The real best value of raising the MPT and SAT

This column was originally published on Roger Waldron’s blog at The Coalition for Government Procurement and was republished here with permission from the author.

As you know, the FY18 National Defense Authorization Act raised the micro-purchase threshold (MPT) for civilian agencies to $10,000 (the MPT remains at $5,000 for DoD) and raised the simplified acquisition threshold (SAT) for all agencies to $250,000. While much of the acquisition “buzz” around last year’s NDAA focused on Section 846 and e-Commerce, raising the MPT and the SAT will have an immediate and significant impact in streamlining acquisition operations and supporting agency mission needs. So too, while much of the thinking/analysis around the increases in the MPT and SAT focuses on the impact on open market purchases, the real “best value” impact from the increases in the MPT and SAT will be through pre-existing, multiple-award indefinite delivery, indefinite quantity (MAIDIQ) contracts.

The increase in the MPT and SAT provides the flexibility for customer agencies to place orders under pre-existing contract vehicles, like NASA SWEP, GSA’s Multiple Award Schedule (MAS) program, the VA’s MAS program, and other major, agency-specific MAIDIQ contacts quickly and efficiently. There is great value in this contract ordering flexibility as compared to open market transactions below the MPT. Namely, the products, services and firms on pre-existing contracts have been vetted for compliance with important government requirements (e.g. Trade Agreements Act, Buy American Act, cybersecurity requirements, socio-economic and small business goals, etc.).

In addition, the prices on these MAIDIQ contracts are the result of full and open competition and/or have been determined to be fair and reasonable while remaining under competitive pressure at the task and delivery order level. As noted in a previous column, the GSA Schedules program offers customer agencies with expeditious, competitive pricing through its electronic market place, GSA Advantage. Indeed, as described in the blog, according to a MBA Professional Report published by the Naval Postgraduate School, which provides a business case analysis comparing GSA Advantage to Amazon Business from the standpoint of prices and processes. It found that, for the top 60 commercially available items purchased by the Air Force using government purchase cards prices were lower on GSA Advantage more than 80 percent of the time. Thus, as compared to open MPT transactions, improving the efficiency of access to competitive/good pricing and compliant products via MAIDIQ contracts yields value to the government.

For the Veterans Affairs Department (VA), this streamlining reform provides the opportunity to support effectively the healthcare needs of our veterans by energizing the VA Federal Supply Schedule (FSS) as the backbone of the Medical/Surgical Prime Vendor (MSPV) program. In particular, by leveraging the VA FSS, the VA could provide the MSPV program office with greater access to best value healthcare solutions than otherwise, and thus, enhance the quality of care delivered to our nation’s veterans.

Last week, the Civilian Agency Acquisition Council (CAAC) published a memorandum entitled, Class Deviation from the Federal Acquisition Regulation (FAR) increasing the micro-purchase threshold and the simplified acquisition threshold, which provides civilian agencies with the authority to issue class deviations to raise the micro-purchase threshold (MPT) and simplified acquisition threshold (SAT) in accordance with the Fiscal Year (FY) 2018 NDAA. Notably, the General Services Administration (GSA), in consultation with the CAAC, already issued a class deviation for GSA-funded procurements. The deviation, however, is not applicable to procurements made through the GSA Schedules program, which are subject to the policies of the customer agency.

By streamlining federal procurement through pre-existing multiple award contract vehicles, customer agencies can achieve a “win-win-win,” where they are able procure solutions that not only support their end mission needs and goals, but are competitively priced, timely, and compliant. Consequently, that Federal customers should seek to leverage the streamlining reform presented by the increase in the MPT and SAT by incorporating the changes through their own class deviations.

Roger Waldron is the president of the Coalition for Government Procurement, and host of Off the Shelf on Federal News Radio.

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