GSA panel on track with schedule policy

To the credit of former General Services AdministrationAdministrator Lurita Doan and Acting AdministratorDavid Bibb, GSA's Multiple Award Schedule (MAS) AdvisoryPanel is moving forward. The next meeting of the 15-memberpanel was scheduled to be held May 22 at the GSA auditorium.Such meetings are open to industry.Statutory authority and implementingregulations require the GSA administratorto define schedule contracting procedures.That's to ensure that the program is opento all responsible sources and orders andthat contracts result in the lowest overallcost alternative to meet governmentneeds.This is an extremely high standard.How can the GSA administrator assureCongress that purchases on GSA schedulesalways will be the lowest overall costalternative when most orders are placedby agency procurement officers overwhom GSA has no control?This is what the MAS Advisory Panelmust address for the benefit of all stakeholders,including agency buyers, schedulecontractors, GSA schedule contractingofficers and the oversight community.Current GSA MAS policy ? last revisedin 1982 ? addresses the lowest overallcost alternative requirement by instructingcontracting officers to seek mostfavoredcustomer pricing on schedulecontract catalogs. Thus, orders againstthose contracts will automatically resultin the lowest overall cost alternative.This contracting system is built on thetheory that the rough-and-tumble worldof the competitive commercial marketplaceprovides the basis for schedule contractprices. The contract requires contractorsto fully disclose their U.S. pricingand negotiate a most-favored customerbasis-of-award relationship that, whenmaintained, automatically provides competitivepricing for the duration of thecontract.The price reductionclause assures thatschedule prices willfall in lock step withbasis-of-award customersthroughout theterm of the contract,just as the economicprice adjustmentclause allows prices to rise.The problem with this system is that itwas designed for pure commodities ?identical items produced by many growersor manufacturers, for which pricing informationis visible to all. Today, governmentdemands brand-unique items. But manufacturersare loath to publish a catalogthat features the lowest price they evercharged for a particular item lest the governmentbecome a price driver ratherthan a reflector of the commercialmarketplace.On the professional services side,hourly labor rates determined by simplemeasures such as years of experienceand education have little to do with theanalysis required to choose the lowestcost alternative that will fulfill therequirements of a performance-basedstatement of work.The first advisory panel meetingheard a presentation by AssociateProfessor Christopher Yukins, co-directorof the government procurementprogram at the George WashingtonUniversity Law School. He emphasizedthat although catalog pricing has valuein the procurement process by settingceiling prices and baseline contract terms,it cannot assure that an individual orderwill necessarily result in the lowest costalternative for a given purchase request ata particular moment intime.I hope the work of thispanel will result in anMAS policy with enoughspecificity at the contractformation and order levelsto include safe harborprovisions so that all ofus, including inspector general auditorsand congressional overseers, can operatewith confidence that there is a sharedunderstanding on the interpretation ofthe rules.