Inside the Reporter's Notebook: Losing faith in GSA schedule prices; EAGLE II lands

Friday - 8/22/2014, 1:04pm EDT

"Inside the Reporter's Notebook" is a biweekly dispatch of news and information you may have missed or that slipped through the cracks at conferences, hearings and other events. This is not a column or commentary - it's news tidbits, strongly-sourced buzz, and other items of interest that have happened or are happening in the federal IT and acquisition communities.

As always, I encourage you to submit ideas, suggestions and, of course, news to me at jpmiller@federalnewsradio.com.

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Agencies losing faith in prices on GSA schedules?

A growing number of agencies no longer believe prices under the General Services Administration schedules program are "fair and reasonable."

Along with the Defense Department, NASA quietly issued a memo in March that requires its contracting officers to do additional research to ensure GSA schedule prices are the best value for the government. Industry sources say other agency memos could follow from the likes of the departments of Health and Human Services, Homeland Security and Energy.

And nearly five months after the Defense Department's Dick Ginman, director for procurement and acquisition policy (DPAP), created quite a stir by changing almost two decades of precedent around GSA schedule prices, Tom Sharpe, the commissioner of the Federal Acquisition Service, finally responded publicly to these major changes.

"I support what Dick Ginman has done in terms of telling his contracting workforce to go ahead and apply techniques to get the best price, value and other things important to the taxpayers when they raise orders or otherwise contract — that means getting competition and that means negotiating prices," Sharpe said in an interview with Federal News Radio. "I think where Dick was at, and I agree with him, is we didn't know how often contracting officers were receiving discounts. If you have any type of large volume at the order level, you should in fact be competing orders and negotiating discounts. The schedules were set up to enable that."

Sharpe said by standardizing part numbers and descriptions on the schedules, GSA will use the data to make decisions about how much price variability in the schedules make sense, and agencies can use the data to make better buying decisions. He said GSA also plans to propose a rule to require schedule contractors to provide prices paid data and all demographics around it.

Sharpe said FAS will put that data in a tool so buyers can use it to help them shape how they should price that order.

"I support the agencies getting the best prices they can," he said. "I'm in the process at FAS of setting the conditions, particularly on the multiple award schedule, such that possibly those deviations would no longer be needed, and I'll defer to those customers."

Despite Sharpe's support of DoD, and presumably NASA too, industry experts aren't happy with this growing trend. Several sources say DoD, and now NASA, aren't solving a problem with the schedules, but rather not addressing a problem with the training of contracting officers.

Bill McNally, NASA's assistant administrator for procurement, said like DoD, he believes contract prices under the individual schedule contract aren't necessarily "fair and reasonable" to the agency at the task or delivery order level.

"This is an example of different agencies who talk to each other and both believe that what they will do is the best thing for their agency," McNally said in an interview with Federal News Radio. "It's a shared practice, what DoD and NASA are doing. It's based on my conversations with my staff and I have had with Dick and his staff, which I think we should be doing more and more in the federal government."

He added he believes NASA contracting officers were ensuring they were getting the best prices when using GSA schedules, but the memo just codified the requirement.

"You should be going out and looking at multiple sources. You should be making sure there is adequate price competition when you sign a task order and that you got a fair and reasonable price," McNally said. "You have to make sure they do all analysis that's within FAR part 15 when price cost analysis, that is done to determine that task order or delivery order."

NASA spends about $100 million a year through the GSA schedules.

Some sources say now that DoD and NASA have issued deviations — two of the three Federal Acquisition Regulations Council signatories — it's only a matter of time until the FAR Council gets involved. GSA is the third signatory.

McNally said as a signatory of the FAR Council, he and others look out for what's in the best interest of the government, not of NASA.

McNally said the idea of GSA schedule prices being fair and reasonable has come up at the Chief Acquisition Officer's Council meetings.

At the same time, if two of the largest agencies believe the schedules are no longer "fair and reasonable," and if other big spending agencies join them, don't be surprised if a major FAR change isn't far behind.

The EAGLE (2) has landed, softly

On your mark, get set — it's go time for the most sought after part of the Homeland Security Department's EAGLE II technology services contract.

DHS quietly has been telling the 60-plus vendors that functional category one is open for business. Industry and government sources say DHS wanted to do a soft launch since EAGLE II faced a host of delays and protests over the last three years.

Functional category-1 is the biggest of the four EAGLE focus areas. It includes system design, development, implementation and integration, software design and development, operations and maintenance, such as help desk, collaboration services and network and security operations.

DHS has struggled to get the $22 billion EAGLE II contract in place. They still face protests from small businesses under functional category 2 — IT program support services.

Vendors have long seen EAGLE as one of the largest avenues into DHS. As of fiscal 2011 — the last year DHS provides data — Homeland Security components spent more than $11.4 billion on 606 task orders over the five-year period.

The winning contractors should expect little change in how DHS buys IT over the next five years, which is why EAGLE II took nearly three years to award.

DHS already lists 23 potential procurements scheduled to go through EAGLE II on its procurement forecast website. These range from the Citizen and Immigration Service's joint engineering teams-sustainment (JETS) program that could be worth $100 million to $10 billion, to FEMA's $10 million to $20 million program under the Disaster Management e-government initiative.

Of course, most vendors are watching what DHS does with its Next Generation Enterprise Computing Services (ECS) program. Basically, it's the follow-on contract to running one of two DHS data centers.

Sources say DHS is sifting through RFI responses to develop its solicitation strategy.

Two other big opportunities that are coming from DHS are FEMA's Enterprise Applications Development Integration and Sustainment (EADIS) that could be worth about $1 billion, and follow-on to its Centralized Operations, Maintenance and Management Information Technology (COMMIT) acquisition.

Sources say both could go through EAGLE II, so the fact that FC-1 is open for business, let the fun begin.

Role shifts for some GSA acquisition executives

Look out for some familiar faces in new positions in the General Services Administration's Federal Acquisition Service.

Donna Jenkins is moving over to become the assistant commissioner for the Office of Acquisition Management from her role as director of the Federal Acquisition Institute. She'll replace Houston Taylor, who's putting on a new hat as the assistant commissioner for the Office of Customer Accounts and Research.

Tom Sharpe, FAS commissioner, announced the seat shuffling takes effect Aug. 24 in a memo to staff, which Federal News Radio obtained.

Sharpe said Taylor "will focus on enhancing the agency's work to communicate and share our value proposition with customers, the collection and use of customer data and our customer relationship and account management functions."

Jenkins has led FAI for about four years and previously served as the director of DHS' acquisition workforce.

Sharpe said Jenkins will "focus on improving and expanding GSA's relationships in our supplier community, modernizing and streamlining the Multiple Award Schedules program and providing training to our GSA workforce, agency customers and industry partners. She will also work on improving the quality of FAS contracts and strengthening our procurement controls across the agency."

Additionally, Bill Sisk, FAS deputy commissioner, will take on a second hat and serve as the acting assistant commissioner for Office of Travel, Motor Vehicle, and Card Services. Bill Toth had been acting since Bill Webster retired in June.

There were a few other noteworthy changes among agency executives.

Tom Bayer, the Securities and Exchange Commission's chief information officer, announced he's leaving government in October.

Bayer said after four years it was time for a new challenge and time to bring in someone new to take the SEC IT to the next level.

"I thought it was good time to leave, as much of what I laid out from an enterprise architecture program and the SEC's working smarter program has been executed," Bayer said in an interview with Federal News Radio. "I feel really good about our progress. We saved $18.8 million last year in IT costs, and we've given our workforce more capabilities. I think that it's good to renew the CIO position after a period of years."

Bayer said he would expect deputy CIO Pam Dyson to step into the acting role when he departs in October.

He said he hasn't started looking for a new job yet because of SEC conflict of interest rules.

Over at the Department of Health and Human Services, Kevin Charest left his position as the chief information security officer in May. Charest spent about seven years in government, including the last 20 months as the HHS CISO.

Charest now is the senior director of IT threat management in the Information Risk Management group for the UnitedHealth Group, according to his LinkedIn page.

During his time at HHS, Charest focused on improving HHS cybersecurity, in part, by using big data. He said in September that the creation of a security operations center (SOC) as a central coordination place to bring together threat data from across the agency is making a big difference.

Additional tools are good, but contracting officers need OFPP cover

There's an old saying among acquisition professionals that unless the FAR says you can't do it, then you can. What happens many times, however, is the opposite and that stops contracting officers from being innovative.

As part of its effort to bring innovation into the federal procurement process, especially around technology, the White House added another tool to the toolbox to help change the federal culture.

The Office of Federal Procurement Policy and the Office of Science and Technology Policy released a story book of acquisition innovations.

The Innovative Contracting Case Studies is "an iterative, evolving document that describes a number of ways federal agencies are getting more innovation per taxpayer dollar — all under existing laws and regulations," wrote Lesley Field, deputy administrator of OFPP, and Tom Kalil, deputy director for Technology and Innovation in OSTP Thursday in a blog post.

Along with the case studies, OFPP set up a government-only email group, called the Buyer's Club, to "provide a useful forum for troubleshooting and sharing best practices across the federal government, serving everyone from contracting officers with deep expertise in the Federal Acquisition Regulation (FAR) to program managers looking for new ways to achieve their agencies' missions."

In the 91-page document, OFPP and OSTP describe eight different approaches to innovative acquisition processes. Some, such as prizes and competitions, are relatively new to government, while others, such as milestone-based competitions, have been around for a long time, but mostly underutilized by agencies.

While a document such as this makes sense, it's far from what's needed.

What OFPP needs to do is provide top cover for agencies when inspectors general, the Government Accountability Office and, especially, Congress come knocking at their door. Over the last five or so years, acquisition professionals have come under more and more scrutiny from auditors, which is causing them to be more conservative.

The White House needs to help traditionally risk-averse contracting officers feel comfortable in doing something different. OFPP's backing would begin to create the change that many of these new tools, such as the TechFAR or the case studies, are trying to kick-start.

IT Job of the Week

IT Job of the Week: It would be easy to highlight the HHS CISO position now that Charest has left. But instead, I'll offer up two positions at the Veterans Affairs Department. VA is looking for an assistant deputy CIO for application support, and a deputy CIO for product development.

This may be the first of several job openings at VA as several high level IT executives are on the move or could be on the move.

Applications to be the assistant deputy CIO for application support are due by Sept. 4.

Applications for the deputy CIO for product development are due Sept. 11.