New rules take effect for agencies buying from AbilityOne contractors

New rules have taken effect for procurement from AbilityOne contractors. Those are the companies, mostly non-profits, whose employees have disabilities.

New rules have taken effect for procurement from AbilityOne contractors. Those are the companies, mostly non-profits, whose employees have disabilities. The rules were ordered by Congress back in 2017 and they bring more competition to the program. For details, The Federal Drive with Tom Temin talked with the Executive Director of the AbilityOne Commission, Kim Zeich.

Interview Transcript: 

Kim Zeich The AbilityOne program provides employment opportunities to individuals who are blind or have significant disabilities through the Federal Acquisition System. Historically, the AbilityOne program has been an exception to competition in contracting. So the U.S. AbilityOne commission announced a new final rule supporting competition in the AbilityOne program. It is limited competition, and we’ll talk about that. But it does deliver on a top priority of that congressional oversight panel.

Tom Temin Right. Because of the wage structures and the nonprofit, I believe, status of many of the companies. You don’t want them chasing lower and lower prices all the time, and yet you want competition. So how does it actually work then?

Kim Zeich The final rule strikes a balance between those important objectives, between meeting our government customers expectations for best value on AbilityOne contracts. At the same time, the final rule helps us advance the AbilityOne mission by taking into account employment and career mobility for individuals with disabilities as factors in the competition.

Tom Temin And how does it do that? What are some of the strictures now that agencies have to follow?

Kim Zeich A typical competition involves, of course, technical proposals, past performance and consideration of price. So when the AbilityOne program commission approves the competition, these will be limited to the largest contracts in the AbilityOne program. The Commission will consider those factors, but at the same time, the Commission will consider and reward what we call mission related factors or the social impact of the AbilityOne employer. So that means the Commission will look at training, it will look at career mobility, and it will look at the overall employment opportunities that an AbilityOne provider brings to the table, in addition to, again, the traditional competitive factors.

Tom Temin Well, does the commission stand in between the requisition or the acquiring agency and the contractors?

Kim Zeich The Commission will have an important oversight role. The Commission will approve a request for competition. Those will be limited. One of the safeguards that we have built into this rule is who can request a competition. So that will come from a high level in the organization, in the customer organization that will come from a senior executive or a general officer. The commission will look at our suitability criteria before approving a competition, and then the Commission will ensure, again, a balance of factors. So technical past performance, price and that social impact that we will look at in terms of the career opportunities for people with disabilities.

Tom Temin And do you expect most of the requests for competition to come from the Defense Department?

Kim Zeich The Department of Defense is the largest AbilityOne customer. The Department of Defense has been requesting the opportunity to have competition. So we foresee some requests will come from DoD. At the same time, we have a lot of civilian agencies who are our customers as well. And so the final rule in fact, takes that into account. It sets a dollar threshold for DoD that is different from our civilian customers. So only again, the largest AbilityOne contracts, whether coming from defense customers or civilian, will be eligible for competition.

Tom Temin What are those dollar thresholds?

Kim Zeich The threshold for defense contract is $50 million total contract value. So that’s 10 million annual value for our civilian customers who tend to have smaller contracts that say $10 million total contract value threshold. So $2 million per year.

Tom Temin Got it. And these are often not high priced types of items that they’re buying. There are items in AbilityOne, but there’s also services to correct.

Kim Zeich And the competition rule applies specifically to AbilityOne service contracts. So we perform a wide range of services. Where I see the competition rule coming into play would be your large base support operations contracts, where AbilityOne may handle the public works for an entire military installation. Could also come into play for some of our civilian contracts, where we have perhaps total facilities management of a large building complex.

Tom Temin We’re speaking with Kim Zeich. She is executive director of the AbilityOne Commission. And what has been the reaction so far or the acceptance on those services contractors.

Kim Zeich The final rule that was just published March 22, and it reflects extensive stakeholder engagement. It directly responds to, I would say, adapts the public comments that we received. So the Commission expects our stakeholders to feel more comfortable with the final rule than they did with the proposed rule. We heard a lot of feedback, we’ve taken about a year since the initial rule is proposed to go through all of those comments, all of those recommendations, and to come out with a final rule that we think achieves the balance all of our stakeholders are looking for, whether their customers or AbilityOne employers.

Tom Temin So you got comments from the ability one companies and also from the federal agencies.

Kim Zeich Correct. We received well over 100 comments. We had listening sessions, in addition to the opportunity for the public to submit written formal comments, and those were taken into account. So the final rule, I would say was informed by and improved by the public comments.

Tom Temin Now, this, I understand, was ordered up by Congress in the NDAA back in 2017. What took so long?

Kim Zeich You’re absolutely right. The 2017 National Defense Authorization Act established an oversight panel to recommend improvements in the AbilityOne program. So the panel took about four years to make a large number of recommendations and to review the Commission’s progress in implementing the recommendations. And the panel reached its sunset point a couple of years ago, we began working on this rulemaking process. The notice of proposed rulemaking was published about a year ago. So establishing regulations is a time consuming process, particularly if you have broad comment and public outreach process, which the commission sought to implement here. And the rulemaking should take time. I would say the rulemaking process worked the way it’s supposed to, in this case, because we did listen to the stakeholders and it adopted an adapted so many of their comments in the final regulation.

Tom Temin And how does this all square of this idea of competition? And there is a price element in there when the AbilityOne, as I understand it, contractors are on a drive, if you will, to get wages up to the minimum wage level, which has been kind of a sticking point for the people that are employed, because they are people even though they have disabilities. And so more and more of them are receiving at least the federal minimum wage. So wages are generally higher. Can this all square.

Kim Zeich It is all part of how the Commission has been working to modernize the AbilityOne program. For the past year, we’ve been pleased to say that everyone in the AbilityOne program working on AbilityOne contracts will earn no less than the federal minimum state minimum wage or the prevailing wage, which on federal contracts tends to be much higher. Our average wage in the AbilityOne program is over $18 an hour on our AbilityOne service contracts. And the competition rule applies within and among AbilityOne employers. So we have a level playing field. Everyone who will be subject to or eligible to compete in a competition will be paying the same wages.

Tom Temin Understood. Ok. Yeah, that is an important development. And what about modernizing in terms of the range of disabilities? You mentioned blindness first, and I think that’s kind of the grandfathered in condition that gave rise to AbilityOne. But in performing services, facilities maintenance, janitorial type of stuff, then probably blind people can’t do a lot of that type of work. So the range of disabilities incorporated has that also been expanding.

Kim Zeich The AbilityOne program does serve a very diverse population among those who are blind, visually impaired or have significant disability. So many of our program employees, and I would say there almost no limits to what individuals who are blind, visually impaired or have significant disabilities can do within the program. But we certainly have a population that encompasses people with intellectual or developmental disabilities, individuals who may have mental health disabilities, as well as those with physical disabilities, hearing loss or deafness, just a very broad range of disabilities. And what we see on these large AbilityOne contracts, there’s often an opportunity to employ people with a very diverse set of skills to provide them with the supports and services they need to be successful on the job.


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