“We need to focus on the new authority we have for unpriced services contracts and incorporate that so that we can really focus on the technical qualifications of vendors and drive down pricing at the task order level when it matters most.”
With this observation during the Dec. 12, 2018, Federal Marketplace Industry Day, Administrator Emily Murphy highlighted the strategic importance of implementing “unpriced services” as part of the General Services Administration’s overall Federal Marketplace Strategy (FMS).
Murphy was referring to Section 876, Increasing Competition at the Task Order Level of the 2019 National Defense Authorization Act, which authorizes “unpriced services” for the schedules and other contracts. Specifically, Section 876 provides that contracting officers need not consider price as an evaluation factor for contract award so long as (1) the contracts feature individually competed task orders; and (2) cost/price is an evaluation factor for issuance of task orders. As such, the term “unpriced schedules” is somewhat of a misnomer; price, as Murphy noted, is considered “at the task order level where it matters most.”
The “unpriced schedule” eliminates the arbitrary, burdensome, and outdated negotiation of labor rates at the contract level. As a result, a significant barrier to entry for new and existing firms will be eliminated, especially benefiting small business service firms seeking opportunities to support federal customers. Correspondingly, the “unpriced schedule” will streamline access to new, innovative commercial services and solutions while enhancing competition for agency specific requirements at the task order level. Simply put, the unpriced schedule will create additional value for customer agencies—which is a key goal of the FMS.
Congress’ vision for the schedules and Murphy’s endorsement of this new contracting flexibility are important developments in enhancing access to commercial services and solutions. Currently, the schedules’ lagging pricing policies and burdensome/complex contract negotiation practices have defaulted the program to “Low Price Technically Acceptable” service contracts. This dynamic undercuts the full potential of the schedules program by limiting access to innovative, “best in class” capabilities from the commercial market.
Over 21 months have passed since Congress provided GSA this specific authority. Over 18 months have passed since the Federal Marketplace Industry Day. Murphy’s endorsement of this authority is right on point in bringing best value to customer agencies and increased competitive opportunities to commercial firms. The Coalition for Government Procurement stands ready to work with all stakeholders to bring this best in class contracting flexibility to customer agencies and the commercial market.