Slide 1 This slide show was developed to explain the implications and impact of the Duncan Hunter National Defense Authorization Act for FY2009, Section 866 on the Federal Acquisition Service. Hello, my name is Nick West, I’m a procurement analyst for the Multiple Award Schedules program office. Today I will be discussing the interim FAR rule implementing Section 863 of the Duncan Hunter National Defense Authorization Act for fiscal year 2009, and it’s implications on ordering off Multiple Awards Schedules and other GSA contract vehicles. In order for this presentation to be effective, you must have some knowledge of existing ordering procedures for GSA’s contract vehicles. To learn more background information about ordering off Multiple Award Schedules visit www.gsa.gov/schedules. Slide 2 This slide is an overview of the topics to be covered in this presentation. I will begin with a brief overview of the acquisition environment that led to the creation of this rule, which will hopefully help you understand why some of these changes have been made. I will discuss the impacts on the Federal Supply Schedules program, particularly looking at the FSS ordering procedures in FAR subpart 8.4. The three main themes are: general restructuring, additional competition requirements, and additional requirements when you are limiting sources. I’ll also touch on the impacts on some of GSA’s other contract vehicles which have very similar requirements for our customers. Slide 3 This slide gives an overview of the current acquisition environment, key regulatory changes and the value of these changes as they relate to the Federal Acquisition Service. Today’s acquisition environment is one that stresses increased transparency, competition, and savings. * The President has issued multiple memoranda that focus on increased savings through Government contracting (7/29/09) and a need for increased competition (3/4/09). The Administration has targeted $40 billion in savings through better acquisition in the next fiscal year. * The GAO has recently conducted several reviews of competition in federal contracting, focusing on the lack of competition in the FSS program, specifically when establishing and placing orders off FSS BPAs. * GSA also commissioned a compliance survey of federal procurement practices in FY10 to monitor the effectiveness and efficiency with which GSA’s’ customers are making use of the Multiple Award Schedule (MAS) Program, and other FAS Contracting Vehicles. Results indicate a lack of additional price negotiations when placing orders off FSS contracts resulting in a loss of possible cost savings to the government. * The SARA panel also recommended adoption of DoD 803 rule for all of government (see https://www.acquisition.gov/comp/aap/24102_GSA.pdf ) * Therefore, Congress passed the FY09 Duncan Hunter National Defense Authorization Act. Section 863 of this act changes acquisition regulations in two major ways: • It enhances competition under multiple-award contracts, which includes FSS, requiring “fair notice” be given to all contractors for order expected to exceed the simplified acquisition threshold (SAT). • It increases transparency by including additional steps that need to be taken if you limit sources. To incorporate Section 863 of the FY09 NDAA, a FAR Case was established, affecting FAR Parts 5, 8, 16, 18, and 38. An interim FAR rule was published on March 16, 2011 which updates each of these FAR parts to include specific requirements to comply with Section 863. An interim rule means that these changes are subject to change after public comments have been received. Also, although the rule was published on March 16, 2011, a 60-day ramp-up period was provided to allow government agencies to inform and train the acquisition workforce on the new requirements. Therefore, the changes in this rule do not actually go into effect until May 16, 2011. Slide 4 This slide outlines key changes to FAR Subpart 8.4 First, let’s discuss the implications on the ordering procedures for Federal Supply Schedules, which are governed by FAR Subpart 8.4. The first change you’ll notice is a major change in the general structure. New sections have been created, thresholds have been changed, and language has been revised. While this presentation will provide a baseline for all the changes that have taken place, I recommend that you re-read the entire FAR subpart 8.4 if you frequently order off Schedules. Here is a basic summary of the changes in FAR subpart 8.4: - In general, it is important to note that the new competition requirements are really not that new, especially for DoD customers. The changes in the FAR have basically been made to include competition rules that have already been adopted by DoD in DFARS 208.405-70. - While previously there were two key thresholds that guided ordering from FSS contracts 1) the micro-purchase threshold ($3,000), and 2) the maximum order threshold (which is specified in the applicable FSS contract). The new rule replaces the second threshold, the maximum order threshold, with the Simplified Acquisition Threshold, and now requires additional competition, or “fair notice” be given to all contractors exceeding the SAT. - 8.4 also now provides detailed guidance when establishing and ordering from FSS BPAs (Blanket Purchase Agreements). - Also, 8.4 now clarifies that procedures in FAR Subpart 33.1 which covers protests, DO apply to the FSS Program. This has always been the case, it’s just that before this rule, 8.4 did not specifically state that Schedule orders could be protested. Slide 5 This slide is a near-copy from the current Advanced MAS module to discuss current competition requirements for orders without an SOW. Now I will talk about the specific changes to the ordering procedures in FAR subpart 8.4. We’ll discuss ordering when a Statement of Work (SOW) is and is not required. This slide outlines the ordering procedures prior to the new FAR rule. So first, we’ll start with when an SOW is not required. The information on this slide should look very familiar, with the two ordering thresholds (micro-purchase and maximum order). Under the micro-purchase threshold you would simply place orders with contractors. In between the micro-purchase and maximum order thresholds, you would survey at least 3 contractors and select the best value quote, and then over the maximum order threshold you would also seek a price reductions. Now I’m going to show you the new requirements in the same format, and underline the changes. Slide 6 This slide outlines key changes to FAR Subparts 8.405-1, orders that do not require a statement of work (SOW). The changes are underlined. The first thing you will notice when looking at the new FAR Subpart 8.4 is that no change has been made to orders below the micro-purchase threshold. You may still place these orders with the firm that offers the best value, while attempting to distribute orders among Schedule holders. And then looking at the left side, the maximum order threshold has been removed. In its place, the FAR inserts the simplified acquisition threshold. On any order expected to exceed the micro-purchase threshold, but not exceeding the SAT, you must now review at least three Schedule contracts (the only difference being the MOT change to the SAT). However, here comes the new part, if three sources are not reviewed, the contracting officer must have a justifiable reason, and then follow additional procedures for limiting sources, which we’ll get into later. The reasons for limiting sources have not changed, they are still the same three possibilities (1. Only one source is capable of doing the work; 2. A logical follow-on; and 3. An urgent and compelling need, and then there is kind of a fourth reason, which is when you require a specific brand name). These procedures are outlined in FAR 8.405-6(a), and we’ll discuss that later too. Moving to the next threshold, any order exceeding the SAT now requires a Request for Quote (RFQ). This is a new requirement for orders that do not require an SOW. The RFQ must then be distributed on e-Buy to all eligible Schedule contract holders. An alternative to distributing the RFQ on e-Buy is to perform market research and send the RFQ to as many Schedule contractors as practicable, in which case you are required to obtain at least three quotes. However, if three quotes are not received when the RFQ has not been distributed on e-Buy, the contracting officer must provide a written determination explaining that no additional contractors capable of fulfilling the requirement could be identified despite reasonable efforts to do so, clearly explaining the efforts made to obtain at least three quotes. Also, if the order is estimated over the SAT, the contracting officer must seek a price reduction, and (this is new) the order may NOT be placed orally. Slide 7 This slide is a near-copy from the current Advanced MAS module to discuss current competition requirements for orders with an SOW Now we’ll discuss orders that require an SOW. This slide shows the old procedures in 8.4 and should look very familiar. Now let’s look at the new competition requirements. Slide 8 This slide outlines key changes to FAR Subparts 8.405-2, orders that do require a statement of work (SOW). The changes are very similar to those that do not require a statement of work, the only difference is that you already develop an RFQ in this case, so that is nothing new. The MOT is still changed to the SAT on the left hand side. The same requirements apply when you use eBuy, or obtain at least three quotes, and you are still not allowed to place orders orally. Slide 9 This slide outlines the old documentation requirements for orders not requiring an SOW that are placed off FSS contracts in FAR Subpart 8.4. NOT TAKEN FROM CURRENT TRAINING Changes have also been made to include additional documentation requirements. This slide shows the current requirements when an order does NOT require a SOW. Slide 10 This slide outlines key changes to documentation requirements for orders not requiring an SOW that are placed off FSS contracts in FAR Subpart 8.4. And here are the new requirements. As you can see the underlined changes: > The contract file must show evidence of compliance with the competition requirements we just discussed (if less than three quotes are obtained and e-Buy was not utilized, the CO must prepare that written determination explaining that no additional contractors are capable of fulfilling the requirements despite a reasonable effort to identify them) > And then the file must also include a basis for the award decision. This is something I guess we were finding in contract audits, where the CO was not always documenting why they chose the contractor that was awarded the order. Now that determination is required in the documentation of the contract file. Slide 11 This slide outlines the old documentation requirements for orders requiring an SOW. NOT TAKEN FROM CURRENT TRAINING Next we’ll talk about the changes to documentation requirements for orders requiring a statement of work. Here are the old requirements. Slide 12 This slide outlines the new documentation requirements for orders requiring an SOW placed off FSS contracts in FAR Subpart 8.4. And here are the new requirements. The only difference here is that the contract file must show evidence of compliance with competition requirements. Slide 13 This slide outlines the old rules for the establishment of Federal Supply Schedule (FSS) Blanket Purchase Agreements (BPAs). NOT TAKEN FROM CURRENT TRAINING Next, we’ll talk about establishing FSS BPAs. As you can see this slide outlines the old procedures for establishing FSS BPAs. I would like to focus on the second bullet, where previously in 8.4, it stated “Establishment of a single BPA, or multiple BPAs, shall be made using the same procedures outlined in 8.405-1 or 8.405-2 . This meant that whatever ordering procedures applied to general FSS orders also applied to establishing FSS BPAs. The FAR council decided that this was not specific enough, and the same exact procedures may not be useful when establishing a BPA. So now FAR 8.405-3 specifically outlines the procedures for establishing these BPAs, and includes additional competition requirements. Slide 14 This slide outlines key changes to the establishment of Federal Supply Schedule (FSS) Blanket Purchase Agreements (BPAs). - First, the regulations now include a preference for establishing a multiple-award BPA over a single-award BPA. We will get into the specific procedures and restrictions on single-award BPAs in a minute. - The considerations are very similar, however now the regulations emphasize a need for on-going competition. - Finally, instead of having the ordering procedures for a multiple-award BPAs be listed out in the BPA, the regulations now standardize those procedures in FAR 8.405-3(c)(2). We’ll discuss this later as well. Slide 15 This slide outlines the restrictions that are placed on establishing single-award BPAs off Federal Supply Schedules (FSS) As discussed, restrictions have been added to discourage the use of single-award BPAs. There are three main restrictions on single-award BPAs: • Single-award BPAs with an estimated value exceeding $103 million (including any options); • The length of the single-award BPA; and • The exercise of options of single-award BPAs Under the first category, no single-award BPA, with an estimated value exceeding $100 million (including any options), may be awarded unless the head of the agency determines in writing that at least one of the four exceptions exist: 1. The orders expected under the BPA are so integrally related that only a single source can reasonably perform the work; 2. The BPA provides only for firm-fixed priced orders for either - products with unit prices established in the BPA; or - services with prices established in the BPA for specific tasks to be performed; 3. Only one source is qualified and capable of performing the work at a reasonable price to the government; or 4. It is necessary in the public interest to award the BPA to a single source for exceptional circumstances. Also, you should note that this written requirement is in addition to any applicable requirement for a limited source justification in FAR 8.405-6, which we’ll talk about shortly. However, these two documents may be combined into one document. - The period of performance of a single-award BPA is limited to one year with four one-year options. - And then finally, each year, the ordering activity contracting officer’s annual determination must be approved by the ordering activity’s competition advocate prior to the exercise of an option to extend the term regardless of the estimated dollar value. Slide 16 This slide continues to discuss the key changes to the establishment of Federal Supply Schedule (FSS) Blanket Purchase Agreements (BPAs). The documentation is very similar to what is required for orders, which was what was previously required for BPAs before this rule. The main differences are • The restructuring. It is now detailed in part 8.405-3 instead of referring the CO back to the 8.405-1 and 8.405-2, and • You must show the applicable limited source justifications, single-award determinations, and evidence that the BPA was established competitively, which we will discuss what that means in a second. Slide 17 This slide shows current procedures/thresholds for establishing FSS BPAs. NOT FROM TRAINING So, here are the old competition requirements for establishing BPAs that do not require a statement of work. Again, they were simply the same as the old ordering procedures for orders. Take special notice of the dollar thresholds on the left hand side, and that there is no requirement to develop an RFQ. Slide 18 This slide outlines key changes to FAR Subparts 8.405-3, orders that do not require a statement of work (SOW). Now, instead of simply referring you back to FAR 8.405-1, the procedures are listed out in 8.405-3. As you can see, the changes are underlined. First, there is only one threshold (the SAT). All the other changes are very similar to those already discussed when we talked about orders. For example, if the BPA is estimated over the SAT, you need to seek price reductions, create an RFQ (even though an SOW is not required), and give “fair opportunity” , which means either use e-Buy, receive three quotes, or follow procedures for limiting sources. Slide 19 This slide shows old procedures/thresholds for establishing FSS BPAs with an SOW. Here are the old competition requirements for establishing BPAs with an SOW. Take note of the dollar thresholds on the left, and again these procedures mirror the old procedures for orders with an SOW. Slide 20 This slide outlines key changes to FAR Subparts 8.405-3, orders that do require a statement of work (SOW). Here are the new rules. There is only one threshold (the SAT), and the same “fair notice” requirements applies. As you can see, the same themes are apparent for all ordering procedures. Slide 21 This slide outlines the old rules for ordering off Single award BPAs, Multiple-award BPAs and BPAs for hourly rate services off Federal Supply Schedules (FSS) Next we’ll look at the procedures for ordering off FSS BPAs shown in this slide. The old rules break out the ordering procedures in three BPA types: Single-award, Multiple-award, and BPAs for hourly rate services. We will also break the changes in this new rule out, first to cover single-award BPAs and BPAs for hourly rate services, then we will cover the new procedures for multiple award BPAs. Slide 22 This slide outlines the new rules for ordering off Single award BPAs and BPAs for hourly rate services off Federal Supply Schedules (FSS) Single-award BPA ordering is the same (you will still just place the order directly with the BPA holder when the need for the supply/service arises) The key change here is that BPAs for hourly rate services require firm-fixed-price orders to the maximum extent practicable. Slide 23 This slide outlines the old rules for ordering off multiple-award BPA off Federal Supply Schedules (FSS) . Now here are the old ordering procedures for multiple-award BPAs. The requirements were loosely set to ensure that orders over the micro-purchase threshold were sent to an “appropriate” number of BPA holders; however discretion was left to the CO on what that was. More detailed ordering procedures were established for each BPA, resulting in a wide range of procedures, often requiring BPA ordering guides to explain these procedures. Slide 24 This slide outlines the new rules for ordering off multiple-award BPA off Federal Supply Schedules (FSS) . The new procedures are shown here. They are very similar to ordering procedures for regular FSS orders with the exception of the second tier. Any order over the micro-purchase threshold now has to go to ALL BPA holders, unless there is a justifiable reason to restrict competition. You are now also required to create an RFQ for orders over the SAT, and distribute it to all BPA holders. This leads to one common question. There are many BPAs out there that cover a wide range of goods and services, and are issued under several Special Item Numbers (SINs). You might ask, if you have a requirement for a specific good or service, and only two of the five BPA holders offer that service, do I need to send the RFQ to all five BPA holders? The answer would be NO. This is where the “all eligible BPA holders” language comes from. You would only need to send the RFQ to those BPA holder that can actually do the work. Slide 25 This slide outlines the current guidelines for the duration of Federal Supply Schedule (FSS) Blanket Purchase Agreements (BPAs). Next, we’ll talk about regulations for the length of an FSS BPA. Previously, there were very broad guidelines which allowed all BPAs to last as long as the applicable Schedule contract. Slide 26 This slide outlines the new guidelines for the duration of Federal Supply Schedule (FSS) Blanket Purchase Agreements (BPAs). Here are the new rules, which are basically the same with one important exception. Now there are restrictions on single-award BPAs. First, single-award BPAs are restricted to a one year base, with four one-year options for a total of five years. Then there are additional requirements for the review at the option period. Slide 27 This slide outlines the current guidelines for the review of Federal Supply Schedule (FSS) Blanket Purchase Agreements (BPAs). Here are the old rules when evaluating an FSS BPA option. Each year you have to make sure the Schedule is still active, the BPA represents the best value, and no BPA ceilings have been exceeded. Slide 28 This slide outlines the new guidelines for the review of Federal Supply Schedule (FSS) Blanket Purchase Agreements (BPAs). Now for all single-award BPAs, the competition advocate must approve this annual review. Everything else is the same for evaluating FSS BPA options. Slide 29 This slide outlines the old posting requirements when limiting sources. Now we’ll get into limiting sources. This slide outlines the old posting requirements when limiting sources. It used to be that the only time you were required to post anything is if you were restricting competition due to a brand name specification over $25,000, and then over the SAT you had to complete and post a formal limited source justification to e-Buy. In both circumstances, you were only posting your document to e-Buy. Now here are the new requirements. Slide 30 This slide outlines key changes to the posting requirements when limiting sources. So previously, we talked about the exceptions to “fair opportunity.” As you recall, there are four reasons you would limit sources (The first three: 1. Only one source is capable; 2. Logical follow-on; and 3. Urgent and compelling need, and the 4th is when you require a specific brand name). I kept on saying that the ordering procedures required you to “use e-Buy, receive three quotes, or follow procedures for limiting competition.” Well these are the procedures for limiting sources. While previously you were only required to post the your documentation under that fourth reason (brand name). Now, for orders over the SAT, when limiting sources for any of the first three reasons I just discussed, you must both synopsize the requirement and post the LSJ to fedbizopps (FBO) for 30 days. For orders under the SAT, but over the micro-purchase threshold, you still have to document why you limit the sources, but there are no posting requirements except for the fourth reason, brand name. Any time you limit the sources by brand name, you only have to post to e-Buy. The same rules apply, if it is estimated over $25,000, you only have to post your reasoning for limiting to the brand name, and if it is over the SAT, you post the formal limited source justification. Then there is a cavieat, if the reason for limiting sources is because of an urgent and compelling need, the posting requirement is allowed to be 30 days after the award rather than 14 days. Slide 31 This slide outlines the required approvals for justifications when limiting sources for FSS orders, BPAs or orders off FSS BPAs This slide show the current levels of approval for the limited source justification. This is nothing new, just more of a reminder. I won’t discuss it in detail, I just included it in this presentation for reference. Slide 32 This slide provides a recommended solution to comply with new FAR requirements under the authority of FAR Subpart 8.4 procurements. THIS SLIDE COULD PROBABLY USE SOME SPRUCING So how do we suggest you comply with all of these new requirements? It’s easy, simply use e-Buy. For those who have never used e-Buy it is a great tool. GSA offers separate training on e-Buy. The usage of this e-tool has increased dramatically in recent years (approximately 14.5% per year). GSA estimates approximately $6.3 billions in federal contracts have been awarded through e-Buy in FY10, averaging three quotes per RFQ. As discussed previously, DFARS 208.405-70 required DoD to comply with basically the same changes that are being incorporated into the new FAR Subpart 8.4 procedures. DoD makes up approximately 59% of the total dollars that goes through e-Buy, so apparently they have found that utilizing this tool has been the simplest and easiest way to comply with these regulations. Slide 33 This slide outlines the old procedures when ordering off Indefinite-Delivery contracts under the authority of FAR Subpart 16.5. Now we’ll discuss how the new rule effects ordering procedures for indefinite-delivery contracts, which is prescribed in FAR 16.505. GSA awards and administers several multi-agency contract vehicles (or MACs) and Government-wide acquisition contracts (or GWACs) that fall under the FAR subpart 16.5 ordering procedures, such as FAME, Alliant, Networx, and others. The notion of “fair opportunity” already existed for ordering off these types of contract vehicles. As you can see from the current requirements listed in this slide, the two key thresholds are $3,000 and $5 million. Unless one of the exceptions applies, orders over $3,000 requires “fair opportunity” be given to all contract holders. If it is a multiple-award contract, and the contracting officer does not need to contact each of the multiple awardees before selecting an awardee as long as they had enough information to ensure that each awardee was provided a fair opportunity to be considered for each order. Basically, the CO could review the contractor’s offerings on their contract and make a determination themselves. Any order over $5 million, the requirements had to be sent to each awardee. Now we’ll look at the new requirements Slide 34 This slide outlines key changes when ordering off Indefinite-Delivery contracts under the authority of FAR Subpart 16.5. Now, as you can see, the threshold has been changed from $5 million to the SAT. The same concept applies under the SAT that applied under the $5 million threshold previously. The contracting officer does not need to contact each of the contractors before selecting an awardee, provided they have enough information to ensure that each contractor was provided a fair opportunity to be considered for each order. Now, orders estimated over the SAT must provide all contract holders fair opportunity and allow all contract holders to submit an offer and be considered, or provide justification. Also, the rule includes a new exception to “fair opportunity” to include if a statute expressly authorizes or requires that the purchase be made from a specified source You might ask whether this new requirement applies to one of GSA’s premier IT small business GWACs, the 8(a) STARS contract, which currently has a threshold of $4 million where you can place orders directly with one contract holder. The answer is no, because this program has a separate authority under FAR Part 19 (19.805(a)(2)) which deals with the 8(a) small business program, and allows them to maintain the streamlined ordering process. Therefore, this program operates under a different set of “fair opportunity” rules. Slide 35 This slide outlines the current exceptions to fair opportunity under FAR Subpart 16.5. The rule also slightly changes the exceptions to “fair opportunity” under FAR 16.505(b)(2). Here are the old exceptions. Slide 36 This slide outlines the current exceptions to fair opportunity under FAR Subpart 16.5. Here are the new exceptions. As you can see, the only difference is that they added the language “for orders exceeding the SAT, a statute can expressly authorizes or requires that the purchase be made from a specific source. Slide 37 This slide outlines key changes to procedures when limiting sources when procuring goods and services off Indefinite-Delivery contracts utilizing the authority of FAR Subpart 16.5. When one of these exceptions do exist, the same restrictions and documentation requirements apply as those required for FSS orders. Previously, the content of the documentation requirement was very broad, and there was no requirement to post anything to FBO. Now, for estimated orders exceeding the SAT, if fair notice is not given: * The CO must prepare a written justification, the contents of which I will show you on the next slide, and * You must post the justification to FBO and your agency’s website for 30 days. Slide 38 This slide outlines the information required in a justification to limit sources when placing orders off Indefinite-Delivery contracts under the authority of FAR Subpart 16.5. Here are the documentation requirements for what must be included in the limited source justification. I won’t read all of this off, since it’s basically the same contents required in the FAR Subpart 8.4 LSJ document. Slide 39 This slide outlines the required approvals for justifications when limiting sources for placing orders off Indefinite-Delivery contracts under the authority of FAR Subpart 16.5. This slide shows the levels of approval for the limited source justification. This is completely new to FAR Subpart 16.5, but it is also the same as the approval levels required in FAR Subpart 8.4. Orders estimated between the SAT and $550,000 only requires the ordering activity CO approval Between $550,000 and $11.5 million requires competition advocate approval Up to $57 million requires the head of the procuring activity, or designee And anything exceeding $57 million, requires the approval of the senior procurement executive Slide 40 Thank you for participating. For more information on how eBuy can help you meet Section 863 requirements visit www.gsa.gov/schedules and view our new “Schedules News and Resources” page. It contains informative training videos and audio podcasts. This concludes the presentation.