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REPORT SHOWS WHAT WE ALREADY KNEW: OTA USE IS GROWING, BUT RELATED DETAILS ARE SLIM

Surprise!  Congress authorizes expanded use of an innovative, non-regulatory centered method of acquisition.  The use of this tool explodes exponentially so DOD can meet critical missions.  With fewer rules, though, there are fewer data sets to review.  This is essentially the finding of a recent Congressional Research Service report issued on the use of Other Transaction Authority inside DOD.  Oversight agencies are actually surprised that there is minimal paperwork to review when examining how OTA’s are used.  That, ahem, was the basic idea.  The existing DOD acquisition system was deemed too burdensome by both Pentagon leaders and Congress.  OTA’s, which until recently existed at the edge of the federal acquisition universe, moved closer to the center.  CRS estimates that OTA use at DOD has grown 650% from 2013.  That’s a lot of innovative R&D to help the agency maintain its technology edge.  More OTA use is on the way, with the Navy recently announcing plans on where and how this acquisition tool will be used.  We’re not suggesting that everything is perfect on the OTA front, but no one can really criticize a streamlined, fast acquisition method for acting like a streamlined, fast acquisition method.  Make sure OTA use is a discussion you have with your customers, even in civilian agencies.

HAVING THE RIGHT CONTRACT VEHICLE MATTERS MORE THAN EVER

Forty-Two Percent of the dollars spent on service acquisition in FY’18 went through Tier 1, Tier 2, or Best in Class (BIC) contracts last year as federal agencies increasingly followed Category Management guidelines set forth by the Office of Management and Budget.  At the same time, open market service procurements dropped by 10%.  Plus, small businesses received 33% of all orders, beating small use goals by 10%.  While these numbers are specific to services, the trend toward consolidating buys among identified BIC contracts is expected to be similar for IT and other major solutions brought via Indefinite Delivery Indefinite Quantity contracts.  The bottom line for contractors is:  Get on one of these BIC vehicles, or partner with someone who is, if you want to maximize your federal business potential.  Similarly, the contracts you have today that aren’t BIC may become worth less and less as agencies drive spending to BIC vehicles where spend under management can more easily be identified.  Federal agencies appear to be serious about driving business to contracts with competitive pricing where spend analysis tools exist to assist them in their budgeting and acquisition functions.  Still more guidance is expected soon from OMB on Category Management and, with it, the trend line toward increased use of preferred contracts is expected to grow further.       

NEW PEOPLE, NEW TRAINING: MAKING SURE YOUR TEAM KNOWS THE RULES

Has your company hired new staff to work on your government contracts?  Have other people been promoted or assigned to work on contract management?  These are all indications you’re your organization is definitely due for training on contract compliance and ethics.  Changing contract managers, especially if there is any kind of gap in coverage, is a high risk indicator for non-compliance that could end up costing your company a bundle.  Allen Federal can help.  We offer training to new, or newly assigned, personnel that can be tailored to your company’s specific needs.  Assume that there have been compliance problems if your old manager left in November and your new one is just coming on now.  Contact us today at info@allenfederal.com and get back on track! 

3 THINGS TO FOCUS ON NOW: ASSISTED ACQUISITIONS, DIRECT CLIENT ENGAGEMENT, & RECOMMENDING INNOVATIVE ACQUISITION METHODS

All federal agencies either have their budget number for FY’19 or will have it in about a month.  As we shift into the next part of the fiscal year, here are three things to focus on now:  1.Assisted AcquisitionDoes your client’s procurement shop not understand them? You’re your project require special acquisition expertise?  Whether you sell IT, professional services, or even other types of solutions, leveraging the capabilities of assisted acquisition offices can be a good way to increase your overall business and help customers in a jam.  2.  Now is the time to develop your sales leads and make sure your target agencies know your capabilities.  Acquisition actions will start coming when the weather warms up, so make sure you’re ready by developing the relationships you need and educating your customers on why your company’s solutions are the best for them.  Don’t try to be everywhere at once, but definitely don’t spend too much time in your own office.  3.  Can you tell your OTA from a BPA?  If not, you’d better learn fast.  If so, make sure you use this knowledge to your advantage by suggesting innovative acquisition methods to your client.  Finding a way to make their acquisition easy helps both the customer and your company.  Whether it’s a set-aside, IDIQ contract, OTA, or other innovative approach, be prepared to recommend the top 2-3 that you think will work best.  This is the time of the year that you set the table properly so you can eat as much as you can later.  Remember, forks on the left!

NEW MEMO EXPECTED TO STRENGTHEN CATEGORY MANAGEMENT

Expect further consolidation of contract methods, more centralized acquisition, and continued data collection and remittance requirements from a new Category Management memo expected soon from the Office of Federal Procurement Policy (OFPP).  OFPP leaders are serious about making further reductions in contracting overhead, which could also result in reducing the number of contractors, while better leveraging the government’s collective buying power.  For service contractors this may mean that the savings the government could not achieve via the commoditization of labor categories could occur via limited, standardized contracts.  In addition, contractors can expect to have data collection and remittance requirements in each contract so that government leaders can analyze prices paid with the ultimate goal of dramatically reducing spending.  Left unsaid, for now, is whether OFPP will attempt to actually mandate the use of specific contract methods to the exclusion of others by threatening agency budgets for those who refuse to go along.  So far, CM comes right up to the line of making specific contract use a “thou shalt”.  Agencies generally go along with the CM guidelines, but also have flexibility to do their own thing.  Removing that freedom would be a sign that OFPP believes that they can succeed where others have failedDon’t get stuck with obsolete contracts that drive little business.  Stay tuned for OFPP’s memo.