MILLER ON PROCUREMENT.

***Multiple Award***

A DC area law firm sent out an article recently with the title, "Are agencies abusing multiple award contracts." It was based on a recent GAO report. The answer is," Of course they are."

It is my experience that the agencies always abuse the procurement process given half a chance. The reasons are many. It may take the agency two years to figure out their next technical move. When they do, they want to get the new system installed ASAP. This often means procurement process abuse to avoid more delay.

In the area of schedule abuse the primary reason is poor training, lack of training and inexperience of the purchasers. It is no secret that most schedule purchases are made by people relatively new to the process. It is rare that even a GS-12 does a schedule buy. This means most are done by GS-5 to GS-11. This means little experience.

Government employees simply play with a deck stacked against them. Lack of training funds, too much workload, lack of management guidance etc. all pay a part.

How else do you explain the DOD employees who recently told GAO they did not get three quotes, bids or schedule comparisons when they did the wrong thing on some 14 buys totaling over $100 million? They told GAO they did not know they had to get three quotes. Does this mean they can't read? Or does it mean no training? Or does it mean they are so lazy they did not check out what they are supposed to do? Or are they just incompetent? Obviously, they had no clue about FAR 8.4 which is also an indictment of their boss, their division chief, their IG, their CA and their HPA.

When I was an army employee, I was appalled daily about the problems. At the FCC they tried hard. GSA was fairly competent in procurement issues but not at all skilled in technical areas.

But vendors seem to like the current mess as few complaints are lodged. Call me if you don't know how or where to complain.

***NASA***

Perhaps the most egregious abuse of the schedule program I ever have seen came from the rocket scientists from NASA. They wanted to buy 22 items from IBM. My client had the same stuff on his GSA but lacked one item. NASA wanted to buy from IBM so badly that they ignored the possibility of buying 21 items from us and one open market or 21 from us and one from the IBM GSA in order to save about $100,000. What is $100K to NASA? They lost the protest.

***Interstate Commerce***

The GSA schedule program has many problems. Most of them are not well recognized. Have you ever considered the fact that it is inflationary?

Dell is in Texas. They are probably the largest employer. They need a skilled workforce. They need good schools to obtain their goals. Suppose they decided to give Texas a better deal than they give GSA? This might be a very valid business purpose.

If your firm did this you probably would be denied a GSA schedule. Dell might cajole GSA into this because they are the largest schedule vendor by 300%. GSA doesn't want to lose that cash cow.

Each schedule award has a form called the 1535. Ever seen yours or Dell's. They can be most interesting.

But the GSA policies regarding the schedule are inflationary when they prevent a firm from giving a larger discount to California on CMAS or NY, MI or IL.

I saw some correspondence a few years ago sent to the 50 governors on this issue. Only two responded. The rest obviously had no clue. One of the responses was huh. The other was quite reasoned and this guy did understand.

But what GSA demands, as the price of admission to the schedule program has been called absurd in court. Check out the Data Translation Inc. case. In this case the GSA auditors found discounts unreported. GSA sued. It cost DTI $500,000 but they won in three courts.

The first court said the GSA demands were impossible to fulfill. That it, may not be possible as a business to keep track of everything GSA wants.

Imagine you are Home Depot. You obtain a GSA schedule. Now you have to report millions of transactions to a central point and then inform GSA when you get below the basis price. Probably can't be done without a T-3 in every store.

Finally, I have had several clients over the years decline to even apply for a GSA. They felt the rules were so onerous and/or impossible they decided not to even try. Some of these were market leaders in their niche. GSA, thus, kept the Air Force from even seeing their GSA schedule.