Interview transcript:

 

Terry Gerton Well, there’s a lot that’s happened since the last time we chatted in the world of federal procurement. Let’s start with OMB’s July 18th memo on consolidating federal procurement activities. From your perspective as a former GSA director, what are the pros and the cons of this consolidation effort?

Emily Murphy I think there were two really remarkable ways they approached this, and both showed a lot of thought. The first was they looked at, what are we going to do with the contract vehicles? They distinguished the contract vehicle from the operational contracting. I thought that made a lot of sense, because the first thing they said, all right, we’re going to take up the current vehicles we’ve got and make those mandatory sources, and we’re going to incorporate it into the FAR rewrite that’s already going on, and Part 8 should be rewritten to reflect that. That made a lot of sense in that we’re going to leverage what we have to get efficiencies. And frankly, that leads into a lot the OneGov strategy GSA is already embracing. It gives them a lot a flexibility also though to figure out how they want to digest SEWP and, you know, CIO-SP3/CIO-SP4, how those are going to all fit together. It strengthens though the schedules program and Alliant, OASIS; it strengthens GSA’s really strong core set of offerings. It then built on that and said, we’re going to empower the category managers to look across government and at the spend that we’ve got and figure out where we need additional contract vehicles and where we can leverage those better and how we can create those. And I think it did a nice job in each of those because it didn’t end up with a solution where you only get one company that’s going to win. It’s always going to be these multiple-award contracts, there’s always going to be redundancy built in. There’s going be competition built in, there is efficiency of operations built in and the out is the secretary or the head of the agency has to agree that the contract doesn’t meet their needs. So it’s a high bar, but it’s not an insurmountable bar if an agency has a very specialized need.

Terry Gerton So they’ve set themselves some pretty aggressive timelines, some 60-day windows here. How do you think that the agencies are going to be able to respond within those timelines?

Emily Murphy So for that first part, using the multiple award contracts, I think that they actually gave themselves 60 days to rewrite the FAR. And considering that they gave themselves 180 days to rewrite entire FAR, I think they were probably well underway at rewriting party. And then they’ve got another 30 days to implement it. So it wouldn’t take effect until the next fiscal year, which I think makes sense and also gives agencies a little bit of time that they’re not trying to change horses in the fourth quarter. But I’m always astounded, because I remember when I first worked on the FAR, which was back in 2005, I was working with Dee Lee, who was the head of defense contracting at the time. She had a goal that we would finish a FAR case in 40 weeks. In 40 weeks, okay, so about 280 days. The administration right now has a goal of rewriting the entire FAR in 180 days. So I’m just astounded at how fast they’re going and all the researchers that brought to bear on this. And that’s really impressive.

Terry Gerton So there is some concern that this consolidation of contracts and procurement in GSA will be detrimental to small businesses. What’s your sense of that? How will OMB and GSA protect the small business program?

Emily Murphy So, I think that if you looked at the GSA schedules, the GSA’s schedules have been very good for small businesses. Small businesses get, you know, far more than 23% of the awards on three GSA schedules. The ability to have task orders appropriately addressed is there. And it’s a lot of it, though, is going to boil down to what does the Part 19 rewrite look like? What does the Part 12 rewrite look, like? A lot of this could be good for smaller businesses in that they’re not going, “I have to go off, chase multiple vehicles and spend proposal dollars going after that,” that the things they go after, that they know that there will be work that comes along with it. Actually, what is the field of dream strategy? A lot of times they’re contract vehicles where an agency’s told if you build it they will come and they build those contract vehicles and then there’s no demand. Now we’ve got at least a business has some ability to know that if they go and they bid on a contract and they win that contract, the small business knows that there’s going to be some workflow going through that contract vehicle. And that I think is going to very good for small businesses.

Terry Gerton I’m speaking with Emily Murphy. She’s a senior fellow at George Mason University’s Baroni Center for Government Contracting and a former GSA administrator. So Emily, tell me about the second half of the OMB memo.

Emily Murphy So the second half of the OMB memo also shows a lot of understanding of the business model GSA has and what’s been successful while still letting GSA try to expand and grow on that. And it looks at operational contracting. There was a lot of discussion when the executive order first came out, was GSA going to just swallow up all the contracting shops across the civilian agencies, at least if not everywhere? How much were they going to try and bring into GSA? And we saw some of that happen fairly quickly with OPM and SBA moving their operations over. The second part of the memo, though, sort of says, wait a second. You know, OMB is not saying, no, you can’t do this, but they’re saying you need to have a really tight business case around how you’re going to do this. You have to demonstrate you’ve got the capacity, GSA, that you can do it efficiently, that it’s going to actually increase savings, that you’re going to be able to manage the risk, that you are going to have the right service level agreements in place. And GSA, you have to tell us how you’re going to recover your costs on this. I think that that’s shown a lot of respect for the Acquisition Services Fund, the ASF, to make sure that GSA continues to operate primarily as a non-appropriated agency, where most of its funds come in through fees that it charges to other agencies, making sure that that is a sustainable model going forward. And that made a lot sense the way that it mapped out that business case and said, all right, GSA, if you want to do this, work with the other agencies, come to us, give us this business case, we’ll work with you and improve this business.

Terry Gerton So as a former GSA administrator, and given some of the workforce changes that have been happening under this administration, what’s your sense of GSA’s capacity to really take on this centralized responsibility?

Emily Murphy So in the past, we’ve tried to do smaller dollar value. GSA has tried to smaller dollar value assisted acquisitions. And it’s never been able to find a sweet spot that made those costs recoverable. The ASF does very well with the assisted acquisition service, which tends to be larger dollar value, you know, a million, two million plus procurements. But things underneath those thresholds, it just never, there was never a sweet spot there that could be identified. Now with the introduction of technologies, AI, to facilitate that, perhaps there’s a better case for that now, and it’ll be interesting to see how that could be demonstrated. But I do think that with GSA having lost a lot of people to the DRP, the Deferred Resignation Program, that it’s something that they’re going to want to step through in a very deliberate fashion and make sure that first they’ve digested fully the OPM-SBA work that they’ve already brought in and then make a very conscious decision as to how they’re going to keep growing.

Terry Gerton Well, and one other question here, and you touched on it a little bit, agencies often think that their procurement requirements are special. And so as GSA says, no, no we have these standard procurement processes and we want all of your work to come through those, what’s your sense of how the agencies are going to say, but wait, I have this special requirement, I still need to be separate?

Emily Murphy So I think that there’s going to be a strong argument that agencies aren’t as special as they want to be. And I still remember back when HHS was trying to get everyone onto a centralized contracting, the woman who was the chief acquisition officer at HHS, and this is back 20 years ago, started off with toilet paper and said, tell me why you have a special toilet paper. And no one wanted to raise their voice. So she started off with the very common goods. GSA has done that work as well. It’s now, as they get more complex, I think that they’re going to have to earn that from the agencies, but the agencies now are supposed to be predisposed and it’s supposed to presumed that the work will go to GSA. The out is going to require their secretary or their administrator or their director to actually get involved and say, nope, we really are special. And no one wants to show up at president’s management council or cabinet meeting and explain why they’re so special. So there’s going to be a not-insurmountable burden to it, but there’s going to enough of a burden to opting out of the common contracts that I think it is going make a real difference.

Terry Gerton So would you say you’re optimistic that GSA is going to be able to pull this all together?

Emily Murphy I’m very optimistic that their contract vehicles are going to be successful and that agencies are going to have a good experience using those contract vehicles. Keeping in mind also, you can, even against a GSA schedule or, you know, you can put a BPA in place. You can do it, so you can continue to tailor it so that you get what you need. And again, I think that GSA will probably take over some of the contracting activities as well, but maybe not as much as people thought when the executive order first came out.

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