This week marks the first in a series of blogs outlining a Commercial Innovation Strategy (CIS) for the General Services Administration’s Multiple Award Schedule (MAS) program. CIS focuses on reforming the lagging MAS pricing policies that emphasize process, oversight, and audit over competition, best value, and innovation driven by commercial market dynamics.
GSA has a wonderful opportunity to take the MAS program to the next level, bringing 21st-century solutions to the federal customer. To do so means reforming a MAS pricing policy that is stuck in the 1980s, a time when products represented the vast majority of sales under the MAS program. Professional services of all types and structures were not on schedule.
GSA’s Federal Marketplace Strategy (FMS) continues apace, with real progress being made on Schedules Consolidation. This progress lays a foundation for fundamental pricing reform that will align pricing policies with the consolidated contract structures (think solutions-based offerings) and improved e-tools to enhance transparency and task order competition for commercial solutions. Pricing reform is the next logical step in transforming the MAS program to increase access to, and streamline the delivery of, innovative commercial solutions to customer agencies.
The first step in MAS pricing reform is immediate implementation of the “unpriced schedule” for services priced on an hourly basis. It has now been 21 months since GSA was authorized to establish an “unpriced schedule” pursuant to Section 876 of the 2019 National Defense Authorization Act. The title of Section 876 says it all, “Increasing Competition at the Task Order Level.” The title reflects the operational reality of the MAS program: Best value solutions are driven by competition for agency specific requirements at the task order level.
Approximately two-thirds of the service orders under the MAS program are fixed price. This reality is consistent with the FAR 8.4’s ordering procedures which promote and encourage use of performance-based, firm-fixed price orders for services. The burdensome, costly, and time-consuming negotiation of contract level pricing is a disconnected drain on the market, hindering access to innovative commercial solutions that serve the federal customer.
Now is the time, and simplicity is the key. For example, GSA could take a straightforward approach by negotiating contracts to establish the basic terms, conditions, and offerings. Price would not be negotiated. Rather, contractors would be allowed to post and submit rates that would be available for customer agencies conducting market research. Then, consistent with the ordering procedures, customer agencies would seek competitive quotes for their SOW-requirements. Such an approach would reduce unnecessary, burdensome processes that create barriers to entry for new and continually evolving commercial solutions, services, and innovations. It also would focus pricing identification at a meaningful point in the acquisition process: The order level. This approach would also render the anti-competitive Price Reduction Clause (PRC) inoperable. As a result, contractors would no longer be penalized for fully competing in the private commercial market.
GSA not moving forward to implement the “unpriced schedule” has held back the ultimate benefits of the FMS. The success of the Schedules Consolidation and Catalog Management initiatives, however, is dependent upon access to the commercial market, and pricing reform is central to maintaining and increasing that access for customer agencies. Congress’ specific authorization of GSA’s “unpriced schedule” was a significant step forward. GSA needs to take the next step and implement the policy for an “unpriced MAS schedule.” It can and should be accomplished now. In this regard, the Coalition is here to help by working with all stakeholders towards the goal of MAS pricing reform.