OFPP promises to tame interagency contracts

By Jason Miller
Executive Editor
Federal News Radio

The Office of Federal Procurement Policy will release final guidance in an effort to tame interagency contracting in the coming weeks.

Dan Gordon, OFPP’s administrator, said Wednesday the new Federal Acquisition Regulations final rule will make up for a decade of lackluster oversight where policy guidance and management controls didn’t keep pace with how agencies created and used multiple agency and governmentwide contracts.

“We will soon be issuing guidance that requires agencies to develop business cases to support their decision to create a new contract,” said Gordon during a Senate Homeland Security and Governmental Affairs Committee hearing on duplication in the federal government. “While in many ways this is based on the success of businesses cases we use in connection with governmentwide acquisition contracts, by the way a model that was commended and recommended for broader use by the acquisition advisory panel a few years ago. The new business cases will expressly require that agencies consider whether their new contract might be causing duplication with existing vehicles and they will need to justify why a new contract would be needed.”

OFPP issued the interim rule through the FAR in December and accepted comments through February.

“We want to be sure the business case makes sense and fit their needs,” Gordon said. “We want to be sure we are using other agency’s contracts when it makes sense to do that and only creating a new contract if it’s justified.”

In the business case, agencies also would have to include anticipated usage by their employees and by other agencies. Agencies would have to justify to OFPP the value the contract would add to current contracting options and the suitability of the agency to award and administer the contract.

Additionally in the business case, agencies would have to identify the costs for awarding and managing the new contract, including the amount of planned fees for agency customers and how those fees would be set.

Gordon said the rule would cover all governmentwide acquisition contracts (GWACs), multi-agency contracts and blanket purchase agreements (BPAs).

More than just interagency contracting-which has been on a the Government Accountability Office’s High-Risk list since 2005 – Gordon said the business cases are the first step to getting a better hold on how many BPAs agencies have in place.

“We also need to be concerned and perhaps more concerned where we don’t have an interagency contract where one could eliminate duplication and save us money,” Gordon said. “Far too often, separate and redundant contracts and BPAS are awarded by each agency component to serve a narrow customer base, which duplicates efforts and denies us the benefit of the federal government being the world’s largest customer.”

Gordon said the proliferation of BPAs worries him more than the increase in GWACs because OFPP knows less about BPA contracts than the others.

“If you ask me ‘how many BPAs exist under the schedules?’ The answer is ‘I don’t know,'” he said. “We have no visibility into BPAs and as a result we have started an effort several months ago, and we are making some progress, working with GSA so we will have a way for agencies to learn about BPAs with improved visibility. I’m hoping we can reduce duplication and consolidate our procurement volume.”

One example of this, Gordon said, is the BPA for office supplies GSA awarded last year. He said 74 percent of all dollars have been awarded to small businesses and the government has saved 10 percent over what the agencies had been spending on office supplies.

Gordon said OFPP and GSA are moving out on new BPAs. GSA issued a request for information for a wireless services and devices BPA last week, and another BPA is coming for multi-functional devices for printing, copying and faxing.

Gordon said GSA also recently launched a knowledge management portal where studies, market research and spend analyses developed in connection with strategic sourcing are posted for other agencies to use.

Gordon said OFPP and GSA are considering developing a database listing all GWACs, BPAs and other interagency contracts, but the government also may use a commercial database from ASI Government.

OFPP’s efforts to reduce duplication among GWACs and interagency contracts are among the areas the Government Accountability Office (GAO) highlighted in a March report on duplication across the government.

Committee members wanted more information on how OMB is addressing the duplication. GAO found 81 areas where agencies had redundant programs.

While Gordon and federal chief information officer Vivek Kundra offered some broad examples of change, Gene Dodaro, the Comptroller General, said one-third of all programs need Congressional approval to change.

Dodaro said there are some programs Congress and the administration could address in the short term.

“There are a number of areas we recommend that bills have been introduced or the administration has made legislative proposals,” he said.

Dodaro said adding a simple question to an IRS form could save as much as $2.9 billion by helping the Social Security Administration have a better of idea of how much money should be withheld due to pension offsets.

Dodaro said there are other examples as well, including the ethanol tax credit that could save the government $5.7 billion. The Customs and Immigration Service also has $640 million in an account from collecting one-time fees, but Congress hasn’t authorized use of the money. Dodaro said it could put toward future costs for the directorate.

Sen. Joseph Lieberman (I-Conn.) plans to write a letter to the Office of Management and Budget and agencies asking for an update on their efforts to reduce duplicative programs.

Dodaro said the letter was a good idea, but a broader oversight approach was more important.

“In these program areas, agencies individually can only take so much action,” he said. “I’ll illustrate with teacher quality. The 82 programs the Department of Education has the bulk of them, but by no means has the control over all the programs. There are 10 different agencies that have those programs. So in most of these areas, in addition to the agencies and what they can do, the administration really needs to take a cross cutting approach across the agencies. OMB has to take a leadership role.”

He added that a number of these areas are up for reauthorization including some of the education and surface transportation areas.

“There are perfect opportunities now to really make some headway,” Dodaro said.

Lieberman promised another hearing later this year. Dodaro said GAO is working on two more reports on how agencies are reducing duplicative programs.

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