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Clarification: Several smart readers pointed out that GSA’s OASIS multiple award contract was actually the first governmentwide contract not to have a total dollar ceiling. GSA issued a FAR deviation for that vehicle in 2013.
For most of the past 18 months, the federal contracting community has expected the Polaris small business governmentwide acquisition contract to have a ceiling of $50 billion. It’s unclear whether it was an estimate from a market research firm like Deltek or Bloomberg Government, or just a rumor that took off on its own, but for much of the past year, every story and every discussion about Polaris by multiple media organizations highlighted this $50 billion number.
Then a few weeks ago, the General Services Administration suddenly asked for a correction on a story about Polaris that says it has this $50 billion ceiling. The request was a bit surprising given the 18 months of stories and discussion, and never a request for a correction previously.
Well like any good journalist, I put on my investigative hat and found out why.
GSA quietly issued a class deviation to the Federal Acquisition Regulations in March removing the requirement for Polaris to have a minimum or maximum quantity under the indefinite delivery, indefinite quantity (IDIQ) type contract. By the way, and to be clear, FAR deviations are rarely big news items that deserve big fanfare and press releases. But you’d think that with Polaris being in the news and garnering attention like it has, GSA may have wanted to alert folks of the significant change.
A GSA official said in an email to Federal News Network that while they issued the deviation in March, it was planning for some time to remove the ceiling requirement.
“GSA incorporated a number of good-for-government key features in the Polaris GWAC program. An important one that we’ve seen misrepresented in the media is the mention of a contract ceiling on Polaris,” said the official, who requested anonymity in order to talk about an active procurement. “In fact, designed to ensure ongoing availability for customers and maximum opportunity for vendors, Polaris will not have a contract ceiling at the master contract level.”
This is the first time in nearly a decade that GSA, or any agency for that matter, created a multiple award, IDIQ type contract that didn’t have a ceiling.
Sonny Hashmi, the commissioner of the Federal Acquisition Service, said GSA is using the authorities Congress granted them under Section 876 of the 2018 National Defense Authorization Act where costs only matter at each individual task order level and not at the master contract level.
“The two or three things that historically have defined how we’ve done large, multi agency or governmentwide vehicles, there’s always been a ceiling, on-ramps have been very few and far between and typically we’ve always had price negotiation at the master contract level. All three of those things are done for the right reason and they follow well-trodden paths and the Federal Acquisition Regulation. But all those three things, many times come together to cause unnecessary friction and heartburn for the industry,” Hashmi said in an interview with Federal News Network. “For our customers, ceilings are great when you can have perfect predictability, what the future is going to look like. We’re living in a world where we can’t predict what the future looks like. Digital is going to be a more central part of how the government operates. Organizations at state local tribal level are going to be going through digital modernizations and that is going to continue to accelerate. So we don’t know what the number looks like. So why come up with an artificial boundary that requires people to do artificial work at some point in the arbitrary future?”
Hashmi said GSA wants Polaris, and really all its acquisition vehicles, to solve problems.
“If it’s highly adopted, that’s a great thing because it means that it’s solving real business problems for people,” he said.
Jeff Koses, GSA’s senior procurement executive, signed the deviation because the Federal Acquisition Streamlining Act (FASA), now codified at 41 USC § 4103, says a solicitation for a task or delivery order contract “shall include [among other things] the maximum quantity or dollar value of the services or property to be procured under the contract.”
In the memo, Koses wrote that the authority to issue the FAR deviation is based on the IT Category’s plan to “on-ramp” new contractors to the Polaris program at least every three years.
“Such on-ramping opportunities do not need to cover all pools, but ITC is encouraged to consider an annual on-ramp, opening a different pool each year,” the memo stated.
Top-line ceilings going away
Polaris isn’t the only contract GSA is planning not to have a ceiling for.
In its response to industry questions about the Services MAC, GSA says it will issue a FAR deviation to remove the minimum and maximum requirements.
Hashmi added that these two will not be the last ones where GSA will seek the FAR deviation.
While he didn’t specifically call it out, it’s easy to see the Ascend cloud blanket purchase agreement fall into the similar category as Polaris and the Services MAC.
Federal procurement experts were surprised about the FAR deviation for Polaris or for any of the other vehicles.
As one federal procurement attorney said, “In light of this [FASA and USC code language], I don’t see how GSA can waive the maximum quantity/dollar value requirement.”
Another said, the Office of Federal Procurement Policy (OFPP) may want to consider asking GSA for a business case as a contract with no ceiling may harm small businesses by reducing other means for competition. The expert added that the agency also is taking on increased risk of protest by unsuccessful bidders.
The other reason for removing the ceiling of Polaris likely is related to the challenges GSA faced with the 8(a) Stars II program. In May 2020, GSA announced the popular contract would reach its $15 billion ceiling 16 months before the end of the contract. GSA had to increase the ceiling size by $7 billion but had to limit the period of performance for contracts as a result.
By not having a ceiling with Polaris, GSA can avoid this potential problem over the life of the contract.
And speaking of Polaris, Hashmi offered a bit of an update. GSA just started reviewing industry feedback on its suggested updates to the evaluation criteria that came out in May.
“You can’t solve for every single use case, so we’re going to try to find the best approach that creates opportunity for the most small businesses that we can,” Hashmi said. “There’s going to be a trade-off that we need to find and that’s just reality. Depending on the feedback that we get, and then to what extent we need to completely change strategy will determine the timeline. I’m hoping that the adjustment that we’ve made or proposed in our updated criteria is it meets the expectations of industry. If that’s the case then we should be able to release the RFP for official response by the end of June timeframe but although don’t hold me to that because all of that depends on the feedback that we get and what adjustments we have to make.”
There are a lot of eyes on Polaris already so it’s understandable why GSA didn’t play up the FAR deviation for Polaris, but at the same time finding out “by accident” because of a request for a correction also makes one wonder whether GSA was trying to downplay another way Polaris is breaking many of the old rules for GWACs.