GSA is expanding the number of providers from three to eight, including six new ones.

Along with current platform providers Amazon Business and Fisher Scientific, GSA awarded spots on the next generation Commercial Platform Initiative (CPI) contract to:

• e-Procurement Services
• Grainger
• Noble Supply & Logistics
• Pacific Ink
• Social Glass
• Staples

Four of the awardees, ePS, Noble Supply, Pacific Ink and Social Glass, are small businesses, opening the door for agencies to obtain small business credit for these small dollar buys.

“This is about meeting our customers where they are with a modernized user experience and streamlined process for government purchase cardholders,” said Tom Howder, the acting Federal Acquisition Service commissioner, in a release.

GSA created the CPI program under a proof-of-concept moniker with awards to Amazon, Fischer and Overstock Government in 2020 under direction from Congress with a goal of capturing data on and managing products under the micro purchase threshold of $10,000. Initially, GSA thought the market was about $6 billion, but came down in the last few years to the potential market being about $500 million.

Overstock Government decided not to bid on the next generation platform, sources say.

Lawmakers detailed its desire for GSA to pilot online commercial platforms in Section 846 of the 2018 Defense Authorization bill. The House Armed Services Committee’s initial goal was to make federal procurement less complex and more competitive through the use of commercial platforms.

“GSA’s announcement of eight contracts awards for the commercial platform initiative represents the passing of a significant milepost on its journey to bring enhanced electronic commerce to agencies,” said Roger Waldron, president of the Coalition for Government Procurement, in an email to Federal News Network. “Collectively, these contracts represent a streamlined channel through which agencies can acquire commercial off the shelf products quickly. They also put competitive pressure on the Schedules program to improve its administrative efficiency, which is a positive result that will help buyers and sellers in the market.”

The awards come at more and more agencies are using the initial three platforms, though data shows Amazon Business received the vast majority of the orders, accounting for 96% of all orders in fiscal 2022, according to an August 2023 report from the Government Accountability Office.

GSA says for 2023, 34 agencies spent $80 million, which is double the amount of money spent in 2022.

GSA also says total orders also increased to 305,000 from 105,000 in 2022, and 52% of all users were repeat buyers and agencies spent on average between $250-$350.

“This is a pivotal turning point in the Commercial Platforms Program as we expand the number of platforms available, including a number of small business awardees,” said Keil Todd, the Commercial Platforms program manager, in the release. “We’re excited to move out on the next-generation of this program to further our commitment to agencies in helping them get the products they need to support their missions.”

With the additional companies GSA is adding, agencies have access to buy from well-known diverse companies like Amazon Business, Fischer Scientific, Staples and Grainger that provide a large variety of products, but from the four small companies.

Noble Supply, for instance, provides the Defense Department with access to products from 13,000 companies.  Pacific Ink offers office supplies and Social Glass provides access to small purchases across 50,000 products. And ePS  filed a protest of the solicitation in December only to gain corrective action and win an award.  ePS is a platform providing access to small business suppliers.

“We are looking forward to assisting GSA in meeting the goals of the Commercial Platform program. This award allows us to bring other federal agencies the benefits that federal buyers are currently experiencing within the e-Procurement Services (ePS)  Army and Air Force eMarketplace programs,” said David Saroli, CEO of e-Procurement Services (ePS), in an email to Federal News Network. “Being part of the Commercial Platform program will also help increase the growth our small business suppliers are currently experiencing through the Army and Air Force ePS e-marketplaces.”

The journey to this award, and it’s unclear if GSA has crossed the finish line given several unknown factors like how many bidders there were and if any that were unsuccessful would file a protest, was not an easy one. GSA took heat for initially overlooking, or ignoring, the requirement to comply with the Javits-Wagner-O’Day (JWOD) Act. The 1938 law mandates the AbilityOne Commission publish a procurement list that identifies commodities and services that the commission has determined are suitable to be furnished to the government by companies who employ people with disabilities. Agencies must buy these specific products and services unless there are specific circumstances that require exceptions.

GSA ended up fixing the solicitation to satisfy the protestors’ concerns.

The post GSA’s commercial platforms program to grow by five providers first appeared on Federal News Network.

The General Services Administration issued its second acquisition letter in just over two years, giving its contracting officers permission to move closer to buying cloud services “by the drink,” or through a consumption based model.

Jeff Koses, GSA’s senior procurement executive, wrote that contracting officers, under certain conditions, can use upfront payments to buy software-as-a-service and it doesn’t violate federal procurement law that prohibits advanced payments.

“In the context of software licenses delivered or accessed via SaaS, payment is often made ‘upfront,’ meaning that payment is made contemporaneously with receipt of the software license and the beginning of the license service term. GSA contracting officers have been asked whether such upfront payment is considered an advance payment. It is not,” Koses wrote. “The central distinction is the contemporaneous access.”

Koses wrote advance payment is a specific type of contract financing method where payments are made prior to delivery or completion of the product or a service. It is not allowed under the Anti-Deficiency.

Technical workaround needed

Rich Beutel, founder of Cyrrus Analytics and a federal procurement expert, said GSA is leaning on a technical workaround given the lack of attention this topic has received from Congress.

“The acquisition letter skirts the Anti-Deficiency Act prohibition by highlighting the requirement for contemporaneous delivery of the software, thus there is no advance procurement delivered without an applicable preexisting appropriation,” he said.

Koses said there are six criteria for the acquisition to meet for contracting officers not to have to worry about the advanced payment rule:

• Access to the software is granted contemporaneously with payment (i.e., delivery of the license is made contemporaneously with payment);
• The license is acquired on a fixed-price or fixed-price with economic price adjustment basis even if other portions of the task order or contract are not fixed price;
• The license is priced at a single seat, multi-seat, unit or subscription price covering a fixed term, defined as “a limited period of time;”
• The license’s pricing/billing model allows for no utilization or consumption metric other than quantity to affect the costs incurred over the negotiated term;
• The license does not require any upfront payment other than the fixed seat, unit, or subscription cost as a prerequisite for access or a pricing discount;
• Within end user or other license agreements, the license service is continuous and uninterrupted for the negotiated term of access to the license.

Larry Allen, president of Allen Federal Business Partners and a procurement expert, praised GSA’s changes.

“I think that this is a win for enhanced competition, especially for small businesses that may have had to previously finance software acquisitions and have to offer higher prices as a result,” he said. “This move should increase competition and drive better pricing. This is a win for common sense in government acquisition.”

GSA recognized the problem

Beutel, who praised GSA’s 2021 acquisition letter that created new ordering procedures to allow the procurement of cloud offerings using a consumption-based pricing formula, said Congress still must amend the Anti-Deficiency Act to allow for industry to bill in arrears for cloud services on a consumption basis.

“Politically, the appropriations committees would likely be very skeptical of such a proposal, despite its clear economic value,” he said. “Over the last several years, we have addressed the need for government to have the legal authority to adopt true consumption based pricing, so as to be able to buy IT capacity instantly as the need arises. This could be achieved through the use of working capital funds and other technical workarounds, as GSA has adopted in the context of certain schedule based cloud procurements.”

This specific issue is causing agencies to have to pay as much as 25% more for cloud services and caused the limited use of the Defense Enterprise Office Solutions (DEOS) contract from the Defense Information Systems Agency.

GSA recognized this problem and asked for industry feedback last July. It issued a request for information asking for industry feedback on SaaS pricing best practices and what are its options better align the schedules with industry practices for pricing and invoicing term-based software.

The post GSA aims to make buying SaaS easier through new policy first appeared on Federal News Network.

The defense industrial base roster of companies keeps shrinking, and supply chain snags have become constant. Now at least some members of Congress have asked whether the Defense Department should step in more often when DIB companies merger or acquire one other. The Federal Drive with Tom Temin gets more now from Democratic Congressman, John Garamendi, ranking member of the House Armed Services Subcommittee on Readiness.

Interview Transcript: 

Tom Temin Your letter to Secretary Austin was widely reported. What do you feel DoD should do with respect to mergers and acquisitions, which occur, I think, more often than people may realize.

John Garamendi Well, let’s start with competition is absolutely critical in every part of the American economy. Unfortunately, what we’re finding in the defense industry is that competition is all but disappeared. The companies do not compete with each other. The five majors don’t. They basically wind up with no bid, no competitive contracts for multibillion dollar programs. For example, the Sentinel program. I was a no bid, no competition, $130 billion contract. This is absolutely unacceptable. And that’s not the only one. We can go to numerous programs. The acquisition enough munitions to replace those that have been used in Ukraine. Every one of those contracts are no bid contracts. Those are simple. One company or another picking up that particular item and manufacturing it for the military without a bid. This is unacceptable. The good news is that the Biden administration, in other sectors of the economy is saying, wait a minute. The American economic system is based on competition, so we’re not going to support continued consolidation where there is a lessening of competition. They’ve not yet done so in the military industrial complex, although they certainly should. And as near as I can tell, the Department of Defense is part of the administration. And the Department of Defense ought to get on board and take significant steps to stop the continued consolidation of the defense industry.

Tom Temin Is the Defense Department, its acquisition patterns and planning processes, could that be part of the problem? Because if there was a discernible and steady demand signal coming from DoD, then maybe more companies would be prompted to get in on it. But it’s the stop and start nature of many of the programs. Says to companies, well, this is not a business for me anymore.

John Garamendi That’s just not the case. These programs go forever and for decades. The funding may move a little bit one way or the other, but the programs continue. Shipbuilding continues. We have 35 continues. On and on, the major programs are cemented in, and that in itself is a problem. But you’ve also hit on the edge of a very significant problem. It’s virtually impossible for new companies to get into the game. The Beltway Bandits control it. They have a relationship with the Department of Defense, and the Department of Defense does what is the easiest. They go and work with people that they already know, often know that have gone through the revolving door. And so we wind up with this cabal between the Department of Defense and the military companies industrial complex. It’s a cozy relationship, and the billions of billions continue to flow. Small companies can’t get in the door.

Tom Temin Yes, because there has been a series of so-called innovation programs, increased use of other transaction authorities and all of these measures to try to get what they say they want, which is innovative small businesses in drones and autonomy and all of these new initiatives. And yet a tiny fraction of the spending actually goes to those companies. That’s one of the factors you’re looking at.

John Garamendi Oh, absolutely. And there’s a major effort within the Department of Defense now to push this entire effort to bring new companies into the contracting for the military. Hopefully will be more successful than the past. And by my most recent count, there are five different organizations within the Department of Defense to do this, but it is frankly not working, in part because it’s easier to do what you did yesterday. And there is a risk to step outside the norm, and there’s a risk to bring in a new company. For example, the manufacturing of certain armaments is now being done by the major defense contractors who have did it before, and the government is spending millions upon millions to expand the capacity of those companies. Could those millions of millions be used to expand the capacity of new contractors? Of course they could. But that’s a risk. That’s a risk to the people that are within the Department of Defense, the acquisition teams. That they may wind up unsuccessful. The power of the big companies is such that, yeah, they’re going to screw up and they certainly have done that multiple times. But they’re big. And in that bigness there’s protection not only for the company, but also for those who do the contracting within the Department of Defense.

Tom Temin We’re speaking with California Democrat John Garamendi. He’s ranking member of the House Armed Services Subcommittee on Readiness. And your recent letter to get back to that, called on the DoD to do more scrutiny or oversight of mergers and acquisitions. Does it have any authority to do anything about it if they don’t like one, that’s happening anyway?

John Garamendi Of course they do. They don’t. The problem is they don’t act. The most recent mergers, they could have spoken up about the effect that is the lack of competition, the consolidation of some critical parts of the supply chain for the materials that the department or the military needs are now in the hands of one company. The way they should have done it is to work with the other federal agencies, Federal Trade Commission, specifically with the White House. The White House and the Federal Trade Commission have a very clear policy of scrutinizing and often opposing mergers. This is done in the commercial sector, not in the military sector. The Department of Defense knows or should know that the consult obligation is eliminating competition, and in some cases, even eliminating the ability to produce or manufacture certain goods, leaving it to just one company. And that company may decide that the profit on that particular line of work is insufficient and will simply ignore it. Now, that’s not just my dreaming that’s actually happening.

Tom Temin Let me ask you about another related gambit that the DoD has been talking about, and that is building up what it calls the organic industrial base. There are certain things munitions, for example, they have plants that do make the howitzer shells and so on. Is that a way to foster competition or is that a way to, do you think, is it removing the impetus for competition?

John Garamendi Actually it’s both. Clearly, over the last two decades, we’ve allowed the organic base from ship repair to munitions and the like to simply atrophy. And that’s is now creating a major problem for the military. We’ve seen the drawdown of our materials, our depots and supplies as we’ve provide the weapons that Ukraine needs. The result of all of this is that the ability of the system to produce the necessary munitions and other items is insufficient. Now, what’s happening here is the federal government is pumping a vast amount of money into that organic base. All parts of from the repair depots to the manufacturing of munitions, as well as shipyards and the like. We have to do that. Now, the bottom line is the military doesn’t run those places. In almost every case, those facilities are contracted out to, once again, the military industrial complex to do the work at that particular facility. That’s not universal, but that is the general way in which this has worked. So once again, we’re back to a handful of companies that contend for those contracts. There’s another piece of this related but not so direct. And that is the Army Corps of Engineers, who is responsible, has the programs to build everything from dams and levees to facilities, depots, airbases and the like. Once again, Army Corps of Engineers finds it more convenient to go to the good old boys that they’ve dealt with for decades and do a contract, a prime contract with that organization. Now, there are excellent contractors around the country and around the world, American contractors that could easily do that work. They do it on the civilian side, but the Corps of Engineers finds it more convenient, easier and less risky to hire, again, the Beltway bandits. And the Beltway bandits bring into various parts of the country, not local contractors, but their crews from wherever it may be around the world, leaving the local contractors out and leaving the opportunity for those communities to enjoy the benefits of these multimillion dollar construction projects.

Tom Temin And you have raised this issue at this particular time. And here it is, March. And, golly, in a few months, you’re going to have to have a National Defense Authorization Act, once again,  before the end of the year, in theory. Will you put something in the NDAA for 2025 that addresses this particular issue, especially in light of this new report that just came out? Defense resourcing for the future, the PPBE McNamara era process, which is still extant in DoD. Kind of relates to all of this also.

John Garamendi Absolutely. Senator Warren and I are determined to make this an issue. We believe in competition, the American system of economic competition. And we want to see that competition in full bloom in the Department of Defense and in the billions, well, it’s $1 trillion of taxpayer money that flows through the Department of Defense and all of its iterations. So, yes, we’re going to stay with that. Also, it needs to be understood that the major contractors, Boeing, specifically refuse to provide the necessary cost information on their program. So simply tell the Department of Defense, go away. We’re not going to give you the information that is required by law to be given to the Department of Defense about the cost factors, in the major contracts that they have. That is absolutely unacceptable. And just as a matter of course, we need auditors, in the Department of Defense that have the guts to have the capability and the resources, to order these multibillion dollar contracts to make sure that the American government and taxpayers are not being taken down the road.

Tom Temin And just a final question on the DIB issue. You mentioned shipbuilding, of which there is virtually no competition. In fact, for some, I think Coast Guard cutters, they had to go to a European company because there was no capability in the United States. But if you look at something like destroyers, carriers, submarines. What evidence is there at this point in time that there is the capacity in the United States for a competitor to these types of platform manufacturers to even exist, given the capital requirements and the talent requirements? Could we even have a second shipbuilder?

John Garamendi It’s entirely possible, if it was the Department of Defense’s strategy to do so. Right now, the Department of the taxpayers are pumping billions of dollars into improving the shipyards, both the public and the private shipyards. There is a strategy. I’ve been working on this now for nearly a decade. The strategy is to rebuild our maritime industry. The Jones Act, for example, and it’s possible for the military to create a program like the Craft Program, which makes domestic commercial airliners available to the military when needed. And every year, taxpayers who Department of Defense are subsidizing the commercial airlines so that we could have those airplanes available when needed. And we do call upon from time to time. We could do the exact same thing with the maritime industry. Multiple ways we can rebuild our domestic shipbuilding. For example, the United States is a huge exporter of natural gas and a petroleum. If 10 to 15% of that was on American built ships, we would build 30 to 40 commercial ships in the next ten years, thereby building the capacity for the military to have multiple shipbuilders available. Is it possible to do that? Yeah, there ought to be a law. I’ve been proposing that now for seven years that we call it energizing the American shipbuilding industry by simply requiring, as we once did, that those exports of petroleum products beyond American ships used to be 100%. Now it’s zero. And Chinese ships are being built to carry American, natural gas, LNG and petroleum products. No, wrong. We should do it ourselves. I know the petroleum industry is going to whine. Oh, it’s going to cost an extra $0.05 a barrel to do it. Well screw them. This is about the United States having a capacity to build the ships that we need to protect ourselves. Right now, we cannot do it.

The post Should the Defense Department get more mixed up with mergers and acquisitions? first appeared on Federal News Network.

The General Services Administration’s top IT official says GSA did not violate the law when it bought more than 100 China-made video conferencing cameras in 2022 as part of a pilot project.

GSA Chief Information Officer David Shive also says nobody at the agency intentionally misled the contracting officer into approving the purchases.

GSA’s deputy inspector general, however, says officials in the agency’s Office of Digital Infrastructure Technologies (IDT) supplied the contracting officer with “egregiously flawed information” to approve the purchase. Deputy IG Robert Erickson Jr. also maintains that the purchase violated the Trade Agreements Act of 1979.

The issue, simmering since the IG issued its report on the purchases in January, came to a head during a hearing on Thursday before the House Oversight and Accountability subcommittee on cybersecurity, information technology and government innovation committee.

“As stewards of federal IT procurement government wide, GSA especially must show preeminent expertise and diligence in buying the right it to ensure government works and is secured,” Ranking Member Gerry Connolly (D-Va.) said. “While GSA has made the case they’ve not violated any laws, the American people deserve to know why they piloted products that would not have complied with the Trade Agreements Act if they were bought at the amount necessary to serve the full organization.”

The IG’s report centers on two separate transactions occurring in March and October of 2022, respectively. GSA purchased a total of 150 video conference cameras from Owl Labs, which manufactured their video conferencing cameras in China until mid-2023.

Shive said GSA’s decision to pilot the Owl Labs cameras was based on their “unique capability of a 360-degree view and portability.”

“It also required no installation, was compact and easy to relocate and store and was one of the least expensive among the options,” Shive said.

The IG report found that “at least” one alternative existed that was manufactured in a TAA-compliant country. But “the market research provided to the contracting officer did not include information on this alternative,” the report states.

Shive maintained that the Owl Labs cameras were the only devices that met GSA’s requirements. He conceded that GSA could have done a better job documenting its requirements.

“We did a fulsome analysis of the market research, interviewed the people involved, and determined that nobody intentionally misled the contracting officer,” Shive said. “We said, ‘Okay, this is a training opportunity.’ So we’ve trained not only this person, but corresponding staff in two ways. One, we’ve given them training on [Buy American Act] and TAA compliance. And the other is we’ve trained them on what proper market research would look like, specifically documentation.”

He also said GSA has taken steps to ensure that the cameras operated securely.

“In line with our security protocols, GSA voluntarily removed older Owls from use that the vendor indicated would no longer be supported,” Shive said. “For the remaining devices, our security assessment determined that the cyber security risks were low. GSA chose to intentionally configure them for use in a more limited manner in order to further reduce any potential vulnerabilities.”

A spokesperson for Owl Labs said the company’s “core products” are now made in Vietnam.

“Prior to mid-2023, Owl Labs worked with a leading, multinational contract manufacturer in China, as many large U.S. companies do,” the spokesperson said. “No security breaches have ever occurred or been reported among customers using Owl Labs products. Owl Labs devices never record, collect, transmit or store any video or audio data from any meetings. We regularly conduct penetration testing of our software and hardware to ensure they meet industry security standards.”

GSA, IG disagree over TAA compliance

Shive further argued the purchases did not violate the TAA since even taken together the procurement didn’t meet the threshold of $183,000 required to invoke TAA compliance. He also said GSA has no intention to purchase any more Owl Labs cameras.

But Erickson Jr. pushed back on that response, arguing the pilot program was meant to lead to a larger procurement.

“This was going to be a bigger purchase,” he said. “It was going to be scaled up to purchase a lot of Chinese video cameras.”

Connolly also took a dim view of Shive’s statement.

“You’ve already got GSA employees saying there was no other product,” Connolly said. “So that would argue no, once we have the pilot, we’re going to scale up with this product. There seemed to be no sensitivity or care that it was Chinese and that there was security concerns inherent in a Chinese camera, because we have experienced that with other Chinese technologies. Red lights had to go on. And it was in violation, frankly, of U.S. government policy. And that’s strange, given the fact that you’re the General Service Administration charged with this very mission for on behalf of the federal government.”

“It’s a very troubling episode,” Connolly added.

Subcommittee Chairwoman Nancy Mace (R-S.C.) illustrated broader concerns about buying technology manufactured in China.

“To think that buying Chinese equipment that could be used to spy on us and our government is a good idea, is a terrible idea, and I hope that you never do it again,” Mace said to Shive during her closing remarks. “And I hope you get rid of what you have and give it to somebody else. Maybe give it to Russia, because I don’t want that stuff in our federal government or in our agencies.”

The post GSA CIO, IG spar over purchase of China-made video conferencing cameras first appeared on Federal News Network.

CORRECTION: FNN incorrectly reported the contract that the court ruling forced GSA to rethink. GSA had to change the Polaris solicitation. This story has been updated to reflect that change on March 1. 

The fix is in for federal small business contracting. And this fix is actually a good one.

Sens. Gary Peters (D-Mich.), chairman of Homeland Security and Governmental Affairs Committee, and Joni Ernst (R-Iowa), ranking member of the Small Business and Entrepreneurship Committee, are trying to correct a misunderstanding of congressional intent when it comes to how and when agencies should consider price when reviewing proposals for contracts.

Ernst said she believes her bill, the Conforming Procedures for Federal Task and Delivery Order Contracts Act, will let agencies push reviews of cost back to the task order level where it belongs.

“This bill would allow small business owners to bid on valuable contract opportunities based on their actual skill and expertise, rather than forcing those small businesses to compete, using more of an arbitrary price competition model that could otherwise exclude qualified and capable small contractors,” Ernst said in an exclusive interview with Federal News Network. “There is a real hunger with our small businesses to see this opportunity. We are going to keep working on this. Hopefully, we’ll be able to get some hearings scheduled on it and bring small business owners in that can talk to this.”

Ernst said she’s confident the bill will get traction this session of Congress both because it’s bipartisan and because it’s beneficial for large and small businesses alike. There isn’t a version of this bill in the House.

The bill is a technical fix to what’s commonly known as the Section 876 authority. In the 2019 Defense authorization act, Congress passed the provision “Increasing Competition at the Task Order Level,” which aimed to enhance and increase competition and access to the commercial market by authorizing multiple award indefinite delivery, indefinite quantity (IDIQ) contracts for services to consider pricing at the task order level when evaluating bids and not at the main contract level when awarding the contract.

Small business hurt by court decision

The General Services Administration used the 876 authority for its ASTRO contract for services to support the operations, maintenance, readiness, research, development, systems integration and support for manned, unmanned and optionally manned platforms and robotics. But when GSA tried to apply the authority to its Polaris small business vehicle for IT services, a vendor protested and the Court of Federal Claims rules GSA’s interpretation of 876 went too far. The court’s ruling forced GSA to rethink the solicitation for both Polaris and its OASIS+ vehicles, and bring price back as an evaluation factor at the main contract level.

This led both Ernst and Peters to seek a permanent technical fix for the 876 authority.

Emily Murphy, the former GSA administrator, wrote in July that a congressional fix is necessary to achieve the goals of 876. She wrote the “goal was to make sure that contractors with the best technical ability win spots on these multiple award contracts, and to push for vigorous price competition at the task order level. This approach allows contracting officers to focus on getting the best solution for the government, but it also delivered savings — contractors wouldn’t have to prepare, nor contracting officers evaluate, thousands of lines of data that isn’t meaningful to the work performed or the prices actually paid.”

Along with this technical fix, Ernst said she’s focused on several other priorities to improve small business contracting in 2024.

Ernst to reauthorize SBIR

One big area is legislation to make the Small Business Innovation Research and Small Business Technology Transfer Programs (SBIR/STTR) programs more effective through reauthorization. Congress reauthorized SBIR/STTR in 2022 for only three years.

“I have seen the trend where there is a consolidation of contracts given to known or existing small businesses. What we have seen then is the movement of all of those contracts to those known providers. Many of these businesses are typically on our coasts. So they continue to get award after award after award. They are the ones that are on the east coast or the west coast,” Ernst said. “We have a large swath of middle America, like where I live in Iowa, where small businesses have just given up on trying to compete against those that have competed for years and years, and who have the system down and they know how to fill out these packets. They know how to get the contracts and they’re squeezing others out that have not been able to secure those contracts.”

Ernst said she is concerned about the issues raised previously about SBIR mills where vendors win funding, but never commercialize their technology, as required under the programs.

But at the same time, she wants the small business industrial base to stop shrinking and SBIR/STTR is a good avenue for those new small firms.

“We just really want to make sure that through this effort, we’re supporting opportunities for small business owners to participate. One of those avenues was my small business expo at Iowa State University last year, it was a huge success. And it opened up federal contracting to so many small businesses across the state,” she said. “We’ll continue to do those types of opportunities. But then the second point, the SBIR/STTR programs is part of our innovation ecosystem here in the United States, and it’s really our greatest strategic advantage when we’re trying to counter adversaries. We’re trying to transition small business research and development from labs and garages to innovate equipment in the field. And we have to remain focused and have that as the central focus of the SBIR/STTR programs.”

Holding agencies more accountable

Increasing the small business industrial base challenge also is a central focus of her Accountability and Clarity in Contracts to Engage Small Suppliers (ACCESS) for Small Businesses Act, which Ernst introduced in September.

She said that bill does several things, including requiring agencies to increase access to government contracts by making sure agencies write small business contracts in plain language.

“It also allows them to achieve an ‘A’ on their small business scorecard or testify before Congress on why they failed to do so. Then it also makes sure that the Small Business Administration’s contracting scorecard measures the health and variety of small businesses because sometimes we get in a very narrow lane of where we’re offering contracts,” Ernst said.

The ACCESS Act also is addressing an ongoing concern about the responsiveness of SBA to the committee. Ernst said she would like to see SBA engage more with the committee and lawmakers to improve these and other areas of small business contracting.

“We have to use our leverage as members of Congress to force the discussion sometimes through letters, through meetings and phone calls with officials over at the SBA. But also getting the information from our constituents, we can never forget that we represent our own states, we have the small businesses within our own communities,” she said. “We need to know from their perspective what is the right way to move forward? What are those obstacles that the federal government has thrown into your path, that maybe we can help you navigate whether you have to go around it, over it, below it, whatever it is, we need to figure out a way for those small businesses to be able to work with the federal government? Hearings are always very important. That is something that Chairwoman Jeanne Shaheen (D-N.H.) and I have been working on, I do have to say it’s been a little tough communicating with the SBA. When [Sen.] Ben Cardin (D-Md.) was the chairman, we ran into roadblocks at every opportunity. Even when we were acting in a bipartisan manner, we would have letters that were not responded to, or even acknowledged at the SBA.”

The post Sen. Ernst hopeful about fixes to small business contracting first appeared on Federal News Network.

The groups are also objecting to the tight cyber incident reporting deadline in proposed cyber rules. They also oppose requirements to use Software Bills of Material (SBOMs).

Agencies released the two proposed cybersecurity rules for information and communications technology (ICT) contractors last fall. The deadline to respond to both rules was Feb. 2.

The proposed rules would, among other things, grant the Cybersecurity and Infrastructure Security Agency, the FBI and the contracting agency “full access to applicable contractor information and information systems, and to contractor personnel, in response to a security incident reported by the contractor or a security incident identified by the government.”

In a joint letter, the Cybersecurity Coalition and the Alliance for Digital Innovation (ADI) argued the “full access” provision in the rules should be removed.

Grant Schneider, senior advisor to ADI, said the proposal would create a “very unbounded type of access” that could raise privacy concerns.

“I don’t think there should be a provision for full access,” Schneider said. “That said, if the government absolutely feels that they need to have that as an option, then I think there’s a number of things that they could put in place.”

ADI and the Cybersecurity Coalition recommended several stipulations to the provision. They argued agencies should only be granted full access if a contractor is not cooperating with an investigation into a cyber incident.

The groups also said there should be an appeals process so contractors can object to “unnecessary” access to systems.

“Just some checks and balances, so we’re doing this in a collaborative manner, we’re taking a risk management approach to cybersecurity, both for the government and for the contractor,” Schneider said.

BSA The Software Alliance also recommended removing the “full access” provisions in the rules. Henry Young, BSA’s senior director for policy, argued the provision would “undercut privacy and security protections.”

“Typically, before law enforcement would get access to private information there would be process or consent,” Young said. “And what this suggests is that maybe those protections would no longer be enforced. So it’s a sea change in how these parties interact.

Stephanie Kostro, vice president for policy at the Professional Services Council, also said PSC’s members have also raised issues about the “full access” proposal.

“We’re also talking a bit about protection of what is called government data or government related data,” Kostro said on The Federal Drive with Tom Temin. “A lot of companies have trade secrets, have pricing models, have sensitive information on their systems. And one of the rules does go in to say, ‘if it is on a system that performs government work, that is government related data.’ That’s an issue in terms of intellectual property, and it’s an issue in terms of privacy.”

Cyber incident reporting and SBOMs

The rules would also require ICT contractors to report potential cyber incidents to the government within eight hours. “Recognizing that initial reports may not contain complete information, even incomplete early reports provide the government an important opportunity to limit the extent of damage to its systems and data,” the proposed rule states.

The industry groups are also urging agencies to modify that requirement. They say the types of incidents and the timeline for reporting should align with the Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA). That law requires a 72-hour reporting timeframe. CISA is expected to issue those rules later this spring.

“When you throw in a different set of reporting requirements, it really just makes the entire process more cumbersome,” Young said. “I would say the most important thing is we just do things in an orderly manner. And it will be much more efficient if we do it that way.

The groups are also pushing back against requirements in the rules for ICT contractors to maintain SBOMs. Young said the government shouldn’t mandate the use of SBOMs until CISA and stakeholders make more progress on efforts to develop and standardize the software ingredients lists.

“We support SBOMs, and I believe they will be required in the coming years,” Young said. “But requiring them now, before industry and government have completed the work that CISA is leading, seems to be out of order.”

‘Markers in the sand’

The proposed cyber rules are motivated by recent cyber incidents, according to Chris DeRusha, the federal chief information security officer.

“I think the important thing to remember is we put these federal acquisition rules together on the heels of the SolarWinds event and Colonial Pipeline,” DeRusha told Federal News Network in October, shortly after agencies published the proposed rules. “It’s really the U.S. government saying, ‘Here’s the things, that based on our experience responding to serious incidents, that have really been missing for us to be able to do our jobs.’”

Schneider, the former federal CISO, said he believes the rules are the government’s “opening negotiation point” in setting critical cyber requirements for contractors.

“I think they’re putting some markers in the sand,” Schneider said. “I personally will be very surprised if we don’t see some movement to a little more of a compromise on some of these areas.”

Agencies will now have to take into account the feedback they received on the proposed rules before issuing final regulations.

“There’s a question of whether they try to get this done before the election or before the end of the calendar year,” Schneider said. “But I think that would be a pretty heavy lift to just given the substance and the size of what was in these rules.”

The post Industry groups push back on cyber incident rules requiring “full access” first appeared on Federal News Network.

• Navy Secretary Carlos Del Toro had a few choice words for contractors. The Department of the Navy is putting its contractors on notice to deliver ships, aircraft and submarines on time and on budget. Del Toro said it is time for contractors to spend more money on the future. "You can't be asking for the American taxpayer to make even greater public investments while you continue, in some cases, to goose your stock prices through stock buybacks, deferring promised capital investments," Del Toro said. Speaking yesterday in San Diego at AFCEA West, the Armed Forces Communications & Electronics Association International, Del Toro also said the Navy and its partners need to reduce costs, optimize systems, and improve interoperability.
  (Navy Secretary Del Toro pushes industry to invest more of its profits - America's Navy)
• A Department of Veterans Affairs watchdog is warning that hundreds of thousands of veterans are at risk of mix-ups with their prescription medications. VA’s Office of Inspector General said it is an issue between the department’s new and legacy Electronic Health Records (EHR). If veterans seek treatment at one of five sites using the department’s new Oracle-Cerner EHR, then receive care at a VA site using its legacy Vista EHR, their medication information may be incorrect. That runs the risk of VA clinicians filling scripts for medicine that conflict with what veterans are already taking or giving them medicine they are allergic to. "While VA is taking efforts to reduce this potential, we remain concerned that patients have not been informed of their individual risks," VA deputy IG David Case said.
  (VA watchdog warns EHR issue puts 250,000 veterans at risk of medication mix-ups - Federal News Network)
• Members of the National Guard and Reserve are not receiving special pay and their advocates want to know why. The National Guard Association is asking Congress to investigate the Pentagon's delay of special duty and incentive pay for the Guard and Reserve. Retired Maj. Gen. Francis McGinn, president of the National Guard Association, said the Defense Department continues to postpone implementation of Guard and Reserve special-pay parity. The fiscal 2022 defense bill required the Pentagon to submit a report laying out the details of implementation. McGinn said the final report did not comply with the congressional request and did not include an implementation plan.
  (Advocates ask Congress to investigate DoD’s delay of incentive pay to National Guard - NGAUS)
• Funding and fragmentation have been major barriers for Federal Executive Boards for decades. Those FEBs are now on the verge of a transformation, as they look to expand their reach with more consistent funding under the Office of Personnel Management. FEBs help coordinate regional agencies and elevate the voices of federal employees working across the country. The program, which has been around since 1961, just updated its strategic plan. But "we don't have a prescriptive roadmap of, 'here's how we're going to do this.' I think that in 2024 and 2025, we're going to pilot various ways of what this can look like," said OPM Deputy Associate Director for FEBs Kelly DeGraff. A couple options on the table right now are adding more boards, or extending the ones that already exist.
  (The 85 percent: FEBs’ future is open-ended, but not uncertain - Federal News Network)
• The General Services Administration is facing new scrutiny about its purchase of prohibited telecommunications technology from China. Rep. Nancy Mace (R-S.C.) said she is concerned about a recent GSA inspector general report that found GSA bought 150 videoconference cameras manufactured in China, which is a violation of the Trade Agreements Act. She said given GSA's role as a major federal buyer of technology, the report raises even more questions about the agency's oversight processes. The chairwoman of the Oversight and Accountability Subcommittee on Cybersecurity, IT and Government Innovation would like answers and documents from GSA by February 23. Mace is holding a hearing on February 29.
  (Rep. Mace probes GSA about purchases of prohibit technology - Rep. Nancy Mace (R-S.C.))
• The Pentagon is shifting how it thinks about improving military infrastructure. A new strategy for resilient and healthy defense communities, released yesterday, will address the Pentagon’s outdated installations to improve service members’ quality of life. The Pentagon plans to create livability standards, which will be implemented into its policies and the Unified Facilities Criteria system. It will inform the department’s infrastructure planning, design, construction and modernization efforts. The strategy is a starting point, from which the department will develop an implementation plan.
  (DoD plans to improve housing, facilities on its installations - Deputy Secretary of Defense)
• The Social Security Administration is taking a new approach to try to reduce improper payments. The agency is proposing to now automate its payroll information system. Incorrect payroll data is often a reason behind overpayments made to Social Security recipients, SSA said. The agency is hoping an automated system will reduce manual reporting errors, and by extension, minimize improper payments. Public comments on SSA's proposed rule are due by April 15.
  (Proposed Rule for payroll information exchange to reduce improper payments - Social Security Administration)
• The future of the Postal Service depends on packages — a lot of them, according to Postmaster General Louis DeJoy. DeJoy told Federal News Network that USPS plans to rollout new products and services, tailored to small and medium-sized businesses. A key tenet of his 10-year reform plan, now in its third year, is to capture a bigger piece of the package business from private-sector companies like UPS, FedEx and Amazon. USPS needs new sources of revenue, because mail volume fell by 42% between 2007 and 2020. DeJoy said that trend is expected to continue.
  (DeJoy says USPS needs to get ‘better faster’ under reform plan, or risk running out of cash - Federal News Network)
• NASA and Texas A&M University are collaborating on a new facility to enable human spaceflight research and development within the commercial space economy. The 240-acre Exploration Park will be located at NASA’s Johnson Space Center in Houston. The lease agreement will let the A&M system and others use the land at NASA Johnson to create facilities for a collaborative development environment to increase commercial access and competitiveness in the space and aerospace industries. This agreement is part of a long history of collaboration between NASA and the university, which has been a space grant university since 1989.
  (NASA, Texas A&M to promote commercial human spaceflight - NASA)

The post Congresswoman blasts GSA for purchasing Chinese tech first appeared on Federal News Network.

Contractors probably know as much about the risks to national security as the Defense and Homeland Security Departments. One view suggests the federal acquisition system hinders those departments from obtaining what they really need. For more, the Federal Drive with Tom Temin talked with Larry Allen, a long time federal sales and marketing consultant.

Interview Transcript:  

Larry Allen Tom, my concern is that while the acquisition system today is focusing on things like socio economic benefits and trying to do everything through the acquisition system, whether it’s Uber compliant, cybersecurity, all of these things are important, but they also all have their place, Tom. And that place is not to hamstring the efficient delivery of critical systems. And as you look around the world today with regional conflicts in the Mideast, brewing trouble in Asia, you’ve got Russia involved in Ukraine. I think this is the time when the United States needs to wake up and say, hey, all of these perceived goods through the acquisition system are really secondary or should be in terms of focus. What we should be focusing on is being able to meet the potential threats that state and non-state actors bring to us and have a more efficient acquisition system, so that our national security agencies have the tools they need to protect us.

Tom Temin There are a lot of requirements for cybersecurity of those contractors, for what they do in terms of their labor practices and diversity hiring, and what they do with respect to carbon emissions. I guess if you have omelet days for your employees and use those gas powered hot plates, you’re going to be in trouble. I’m joking, sort of. But is this the kind of thing you mean that just hinders competitive bidding on reality of what the government needs?

Larry Allen Yeah, it certainly is. I think there are a couple of impacts of today’s acquisition system and kind of the sideshows, if you will, that, we are, we have to jump through. One of those is that it reduces competition. Even as the administration wants to increase it, particularly among small businesses. Small businesses don’t have the bandwidth to jump through that many hurdles. Even if you’re a larger business, you can provide the things that government asks of you. But the government acquisition system itself is moving more slowly than it should be, because we have to look at all of these side issues. And as I said, I don’t mean to say that they’re not important. They all have their place. Unfortunately, I think that place is now up at the front of the line where it really shouldn’t be. At the front of the line needs to be efficient acquisition. Look at commentators around the U.S., Tom. You see a lot of them saying that we haven’t faced these many threats since the 1930s, and we need to make sure that we’re not flat footed. And having a better acquisition system is really central to that.

Tom Temin Could you maybe comment on what seem to be two canaries, if you will, in the mine shaft of procurement? One is that even though slightly more dollars go to small business year after year, the number of small business vendors is shrinking. The roster is shrinking even as the government tries to encourage more people to come in. What’s the first one?

Larry Allen First one, I think you have to understand, I think there’s a tendency in government to look at small business as a monolith, and small business is not a monolithic entity. There are different types of small businesses. So what you see when you look at the government sales data that goes to small business, you see a lot of successful small companies that get the bulk of that business and a lot of newer and other small businesses that don’t. So look, our small business number is going up incrementally. Yeah that’s great. But that money is going to really a cast of Usual Suspects and then some other people who happen to be close enough to that cast of Usual Suspects. They’re the supporting cast, if you will. And that’s what we get. You have professional small businesses who are dedicated to the government market and professional large businesses, and those are the ones that have the resources and also don’t have any choice but to invest in the never ending stream of special and unique requirements to do business in this market.

Tom Temin We’re speaking with Larry Allen. He is president of Allen Federal Business Partners. And the other canary I wanted to ask you about is the rising use of other transaction authorities, OTAs which take place outside, of course, the Federal Acquisition Regulation in the [Defense Federal Acquisition Regulation Supplement (DFARS)] so far. Congress is ok with it. Everybody’s ok with it. I wonder what scandal is brewing out there that we haven’t seen yet, just having watched this market a long time. But is that another indicator that some things are not what they should be on the regulated side or the more regulated side?

Larry Allen Tom, I think you’re right on the nose with that. You look at the OTAs use, it’s non FAR based acquisition method, where you look at other things that are been here to for used for kind of niche acquisitions like small business innovation research acquisition. And then you look at the Defense Authorization Act and you see that Congress specifically directed the Department of Defense for this fiscal year to look at more commercial solution openings, which is a OTA like acquisition method. If you’re looking for all of these ways around standard acquisition, you have to ask yourself, is the Maine Acquisition Highway just totally bottlenecked all the time? And if it is, what can we do to ease those bottlenecks to get the acquisition traffic on the traditional roads moving more smoothly so that we don’t have to have all of these workarounds that get us where we need to be.

Tom Temin And speaking of that relationship between government and industry, you’re also writing in this week about CISA, the Cybersecurity and Infrastructure Security Agency, and the FBI seeming under some coming rules to be able to get into the systems of contractors and look around in there.

Larry Allen Tom, this is a proposed role. The comment period on this proposed rule just closed. And even though the FAR council extended the comment period, I don’t think there’s some role that a lot of contractors have caught. As you said, this is a rule that would allow CISA and the FBI to look at contractor IT systems any time that there is a cyber breach and it gives those agencies almost unfettered access to contractor IT systems when there’s a cyber breach. The concern is that anytime you give any agency or anybody unfettered access to your information systems, there’s no real way of controlling where they go. They’re going to go poke over here, they’re going to go looked over there. And while they may be originally looking for what happened to cause the cyber breach, they may also inadvertently roll over some things. And, look, we’ve also had incidences where people’s personal information has been breached by the office in both systems maintained by the Office of Personnel Management. You’ve got critical non government contractor information in those systems for your commercial customers. I think that this is a proposed rule that contractors really need to pay attention to. And even though the comment period may have technically closed, go ahead, submit some comment, raise your concerns. Make sure that people know that this could be a real burden for you if, in fact, you think it’s problematic.

Tom Temin The rule is going to happen. Even though they extended the comment period, they don’t propose rules and then suddenly say at the end of the rulemaking comment period, gosh, you’re right, we don’t need this and toss it out. There’s going to be something. So you might as well get in on what commenting is still left.

Larry Allen Well, I think that’s particularly true in an area where you’re talking about cybersecurity, Tom, cybersecurity is one of those things where people are like, well, we need everything we can get. Well, cybersecurity is really important. It is. But it’s not just important for government contracting. If you’re a company that sells both commercially and to the government, you have every right and your commercial customers have every right to make sure that the information you use and the conduct of your non-government business remains secure. And it’s reasonably safe from a government agency coming in with its camel’s nose under the tent to sniff somewhere else, and then either intentionally or quasi intentionally sniffing down a road that was beyond the original intent of the rule.

The post How acquisition hinders national security first appeared on Federal News Network.

From new authorities to an updated organizational structure, the State Department’s acquisition office is going to look much different in the next few years.

State is reorganizing its acquisition efforts around four lines of business:

• Diplomatic security
• Overseas buildings and construction
• Technology, cybersecurity and artificial intelligence
• Professional services

Michael Derrios, the senior procurement executive at the State Department, said the goal of the reorganization is to help agency customers get services from a consolidated and expert group of contracting professionals.

“It helps me with category management. How do we aggregate the demand?” Derrios said at the recent ACT-IAC AI Acquisition Forum. “I love the fact we have the best-in-class vehicles. We use those. But that is not the panacea for category management. Where the rubber really hits the road and where we really save money is when I can go to 10 customers that, in real-time, have a need and a procurement action that is coming in the next couple of months or weeks and say, ‘hey, let’s talk about that. Is there an opportunity smartly aggregate that demand?’ We can approach industry in a means where we can leverage our buying power.”

While that new structure comes into place, Derrios also is giving State’s acquisition workforce new tools and creating new governance bodies to help reduce time to contract award.

One new acquisition approach that all of these new organizations will be able to take advantage of in the coming years is the use of State Department specific federally-funded research and development centers (FFRDCs).

Derrios said State received approval in October to enter into sponsorship agreements and establish direct relationships with FFRDCs.

“It gives us another tool in the toolbox that we just don’t have today. Today we have to go to other agencies and try to get access to their FFRDCs. Now we will be able to have our own suite of FFRDC contractors,” Derrios said in a recent interview on Ask the CIO. “We just didn’t have our own indefinite delivery, indefinite quantity (IDIQ) vehicles with the MITREs, LMIs or RANDs of the world. They provide great service in niche areas. The State Department’s mission is evolving. We are now doing things that the department wasn’t asked to do in year’s past. I think that is the case across the board in all aspects of our mission. The research aspect, especially of R&D, is something we could benefit from.”

State seeking OTA authority

State’s office previously could use other agency’s, such as the Department of Defense, contracts with FFRDCs as long as it met the scope requirements.

But Derrios said scope was only one challenge. Agencies tend to protect the contract ceilings of their FFRDC vehicles so that too limited access.

“The other agencies is going to, and rightfully so, protect the ceiling on their vehicles and when other agencies are eating into that ceilings a bit too much, they back off and say, ‘hey, you need to go somewhere else and get that support,’” he said. “We could be right in the middle of something, and frankly it happened, and had to start over. We want to try to alleviate this problem by having access to our own suite of vehicles.”

Along with FFRDCs, Derrios remains optimistic that Congress will grant State another important acquisition tool: The authority to use other transaction agreements (OTAs).

He said State has asked Congress for permission two years in a row, and would like to see OTAs expanded to all agencies.

“I think the State Department has some very unique needs that we could benefit from OTA authority,” he said. “In our diplomatic security portfolio, for example, the ability to accelerate development of a particular security related product could absolutely help our mission set. The ability to do that with a vendor who may be doesn’t know anything about federal procurement, and, frankly, may not even care about federal procurement, but they would be happy to develop something that they may be using elsewhere, we would love to have that capability more at the Department of State. I’m going to keep at it and see where it goes.”

New governance over large projects

The new acquisition tools and the reorganization are pieces of a larger effort to improve how the State Department manages acquisition more broadly.

Over the last year, Derrios said his office launched an Executive Business Review Council (EBRC) to look at acquisition from the mission and contracting sides.

“We really want to shore up both sides of the house there, and we’re requiring folks at a particular dollar threshold to come forward and talk about their program plans and the infrastructure that they’ve established, including their budgeting, how prepared are they for us to enter into a big contract for them, their acquisition support needs and is there a good acquisition strategy attached to it?” he said. “This EBRC is in a pilot phase right now. We’ve already had a couple of programs go through it successfully, I think, and it’s sparked really good dialogue with a set of executives that have shared equities and the department’s acquisition program.”

The executive council is led by Alaina Teplitz, State’s assistant secretary of the Bureau of Administration and chief procurement officer, and Douglas Pitkin, State’s director of the Bureau of Budget and Planning and program management improvement officer.

Derrios and other senior leaders like Kelly Fletcher, State’s chief information officer, also sit on the council.

“The BRC is a big one for us. It’s a flagship effort to really start to think about how we do major acquisitions differently,” Derrios said. “The threshold [for review] is $250 million and over. So it’s pretty high. We don’t want to clog the system with everything. It’s risk based. At that dollar threshold, we’re expecting program offices to have a more formalized plan and approach for program management. The procurements at that level are usually for systems, which are very complex and/or major services. It’s aimed at catching those things and not creating a bottleneck with lower dollar things.”

State will be putting more large-dollar projects through the ECRB in 2024, capture lessons learned and sharing them across the department.

Derrios said he hopes the benefit of this approach is accelerating acquisition planning and time to award.

State’s new forecast to industry

The other significant governance change that started in 2023 and will expand in this year is around procurement planning.

Derrios said State is doing two things. First, it’s redesigning their forecast tool to make it much more robust. He said industry should be “pretty excited” for the forecast tool’s redesign.

Second, State is putting more thought and efforts in its procurement planning conferences. Derrios hopes to create easier and more often opportunities for program managers, contracting experts and industry to get together to talk about their upcoming needs.

He said, too often, those discussions don’t happen for an assortment of reasons and program folks end up missing out on potential innovations.

“We’re trying to drive that in a formalized process so that all of our customers are getting that same experience. We have very good planning, unfortunately, sometimes it’s in pockets. We’re not leveraging that, I think, to the extent that we should be,” he said. “All of that upfront work needs to happen in order to populate a better forecast for industry to see. We’re trying to build an acquisition ecosystem at the department where it all fits in together. I’ll make the distinction between acquisition planning and procurement planning. Procurement planning is what are the vehicles that we need to put in place for you to meet your needs? The acquisition planning is, ‘hey, so you’re going to be going after a big contract that is delivering capability for the department’s mission, and this program is integral to mission success and the contracts that we’re going to award.’ It’s all connected.”

The post State Dept reshaping acquisition organization, processes first appeared on Federal News Network.

The General Services Administration’s (GSA) third attempt to modernize the catalog management system running on its Advantage! program seems to have finally hit the right mark.

GSA is expanding the number of users of the new FAS Catalog Platform (FCP) after a successful test run over the last year with vendors under the Office Supplies 4 contract.

Mike Shepherd, the director of the catalog management office in GSA’s Federal Acquisition Service, said industry sellers and agency buyers will see a stark change when using the FCP from the previous catalog management system, called the Schedule Input Program (SIP), under GSA Advantage!.

“The FCP, in its most basic form, is replacing SIP with a new web-based user interface. It’s going to bring in some really new key enhancements that are going to benefit both our suppliers as well as our acquisition workforce and customers,” Shepherd said in an interview on Ask the CIO. “On the Advantage! side, it’s an intuitive web-based application. When you log in to FCP, you will quickly realize this is very different from that desktop SIP application. But really, it’s more than that. It’s a capability that’s going to be integrated with e-modification in such a way where we’re going to be able to capture catalog information during the modification process. What this means for our suppliers is we’re going to be able to automate publishing to GSA Advantage!. We’re going to speed up that time to get catalog changes down to the Advantage! platform.”

The time it takes to modify a catalog has been a major and long-standing pain point for industry for the last two decades.

GSA says the new platform automatically publishes modifications to GSA Advantage!, saving an average of 34 days for vendors adding new products to their catalogs. GSA also says it publishes catalog deletions within 1-to-2 days of a modification submitted by the contractor.

Shepherd said it used to take more than 10 days to be able to delete products.

In addition to addressing long-standing pain points, GSA says the new platform also features several other modern tools.

• Automated data validation checks.
• A central hub to review all catalog actions and statuses.
• Access to catalog history.
• Shared user interface between contractors, contract specialists and vendor support center staff.

As part of the platform’s expansion, GSA will add more users and begin a pilot covering professional services.

Shepherd said the initial pilot included 32 companies on the OS4 vehicle. GSA asked contractors last year about their interest in joining the expanded pilot to use the FCP.

“We’re going to scale up about five times, so to about 150 new users onboarding in this next tranche. From there in January, we’re going to plan to bring in more and continue to bring in a few hundred per month through the end of fiscal 2024,” he said. “What that means for us in terms of our target as a program is that we’re going to move the majority of Advantage! catalogs into this new platform by the end of the fiscal year so that users can benefit from these new features.”

GSA to expand to services

Shepherd said GSA plans to expand the catalog platform to services contractors later this year.

“How can we make it easier for suppliers to submit labor categories and rates? As part of this year ahead, we are targeting a limited pilot for services, a minimum viable product (MVP), much like the MVP we have for products today by the end of the fiscal year,” he said. “The initial services MVP will allow us to collect structured data for services. That means labor categories and rates. Once we have that, structured data is really going to be foundational to allow us to feed the CALC-Plus tool. So for contracting officers today, if you work in GSA, you are uploading to CALC-Plus through a fairly manual two-step process. But through FCP, by taking in labor categories and rates, we will be able to feed that data directly into CALC-Plus as one of the use cases.”

GSA has tried to modernize the SIP system at least two other times over the last decade, but fell short of expectations.

Shepherd said GSA took the lessons learned from those failures and applied them to this current effort, including, for possibly the first time, having a dedicated office and employees for the catalog platform modernization initiative.

“One big difference between the legacy SIP program and what we’re doing now is I am here as the director of the catalog management program at GSA. That is no small thing. What that should signal to all of our stakeholders is catalog management matters: Coming up with more efficient, cleaner way to process catalog information and then improving the advantage experience on the front end for our customers,” he said. “It matters enough where we’re going to establish a catalog management office to do that work.”

Long-term modernization effort

The new catalog is part of a broader and long-running effort to modernize GSA Advantage!. GSA consolidated the schedules program from 24 to 1 and has been modernizing its user tools and the back-end systems that both run and feed Advantage!.

Shepherd said GSA will continue to keep industry and agency customers in the loop on its next steps. For example, GSA sends out a survey to contractors who have been using the new catalog after so many months.

“If a user happens to hit a friction point in their journey, they can fill out a survey then and give us that feedback in real time,” he said. “We are also very focused on meeting with users in small groups once they’ve been in the application for a few months, working with them to understand what’s good, what’s bad and where do we need to focus some energy going forward. We’re going to continue to do that throughout this user transition moving into the fall. So far, at least, the survey results are positive. But we recognize, as we scale this, certainly new challenges will emerge and we’re ready for those challenges.”

The post GSA marks key milestone in schedules modernization effort first appeared on Federal News Network.

The Procurement Innovation Lab at the Department of Homeland Security is entering phase three of its lifecycle.

This is where the PIL takes everything it has learned over the last several years about changing the culture of procurement and begin applying it at deeper, programmatic level.

Scott Simpson, the digital transformation lead for the Procurement Innovation Lab at DHS, said the next chapter is all about improving the “big A” acquisition process.

“We’re looking at how do we take everything we’ve learned from changing the culture of procurement, start applying it to changing the culture of mission?” Simpson said in an interview with Federal News Network. “It’s going to be a lot of different things in phase three. From using the relationship that we built in phase two at the procurement level to now changing those relationships to expand outwards and look at the broader picture and say, ‘Hey, you were an awesome partner with us as we focused on this small ‘A’ procurement so now help me take that and broaden it to this whole big program, this big ‘A’ acquisition there.’”

While details around some of the specific initiatives and projects the PIL will launch are still coming together, Simpson said the team likely will start internally to work with DHS and components acquisition offices before moving to non-DHS agencies.

“We’re starting with in-house projects. What are some of our policies that are getting in the way of our acquisition workforce? What are some of the bigger things that are that tripping people up that we can work on together to find a common solution?” he said. “In fiscal 2022, we deployed the PIL idea competition, and one of the first PIL idea competitions was sponsored by our policy office. We have the Appendix G process, which looks at security, and it was a real process to go through Appendix G. So we got all this feedback about how can we streamline this process, and that’s what really helped us start thinking about the bigger picture.”

One way the PIL will reimagine acquisition policies is through a “hack the policy” type of competition. The Army Contracting Command at Aberdeen Proving Ground did something similar in 2022, eventually removing 60 pages and three months of required reviews from its internal acquisition policy guidance.

Simpson said the goal is to bring all the interested parties together — the contracting officers, the policy owners, the lawyers and anyone else — to address challenges by reworking and improving DHS’s guidance.

“I think the big obstacle is unlearning. Actually, there’s this concept of being an infinite learner and it’s really hard to be an infinite learner. But being an infinite learner means having the ability to learn something, unlearn that and learn the next thing. For so long, and in our work series, we were not infinite learners. We are focused on what it says in the FAR and then once you learn that, you can apply it forever,” he said. “So it’s unlearning the learning process that we had in place. Part of it is learning that I have permission to do that, and I’m not going to get in trouble if I take the leap. We’re trying to instill upon the workforce that courage to go and take the leap as the permission to innovate and the ability then to reengage their critical thinking, which for so long has been pushed back on when you say, ‘Hey, I’ve got this new idea,’ and someone says, ‘No, that’s not how we’ve done it before. Let’s just do it that way because we know we didn’t get a protest or whatever else.’”

Culture of innovation

Simpson said the PIL would take those internal experiences and lessons learned and share them with other agencies. He said the “train-the-trainer” model continues to work well for the PIL.

Since the PIL’s creation in 2015, one of its main goals has been to spread the culture of innovation not just throughout DHS, but across all agencies.

Simpson said in 2023, the PIL trained over 1,600 people in just its coaching clinic, which is for individuals who want to start to coach teams and do things like the PIL and help mentor and support others to use innovations within their own organizations.

“We’re working with our Homeland Security Acquisition Institute to find the right learning module to keep pushing forward in the learning environment [that fits the person the best]. What does that look like? What is the content like because one of the things we’re really heavy into is we don’t want someone just sitting there listening or watching slides and click, click, click, and we want it to be engaging. We know that adult learners learn by doing, and so we want to keep engaging them throughout the class, via whatever new methodologies they have, whether it’s scenario-based learning, reactive learning, going out and doing it learning and coming back,” he said. “We’re working with our Homeland Security Acquisition Institute to figure out what is that right first step. We’re hoping in the next half of the year we will push out at least one module. Once we get that one module done, then we’ve learned how to do it for other modules and we can start building a whole series of innovation modules.”

He added some of the ideas for that first module is around facilitating evaluations of different procurement strategies for different types of acquisitions through multiple award contracts as well as open market solicitations.

The PIL will pilot the modules, take the feedback from that initial set of students and iterate with a goal of eventually making it available for all agencies.

Another priority area for the PIL this year is emerging technology. One of its action groups is analyzing how tools like robotics process automation and artificial intelligence can help address the rote and mundane things that contracting officers have to do.

“How can you take emerging technologies and start to apply it so that you look at not just this action that they do, but the one before and the one after it? How do you put it all together?” Simpson said. “We’ve got this action group that’s looking at that and starting to implement things for closeouts or for responsibility delegations. It’s these little things that the acquisition workforce knows that it’s just something that they’ve got to do today and, oftentimes, they put it off because it’s time-consuming or mundane. But it’s also really important because it helps us to balance our books and it brings back money that actually can be spent on other things. There’s so many reasons why they need to do this. So we’re trying to help both sides understand the perspective and do something with emerging technology to help people out.”

The post Procurement Innovation Lab to tackle ‘big A’ acquisition at DHS first appeared on Federal News Network.

With spending against governmentwide acquisition contracts reaching an all-time high in fiscal 2023, the Office of Federal Procurement Policy is pushing agencies to make changes to ensure a healthy amount of small businesses participate on these vehicles.

In a new memo from OFPP, the Biden administration is telling agencies to take specific steps like on-ramps, applying the “rule of two” and even not using a “best-in-class” contracts should they be detrimental to small firms, when managing or buying from a multiple award contract.

“This guidance takes an important step in ensuring our diverse base of small businesses have opportunities in a greater diversity of acquisition strategies,” said Small Business Administration Administrator Isabel Casillas Guzman in a blog posted by the Office of Management and Budget today. “By taking advantage of the strategies in this guidance, the federal government will be able to increase the number of small business firms in the federal supplier base and increase contracting opportunities for small disadvantaged businesses (SDBs).”

OFPP also is encouraging better and more regular communications with both small businesses and with SBA’s Procurement Center Representatives (PCR) and the agency small business specialist in the development of multiple-award contracts.

“For these acquisitions, agency requirements and acquisition officials should invite the agency small business specialist and the SBA PCR to engage with the agency early in the acquisition planning process during the development of the acquisition plan,” the memo states. “Agencies should include in the acquisition plan rationale, including the market research undertaken, when a multiple-award contract would not be fully or partially set aside for small businesses, or when a reserve would not be used. The explanation should be reviewed by the agency small business specialist.”

OFPP’s memo comes as agencies have spent more money than ever with small businesses. In fiscal 2022, the administration says small businesses received nearly $163 billion in federal contracts, of which a record of nearly $70 billion went to small disadvantaged businesses (SDBs).

New data for 2023 from HigherGov, a market intelligence firm, show the use of multiple award contracts continued to grow. The company says almost 55.8% of all awards went through a contract vehicle with the General Services Administration’s OASIS and NASA’s SEWP V seeing record awards of $13.4 billion and $10.5 billion, respectively. GSA says its schedules contract saw a record $46 billion in sales last year, a $4.6 billion increase over 2022.

Additionally, OFPP’s push for agencies to use one of the “best-in-class” contracts like SEWP V or OASIS — there are 38 BICs in all — saw more spending across these multiple-award contracts. Deltek, another market research firm, found agencies spent more than 54 billion dollars, or 12.7%, of all procurement on BICs. This is up from $37.6 billion in 2019.

And despite small firms generally doing well under best-in-class with small business utilization holding steady at 38% between 2018 and 2022, the number of small contractors continues to decline. SBA highlighted this problem in May. It said agencies since 2010 have seen about a 40% decrease in the number of small businesses receiving prime contract awards. Over the same period of time, the number of small companies doing business with the federal government for the first time has decreased by about 60% — and over the past 15 years, new entrants have dropped by approximately 80%.

Deltek found there are 1,800 fewer small business contractors in 2022 as compared to 2020, using GSA’s supplier base dashboard. Deltek also says what is worse is the number of new entrants into the federal market as defined by having won a single prime contract or less in the last three years dropped 2,200 over the last three years.

The fact is that while the small business percentages look healthy, especially with BICs, it’s a smaller group of vendors winning contracts, which is part of the problem OFPP is trying to address in with this new guidance.

“This is a crucial step in supporting a diverse and resilient federal marketplace, driving cost savings, and improving the overall supply chain. The new actions announced by the Biden-Harris administration will have a significant impact on expanding small businesses’ access to federal contracts,” Christine Harada, the senior advisor in OFPP, wrote on a post on LinkedIN.

As a backdrop to the memo, House lawmakers over the last two weeks are turning their attention to a growing body of concerns about how small businesses are figuring in new large ceiling-value multiple award contracts from NASA and the Veterans Affairs Department. House Small Business Committee leaders wrote to NASA on Jan. 12 about the small business size standard it’s planning on using on the SEWP VI GWAC.  Then on Thursday, House Veterans Affairs Committee leaders wrote to VA seeking details about the agency’s decision not increase the number of small business awardees even more under its Transformation Twenty-One Total Technology Next Generation 2 (T4NG2) contract vehicle.

The memo also comes ahead of new rules in the Federal Acquisition Regulations. OFPP says the FAR Council and SBA are developing proposed regulatory amendments to address the steps outlined in the memo.

“In advance of any finalization of such regulatory amendments, which will be subject to notice and comment, OFPP encourages early agency adoption of these management steps, which can help agencies in meeting the SDB contracting goal they negotiated with SBA for 2024 in accordance with OMB Memorandum M-24-01,” the memo states.

Among the biggest impending changes is the application of the “rule of two” to multiple award contracts. Under FAR Part 19 and 13 CFR, the “rule of two” requires that an acquisition shall be set aside for small business concerns whenever there is reasonable expectation that offers will be obtained from at least two responsible small business concerns and award will be made at fair market prices.

Major change to ‘rule of two’

For the first time, the memo is applying this concept broadly across multiple award contracts.

“Except for orders citing an exception to competition (FAR § 16.505(b)(2), exceptions to fair opportunity, or agency procedures that reflect an appropriate exception), agencies should set aside orders over the micro-purchase threshold (MPT) for small business contract holders when the contracting officer determines there is a reasonable expectation of obtaining offers from two or more small business contract holders under the multiple-award contract that are competitive in terms of market prices, quality, and delivery,” the memo states. “If not using an order set aside, including on multiple-award contracts that have no or only one small business contract holder, the contracting officer should document the basis for the determination in accordance with agency procedures.”

That documentation also should include specifics about the agency’s market research efforts, including research of small firms not on multiple-award contracts and why it decided to use the specific vehicle, and share that documentation with the agency’s small business specialist, giving them time to review and respond.

“The small business specialist should notify the PCR for any non-set-aside order over a threshold negotiated between the agency and SBA,” the memo added.

Larry Allen, president of Allen Federal Business Partners, expressed deep concerns over the “rule of two” changes.

“This memo upends over 30 years of established policy.  OMB ruled several years ago that the rule of two would be applied at the contract, not task order level.  There was also language in the legislative report accompanying the Federal Acquisition Streamlining Act (FASA) that made it clear that the increase in the small business acquisition threshold included in that bill did, in no way, change the procurement preferences outlined in FAR 8.4,” Allen wrote in an email to Federal News Network. “Government contractors have invested millions in indefinite delivery, indefinite quantity (IDIQ) contracts as they are fast and easy ways to buy.  Where should those businesses go to get their money back?  This administration touts transparency, but this is a major, substantial policy shift that no one outside of OMB or SBA apparently knew about.  How can industry think that the administration is serious about transparency and wanting to work as partners when it changes the rules without even going through a rule making before doing it?  How can OMB people who have worked with industry for years look them in the eye anymore?”

As part of this overall effort, OFPP says it will be working with GSA’s the Office of Shared Solutions and Performance Improvements and the SBA to create a standard reporting tool for agencies to track and manage how they are meeting the goals of the memo.

“In addition, OMB and SBA will work together to identify priorities for supply-chain strengthening where improvements can be made, as evidenced by data indicating that small businesses are underrepresented in a federal market segment relative to the economy at large, that dollars are heavily concentrated in a small number of market participants, or that the percentage of dollars going to small businesses is significantly higher through the open market than through multiple-award contracts,” the memo stated.

The memo also follows a series of efforts OFPP kicked off in 2021 to address small business contracting. In June 2021, President Joe Biden issued an executive order to increase contracting spending on small disadvantaged businesses by 50% over the next five years, to reach 15% of all prime contracts by 2025.

Last February it launched two tools, a supplier base dashboard and a procurement equity tool, to help agencies find potential firms to replenishment the industrial base and compete for federal work.

The post OFPP expands small business ‘rule of two’ to multiple award contracts first appeared on Federal News Network.

Two prominent procurement laws address supply chains and the industrial base: the Buy American Act (BAA) and the Trade Agreements Act (TAA). As the names imply, the BAA favors domestic end products using a certain percentage of domestic components, and the TAA allows products made in allied countries to compete with domestic supplies. Although the BAA sounds like the best, most patriotic choice from the standpoint of assuring economic, strategic and national security stability in our supply chain, the TAA, in its implementation, may provide the best overall results.

Certainly, there are supplies that we want sourced in the United States. Achieving that end via the BAA, however, may prove to be difficult. The BAA is a price evaluation preference tool that does not prohibit the purchase of foreign products. Rather, it places a price premium on foreign end products of 20% if the lowest domestic offer is from a large business and 30% if the lowest domestic offer is from a small business. Thus, the government may end up buying products from China or other non-aligned countries if the domestic price is low enough after adding the premium to the low foreign offer. On the other hand, the TAA ensures that products will be purchased from domestic sources or from allies with which we have a trade agreement. The reciprocity of TAA also ensures that American-made products are treated fairly under foreign government procurements. Consequently, accounting for the totality of our nation’s supply chain policy interests, leveraging the TAA results in the most efficient price, excluding prices and products that might be offered from non-aligned countries, such as China, while strengthening the security and stability of the industrial base, and increasing its reliability, especially in times of need.

In the context of small business, the application of these two laws is especially confounding. Generally, for a small business or socioeconomic set-aside for supplies, an offeror seeking to qualify as a small business must supply the product of a small business made in the United States. If no small domestic manufacturers exist, the Small Business Administration (SBA) can issue a waiver of the nonmanufacturer (NMR) rule, which waives this requirement. Under these circumstances, the small business offeror can offer the product of a large business or a product made outside of the United States on a small business or socioeconomic set-aside supply contract. Although the TAA allows the President to waive BAA for countries with a trade agreement with the United States, the act restricts the President from waiving any small business or minority preference in government procurement.

The implications of the foregoing are significant. Clearly, the TAA should not apply if SBA has not waived the NMR because, in that case, an offeror on a set-aside contract must supply the product of a small business made in the United States. If, however, SBA has issued a waiver of the NMR because no small business manufacturers exist, then the BAA must apply to the set-aside, notwithstanding the fact that, but for the purchase being made from a small business under a set-aside, the law and policy interests underlying the TAA would control. The government, then, could find itself required to purchase a product from a non-designated country, and, in so doing, potentially introduce risk into the supply chain and otherwise harm other-than-small domestic manufacturers.

This anomaly arising from the interplay between these laws needs to be addressed. Some believe a clarification may be affected via legislation. Others see a remedy in amending FAR Subpart 25.4 to provide the TAA does apply to supply acquisitions set aside for small business or socioeconomic categories if SBA has issued a waiver of the NMR. Given the significant implications for our supply chain and national security, policymakers need to decide on an approach and act. In the meantime, it should make sure its requirements are fashioned to mitigate the deleterious effects identified here.

The post Protecting the supply chain and national security first appeared on Federal News Network.

From a procedural standpoint, Section 849 of the FY2018 NDAA states that, in connection with contracts involving commercial item acquisition procedures, after reviewing regulations (which implicate the inclusion of contract clauses), DoD is to propose DFARS revisions to eliminate the regulations reviewed unless the secretary of Defense “determines on a case-by-case basis that there is a specific reason not to eliminate the regulation.” Notwithstanding this statutory direction, the proposed rule identifies for elimination only two provisions and one clause from the DFARS 212.301(f) list of provisions and clauses applicable to contracts and subcontracts for commercial products and commercial services.

The result reflected in the proposed rule here is significant, especially when one considers what has transpired since the procurement reforms of the 1990s. In 1996, DFARS Part 212 included only three clauses regarding the acquisition of commercial items. Today, there are over 100 such clauses driven by regulation that are required to be included in commercial product and services contracts (Cf. DFARS 212.301). What has prompted an over 33-fold growth in regulations (and associated clauses) applicable to commercial products and services contracts alone should spark at least an inquiry into why no determination has been issued from the secretary of Defense. The fact that the Advisory Panel on Streamlining and Codifying Acquisition Regulations (Section 809 Panel), created by Congress to review DoD acquisition, recommended eliminating 55 such DFARS provisions should only add to our curiosity.

The absence of the secretary of Defense’s case-by-case specific determinations not to eliminate the regulations involved here represents a matter of compliance with the statute. In addition, as the Coalition mentioned in its comments, without these determinations, stakeholders are denied an opportunity to provide meaningful input on the proposed rule. As a consequence, the government may remain burdened by unnecessary regulations. Equally as important, however, is the consequential effect unnecessary regulations have on the defense industrial base.

The Coalition has written about the challenges arising from a “systematic re-regulation of commercial products and services contracting” since the significant acquisition reform efforts enacted at the end of the last century. Our “compliance checklist” way of contracting has hamstrung efforts to address market changes beyond instituting new rules, with which parties must comply. Along with an increase in contracting clauses, these rules keep government on “a march backward to the over-bureaucratized environment that existed before acquisition reform.” We further stated:

Much has been made of the shrinking industrial base supporting the federal government, especially the falling number of small businesses in the federal market.

• According to the Small Business Administration, the number of small business prime contractors decreased by 6%, from 69,400 in 2020 to 65,428 in 2021.

• According to the Government Accountability Office, from FY2011 to FY2020, the number of small businesses receiving DoD contract awards decreased by 43%, despite obligations increasing by 15%.

• The number of large businesses receiving contract awards fell …[,] on average[,] by more than 7% annually over the same period.

GAO and SBA did not articulate what is causing this drop in industry participation in the government-wide industrial base. Much of the decrease, we believe, can be attributed to the re-regulation of commercial item contracting.

Indeed, if the system is burdensome, it motivates companies, especially commercial companies with needed technology, to seek alternative markets to maximize the capture dollars.

The challenges facing our nation are many and significant. They require agile means to access the innovation needed to address them. That agility cannot be found in a system made sclerotic by mechanisms focused on compliance without a concomitant demonstration of benefit.  It is for this reason that understanding the secretary of Defense’s reasoning for keeping in place each rule/clause here is important.

The post What is fair and reasonable: How many clauses are enough for a commercial item contract? first appeared on Federal News Network.

Part of that sigh of relief that you may have heard coming from the Pentagon when Congress passed the 2024 defense authorization bill was for no major new requirements for managing other transaction agreements (OTA) authority.

The two provisions in the NDAA around OTAs were minimal, including asking the Government Accountability Office to report on the Defense Department’s spending through this process.

The fact Congress left OTAs mostly alone is a good thing as DoD recently updated its guidance for using this tool.

MaryKathryn Robinson, the director for contract policy in the Office of Defense Pricing and Contracting, said the growth of OTAs over the last seven years truly precipitated the new how-to guide.

“We want to be able to help the DoD acquisition community as well as our partners in industry, academia and nonprofits to help define what an OTA is, and help them create the best OTAs that they can,” Robinson said in an interview with Federal News Network. “We made those updates based on changes in statute and regulation, and recommendations that we received from the DoD inspector general and from the Government Accountability Office. But then we also added administrative guidance and best practices for things like reporting funding, participation and validation of those non-traditional defense contractors, protest procedures, agreements, contract officer warranting and training, and then other considerations for folks to take into account as they move forward with their OTAs.”

DoD hadn’t updated its OTA guide in about five years and a lot has changed since then both in the use of these approaches as well as concerns about them.

Between 2016 and 2022, Robinson said DoD has taken about 15,000 OTA actions, which includes both new agreements and modifications. Those 15,000 actions were worth about $70 billion.

The real push for OTAs, however, came after 2018. In 2016, for example DoD took about 333 OTA actions worth $1.3 billion. By 2020, and that includes the use of OTAs as part of the response to COVID-19, DoD took 3,200 OTA actions worth $16 billion.

“We’ve come down a little bit in our dollar spend. But right now in 2022, our last year of full data, we had about 4,400 actions for about $10.7 billion. Right now we’re thinking that, and I don’t have the final 2023 numbers, but I think that 2023 is going to come in around that,” Robinson said. “I know that about 80% is for research and development. Then, we have a couple OTAs for weapons and ammunition, electronic and communication equipment or professional services.”

While 2023 data isn’t finalized, HigherGov, a government market intelligence company, estimated that in 2023, DoD had more than 1,200 active OTAs worth more than $23.6 billion.

During those growth years, Congress has paid close attention to DoD’s use of OTAs. In the 2020 NDAA, for example, Congress required a report from the Pentagon on the use of OTAs for prototype projects.

In the 2024 NDAA, Congress told GAO to submit a report by Feb. 1, 2025 on the use of OTAs with a focus on:

• The extent to which such transactions are used in accordance with policy and guidance related to the use of such transactions;
• The total number of transactions for each fiscal year made to nontraditional defense contractors;
• A summary of such transactions to which DoD is a participant for which performance has not been completed on the date of submission of such report, including— (a) a description of the entity or agency responsible for any consortium; (b) the number of members in each consortium, including the percentage of such members who are nontraditional defense contractors for each such consortium; (c) the total amount awarded under such transactions to each consortium manager for fiscal years 2022 and 2023; (d) the total amount awarded under such transactions to members who are nontraditional defense contractors for each such consortium for fiscal years 2022 and 2023; and (e) a list of contractors who have been awarded more than $20.0 million under such transactions, including a brief description of each such award, the number of awards made, and the total dollar amount awarded for fiscal years 2022 and 2023.

The second OTA related provision in the 2024 NDAA focused on clarifying the use of OTAs for installation or facility prototyping. Congress also increased the amount of the agreement to $300 million from $200 million.

Non-traditional vs. traditional contractors

Despite the growth, concerns and myths about how DoD is using OTAs continue to survive.

Robinson said one key feature of the guide is to dispel many of those myths.

One big one is “traditional” defense contractors get many of these awards. Robinson said while it may look like the big defense contractors are winning many of the OTA agreements, DoD measures participation by non-traditionals differently than just by who signed the agreement.

“The requirement is for a non-traditional defense contractor to be part of the team in a significant way. In fiscal 2022, 92% of our OTAs were awarded to those OTA contractors or performers that had a non-traditional defense contractor performer on they’re doing something and in a significant way,” she said. “What does it mean to say ‘in a significant way?’ The agreements officers are actually held to figure that out and make that determination and make that independent judgment. Significant is not necessarily dollars. Significant could be specifically a key technology or a specific cost reduction. Some of the things that we look at is does the non-traditional defense contractor supply a new key technology, product or process? Do they have a novel application or approach to technology? Do they have material increase in the performance efficiency of a key technology? Do they result in a material reduction in cost and schedule a project or to provide a material increase in the performance of the prototype project? So again, that does not necessarily mean that they’re the prime contractor on something. But it does mean that they’re doing some heavy lifting on the actual project itself.”

Another big myth DoD tries to dispel is that OTAs aren’t, or don’t need to be, competitive.

Robinson said DoD not only encourages competition for OTAs, but actually benefits the military service or defense organization in the long run.

“The other benefit of a competitive prototype OTA is that you can go to a non-competitive follow on production award out of that,” she said. “Another myth that we continually hear is that OTAs can only be awarded through consortium. In 2022, 50% of our OTA actions were awarded through or to a consortium. But again, it’s only 50%. OTAs can be awarded to a single company. They can be awarded to a joint venture. They can be awarded through partnerships.”

In addition to mythbusting, DoD included uses cases, a step-by-step approach to executing OTAs, legal considerations and definitions of the different types of agreements.

Robinson said there is a lot of training and other tools to help DoD use OTAs.

“OTAs are an opportunity for agreements officers to be flexible and to be innovative and to work with their partners in industry, academia, to come up with something terrific, novel and inventive for the warfighter,” she said. “Hopefully they recognize the guide is not here to prescribe any approaches, but it’s here to help them figure out how to use that OTAs appropriately so we can meet the warfighter needs.”

The post Growth of OTAs, corresponding myths gave DoD plenty of reason to update its guide first appeared on Federal News Network.