BPA FSS: Back to the future or “Already seen once again!”
This column was originally published on Roger Waldron’s blog at The Coalition for Public Procurement and has been republished here with permission from the author.
On May 13, the General Service Administration launched a Request for Information (RFI) soliciting industry input on a “Government-wide Cloud Acquisition Strategy and Global Purchase Agreement “. The RFI details the acquisition strategy to deliver multi-award BPA for commercial software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS).
The RFI raises a number of questions:
First, on page 5 of the RFI, GSA compares the generic government-wide multi-reward BPA strategy with other acquisition tools by highlighting the negative characteristics of these tools, including multi-reward BPA. single attribution and the computer GWACs of the GSA. It is puzzled that GSA characterizes these key acquisition tools in this way, especially when some GSA IT GWACs are identified as Best in Class contracts.
What message is sent to its client agencies and industrial partners regarding these tools? Make no mistake, members of the Government Procurement Coalition strongly support the Federal Procurement Schedule (FSS) program. However, GSA’s industry partners also understand that Single Award BPAs and IT GWACs play a critical and positive role in supporting the mission requirements of client agencies. Unfortunately, the RFI gives the impression that GSA is competing with itself, undermining its comprehensive approach to the federal customer.
Second, the RFI and previous generic government-wide BPAs raise questions about the additional fees charged to client agencies and the addition of BPA contract terms / features that are not included in the underlying FSS contracts. The additional fees charged for creating government-wide generic BPAs raise questions about the GSA’s overall fee structure. It may be time to take a comprehensive review of fees and operating costs to determine if industrial finance fees are set at the appropriate level. With regard to additional BPA terms that are not included in the underlying FSS contracts, GSA should engage in dialogue with its industrial partners and customers as to whether these terms should be negotiated at the FSS contract level. Too often it seems that a rationale for running a government-wide BPA is to add standard functionality that could have been included at the contract level.
Finally, generic government-wide multi-award BPAs create vertical duplication of contracts (i.e. redundancy in administrative processes and contract terms), increasing costs for FSS contractors, GSA and client agencies. FSS contractors must negotiate and administer their FSS contracts, compete for and manage a generic government-wide multi-tasking BPA, and ultimately compete for and manage a work order issued under the BPA. Why not ensure that FSS contracts include the conditions / features suitable for the federal market and then place a task order as part of the contracts? Generic, government-wide, multi-award BPA creates an additional layer of costs, administration, and processes that increase costs for everyone.
Careful development of requirements is essential for success. BPAs that include strong and comprehensive requirements strengthen competition, reduce costs, increase value, and drive positive business and mission results. Nine years ago, on June 4, 2012, the “FAR & Beyond” blog published a set of “Federal Procurement Calendar Best Practices for GAP”. These best practices remain fundamental to leveraging the FSS program to meet the needs of client agencies. Here is this blog reprinted in its entirety:
Best Practices for Federal Procurement Schedule GAP
As promised, this week’s blog post provides best practices for Federal Procurement Schedule (FSS) General Purchase Agreements (GPAs). The goal is to promote practices that improve competition and opportunities for government and industry. Robust FSS BPAs exploit requirements and deliver the best value for money to agency clients. Likewise, strong FSS GAPs translate into positive business results for FSS entrepreneurs.
GSA Calendars – Best Practices for Establishing Global Purchase Agreements
The GSA Schedule program provides agencies with an excellent platform to acquire business services, solutions and products at reasonable prices. Agencies can build relationships with business partners and leverage their purchasing power more by establishing Global Purchasing Agreements (BPAs). Regulatory requirements for establishing GAP are set out in FAR 8.4. In addition to complying with regulatory requirements, there are specific strategies that have been shown to be effective in enabling an agency to structure BPAs in a way that increases the ability of GSA Schedule contractors to respond more competitively. This document presents the best practices that have resulted in successful GAPs for both federal agencies and contractors on the GSA calendar.
Business entrepreneurs overwhelmingly report that they offer their best terms and prices to customers who provide the most detailed information about their needs and usage. Business customers who get the best deals share the following characteristics. They have:
- Known, requirements they share with potential suppliers;
- Commitment to acquire a specific volume;
- Centralized program management; and
- Partnering strategies with suppliers
Specific information on the factors listed above, when included in a statement of work, has great potential to enhance the ability of government and industry to deliver the best value for money to the taxpayer.
Specific requirements, volume commitments and / or guaranteed minimums for GAP will lead to increased competition and better prices. Generic GAPs that rely on subsequent competition for task orders introduce a counterproductive level of complexity and cost.
BPA best practices
The following practices have resulted in BPAs that improve efficiency and enhance effective competition while providing the best value for the government.
1. Focus on the requirements. BPAs should be structured with a targeted set of requirements in order to improve effective competition and pricing. The actual requirements lead to real price competition in the FSS ordering process.
- GAPs reflecting single agency requirements should be preferred over multiple or government-wide GAPs. Single agency GAPs allow the government to state specific, realistic, and genuine requirements that can be accurately assessed.
- Include maximum and minimum requirements. This information allows bidders to provide targeted pricing and avoid having to build in cushions to cover risks and changes that may never materialize.
- Include a good estimate of the government’s intended use.
2. Include real economic incentives for competition. Commercial pricing policies generally extend favorable pricing to customers with terms and guarantees that provide the business with an economic advantage. Economic incentives include:
- A commitment to acquire a guaranteed minimum volume;
- In the absence of a guaranteed minimum, the BPA may include a list of required users;
- If an agency cannot commit to a guaranteed minimum or required user list, GAP should be assessed solely on the basis of technical requirements; The price can be established on the basis of competition between technically qualified BPA holders at the task order level.
3. Pay attention to the management of BPA. Major BPAs should have an assigned program manager to ensure effective execution, implementation and administration. Too often, GAPs are established without a targeted management plan for effective use. Program managers can be particularly effective at:
- Establish strong communication between contractors and end users to continuously improve contract administration.
- Eliminate unnecessary administrative requirements that add unnecessary costs to the process.
- Control of agency orders.
- Periodically review GAPs to ensure the best value for money.
4. To the extent possible, involve industry partners in developing the acquisition strategy. The government should use industry meetings and statements of work to share agency goal statements. In some cases, agencies focus entirely on negotiating low prices and may miss opportunities to acquire new business solutions that can improve service delivery or provide advanced technology. Agencies can also focus on reducing the unit price of products or services without considering greater opportunities to reduce the total cost of operations by changing what they buy or how they buy. Full integration of industry discussions early in the process can open up opportunities for business partners to suggest new cost reduction strategies.
5. Eliminate “generic GAP” (no declared users, no minimum volume, general statement of requirements). Generic multi-award BPAs that rely on subsequent task order contests add an extra level to the FSS ordering process that is unnecessary and should be avoided. These GAPs represent a vertical duplication of contracts and increase costs for both government and industry. In addition, any price competition when establishing these GAPs is illusory. Subsequent BPA task order competitions for specific requirements establish the actual price paid by the government – it is more efficient to compete against these requirements directly with GSA schedule contracts.