GSA’s schedule consolidation — what you need to know

The General Services Administration announced it will, indeed, meet its Oct. 1 goal of requiring all new multiple award schedule (MAS) offerors to use a new, consolidated schedule solicitation to obtain a schedule contract. The agency released a notice on Aug. 29 stating that the new solicitation, along with accompanying information such as a “significant changes” document, will be available on FedBizOpps on that date. While GSA intends for the simplified solicitation to make the lives of both contractors and contracting officers easier, only time will tell if having a unified solicitation creates a level playing field, or makes it difficult-to-impossible for some companies to do business in a consolidated schedules world.

GSA’s three-phase approach

GSA has publicly announced a three-phased program through which it will consolidate MAS contracts.

Phase I is the issuance of a new, unified schedules solicitation. This is the phase that the agency hopes to have in place by Oct. 1.

Phase II is the mass modification of existing schedule contracts. The new terms and conditions of the unified solicitation will be sent to existing contract holders as a modification that they are intended to sign and return to GSA.  After that, and unless other steps have been taken (see below), each schedule contract will contain identical terms and conditions.

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Phase III is the consolidation of multiple contracts currently held by one company into one, unified agreement. In addition to the standard set of terms and conditions, this phase will also further promote the elimination of the existing schedules special item number (SIN) taxonomy, through which sub-parts of schedule contracts are organized, replacing it with a system based on North American Industrial Classification (NAIC) codes.

GSA believes that this approach will make schedule contracts easier to use, especially by Defense Department customers who are already familiar with the NAICs system.

Streamlining

The consolidated solicitation gets rid of multiple contract clauses that had been used to define contract specifics like lease and delivery terms, small business plan requirements, and the economic price adjustment clause. As part of the consolidation process, GSA acknowledged, for example, that there were over 17 different formal economic price adjustment clauses in use. Eliminating obsolete contract clauses from schedule contracts and ensuring that contractors have a certain set of terms and conditions in common should be positive outcomes.

Contractors, GSA contracting officials and customers will be able to point to a common contractual foundation that should make users more confident in buying from schedule contracts and make managing those contracts easier.

One size does not fit all

GSA is reducing the number of schedule contracts from 24 to one. That reduction cuts across multiple service market segments, commodity-like commercial items, security equipment, hardware and more. While some terms and conditions can be the same for each of these, it is undeniable that the commercial world, upon which schedule pricing is based, does not buy each of these solutions the same way. As such, some flexibility will need to remain even after consolidation if schedule contracts are to continue to be viable ways for companies to reach their federal customers.

One potential concern is that GSA contracting officers (COs) will require strict adherence to the common terms in the consolidated solicitation. This is not idle speculation. Experienced schedule contractors know well that COs will sometimes already default to standard rules, even when a good case can be made that they need to be adapted to fit special circumstances. Adherence to standardized terms is perceived as low risk and is also a way to more quickly manage multiple offers, rather than acting on the exception requests of multiple contractors. It is likely that some of the first contractors requesting changes to the standardized terms will face an uphill battle that could delay the award of a new contract.

What about submitting a new offer now?

If your company is contemplating a new schedule contract, it should strongly consider submitting that application now under the proper existing schedule solicitation. GSA, indeed, has stated that they want schedule business to proceed under current rules until Oct. 1. You may find that negotiating special terms is easier now and gets you a head start at selling through the schedules program.

Unique terms and conditions

Many current schedule contractors have negotiated specialized terms in their current schedule contract. Carefully and precisely defining the circumstances under which the schedule’s price reductions clause (PRC) is triggered is a leading example. Contractors want a precise and well-understood PRC trigger so that they can develop a consistent management structure around it to ensure that they remain in compliance. New, more generalized, PRC terms may jeopardize current specially crafted agreements.

Current schedule contractors will see the new terms in any offer they submit after Oct. 1. The new terms may also be part of a schedule renewal, or even a large-scale modification as COs work to get all of their contracts on a common footing. As such, each company should carefully review the new solicitation and ensure that specialized terms can continue to be a part of their own contract.

Do not sign any new contract, modification or extension until you have thoroughly read the terms and understand what your company is responsible for it terms of compliance. Your company worked hard to negotiate for especially tailored contract terms. Don’t sign away those terms without fully understanding the risks and the impact on both your company’s commercial and federal business.

Contract consolidation

Another concern of existing schedule contractors is how and when GSA will consolidate its multiple schedule contracts into one. Consolidation is the third and final phase of the consolidation project. GSA’s ultimate intent is to have each company hold one contract that encompasses the full range of services and products they would like to offer through the MAS program.  Companies with multiple schedules, though, are concerned over how this will be put in place. They point out that there are fundamental differences between how services and products are brought, and that even service acquisitions can be unique depending on the specific needs of a customer agency.

These concerns, along with the logistics involved in consolidating as many as five or six different schedule contracts into one, are likely reasons why GSA placed this phase last. If the full potential of the consolidation’s intent is to make the schedules easier to use, GSA will have to work carefully so that agency customers can continue to easily find the solutions they need.  This will be a key test of the NAICs-based classification system. The agency is betting that it will be a more familiar and more easily understood classification method than the current SIN structure.

Regardless, the contract consolidation phase will likely take some time. Both contractor and GSA internal management systems may have to be changed.  While some contractors have a centralized contract management structure, most let each business unit manage its own contract. They may have little, if any, contact with other business units that hold schedule contracts. Similarly, GSA’s current structure means that service contracts are handled in Auburn, Washington, while IT contracts are handled in Washington, D.C., Atlanta, Kansas City and Fort Worth.

Each region feels ownership for the contracts it currently manages. Making sure that each business unit or GSA region buys into the consolidation process and supports it will be critical to the success of this phase.

The bottom line

GSA leadership already deserves praise for bringing this schedules consolidation effort further along than any previous attempt. The agency seems to have the support of both internal and external stakeholders. Though there are risks, GSA’s schedule consolidation initiative should be an overall benefit to contractors, GSA and schedule customers. Consolidation may make it easier to find solutions through a more familiar taxonomy than existing schedule contracts provide. Some degree of common terms will also make it easier for GSA to manage contracts and enhance customer confidence.

Contractors, however, should plan to participate in GSA’s multiple training sessions. Experience has shown that contractors may have more information on new changes than their COs. Such knowledge can help minimize any hurdles that may arise when the new terms come to your schedule contract.

Larry Allen is managing director of the Federal Market Access Group at BDO USA.

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