Rick Vogel isn’t sitting still this time. Back in 2010, when the General Services Administration kicked off the strategic sourcing initiative for office supplies and tried to shut the door on hundreds of small businesses under Schedule 75, Vogel sat by, watched and waited.
We know now that the Obama administration’s office supplies strategic sourcing effort not only failed, but put dozens, if not hundreds, of small businesses out of business. Vogel, who is the federal government sales manager for Coast to Coast Computer Products in Simi Valley, California, said the remaining contractors under Schedule 75 are facing such low margins, they can hardly stay afloat.
Vogel knows this because he is one of those surviving contractors.
Now nearly nine years later, Vogel said he understands with bright clarity what GSA is trying to do with its 2nd Generation IT (2GIT) multiple award contract.
“The 2GIT solicitation is a violation of the Small Business Jobs Act and it will decimate the industry,” Vogel said in an interview with Federal News Network. “GSA got away with it under Schedule 75. I look at this as I’m fighting for my livelihood here. I’m dying on this hill.”
Coast to Coast filed a pre-award bid protest with the Government Accountability Office alleging GSA violated several provisions of the 2010 small business law with the 2GIT solicitation.
Among the provisions in the law that Coast to Coast alleges GSA violated are:
No analysis of 2GIT’s potential impact on small businesses.
No evidence of having evaluated alternative contracting approaches to a multiple award contract with a limited number of awards.
2GIT will negatively impact more than 700 small businesses under the five special item numbers that are part of the new contract.
2GIT violates the bundling statute because it’s not a direct follow-on to the Air Force’s NetCents contract.
The evaluation factors are unduly restrictive, including the requirement for the small firms to be certified under the ISO-9001 standard.
The self-evaluation factors are unduly restrictive giving too much power to resellers ProMark and the Immix Group.
“They are making it impossible for so many small businesses to compete for a spot on 2GIT,” Vogel said.
Additionally, Vogel said GSA also now is in violation of the Competition in Contracting Act (CICA) for not placing a “stay” on the procurement given that GAO accepted Coast to Coast’s protest. He said GSA sent a letter to Schedule 70 contractors saying despite the protest bids are still due on May 6.
“I can’t think of any urgent or compelling reason for this procurement to continue while there is an active protest,” he said.
A GSA spokesman said the agency doesn’t comment on active litigation.
Now before you dismiss Vogel’s complaints as “just another whiny small business,” let’s take a step back and understand why he is so fired up over 2GIT.
Vogel has spent the last 20 years building a federal practice for Coast to Coast. Over the last decade, he had to shift from providing office supplies to IT products. Coast to Coast made a strategic decision not to bid on the strategic sourcing office supplies procurement because it had just won a big deal with the Army and didn’t want to over-extend themselves.
It seemed like a smart business decision from a responsible company until the Army mandated the use of the governmentwide office supplies contract despite having just awarded its own contract for similar products.
All of a sudden Coast to Coast was all but locked out of the market as more and more agencies required their contracting officers to use the strategic sourcing contract.
“I’ve had to reinvent my life once already and I don’t want to do it again,” Vogel said. “We went from selling office supplies to IT products under Schedule 70. If GSA closes down Schedule 70 like they did with Schedule 75, I’m getting out of the government marketplace and will work only in the commercial market. There will not be any compelling reason for any company to get into marketplace if 2GIT gets into place.”
Vogel said he sees the same pattern with 2GIT. He said GSA will award nine spots on the IT products contract and unofficially mandate its use, thus potentially cutting out thousands of small businesses out of the market.
“GSA said it during industry days and verbally told me that they have an agreement with the Air Force to demand its use as NetCents sunsets, and they have other agencies who are interested and are asking others. They’ve also said they plan to expand it to state and local governments,” he said.
To be clear, GSA’s industry day slides do not talk about mandating 2GIT, and, generally speaking, agency officials have strongly pushed back against mandating any contract vehicle, saying the value of the approach should be enough for agencies to want to use it.
But like strategic sourcing for office supplies neither GSA nor the Office of Management and Budget mandated its use, but several agencies from the Army to Census to DHS required contracting officers to justify why they wouldn’t use the vehicle.
Self-scoring factors questioned
Vogel said there are other signs that small businesses are in trouble beyond the real or imagined forthcoming mandate. The self-evaluation scoring system makes it nearly impossible for most small businesses to compete.
The protest states, “If a small business concern does not have a teaming agreement with both Promark and Immix Group, it will be impossible for them to score competitively against the limited subset of contractors who are receiving support from these two large business concerns.”
Vogel said the way GSA created the self-scoring system puts small businesses at a disadvantage because to get the allotted number of points to score in the top nine, a company has to have a teaming agreement with one of the big resellers to meet the breadth and depth of the products sought under 2GIT.
“You can’t offer the full basket of products required under 2GIT without an agreement with the Immix Group or Promark Technology because they have exclusive letters of supply with enough companies that would make it hard to have enough points to be in the top nine,” he said. “So that means Immix or Promark control 1,500 points in the self assessment scores and without an agreement, you are basically out of the competition.”
Vogel said GSA gives 200 points as a small business preference, but that’s not enough to balance out the 1,500 points given to companies that have agreements with the resellers.
If your next question is why doesn’t Coast to Coast just get an agreement with Immix or Promark, Vogel said both companies are limiting the number of agreements they will make.
Additionally, Vogel said another example of GSA following the same playbook at the office supplies effort is the lack of impact analysis that 2GIT would have on small firms. He pointed to the 2014 Small Business Administration decision that GSA didn’t conduct an adequate assessment of the office supplies program impact on small firms as required by the Small Business Jobs Act as a reminder.
Vogel has been working with SBA’s Office of Advocacy, which has asked GSA’s Procurement Center Representative (PCR) to look at 2GIT’s impact on small businesses.
Will Congress pay attention to 2GIT?
The irony in all of this is GSA Administrator Emily Murphy, when she was a staff member for the House Small Business Committee, expressed serious concerns over how the office supplies program impacted small firms. Vogel said he’s prepared to bring this issue to her attention.
When Murphy was with the House Small Business Committee, lawmakers added a provision to the 2015 Defense authorization bill requiring GAO to report on the impact offices supplies program’s impact on small businesses. The provision didn’t make it into the final bill, but GAO has done several reports on strategic sourcing that found GSA and the Office of Management and Budget have not done enough incorporate small business needs into strategic sourcing or its follow-on initiative, category management.
“We want them to scrap the procurement and do what they promised for the Air Force by rewriting it so it’s a follow-on to the NetCents scope. NetCents was limited to the Air Force and to those agencies with an agreement with the Air Force. It was limited in scope for products,” Vogel said. “There is so much impact and reach for 2GIT if it is implemented this way. I don’t know if GSA either doesn’t see it or doesn’t care. I don’t know if their end game is to narrow down the number of contractors on Schedule 70, but that is what it seems to be.”
And after watching the decimation from strategic sourcing under Schedule 75, Vogel couldn’t sit still any longer.