Complaints are coming from contractors on the General Services Administration’s multiple-award schedule. They say contracting officers are trying to re-negotiate finished contracts and making unreasonable demands for information. For more, the Federal Drive with Tom Temin talked with federal sales and marketing consultant Larry Allen.

Interview transcript 

Tom Temin  And you have found that this is mainly happening in the information technology part of the Unified Schedules program.

Larry Allen That’s right. And at the outset, you know, I’ve worked on the GSA Schedules program for well over 30 years. And we certainly have seen things ebb and flow over that time. But recently, the level of industry discussion on problems, particularly with the IT schedule, has been pointing up close to an all-time high. And it’s time to get these issues out in front of people… get a little disinfecting sunshine on them, if you will, so that we have a program that works better not just for contractors, but for government customers.

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Tom Temin Well, what is happening? What are contracting officers actually doing, that the contractors are complaining about?

Larry Allen  They’re doing several things. I think one of the most notable things, Tom, is that there seems to be no end to the amount of data that contracting officers feel that they are entitled to. Papering the record, just one more set of transactional data, and you know, all of that data…everything a contractor submits, it has to be accurate, current and complete. And the more you’re asked to submit, the more, you’ve got to keep track of everything and make sure you’re meeting that standard. And if you’re not, then you are setting yourself up for some future potential audit problems, not to mention the paperwork that you’re having to provide in an endless stream of requests that come. One of the other things that’s happening is — and you alluded to it in the setup — and that is (for) contracts that are already in place, GSA has already negotiated it, the contracting officer has found that to be a fair and reasonable price. Six months (or) a year later, a company comes in and asks for a contract modification. And the contracting officer now uses that as an occasion to reopen negotiations on everything and say, ‘Well, wait a minute, that maybe wasn’t a fair and reasonable price.’ And the contractor is left saying, ‘Well, wait a minute, this is how I’ve been selling. I’ve been doing this for the last year, people enjoy doing business with me this way.’ You know, there’s only so much blood in the turnip that you can give. And that’s an issue too. I think one of the things that every contractor ought to be concerned about as well, Tom is contracting officers asking companies who have their contract set up through GSA’s Transactional Data Reporting pilot, for contractor-based sales information. That’s not supposed to happen at all. And it’s a real danger for me, I think, look, when TDR was set up, I put a blackbox warning out on it on exactly this issue. And since then, things have you know, mitigated a little bit where TDR has proven to be a viable pathway for companies who can’t use the traditional method to get on scheduled. But if we’re getting into a situation where there’s no standard for what constitutes enough data, or how much data because there’s not supposed to be any data in the first place, that is a moment that every TDR contractor should wake up and say, ‘Stop. What’s going on here?’

Tom Temin We’re speaking with Larry Allen, president of Allen Federal Business Partners. I mean, there are legal restrictions on what the government can ask for — correct? — in what are basically totally commercial products. This is not cost plus contracts or development contracts, but simply commercial items available widely.

Larry Allen Right. And I think this is one of the disconnects, Tom. First of all, the Paperwork Reduction Act is a rule that even the schedules program has to adhere to, where the government is only supposed to make reasonable data requests. And in fact, GSA has to go out every so often, and renew its authority to collect data from contractors. Usually, that type of request is rubber stamped at the FAR Council. But right now, I don’t think it should be. It seems like if it just sales through the rulemaking process, then the idea is that whatever we’re asking for is fine, and we’re not asking for anything more than we should be. And that’s manifestly not the case. Ironically, we’re talking about this at a time when GSA is trying to be pro-environment, but there are a lot of trees that are losing their lives to provide the paperwork, the contracting officers want. Are you aware that GSA management is aware of this? And maybe we’ll do something to mitigate it… get some word out to their CEOs? Tom, I think they weren’t aware of it before this, but they’re aware of it now. I know that the schedules program management office is aware of these issues. They’ve already indicated that they want to have discussions with the contracting officer management team at the IT part of GSA. I think that’s a good idea. But I do think it’s going to take some senior level intervention here to say, ‘Hey, look, this program worked best when it’s a partnership. When contractors and GSA work together to serve our common federal customer. This is not a program that works well of contractors have a target on their back.’  And just because you’re doing $20 billions a year today through this program, from the IT schedule doesn’t mean that thus now and forevermore, it shall be. One need look no further, Tom, than the Oasis Plus Program and the fact that Oasis overtook the GSA professional services schedule in terms of sales a couple of years ago. So you can actually kill the goose that lays the golden egg.

Tom Temin All right, well, we’ll keep an eye on that one and see what develops. Especially as you say, there’s a lot of G wax around that people can use alternatively to the to the schedules. Also your reporting that whistleblower lawsuits are reaching companies in greater frequency, especially to help enforce the cybersecurity regime.

Larry Allen That’s right, Tom, we’d forecast when all the cybersecurity rules started coming down, that the primary way that they would be enforced would be through whistleblower cases. And we’re just starting now to get some evidence that that’s actually what’s playing out. We had a whistleblower, this time, blowing the whistle against SAIC alleging that on one of their government contracts, they didn’t fulfill all the cybersecurity duties they were supposed to adhere to. We don’t know whether that’s true or not. But what we can say is that once the allegations were made, the contractor in this case acted in a way that is probably not a best practice. You don’t solely isolate the employee, you don’t take away their rights, you don’t fire them for blowing the whistle. There are FAR rules on that type of stuff. And you can actually make the situation worse for yourself. Because now instead of just having to defend against the cybersecurity allegations, you’ve got a retaliation suit that you’re gonna have to settle as well. So it’s just really full employment for your legal staff.

Tom Temin Yeah. So, what’s your best advice for companies then, besides making sure the cyber procedures are in place that are required to start with?

Larry Allen Well, I think at a basic level, if you have whistle — every company has, on paper anyway, whistleblower protections. Those whistleblower protections actually have to be operational. It’s nice to have them on a piece of paper, it’s nice to have them in a policy document, but they actually have to be lived. And don’t fear the people who blow the whistle. Look if, at a minimum, if you’d listened to the whistleblower in this case, you would have an opportunity to know whether or not the allegations were valid or not. Now you’ve got lawyers involved and the Department of Justice, it’s going to cost you a lot of money, it’s probably going to cost at least one person, their job in the company. And you didn’t need to do it. So, my advice is to relax, work through it, follow the rules that you’re supposed to follow. They’re there for a reason. And they can actually save you some time and aggravation.

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Tom Temin I guess that’s our theme today. Stay within your guidelines and your lanes of travel, whether you’re government or industry.

Larry Allen I think that’s a good takeaway. These things exist for a reason and they help make sure that we have a good government market. And that’s really what the outline is. We want to be able to have the business of government run smoothly.

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