The General Services Administration is driving what it hopes to be a final nail in the LPTA coffin.
As one of three major acquisition policy changes GSA is seeking over the next year, the proposal would remove language in the schedules program that many blame for why agencies use lowest price, technically acceptable (LPTA) still too often.
Jeff Koses, GSA’s senior procurement executive, said the legislative change would bring clarity to the Competition in Contracting Act of 1984.
“Over the last 40 years, we’ve moved to a best value mindset. Acquisition is not about trying to buy the lowest priced item,” Koses said in an interview with Federal News Network after speaking at the Coalition for Government Procurement’s fall conference. “The problem with the standard in that language calling for the lowest cost alternative is it gets confused with lowest price, technically acceptable. We think if we replace that language with best value, it’s clear, it’s easier to train, it’s easier to explain, and, more important, it’s consistent with the direction Congress has given and consistent with what we’re trying to do with the acquisition system.”
The update to CICA is one of three legislative proposals GSA submitted to Congress. Another one would enable GSA to increase the percentage from fees collected through the schedules program and other governmentwide contracts that would go to the acquisition workforce training fund. The third request to Congress is not new this year, but one GSA has suggested before. It wants to amend the fiscal 2020 Defense authorization bill, which included the Fair Chance Act, commonly referred to as “Ban the Box,” to transfer the complaint procedures assigned to GSA and the Department of Defense to the Department of Labor.
At the same time, GSA also issued a proposed rule yesterday that would make permanent the pandemic-era changes to the Economic Price Adjustment clause.
The change to CICA aims to bring more consistency to how agencies use the schedules and reinforce that LPTA should mainly be used for non-complex product buys.
“Plainly, ‘price’ is simply the price, but ‘lowest overall cost alternative’ includes consideration of price as well as administrative costs, etc. The proposed amendments would provide clarity for federal agencies and industry and align with Congressional mandates for acquisition to place less emphasis on price and more emphasis on best value,” GSA wrote in the proposal. “‘Best value’ also reflects the current realities of how ordering activities use the GSA [schedules] program per its ordering procedures in the FAR.1 Putting the GSA [schedules] program on a level playing field with other acquisition procedures would expand opportunities for small businesses in the GSA [schedules] program, increase competition and help GSA better fulfill public policy objectives that contribute to the price of a product or service, particularly in terms of supply chain risk management.”
Koses said CICA change would help contracting officers as well as companies alike.
For contractors, Koses said the ability to offer “complete solutions” without having to worry about price as a major factor.
For contracting officers and others, he said, “it will make training and education easier and more consistent with the way the federal acquisition works.”
More money for training
The proposal to increase the acquisition workforce training fund would be the first update to that program in 20 years.
“This proposal entails increasing the AWTF credit from 5% to 7.5%. This projects to be a $11.5 million increase to the fund’s collections in fiscal 2024, with the Federal Acquisition Institute (FAI) retaining $7.5 million of the new funds and the remaining $4 million being transferred to the Defense Acquisition University (DAU),” GSA wrote in the proposal. “In fiscal 2022, about $22 million was credited to the fund, with FAI retaining $14 million and the remaining $8 million being transferred to DAU. Approximately $20 million of those credits came from fees collected by GSA for the use of its applicable contracts (such as federal supply schedules and governmentwide acquisition contracts). If the fiscal 2022 credit (5%) had been increased to the proposed 7.5% rate, total collections would have been approximately $33 million, with $21 million being retained by FAI and $12 million being transferred to DAU. GSA-collected fees would have accounted for $30 million of the total $33 million in fund credits.”
Koses said agencies are asking contracting officers and others to do more complex work, particularly with new cybersecurity and supply chain risks management requirements coming into play, so the funding to pay for more training is more important than ever.
“Congress has asked us to train the workforce in cybersecurity protections. FAI is developing a new curriculum, there’s charges for things like that,” he said.
The third policy change is a proposed rule in the Federal Register that would make it easier for companies to increase their prices based on inflationary pressure on GSA schedule contracts.
The proposed rule would make six revisions to the EPA clause:
Standardization and simplification of existing schedule EPA requirements;
Retention of the schedule contracting officer’s authority to reject, accept or partially accept an EPA request;
Creation of a definition for “economic price adjustment method” for the purpose of formalizing within resultant contracts offerors’ proposed EPA mechanism(s), the applicable pricing subject to EPA, and any other agreed upon requirements;
Clarification on what is not covered by an EPA request;
Ability for the EPA method to be revised via mutual agreement during contract performance; and
Establishment of a single consolidated schedule EPA clause.
Koses said the deviation to the economic price adjustment process worked so well GSA wants to make it permanent.
“It’s effective. It empowers our contracting officers to make good decisions. It helps us in working with our industry partners,” he said. “It would update the several EPA clauses currently in the schedules program, consolidate them to one and get rid of all of these regulatory mechanisms, instead relying on market forces, on the knowledge intelligence and negotiation skill of our contracting officers and on industry recognizing that they have to operate in a competitive market.”
GSA is accepting comments on the proposed rule through Jan. 16.