New protests further delay GSA's Office Supplies 3 contract

Friday - 8/29/2014, 2:02pm EDT

The Federal Strategic Sourcing Initiative for office supplies is on hold again. Six firms that unsuccessfully bid on the Office Supplies 3 vehicle have filed protests with the Government Accountability Office. This comes less than two weeks after the General Services Administration announced it awarded spots on the OS3 vehicle to 21 companies.

The protests effectively shut down the FSSI program for office supplies because GSA let version 2 of the contract expire in May.

"During the stay, we advise federal customers to fulfill their current needs through GSA's Multiple Award Schedule (MAS) 75 or through GSA Global Supply via GSA Advantage!" said a GSA spokeswoman by email. "We look forward to the resolution of the OS3 protests as soon as possible so that GSA can continue helping customer agencies make good use of purchasing data, procurement dollars and good business sense in meeting their missions."

This is the second time that opposition to OS3 has delayed the program. Vendors protested to GAO the solicitation, alleging GSA violated the Small Business Act by not conducting an economic analysis. GAO in June denied the protests, letting GSA move forward with the OS3 program.

GAO has 100 days to decide the cases, which means these latest protests could delay OS3 through early December.

The protests were filed by:

  • Cartridge Savers

  • Coast-to-Coast Computer Products

  • Industries for the Blind

  • National Industries for the Blind

  • Staples Contract and Commercial

  • Supplies Now

GAO already dismissed a protest by Cutis Office Supply on Aug. 27, calling it untimely and saying it did not adequately articulate the deficiencies with the awardees.

"The number of protests is no real surprise, given the size and scope of business GSA foresees doing under OS3," said Larry Allen, president of Allen Federal Business Partners.

"Companies that lost the OS2 bid found out the hard way that not being on the FSSI can significantly impact their federal office supply business. With the exception of the National Institutes for the Blind protest, I don't know that the protests indicate that GSA did anything wrong, merely that companies want to make sure they've done everything they can to protect themselves," he said. "Protests right now, at year-end, also ensure that unsuccessful companies can continue doing business through their GSA Schedule through the end of the fiscal year. That's definitely a contributing factor to some of the protest actions."

Allen said the National Industries for the Blind's protest stems from the organization's belief that GSA, to a certain extent, is disregarding the mandatory source requirements under the law and throwing obstacles in NIB's path to provide office supplies. This is NIB's second protest of OS3. GAO denied the first one on July 2.

Sam Bornstein, a professor of accounting and taxation at Kean University's School of Business in New Jersey, and a partner with Bornstein & Song, has been an outspoken critic of the FSSI initiative. He said GSA should take advantage of the OS3 delay to conduct a cost-benefit analysis on the Office Supplies 2 contract.

"The ‘cost' should include the economic and social costs of job loss for all of the employee jobs that have been lost due to the FSSI OS2," he said. "SBA endorsed the need for a CBA and the analysis of the economic and social costs of job loss in its April letter to GAO. SBA believes that this is a reasonable approach to assess negative impact of the consolidation."

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