Contract Overload, part 3: OFPP ready to set tone for the future of MACs.

By Jason Miller
Executive Editor
Federal News Radio

The Office of Federal Procurement Policy finally looks poised to do something about the proliferation of multiple award contracts.

After five years of issuing guidance, best practices and talking about reining in the wild west of contracting, OFPP administrator Dan Gordon will signal his intentions in a matter of weeks.

Industry sources say Gordon will decide by the end of May whether to renew National Institute of Health’s ability to run a governmentwide acquisition contract therefore either letting them proceed in awarding CIO-SP3 or requiring the current version to expire in December.

Advertisement

In fact, Gordon will host a “listening-only” session May 26 with Council of Defense and Space Industry Associations where some industry sources say he will announce his NIH decision.

Even if he waits a few more weeks, Gordon says the decision to let NIH proceed with CIO-SP3 must be made in short order.

Industry sources say whatever he decides also will indicate how he wants to proceed over the next year or so with the more broad problems with multiple award contracting.

Gordon has been on a listening tour for the past few months, talking to industry, agencies, member of Congress and just about anyone else who has an interest in addressing the ever-growing number of MACs.

“I want to make sure we hear from people with different points of view about the advantages and disadvantages of having all of these multiple award contracts,” Gordon says in an interview with Federal News Radio. “I think I could point to a couple of trends that emerged from our discussions: one is for industry in particular that having so many contracts that are essentially covering the same goods and services is adding to their bid and proposal costs in a way seems to them be unjustified. At the other end of the spectrum, people agree that to going back to mandatory use of the General Services Administration the way it was 20 years ago is not appropriate.”

He says agencies must find a happy medium between having a 100 similar or even duplicative contracts that are wasteful to vendors and not helpful for the government, and having just one contract provider.

Gordon says OFPP’s listening tour eventually will shape new policy to control the numbers of and the costs for the ever increasing multiple award contracts.

“There are broader procurement policy questions we want to think about,” he says. “I would doubt this will lead to a need for statutory changes, but more likely a change in policy. How many GWACs we should have? How many interagency contracts should we have? And whether agencies should have agency specific contracts?”

These are similar questions industry and others experts are asking.

“There is overlap, but is there enough overlap to say we don’t need multiple contracts?” asks Alan Chvotkin, senior vice president at the Professional Services Council, an industry association. “Part of that goes to work itself. Take the Air Force, which has their computer program run out of Gunter Air Force Base. Could that work be accomplished through other vehicles? The answer is probably so. So it really calls into question why does the Air Force or any agency go down path of own contract vehicles?”

He says there are no disincentives for agencies to create their own contracts.

Chvotkin says OFPP could make a few changes that would help, starting with creating an inventory of all the GWACs and MACs.

This would lead to the second thing, which is requiring agencies to see what other contracts currently exist to see if it fits their needs before creating a new one.

Gordon says OFPP eventually will create a GWAC and MAC database, but he has not yet put out a data call to agencies.

Another suggestion is to give OFPP the approval authority for all MACs along with the authority they already have for GWACs, says Molly Wilkinson, minority counsel for the Senate Homeland Security and Government Affairs Committee.

“OFPP has to take a holistic look and say, ‘How is this operating?’ ‘How did this get approved?’ ‘Why did these move forward?’ ‘Why did we do this?'” says Wilkinson during a recent conference sponsored by the Coalition for Government Procurement. “You’ve got a shrinking acquisition workforce and these cost money to contractors to prepare bid and proposals that get passed back to the taxpayer. It just makes no sense.”

Scott Amey, counsel for the Project on Government Oversight, agrees that someone needs to play traffic cop.

“When a new interagency contract comes up or an agency is creating a new contracting vehicle, someone needs to make sure that agency knows the pluses and minuses of it,” he says. “It’s really market research 101. The government will get better prices from better decisions, save money, time and energy over the long run.”

Chvotkin, however, says PSC doesn’t support OMB approval for MACs. He says an inventory may be enough or a peer review board made up of Chief Acquisition Officers could work fine.

Jim Williams, the former commissioner of the General Services Administration’s Federal Acquisition Service, says there needs to be a test for all new GWACs and MACs.

“Do you need it and is there something already out there?” he asks. “It’s a mindset that if something already is working why add unnecessary costs? Agencies should need to justify doing something when already multiple channels exist.”

Peter Levine, the counsel for the Senate Armed Services Committee, says the current environment is “chaos.”

“The replication of redundant vehicles that don’t seem to serve any particular useful purpose for either the government or the contractors is a big problem,” he says at the same conference Wilkinson spoke at. “Why we would want to have a dozen different contract vehicles all of which cover the same services, mostly, and allow in every contractor who seems to have an interest in being in, it doesn’t narrow the universe of the services being acquired, it doesn’t narrow the universe of providers.”

He says the government needs to get value from these MACs by identifying specific services and specific contractors who are the best at providing those services.

“If you put 100 people on a contract, you haven’t provided that service and the user is in the same position as if you hadn’t provided that vehicle at all,” Levine says. “And the same thing from the other side, the guy who gets on to the contract isn’t better off than before because he is one of a 100. If you actually want to provide a service, we need a much more ordered universe than we have today.”

Gordon has meet with several congressional committees, including Wilkinson’s but hasn’t gotten into the details of what can be done to lessen the impact on agencies and vendors of multiple award contracts.

Wilkinson says the Ad Hoc Contracting subcommittee is planning its second hearing on interagency contracting in June.

Amey adds that what’s really needed is a comprehensive analysis of the entire multiple award contracting environment.

“We’ve seen some nibbling around the edges, but what we really need is either a congressional review or multi- agency inspectors general review of the system,” he says. “The market has changed, there is consolidation in industry, especially in IT. Where we are currently is we need to go back and revisit the benefits of interagency contracts and the risks.”

He says POGO is not advocating only one source, but do agencies need five when two or three would do?

And Gordon and others too don’t want one source of procurement, but the need to right size the MACs is clear.

“One of our key priorities is fiscal responsibility, saving money and reducing the risk to government,” Gordon says. “Having multiple contracts may well, especially the large number that we have, be a cost waste for the government, and we can’t afford to waste money.”

For more, see the Contract Overload series page.

(Copyright 2010 by FederalNewsRadio.com. All Rights Reserved.)