MILLER ON PROCUREMENT.

***GOVERNMENT SALES***

I founded this firm in 1973 for a couple of basic reasons. Agencies were abusing vendors. This was especially true to GSA. In fact GSA was abusing agencies as well. I remember a case where GSA took an excess machine from NASA Ames and sold it to NASA Langely for about $400,000. I wanted to help vendors avoid abuse by GSA and NSA.

In 1973 I had dealt with dozens of large firms such as Xerox, IBM, DEC etc. of all the firms I had dealt with only IBM had an excellent understanding of the rules. The rules now are the FAR and the FAR supplements such as the DFAR. Then it was the FPR for civilian and ASPR for DOD. I would see large firms like Univac come into GSA and most of their troops had absolutely no understanding of the rules.

This has largely changed although most sales people think they know a lot more than they actually know. Much of what they know is anecdotal and incorrect such as the 49% rule. But I think I can take quite a bit of credit for both government employees and vendors having a much better understanding of the rules.

But guess what. Agencies still deliberately disobey the rules. I found two RFP's from DOD in which DOD is demanding a most favored price guarantee. I wrote to DOD and they refuse to change. I have no personal interest in these two bids. But you should. Send me money and I will sue DOD on your behalf.

You might as why as you are not bidding these two RFPs? The why is because the next case will be one you are bidding. The agency is like a speeder. Drive 75 until your radar detector goes off and then slow up. I have seen such behavior out of agencies many times. They are often ignorant, more often arrogant and they think you are too dumb, too poor or too scared to protest. They are mostly right.

And the things that GSA dos to abuse agencies and vendors is legion. I have written about them often. Take a look at the Komatsu and the DTI cases if you need refreshing.

If a vendor does not file at least one protest a year you are part of the problem. Every time you look at an RFQ which illegally specifies brand name, be it HP, Compaq, Cisco or Oracle, and you no bid or bid without complaint you are part of the problem.

The procurement system is getting really hairy and often unprofitable. This is why some very large firms have left the federal business and/or the schedule business. It will not improve without drastic action. Call me if you want to throw the first stone.

***PROCUREMENT REFORM PROBLEMS # 34***

So many problems exist that policy people and GSA chose to ignore or simply don't know such is happening. Take this recent case.

GSA is earning much of it's money by performing work for other agencies. GSA does not want this to stop. This means that GSA finds it easy to conduct tained bids to please the client.

The AF sent GSA FAST in SF $500.000 to buy some Cisco gear. Problem #1. The AF has no sole source rationale for Cisco, they just want it. GSA does not ask for this. GSA apparently does not want to think about whether this is a valid sole source or perhaps they delude themselves with the concept that the AF in Korea must have a valid reason for their preference.

At this instant 3Com, Cabletron, Bridge, Juniper, Lucent, Nortel and a host of others have been defrauded.

So GSA proceeds to do a schedule buy. They obey the Rule of 3 ignoring the fact that they have no competition at all except for the markup of 5-10% above cost. Perhaps GSA is dumb enough to think they have competition. In one case, GAO ruled that even though the agency had 110 bids the fact that the IFB only allowed one brand to be bid was illegal.

But now it gets more interesting and far, far too complex for GSA to master. A Cisco dealer comes in to GSA and puts in a bid even though they don't have a schedule for Cisco. The bid is about $50,000 lower than the schedule offers. GSA ignores the bid and awards to a schedule firm on the grounds that it is too much work and would take too long to do a real bid.

In an IRS protest one court ruled that this type of assumption based on an estimate of $14,500 as the cost to prepare and conduct an RFP was unsupportable. In another case a court held that an assumption of $40,000 was far too high.

I have just described two of the major problems associated with the schedule ordering process. They both need to be fixed desperately. They are crying out for a court case.

I have performed the procurement described above for a couple of agencies for $2500 and at that I am earning about $500 per hour. GSA FSS needs to amend FAR 8.4 to simply state that any vendor without a GSA can get in on the fun by submitting a bid accepting the terms and conditions of any appropriate GSA schedule and then bid against the three schedule vendors.

***SINGLE V. SOLE SOURCE***

Suppose an agency has a valid JOTFOC to justify ordering a product based on brand name - say Oracle. How to proceed? It probably needs to go in the CBD unless they are ordering from an existing contract. But Oracle must be o 30 contracts including three GSA schedules.

Even if an agency has a valid sole source they will almost never had a valid single source for the product. Oracle is sold by many firms including Oracle. If the advantage system was a reality and if FAR 8.4 were skillfully done the system would reveal all contracts on which the Oracle products resides, rank them by price and the buyer would have to procure from the lowest priced contract or invent a rationale which would survive in court for why they strike number one and move to number two.

Will GSA ever have access to non-schedule contracts? Will GSA ever require buyers to list and rank by price all schedules? Why not?

But the point of all this is you might have to issue a proposal to compete among Oracle suppliers. See FAR 17.207

***SALESMEN***

Ever see that cartoon where the barbarians are assaulting the castle and the prince is preparing the boiling oil and he tells his aide he has no time to see a salesperson?

Behind him is the preppy sales guy with bow tie and a briefcase and large sample box which says Acme Machine Guns.

Everyone is a salesman. He have to sell someone for everything in life you desire. That includes a raise, a new car, and a spouse. Many people say to me I could never sell anything. Wrong.

I am a sales person. Years ago in the IT industry Univac and Xerox etc. Would not hire females. One firm had a lovely lady who sold to my agency and my boss met with her as often as she asked. Why was that and why were these old line firms so stupid.

Some of the most successful people in federal sales wear dresses. I would even be willing at to bet that, on average, female sales people earn more than males. Did anyone ever research that?

But I am probably below median on Sales skills. If this were baseball, I probably hit about .220. No DiMaggio here for sure.

Let me tell you about a real sales guy I know. What does he sell? He is an independent agent. He sells whatever the agency needs and has not been able to find. He is a finder. He sells condoms to Africa, Virginia pine heartwood which is 150 years old to panel a new Dept of State conference room etc. You get the idea. How does he do this? Well he is short, not a good dresser, dumpy and balding. So he does cut a good figure. He rarely spends a dime on a federal lunch. He does not do golf.

He quite wisely many years ago said the government is too big for me to cover it all. So I do GSA, USDA and Interior. Here is an actual success. He goes into one of those agencies, spots Marie, a long time business acquaintance cheerily asked, "what up".

Marie says Bob it is not going well. He says how can I help. Marie hands him a bid. She got no bids. It is for portable backpack sprayers which must be entirely plastic with no metal fittings because they will contain corrosive chemicals for a variety of uses. GSA will put them in the warehouse and several agencies will buy them.

Bob says I think I can help and will call you Friday. He goes to the library and gets the Thomas Directory, finds all US made sprayers, calls a few up and finds a firm in a nearby state which makes one to meet the spec.

Within three days he has a late bid into Marie and Marie accepts it because the FAR allows late bids when it is the only bid. How many of our readers can find the clause? He now makes $20,000 a month on this contract and only opens the mail. Never sees the sprayers. You have to love this business.

***DSS-W***

This grossly incompetent procurement shop seems to be a favorite of the brass in the Pentagon because they are adept at getting the brass what they want without all the nicities of the FAR.

We were amused by the recent GAO report where this shop bought $200 million worth of IT without getting more than one quote as required by FAR 8.4.

They had the audacity to blame in all on GSA because GSA did not tell them they had to get quotes. This has only been in the FAR 50 years. If you come in late, schedules were authorized by the CICA law in 1984 and only if the buyer followed the rules laid out by GSA and awarded to the lowest cost firm that met the agencies needs. No value awards on schedule deals. Right!

I have been telling my friends in the Army and DOD for a very long time about DSS-W but nothing ever changes because the brass wants what they want. A good lawsuit, a political scandal, a GAO protest, a congressional investigation etc. would all change this. But it hasn't happened.

I was telling a salesman friend about this mess and he said ain't it great. Seems he gets a lot of business there and doesn't want anything to change. It admitted it was often tained business.

I knew a man who was delivering a bid there a few years ago and he overheard Miss Smith on the phone with Col. Jones lamenting the fact that the bid was due on Monday and nobody had bid. This guy, being a sales guy with a bit of larceny in his heart, went back to work, sorted through the RFP stack, found the one due on Monday and gave DSS-W a late bid worth almost $2 million. He got the award.

Maybe we don't want smart contract shops any more than we want a better-equipped and staffed IRS.

Here is to good old DSS-W. How many sales people do you have assigned there?.