Protests force GSA to suspend governmentwide use of Office Supplies 2 contract

Thursday - 6/5/2014, 3:49am EDT

The General Services Administration has suspended governmentwide use of the Office Supplies 2 strategic sourcing contract.

The contract expired on May 31, and GSA tried to extend it to November, but 11 vendors protested the extension. The timely protest to the Government Accountability Office required GSA to put a stay on the implementation of the extra six months.

"Please also note that as a result of these protests, a suspension of contract performance is hereby implemented until further notice from the agency," wrote Nelson Duncan, section chief in the National Administrative Services and Office Supplies Acquisition Center in GSA's Region 2, in a letter to OS2 contract holders, which was obtained by Federal News Radio.

Coast-to-Coast Computer Products, which is not one of the OS2 contract holders, filed the initial protest, alleging the extension violates the Small Business Jobs Act of 2010. GAO has until Sept. 10 to decide on these protests.

"The fact that these extensions go beyond the total option terms allowed by the original award documents of three calendar years; that these extensions represent newly awarded bridge contracts by technical definition, and that these bridge contract awards represent a consolidation of contract vehicles that could immediately be met by hundreds of small businesses," Coast-to-Coast wrote in its bid protest submitted to GAO on May 28, which was obtained by Federal News Radio.

Coast-to-Coast (CTC) claims that GSA must do an impact assessment of extending OS2 on small businesses before going forward with the new deal.

Starting in December 2013, the Small Business Jobs Act requires the justification prior to award, and the vendors say GSA didn't meet that requirement.

CTC stated in its protest that GSA didn't meet any of the requirements in the Federal Acquisition Regulations that would let it extend the contract without doing the justification and analysis.

"The FSSI OS2 BPAs are commodity supply contracts, and there are no specialized or intricate services incorporated in these vehicles that cannot easily and immediately be met through the general GSA MAS 75 program by hundreds of existing small business federal supplies contractors," Coast-to-Coast stated. "The commodities and supplies included in the scope of the FSSI OS2 contracts are an ongoing and well anticipated need, which can be easily forecasted and managed by each ordering activity. No urgency exists to extend the FSSI OS2 BPAs beyond the final option period set to expire May 31, 2014."

Repeated requests to GSA for comment or even confirmation on the decision to suspend OS2 were not returned.

GSA wanted to extend 13 of 15 blanket purchase holders under OS2, with New York Inkjet, LLC, and WECsys, LLC, not being offered more time, according to Coast-to-Coast's protest document.

Additionally, CTC has asked GAO to request that SBA rules on GSA's need to meet the rules under the Small Business Jobs Act and perform a contract consolidation impact study.

SBA ruled against GSA in a protest under the OS3 contract. GAO is expected to decide those protests by June 9.

Currently, GSA is facing more than two dozen bid protests over the Federal Strategic Sourcing Initiative, and now House lawmakers want GAO to study the impact of FSSI on small firms.

But with OS2 suspended, agencies must figure out what options they have to buy office supplies.

"The bid protest on OS2 results in a suspension of BPA performance. As a result, agencies are likely scrambling to identify procurement options to meet their needs," said Roger Waldron, president of the Coalition for Government Procurement, an industry association representing GSA schedule holders. "Agencies could go back to Schedule 75, revisit their own pre-OS2 BPAs for office supplies, or even go open market. This whole situation shines a light on the high risk approach to FSSI that puts all the eggs in one basket."

With OS2 in place, GSA closed Schedule 75 to new vendors in September 2010, thus potentially limiting the number of vendors capable of meeting the government's requirements today.

GSA set up OS2 in 2010, and several agencies either mandated its use or required its contracting officers to check its prices first and justify why they would use a different approach to buying office supplies.

Over the last four years, GSA says the government has saved or avoided spending more than $360 million in office supplies because of the lower prices under the contract.

GSA says in its OS2 dashboard that the Veterans Affairs Department has spent the most money under OS2 — $186.7 million. The Navy with $75.9 million and the Homeland Security Department at $66.7 million spent also are large users of the contract.

GSA says in nine out of 10 cases, the median price under OS2 is lower than the median price under Schedule 75.

RELATED STORIES:

Congress joins the fray as protests mount over strategic sourcing

SBA finds fault with GSA's strategic sourcing analysis for office supplies

Strategic sourcing: Pennywise but pound foolish?