claims and the certifications by the contractor that apply.  They have significant legal implications.


VI. SUMMARY

When contract disputes or the potential for claims and appeals arise it is best to view each instance uniquely in deciding which of the three avenues discussed in this article may be appropriate. 

Contract disputes are serious matters. In the event the impact to the company from a risk perspective is substantial, it is best to involve a law firm that specializes in government contract claims for advice on how to proceed. 


Saturday, March 30, 2019

Managing Teaming Relationships in Small Business Federal Government Contracting

Image:  "Generationnext"

Most small businesses, particularly those selling services, will encounter the need to team with industry partners in small business federal government contracting. 

As a prime contractor, a supplier or a subcontractor, the need to carefully develop stable relationships is a prime driver for success in the venue. 



HARD FACTS ABOUT THE ENVIRONMENT

Be prepared to encounter challenges in the areas discussed below. They are presented because they occur enough that you should be aware of them.  It is astute to manage the associated risks.

Initial challenges for the small business in government contracting are not so much in the areas of barriers as they are in lack knowledge (which I concede is a form of barrier but one that can be dealt with). In short, be aware of what you do not know you do not know.

Lack of knowledge goes all the way from local and state employment law to federal  contracting rules. Enough small businesses have succeeded in the venue that it has proven small enterprise education, with trained personnel in government and prime contractors to do so, greatly enhances success.

Contracting officer's, either government or corporate, and their staffs are often not equipped in the skills necessary to guide the small business. 

Large business and government agencies often inadvertently take advantage of the small enterprise lack of knowledge or make poor assumptions regarding what a small business knows. This can lead directly to abusive practices.

A prime example of an abusive practice is large corporations signing teaming agreements during proposal efforts and then not awarding subcontracts to the small enterprise as agreed, keeping the majority of work for themselves.  They then recruit the help away the small enterprise.

Agencies often take extended time frames to put in place prime contracts after source selection and award to a small business. They do not realize that a small enterprise does not have deep pockets and must have cash flow to sustain a new program with new employees.

Funding levels on programs are often insufficiently committed and the small enterprise is not adequately informed about limitation of funds and funding exposure


One of the most common traumatic situations is newly established enterprises having no job cost government compliant business system in place. The industry partner(s) or the government have assumed that capability will materialize and when it does not the government audits the bills, finds no backup and shuts down the cash flow until the system is fixed. At that point the business can fail. The company should have become educated much earlier in the process about these requirements.


The number of poorly performing SETA contractors in roles not suited to them in government contracting officer support is increasing in federal agencies. These firms need to be vetted and better managed for the omissions and commissions they contribute to the above. 

Not every small enterprise can get into a class on government contracting at George Washington University, The Defense Acquisition University or send their personnel to lengthy and costly seminars conducted by organizations like the National Contract Management Association. These are all great education sources but do not come close to filling the complete requirement and cost time and money.

PROTECT INTELLECTUAL PROPERTY, RATES AND PERSONNEL

The nature of the government contracting venue is that you may very well find yourself teaming with a company on a major, long term project and competing against them on another project where the team makeup is different. It is therefore essential to protect your intellectual property, your rates and your personnel.


VET PROSPECTIVE INDUSTRY PARTNERS CAREFULLY

Not every company that approaches you with a suggested teaming arrangement will be ethical, straight forward and honest. Vet them carefully through the Better Business Bureau, a Dunn and Bradstreet Report, references and searches on their prior business arrangements, contract awards, business activities, subsidiaries and history. 


ACQUIRE ADVISERS AND SPECIALIZED HELP WHEN YOU NEED IT

There are free or very low cost resources through local government organizations who can assist the small business in understanding the government contracting venue.





REMEMBER:

Be straight-forward and honest with your industry teaming partners.

Do not violate share arrangements, teaming agreements or non-disclosure agreements. Such violations are a death knell for your reputation in the business.

Do not become known as a resource raider by hiring away from other firms with whom you have teamed.

Give it your best shot as a prime or a sub but involve the government contracting officer if you must resolve industry teaming disputes that may damage your past performance record.

Exclusivity is the practical way to go on any given program. Team early and exclusively then give it your all and be a winner. Your reputation is key, ethics count and your customers as well as your industry are observing you.



Vital Tips for Project Management in Small Business Federal Government Contracting

Image:  Australian Naval Institute 
Good small business project management focuses the resources on a plan for contract execution, the schedule, budget and customer requirements baseline and the status of a given effort among other concurrent projects to give visibility into problem solving and management trade offs.

If you are a small enterprise selling off-the-shelf commercial items under FAR Part 12 or marketing commercial products on a GSA schedule, you may be initially challenged by the government contracting venue. With persistence you will establish selling relationships through agencies and prime contractors. Your project management challenge is minimal.

A service contractor faces a far greater challenge in understanding the nature of government contact project management and succeeding at it
.
PLANNING IS KEY

Strategic thinking must be applied to structuring a government service contract project management capability in your company. It must involve long term planning and designing a business system as well as establishing rates and factors to bid new work and control it while interfacing with the customer.

A Framework For Small Business Federal Government Contracting Business Systrems

When one plans in detail to define the product or the service one reduces performance risk

The project management challenge is not to launch significant and costly resources before the specification for the product is sufficiently defined, obviating the need for costly revisions or abandonment, yet knowing when the product definition and plan are suitable for release.
Good project management starts early.

Without a well written Statement of Work (SOW) and associated supplies  and services specifications there is unacceptable risk in the future  contract and is it exceptionally high risk to bid or contract the job. 
Both the contractor and the customer must come to an understanding regarding the scope of effort to be performed. That understanding is conveyed in the Statement of Work (SOW) and confirmed in the specifications referenced therein.  A good SOW should have the following principal attributes:

* Clear identification of the products, services, skills, materials and performance factors required to complete the contract

* A description of the conditions under which the contractor will be required to perform and any related environmental or location factors

* Specific references to product specifications that govern an acceptable product or services performance outcome and delivery  acceptance

* A schedule for the contract that identifies discrete delivery dates for products and specific start and end dates for supporting labor.

* A precise description of customer furnished material or facilities required and when it will be made available to the contractor.

If your customer does not provide the above, offer the document during the comments period, during your proposal or during negotiations that represents a version to which your company will commit. 

Do not let the fact the program is competitive sway you from the facts. Signing off on a poorly written SOW results in a difficult contract to manage, a high probability for disputes during the  contracting period and a poor past performance record you will have to  deal with in the future on other jobs.

PROJECT MANAGEMENT RULES OF THUMB

A secondary and related challenge is managing the baseline for the product or service to avoid scope creep, superfluous bells and whistles and other diversions that risk the basic completion objectives. 

Set a baseline for what can and cannot be achieved for the resources and time that have been committed to the job and present to the client.  Use it as a bench mark for discussion to establish a plan going forward. Then control it using sound baseline management. 

Stay away from "Scope Creep" that can kill a contract, a customer relationship and a past performance record, all of which are important to your business. Stay in front of "Scope Creep" by communicating positively with the customer to control the baseline, keeping cost, schedule and technical performance integrated and synchronous.

Use the below rules of Thumb to control "Scope Creep":

KNOW - The contract value and its ceiling amount

KNOW - The incurred cost to date and commitments

KNOW - The scope of work and whether or not your current efforts are supporting it or some other objectives

KNOW - The estimated cost at completion based on where you are at today

KNOW - Your customer and who among the customer population is prone to direct out of scope effort.

 KNOW - WHEN TO SAY "NO" to "Scope Creep" and say it officially in   writing to the contracting officer specified in your contract.

For baseline management and earned value techniques in achieving the above, please see the articles linked below:

Baseline Management In Small Business Contracting

Earned Value Management Systems

CAREFULLY SELECT YOUR PROJECT MANAGER(S) OR PERFORM THE ROLE YOURSELF

The following are the more esoteric project manager attributes necessary in the government contracting industry:

DEVELOPING the ability to cross organizational lines and make disparate groups or functional organizations work together with only a power of persuasion and a contract.

EVOLVING the art of directing resources without having them as direct reports while keeping home departments and functional bosses happy at the same time.

MANAGING to convince the executives in the company that specific project (s) are the most important in the firm.

LIVING with the prospect that if the project is late, fails or otherwise disappoints the powers that be, replacing the project manager will be the designated corrective action.


GROWING to crave the satisfaction that comes from succeeding at the above challenges and you would not have any other job because no other pursuit makes your day go as fast, grows you skills as sharp and totally occupies your intellect.