Interview transcript:
Terry Gerton Well, we continue to talk about iterations on the FAR overhaul, and there was a big chunk that came out on August 14. Tell me, what’s your general sense of that package?
Emily Murphy I think it was actually the most groundbreaking of the packages we’ve seen so far. It did a lot in terms of simplification, commercialization and really just some incredible shifts in how procurements are going to operate going forward. I was really excited to read it, and it’s going to be a lot of fun to see how it ends up being implemented.
Terry Gerton Well, simplification and commercialization have been very common themes so far in this administration. So let’s start. What part of it do you think was most important or transformative?
Emily Murphy Oh, so most, it’s a tie between [Part] 8 and [Part] 12. Both of them did some pretty impressive things. 8, we’d already gotten a little bit of a hint from Russ Vought’s memo, M-25-31, that we were going to see a prioritization of governmentwide best-in-class contracts. And we saw that come in place. So we still have priorities for AbilityOne, for Federal Prison Industries. But now contracting officers are told that they have to look first at BIC contracts as a source of supply. And that’s going to be a real game changer for everyone, because if you’re a company that has been doing business independently with an agency or on an agency’s own multiple award contract, but your competitor has a seat on a GWAC [(Governmentwide Acquisition Contract)] or on a GSA schedule that’s considered a BIC, you’re now at a competitive disadvantage. Because it’s not just that, you know, is that company on both and therefore you have to go with the BIC. It’s, is the solution or the product, the service on a BIC? You have to go with that BIC.
Terry Gerton So what is that going to mean for contracting officers as they’re trying to source their procurements?
Emily Murphy So contracting officers are told that they have to do a D&F, a determination of findings, if they choose to go with something other than a BIC, and it needs to go up to the HCA, the Head of Contracting Activity, or the senior procurement executive to be signed off on. So it is a big deal. It means that they’re going to be doing a lot of market research to see what’s on those BICs. This is going to create a challenge also though. How does GSA and OMB make it really explicitly clear what solutions are out there? How do we make it easier to find those? And so that’s going to be one of the challenges involved.
Terry Gerton It seems like there’s got to be kind of a new oversight mechanism to make sure that contracting officers are actually doing this. Do you see a change in those kinds of rules coming?
Emily Murphy Well, it’s interesting you say that, because we saw an RFI come out from GSA last week for a procurement ecosystem that was supposed to accommodate up to 250,000 users, cover everything that GSA on the federal acquisition side of the world does. So everything from the contract vehicles it has, the schedules, the GWACs, the travel contracts, fleet, everything. Sort of a cradle to grave approach. And I suspect that part of the reason they’re looking at that is to make sure that contracting officers, whether they’re at GSA or someplace else, are getting all that information.
Terry Gerton So it could be kind of a one-stop shop for all of the approved sources.
Emily Murphy That’s what GSA seems to be suggesting.
Terry Gerton That would be quite a change.
Emily Murphy It’s a very ambitious RFI — it’s a draft RFI, I should say, it’s not even an RFI, but it’s a draft RFI and request for white papers — it’s a pretty ambitious undertaking. The one more thing on Part 8 that’s really exciting: For the first time ever, the FAR mentions shared services. And it tells us that contracting officers should look at shared services before making an award. And actually I said one more thing, but I’m going to give you two more things, because the other really exciting thing is they took all of the ordering procedures for schedules that had previously been in the FAR in Part 38, and they moved them to the GSAM [(General Services Acquisition Manual)]. And GSA did a lot to streamline those ordering procedures. They made it much easier to do a single-award BPA [(Blanket Purchase Agreement)]. They took away a lot of the independent evaluations that agencies were making. They’re looking to make these a much more user-friendly experience. It also, though, by moving it out of the FAR and into the GSAM, It means GSA doesn’t have to coordinate all of the changes in the future with the FAR Council. So it’s going to have a little bit more independence to control the future of the schedules program.
Terry Gerton That is interesting.
Emily Murphy It’ll still be where that one would be. So it’s not like GSA is going to be off on their own charting their own course, but it’s a big deal. And reading FAR, the GSAM 538 now is, I highly recommend it to anyone who’s working in the schedule space.
Terry Gerton I’m speaking with Emily Murphy. She’s former GSA administrator and now senior fellow at the George Mason University Barone Center for Government Contracting. Well, Emily, you also mentioned Part 12. Tell us about what you were seeing there.
Emily Murphy Part 12, again, we saw a huge emphasis on commercial acquisition that we really want to simplify and streamline and promote using commercial solutions. We went even further though this time around and we said that we’re going to be doing, there’s always been a $7.5 million threshold for commercial solutions that were for commercial items. This went further, and actually if you watch the video that was included in the Practitioner’s Album with Part 12, you’ll see some of the contracting people from DHS’s PIL [(Procurement Innovation Lab)], and they’re so excited because they’re talking about the $7.5 million threshold and what it means, and how this is going to really streamline and push forward that simplification. So we got rid of a third of the clauses that previously came along with Part 12. That’s a substantial reduction in what contracting officers are going to have to administer, and what contractors are going to have to accept in order to do business with the government. But the ability to use these simplified acquisition procedures up to seven and a half million dollars, when in the past they’ve generally stopped being used at about $250,000, is an incredible game changer in terms of where we’re going to have contracting officers spending their time and energy, and what we’re going to be demanding of our contractors. I have to think it’s a little bit tied also to the attempts to, for OneGov strategies where we’re trying to bring OEMs [(Original Equipment Manufacturers)] in, and if we can make this a simpler process, perhaps more OEMs will want to be prime contractors with the government.
Terry Gerton Speaking about that simplified procurement limit of $7.5 million, it looks like they’ve also brought construction into that category.
Emily Murphy And I haven’t had a chance to speak with anyone in the construction space about it, but in the past, it’s always been a challenge because if you talk to the construction industry, they’ll tell you that every project is individual, separate. It’s very hard to commercialize them and make them a standard offering. Additionally, you’ve got things like the Brooks Act and others that have applied in construction and still continue to apply. So it’s going to be interesting to see how that’s carried out and what that means for those, I hate to call anything that’s $7 million or $7.5 million a small purchase, but for these smaller purchases. Because when you think about new construction, that’s still, a new courthouse will cost you several hundred million on up.
Terry Gerton With the simplification of Part 12, how should contracting officers balance, I guess, this new openness to innovation, but also the old sort of fairness and equality and consideration of the bids?
Emily Murphy So I think it makes it even more important that contracting officers go back to an earlier release in the FAR when we talked about sources sought and how to do market research. And there was a real emphasis at that point in time from the FAR Council on educating themselves, making sure that they’re having conversations, using RFIs, but not only RFIs — using industry days, using conversations, structured conversations with offers. So making sure that they know what’s out there. And it is also going to become a question of making sure that it’s clear what’s available through, again, when you take Part 8 and 12 together, what’s available through those BICs and what is the art of the possible? And we haven’t even talked about things like OTAs [(Other Transactions Authorities)], which are also promoted, you’re using CSOs [(Commercial Solutions Openings)], it becomes much more attractive at this point. The one that isn’t mentioned in any of these sections though, is the Small Business Innovation Research Program. And I’m a little concerned because SBIRs in the past have always had that ability to be a preferred sole source once they hit Part 3, because some competition was considered to have been resolved by Parts 1 and 2 and to be commercialized at that point in time. But if a commercialized SBIR isn’t on a BIC, does it have all the advantages of being a SBIR, or does the advantage go away? So that’s one of the questions that I think is going to have to be explored going forward.
Terry Gerton And what else are you watching as the packages continue to roll out?
Emily Murphy The speed at which they’re coming out. So we saw several new parts release on the 14th and we saw another drop on the 21st. We had the new language come out about bid protests. We’ve got some new language on contractor responsibility. So it’s going to be interesting to see how these all fit together. And we’re still waiting to see what Part 19 and Part 15 look like. And those are two that I’m watching for pretty closely to see what changes are there, what changes and what stays the same.
Terry Gerton It’s a little bit like reading a mystery book chapter out of order. You don’t quite know how to put all the pieces together yet.
Emily Murphy I always think of it as a jigsaw puzzle where we’re getting just, you know, four or five pieces at a time and trying to figure out what the picture is going to be at the end. But it’s exactly that mystery.
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