Government Contracts Monitor

Transforming the Federal Marketplace

March 17, 2015

On December 4, 2014, the Office of Federal Procurement Policy (OFPP) announced a new strategic plan to create a more innovative, effective and efficient federal acquisition system. This plan focusses on three core elements: (1) buying as one through Category Management, (2) driving innovation through developing and deploying talent and tools across agencies, and (3) building stronger vendor relationships. On Friday, March 6, 2015, OFPP Administrator Anne Rung posted a 90-Day Progress Report, reporting on interim developments and announcing next steps. Contractors need to be aware of these developments and plan for coming changes.

Building Stronger Vendor Relationships: Interestingly, while this item was addressed third in the December 4, 2014 Memo, it is listed first in the Update. This reordering reflects the importance being placed on reaching out to and partnering with industry to obtain input, identify and reduce unnecessary burdens, and incorporate commercial best practices. As stated in the December 14, 2014 Memo, “Early, frequent, and constructive engagement with industry leads to better outcomes . . . particularly important for complex, high-risk procurements, including those for large IT projects.” To this end, the first-ever Government-sponsored online “Open Dialogue” was launched last spring, drawing almost 500 participants. OFPP also has taken other steps, including partnering with the General Services Administration (GSA) to improve customer-facing tools and simplify the Federal Supply Schedules (FSS) process. One important early step flowing-out of the latter is GSA’s March 4, 2015 Federal Register Notice (80 Fed. Reg. 11619), proposing major changes to GSA’s pricing mechanisms, including changes to the Price Reduction Clause.

The Update announces that OFPP “will issue guidance to agencies directing them to seek feedback from vendors and internal stakeholders – such as contracting officers and program managers – on how well certain high-dollar IT acquisitions perform … us[ing] Acquisition 360, the first ever transaction-based feedback tool that allows agencies to identify strengths and weaknesses in their acquisition processes with the focus on pre-award activities, contract execution, and certain post award activities, such as debriefings.” Additionally, OFPP is preparing for a second Open Dialogue beginning this spring, “to get industry feedback on steps being taken to ease contractor reporting and improve commercial item acquisitions – issues raised by stakeholders in our last open dialogue.”

Category Management: Perhaps the most substantive and far-reaching aspect of the new strategic plan is the move to implement and institutionalize purchasing government-wide through “Category Management” that breaks down federal spending into 10 common categories, such as IT, professional services, security & protection, facilities & construction, etc., and treats them as individual business units. According to OFPP, “Each category will be led by a senior Government executive who is a true expert in the category and who will develop a Government-wide strategy to drive improved performance.” The idea is to collect and share important contract and pricing information in a central location called the Acquisition Gateway, and to coordinate future buys.

The CMLC has prioritized the collection of IT contracts, and the Update anticipates that “[i]n a few short months, the government acquisition workforce will have access to key information for all major IT commodity contracts across government, including bureau-wide, agency-wide and government-wide contracts.”

Driving Innovation: The December 4, 2014 Memo detailed various steps already taken, and further steps directed, to enhance workforce training and the use of technology, and instill a culture that rewards and drives creativity. The Update states that “progress has been made,” and that the Government will soon launch a “TechFAR Hub” on the Acquisition Gateway. In addition, OFPP has “drafted an initial plan for training and deploying a cadre of certified digital IT acquisition professionals to agencies to assist in this area,” and “will encourage agencies to stand up ‘Buyers Clubs,’ as [Health and Human Services] did last summer, to test, document, and scale new ideas.”

Conclusion: The bottom line is that major changes are coming, as the Government continues to deal with reduced budgets and the need to get more for the money, while at the same trying to simplify the acquisition process, particularly in the IT arena, effectively and on a cost-efficient and timely basis. Industry needs to participate in this evolving process, and stay informed and be prepared for the coming changes.