GSA panel calls for clarity, transparency for contract pricing

Members of an independent panel created by the General Services Administration to review the policies and rules of GSA contracts repeatedly said on Tuesday that the schedules needed more clarity and transparency in pricing policies.

Comment on this article in The Forum.The meeting of the GSA blue-ribbon advisory panel on multiple award schedule contracts was the first of a series expected to run through the summer. GSA formed the panel in the wake of three information technology companies (Sun Microsystems, EMC Corp. and Canon USA) that chose not to renew their schedule contracts in 2007 because of increased scrutiny from the agency's inspector general regarding their pricing policies. The schedules are required by law to provide best overall value for pricing for government agencies.

The panel will examine the schedule contracts and focus on pricing. Former GSA administrator Lurita A. Doan originally formed the panel to develop recommendations on how the schedule contracts could be improved. The panel is made up of 15 members, 11 from within the government and four representing industry associations comprised of private companies.

The Multiple Award Schedules are indefinite-delivery, indefinite-quantity contracts negotiated by GSA for commercial products and services. The federal government and other authorized users may issue task and delivery orders against the contracts, which are awarded by GSA for base periods of five years plus three five-year options.

Frustration over the management of the schedule contracts has been reflected in sales, which have remained flat in recent years. For fiscal 2007, GSA reported sales of $35.8 billion on all schedule contracts, a slight increase over the $35.2 billion for fiscal 2006, according to INPUT, a federal consulting firm in Reston, Va. IT sales totaled $16.5 billion in fiscal 2006, relatively unchanged from the $16.4 billion in sales for fiscal 2007.

During the meeting, members discussed what they thought would represent success for the panel. Chairman Elliot Branch, executive director for contracts at the Naval Sea Systems Command, said success for him would constitute three things: finding the most competitive pricing for GSA's government customers, striking a balance that ensured fair pricing for commercial partners, and providing clarity and transparency to all stakeholders regarding pricing policies.

Other panel members agreed, noting that confusing rules such as what triggered the price reduction clause, along with the changing nature of multiple award schedules themselves, lead to much of the dissatisfaction with the contracts.

"The schedules started out as product-oriented contracts," said Judith Nelson, branch chief for the consolidated and language services branch and a contracting officer for GSA. "Now they are services-oriented. I don't think the pricing policy has kept up with the emphasis on services. I would like to take a look at that."

Debra Sonderman, director of the Office of Acquisition and Property Management for the Interior Department, said she was concerned with the frustration over schedule pricing. She said she was looking for consistency in pricing as well as practical suggestions on how contracting officers could execute against the schedules. She noted that transparency was especially important to her because 40 percent of Interior's purchases are made off the schedules.

During an interview with Nextgov, acting GSA Administrator David Bibb said the price reduction clause would have to be examined, given the shift from an emphasis on goods to services within the contracts.

"I'm personally interested in knowing if there's a better way to get competition and the best price without the inherent abundance of paperwork, checking and cross-checking," Bibb said. "When you have thousands of items covered under one schedule, it gets to be a nightmare to try to keep up with that."

Bibb said he wanted the panel to examine if there was "something better, something easier and more efficient that doesn't require an audit to tell if you get the best price." He added that he wasn't against full audits, but wanted to see if there was a better way to ensure that contracts provided the best value.

The next meeting of the panel is scheduled for May 22, after which it is expected to meet one or two more times early in the summer to solicit public comment. The members will then formulate their recommendations, which the panel will forward to the GSA administrator, who can choose to accept or reject them.

Bibb said he was open to taking action on a more immediate basis: "If a good idea comes up in week two, we'll say, 'Hey, maybe we should take a look at that.'"