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Contracting for supplies and services in the federal government: the "down and dirty"; How does a novice navigate these treacherous bureaucratic waters and actually contract for simple supplies or services?

Ask any contracting officer in your organization how long it will take to award a contract for any requirement, and rest assured that whatever response you receive will include the words: "It depends." More likely than not, you'll walk away from the conversation more perplexed than before you asked the question.

But, let's be fair. The contracting officer is required to comply with a book called the Federal Acquisition Regulation (FAR), which is slightly thicker than War and Peace and Moby Dick combined. And, if that's not enough, each agency and subagency of the federal government is compelled to attach its own component supplement regulations. All of this can make a response to the original question appear more like a rough estimate than a straight answer.

So, how does a novice navigate these treacherous bureaucratic waters and actually contract for simple supplies or services? I hope to shed some light--in layman's terms--on the process and offer some tips to government employees and vendors alike to help "get business done."

What I Want

To acquire simple supplies or services, it is important to start off in the right direction by adequately defining the requirement. With basic supplies, it's fairly easy. Simply perform market research, and list the items you need. Full statements of work are not necessary, but be sure to include information, such as delivery instructions, warrantees, timelines, and other pertinent facts. This format generally works for basic supplies and those services that do not normally require a statement of work (i.e., annual software support or a standard one-day training session). When defining a supply, be ready to include the words "brand name or equal" in your description. As good stewards of those taxpayer dollars, the government cannot restrict its acquisitions to a brand name based on personal preference.

Many services, however, are a little more complicated. Services often require a statement of work that details the tasks to be performed, deliverables, government-furnished property, location of work, and a myriad of other items that must be included. As an end user, your best bet is to call the contracting office before you even begin to start defining your requirement. Nine times out of 10, they will have written contracts for similar requirements and can offer you a good sample statement of work. Current Department of Defense (DOD) policy is that service acquisitions should be performance-based where possible.

Finally, there are many requirements in which the government does not really know exactly what it needs. In situations like these, it's best to write a statement of objectives or performance-based statement of work. In this process, the government defines the general parameters of the requirement and allows the vendors to propose technical solutions. The government then reviews the submitted technical and cost proposals and selects the best alternative using best value criteria.

What's the Deal with GSA?

A good place to start with your requirement is to consider using the General Services Administration (GSA) Federal Supply Schedules. The rules of GSA schedules provide an expedited method of purchasing commercial supplies and services without a lot of baggage. For supplies, the FAR requires the government to "review the catalogs or pricelists of at least three schedule contractors." (1) Direct competition is not normally required. These catalog pricelists can be found on the GSA Advantage Web site, https://gsaadvantage.gov, which is fairly user-friendly. You may also consider other non-price factors such as past performance, special product features, delivery terms, and other elements when selecting a GSA product. While the prices listed in GSA are already determined to be fair and reasonable, the government may request discounts and, at some dollar thresholds, is expected to receive discounts.

GSA services, on the other hand, are a little trickier. With most GSA services, a statement of work and source-selection criteria is usually required. The government must then provide a copy of a request for quote (RFQ) to "at least three schedule contractors that offer services that will meet the agency's needs." (2) For services, limited competition is required. However, best-value criteria (i.e., past performance, management plan, and technical approach) may be used in this evaluation. Additionally, the GSA Web site has a function called e-Buy, which facilitates electronic posting of RFQs and RFPs to GSA schedule-holders. DOD requires the customer and contracting officer to apply DOD business criteria in the evaluation and approval to use non-DOD contracts.

Multiple-Award Contracts

GSA schedules are not the only external contract vehicles available. There are many contracts that have been established for government-wide use, especially in the information technology arena. Most of these vehicles are multiple-award contracts, meaning that more than one company has been awarded a contract under this vehicle. Several examples of this are the NASA SEWP III, (3) the Air Force Way (AFWay), (4) and the Army Small Computer Program (ASCP) (5) contracts for information technology supplies.

The general rule for multiple-award contracts is that the government must provide each multiple awardee with a "fair opportunity" to be considered for each order. (6) The requirements for fair opportunity are not too stringent, and the contracting officer may "exercise a broad discretion in developing appropriate order placement procedures." (7) Specifically, the government "need not contact each of the multiple awardees ... if the contracting officer has information available to ensure that each awarded is provided a fair opportunity to be considered for each order." (8) However, it should be noted that some agencies, including DOD, have established more strict interpretations of fair opportunity.

Window-Shopping for Contracts

While the use of external governmentwide acquisitions contracts (GWAC) is often the best alternative to the government, it is important to consider all the facts. To begin, many external contracts have service fees. Some government organizations charge a fee as high as 4 percent for the service of using their contract. Additionally, government customers don't always have the direct access to the contract team. In other words, you may have very little remedy when that contract specialist doesn't answer his/her telephone for your urgent request.

Open Market

Assuming that the required supply or service is not available through GSA, existing contracts, or other vehicles, the final means to buy supplies or services is through the open market.

This is a breakdown on the general requirements for open-market procurements.

(1) Under the micro-purchase thresh-old of $2,500, the government purchase card (formally called the IMPAC Card) is generally required. These purchases do not involve the contracting office, and most rigid competition rules do not apply. It should also be noted that the micro-purchase threshold is higher for some purchases relating to contingency operations and homeland defense. (9)

(2) For requirements between $2,500 and $10,000, the government should "consider solicitation of at least three sources to promote competition to the maximum extent practicable." (10)

(3) From $10,000 to $25,000, the government follows the rules above but must also--at a minimum--display the solicitation in a public place for at least 10 calendar days. (11)

(4) Between $25,000 and $100,000, the requirement must be published on a nationwide government point of entry (GPE), which can be accessed at www.fedbizopps.gov for a "reasonable" amount of time. (12)

(5) More than $100,000, these requirements must be published on the FedBizOpps Web site for a minimum of 30 calendar days. (13)

Normally, purchasing supplies and services through the open market requires more time and energy. Additionally, there is greater potential for protest and delay, due to the publication requirements associated with the open-market rules.

The Sole-Source Conundrum

There is no easier way to annoy a contracting officer than to say the words "sole-source." From a contracting perspective, every customer is sure that there is only one vendor that can meet customer requirements. This recommendation is made despite the fact that oftentimes the government customer has performed very little market research to support this conclusion. What most people don't understand is that going the sole-source route is a sure-fire way to delay your procurement for at least a month.

To begin with, the justification has to be solid. There are multiple approved circumstances in the FAR that permit the use of sole-source justifications, but the most common is based on the premise that "Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements." (14) The biggest problem with using this kind of justification is that the government is mandated to publish a notice on the FedBizOpps Web site, stating the government's intent to go sole-source and further stating that no one else can do the work. In reality, if the justification is not watertight, this notice becomes a giant invitation for other companies to refute the premise that only one company can perform the work. If this happens, you can expect the lawyers to get involved, and then the requirement will likely be delayed significantly.

The other most common circumstance is based on "Unusual and Compelling Urgency." (15) Note that from a layman's standpoint, this generally won't be authorized unless the government can show that it would be "seriously injured" by reducing competition. In general, government attorneys have taken a fairly conservative position on what constitutes "serious injury." But, you can rest assured that "Unusual and Compelling Urgency" is not likely to be approved simply because the boss wants it now.

Mysterious "Set-Asides"

So, what the heck is a very small service-disabled, woman-owned, Alaskan, disadvantaged, 8(a), HUBZone business? It's not uncommon for a contracting officer to "set aside" a requirement for some special type of business--whether it is a small business, small-disadvantaged business, or otherwise. One of the primary reasons he/she does so is based on requirements set by the senior leadership. Ultimately, the federal government has determined it has a responsibility to spread the wealth to segments of the community that are underrepresented in business.

On the other hand, a wise customer/contracting team will use these rules to its benefit. Let's face it. While the government is supposed to offer opportunities to all business under full and open competition, it is not always practical. By using some of the established socioeconomic programs, you can cut down on procurement time while still getting a reasonable price and meeting the socioeconomic goals. Here is a short breakdown of some of the more predominant business development programs available.

Small Business Set-Asides

Companies self-certify their organizations as a small business, based on the amount of annual receipts (16) or number of employees on the type of product or service provided. The Small Business Administration (SBA) has published a table of size standards, according to the North American Industry Classification System--more commonly referred to as a NAICS Code. The SBA size standard tables can be found at www.sba.gov/size/sizetable2002.html. The bottom line is the federal government is supposed to "set aside" or limit competition to small businesses for all requirements between $2,500 and $100,000 (although some exceptions do apply). (17)

Very Small Business

A very small business is one located in specific regions of the country (18) and, together with its affiliates, has no more than 15 employees and annual receipts not exceeding $1 million. (19) In many cases, a contracting officer may set aside a requirement for very small businesses on requirements between $2,500 and $50,000, provided they are served by SBA representatives located in their geographic regions. (20) Again, if a requirement is set aside for very small business concerns, only very small businesses can compete.

Small Disadvantaged Businesses

To receive small disadvantaged business (SDB) status, a firm must be certified by the SBA or have completed an application pending at the SBA. (21) Generally, a company can quality as an SDB if it meets the requirements of a small business and has significant minority representation in ownership. The FAR allows for three main mechanisms for SDBs: (1) the government may use SDB status as an evaluation criterion in award of a contract, (2) there should be incentives for SDB subcontracting, and (3) non-DOD agencies should use a price evaluation adjustment for SDB status. It should be noted there is no formal set-aside for SDB concerns in the FAR.

HUBZones Small Businesses

The government has established a preference for small businesses located in historically underutilized business zones (HUBZones). To qualify under the HUBZone Program, businesses must be certified by the SBA. (22) More information on HUBZone qualification can be found at www.sba.gov/hubzone. In general, contracting officers can set aside requirements for HUBZone concerns, as well as offer price evaluation preferences. (23)

Woman-Owned Businesses

While some woman-owned small businesses may be able to qualify under the Small Disadvantage, HUBZone, and 8(a) Programs, the FAR does not explicitly provide any formal incentives for strictly woman-owned businesses. However, many organizations, such as the Department of Army, do establish incentives in their agency FAR supplements. No formal certification is required for woman-owned small business concerns other than self-certification.

8(a) Program

The 8(a) Program is one of the most useful tools in a contracting officer's arsenal. 8(a) firms are usually small disadvantaged companies certified for the 8(a) Program by the SBA. This program also includes special provisions for set-asides for Indian tribe and Alaska native concerns. (24) Under this program, the government can award sole-source contracts to an 8(a) company for requirements under $5 million for manufacturing and $3 million for other acquisitions. Above these thresholds, the contracting officer may set aside the procurement for competition among 8(a) businesses only.

The greatest advantage to this program is that the government does not need to compete the requirement under these thresholds and can establish long-term relationships with 8(a) companies. Be advised that the application and approval process to qualify as a certified 8(a) company is fairly lengthy and cumbersome.

Service-Disabled Veteran-Owned Small Business Concern (SDVOSBC)

The Veterans Benefit Act of 2003 established a program to encourage government business with service-disabled veteran-owned small businesses. Under this program, contracting officers have the authority to set aside requirements for service-disabled veteran-owned small concerns. (25) Qualification under this program requires self-certification.

Other Programs

In FAR Parts 19 and 26, there are special programs for Indian Incentive Program, disaster or emergency assistance activities, historically black colleges and universities and minority institutions, and as of recently, native Hawaiian organizations. (26)

While this is by no means an all-encompassing summary of all the socioeconomic programs established, perhaps it will provide some clarity to some of the more predominant requirements in the FAR.

Words to the Wise

It might be helpful to offer a few tips to those government workers creating the requirements and to those vendors who hope to provide these supplies and services to the federal government. See the sidebar on page 29 for these tips.

Obligatory Contracting Disclaimer

While this article has tried to shed light on the federal government contracting process to non-procurement government personnel and vendors, it is important to keep in mind this is only a general guide. There is always an exception to every situation, and many topics are not covered in this article. Also, note that each department of the federal government has its own supplement with even more rules and restrictions. But, hopefully, this article will provide you with a starting point to improve your understanding of the process.

Endnotes

1. FAR 8.405-1(c).

2. FAR 8.405-2(c)(2)(ii).

3. Accessed at www.sewp.nasa.gov/on October 17, 2005.

4. Accessed at https://afway.af.mil/on October 17, 2005.

5. Accessed at https://ascp.monmouth.army.mil on October 17, 2005.

6. FAR 16.505(b)(1).

7. FAR 16.505(b)(1)(i).

8. FAR 16.505(b)(1)(ii).

9. FAR 2.101.

10. FAR 13.104.

11. FAR 5.101.

12. FAR 5.203.

13. Ibid.

14. FAR 6.302-1.

15. FAR 6.302-2

16. As defined in FAR 19.101.

17. FAR 19.502-2.

18. See FAR 19.902 for designated very small business eligibility locations.

19. FAR 19.001.

20. See FAR 19.904 for more detail.

21. FAR 19.304.

22. FAR 19.1303.

23. FAR 19.13.

24. FAR 19.805-1(b)(2).

25. FAR 19.14.

26. DFARS 219.805.

About the Author

MAJOR PATRICK R. STARESINA, CPCM, CFCM, is a contracting officer with the National Guard Bureau in Arlington, Virginia, and a member of the NCMA NOVA Chapter. Send comments on this article to cm@ncmahq.org.

RELATED ARTICLE: Tips for Government-Requiring Activities

(1) Understand your requirement and do your research. The more you understand your requirement and the marketplace environment, the more you can contribute to the procurement process.

(2) Don't let persuasive salespeople dictate the method of your procurement process. Don't get hung up on specific brands or companies. Be sure to define your own requirement in general terms.

(3) Don't make promises that your contracting officer can't keep. Don't accept quotes and expect the contracting officer to "make good on your deal." Remember that a contract is not follow-up paperwork for your requirement. The contract is your requirement.

(4) If you can't beat them, join them. Speaking from experience, a government customer who continuously fights the contracting officer on procurement methods is more likely to have longer procurement lead times and incur more frustration.

(5) Get to know your contracting officer better. Make friends with the members of your contract team and include them in your requirements early. Encourage them to care about your mission, and make them feel like a part of things. Take their advice seriously, and you'll reap big dividends.

RELATED ARTICLE: Tips for Commercial Vendors

(1) If your firm is serious about selling supplies and services to the federal government, you should seriously pursue GSA and other government procurement vehicles. This includes exploring some of the socioeconomic considerations. In general, the government doesn't like dealing with open-market quotes.

(2) If you have a GSA schedule or multiple-award contract, get all of your items and related services on that contract. It is very aggravating for a contracting office attempting to purchase an item with ancillary services, only to find the ancillary services are only available on the open market. This includes installation, related consulting, support agreements, training, and maintenance.

(3) Make sure the work you are performing is within the scope of your contract. For instance, do not try to offer financial consulting services through your information technology GSA schedule. The federal government is seriously cracking down on misuse of existing contracts.

(4) Above all, be competitive. Despite what you might see on the news, the government wants high quality at reasonable prices. Don't rely too heavily on politics or socioeconomic status to bring you continued business.
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Author:Staresina, Patrick R.
Publication:Contract Management
Geographic Code:1USA
Date:Dec 1, 2005
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