# Presentation: ER2UWYRMJWAAWPGWZWXRZTDCANED77AA

## Guidance:Using Other Agencies’ Contracts & Services 

- Joseph Waddell
- Office of Contract Management
- December 2004

**Notes:**
Past several years Agency’s increasingly going to other agencies to place orders supplies/services.
	-- Encouraged by Congress & OMB
	-- Greater efficiency – centers of excellence

Some critics argue pendulum has swung too far and it needs to swing back toward more restricted use.
	-- Cite number of abuses particularly involving DOD & GSA

Most notorious case:  In August 2003, Army’s used a Interior BPA (FSS) for IT support to obtain interrogator services – Out of scope -- Story broke about torture of Iraqi prisoners at Abu Ghraib prison.  
  -- Allegations contractor off this order involved.
  -- Spot light on DOD/GSA/DOI acquisition community.

CO trying to respond to an emergency need.  Clearly out of scope.

DOD almost lost ability to use FSS, new statutory limitations.
GAO reorg, closed offices, “Get it Right!”
  -  Will continue to provide good customer service
  -  Compliance is essential  (or out of business)

## Objectives for this Training

_**Understand**_
- Regulation and policy requirements
- Proper usage
- Potential pitfalls

**Notes:**
I understand we do a pretty good job – compliance
Ask to provide sensitivity training – Understand what’s at stake.
Need for –
 Compliance
 Proper documentation
 Exercise of good business judgment
 Avoiding inappropriate uses

## Areas to be Covered

**Interagency Agreements (IAA)**
**Economy Act**
**Other Funds-Out IAA’s**
** ****ex., Franchise Fund Organizations**
**Federal Supply Schedules**
**Government-Wide Acquisition Contracts **

**Notes:**
IAA – our contract with another agency when ordering their services or when ordering supplies/services another agency’s contracts.

FSS does not require an IAA
GWAC may require IAA.  IAA needed if Service Agency runs competition, manages contract, pays invoices.

Economy Act – General authority

Other Funds-Out IAA’s 	
   – specific authorities
   -- ex. Franchise Fund Organizations / GSA Fed Tech Service

## Economy Act Interagency Agreements (IAA)

- General authority
- Used when more specific authority not available
- Statutory Authority
- 	    Economy Act of 1932 (31 U.S.C. 1535)

**Notes:**
Economy Act 

A general authority allowing us to obtain supplies/services from other agencies
May use this authority if:
Appropriate funds available 
Order is in the best interest of the Gov’t
The goods/services cannot be provided as conveniently or cheaply by private industry 
A more specific authority not available

## Other Funds-Out IAA’s

- When a more specific authority applies
- Examples of Service Agencies
- Franchise Fund Organizations
- GSA’s Federal Technology Service

## Franchise Fund Organizations

- Provide common administrative support
- Service Providers
- 	   Commerce		Interior			HHS
- 	   Treasury		Veterans Affairs		EPA
- Specific statutory authority:
-   Government Management Reform Act of 1994
- 	Section 403 of Public Law 103-356

**Notes:**
Franchise Fund Organizations

Provide common administrative support – payroll, accounting, computer services, telecommunications, procurement, facilities management, travel management, copying and printing, personnel management, health services and specialized training. 

Self-supporting business-like centers working on a fully reimbursable basis.

Fastest growing FFO is Interior – GovWorks – provides acquisition support – Special approval required!

## GSA’s Federal Technology Services

- Provides IT hardware & services
- Specific statutory authority:
- 	   Information Technology Fund (40 U.S.C. 757)

**Notes:**
Fed Tech Service provides IT hardware and technical support.  Cradle to grave support from Acq Planning, PWS development, procurement and management.

Operates on a full cost reimbursement basis, operates a revolving fund, but is not a Federal Franchise Organization -- Also should not to be confused with FSS

## IAA Implementing Information

- FAR 17.5 for Economy Act
- Consult servicing agency
- DOE Acquisition Letter (AL) 2005-04
- “Proper Use of Non-DOE Acquisition Vehicles,”
- DOE Acquisition Guide, Chapter 17

## Economy ActImplementing Information

_**FAR 17.503 requires a D&F that:**_
- IAA is in best interest of Gov’t.
- Supplies/Services cannot be obtained as conveniently or economically from private industry
- If services will be provided by a contractor:
- The servicing agency’s contract is existing
- The servicing agency has expertise to enter into such a contract & DOE lacks such expertise, or
- The servicing agency is authorized by law/regulation to purchase such services on behalf of other agencies.

**Notes:**
FAR 17.503 requires a D&F when using economy act to go to another agency.
-- Best interest Gov’t
-- Cannot be obtained as conveniently or economically from private firm
-- If the servicing agency will provide services using a contractor, certify:
	-- Existing contract 
	-- Service agency has expertise to acquire the services which DOE lacks, OR
 	-- The service agency is authorized by law / reg to purchase such services on behalf of other agencies.

## New RequirementsAL 2005-04

- Enhanced CO requirements
- Administration
- Determination & Findings (D&F)

**Notes:**
AL 2005-04 was issued to ensure we are doing things properly 
  - avoid problems other Agency’s are encountering – particularly GSA & DOD

Ensure CO is involved throughout the process

That we are monitoring performance and any changes to the service agency’s order or contract placed on our behalf

Plus new D&F requirements documenting that we are using the vehicles properly.

## AL 2005-04

_**CO Must**_**:**
- Sign **all** IAA’s
- Monitor (or designate COR to monitor) IAA performance and any associated contracts
- Ensure the IAA complies with DOE policies & regulations
- Ensure inclusion of appropriate DOE clauses in Servicing Agency’s contract
- Submit IAA’s to Office of Contract Management (ME-62) or the appropriate office in NNSA for review as required.

## AL D&F Requirements

_**CO shall execute a D&F that**_**:**
- Addresses requirements of FAR 17.503
- Certifies conformance with all DOE regulations, policies and procedures
- States that the DOE and service agency CO have determined the services to be within scope of the servicing agency’s contract
- States that CO will review all follow-on tasks to ensure they are within scope of the IAA

## D&F Requirements Continued

- Discusses all DOE requirements to be incorporated in the IAA & resulting contract
- Describes the supplies/services required and servicing agency’s roles and responsibilities
- States the IAA in the best interest of DOE, and
- Certifies compliance with FAR 7.3
- 	   (Contractor verses Government Performance)

## Additional AL Requirements

_**Working with Franchise Fund Organizations**_
- Services _must_ be obtained through an IAA
- If obtaining Acquisition Services for placement or administration of contracts and financial assistance:
- IAA _must_ be approved by the HCA
- _Prior_ notice to Senior Procurement Executive

**Notes:**
The requirement for HCA approval and notice applies to orgs like Interior’s GovWorks
  -- Need a legitimate basis for outsourcing our procurement services,
  -- Not a go-around.

## IAA Potential Pitfalls

- Services not in-scope
- Pre-award/Post-award
- Army’s $37 M construction project using IT Funds
- IAA doesn’t define roles/responsibilities
- Service agency contract lacks DOE special requirements
- Security, appropriation limitations, emphasis on competition, commitment to small business

**Notes:**
Example:
Federal Technology Service place a $37 million order for construction using the Army’s IT funds – Needed to house computer equipment.

Understanding how this could happen:
 -- Fed Tech Services cost reimbursement
 -- Aggressive marketing, Motto: “Thrill the customer.”
 -- Employees paid bonuses for bringing in business
 -- Poaching
 -- People began to cut corners

-- Army liked using revolving fund – expiring funds (even one year) lose fiscal identity when rolled into fund (Available up to five years).  
	-- Army protecting funds
	-- Unfortunately for Army it got caught laundering the funds

Just this sort of scandal now threatens our use of these kinds of services

GSA reorganized Federal Technology Service / closed a couple offices.

## Solutions

- Stay within the scope of the IAA and service agency’s contract SOW
- Comply with Federal or DOE regulations, policies and procedures
- Ensure the IAA defines roles/responsibilities
- Ensure DOE special requirements are incorporated into any resulting contract or order
- Monitor performance and cost

**Notes:**
Done with IAA’s.

## Federal Supply Schedule (FSS)

- GSA Multiple-Award Schedule
- 		41 U.S.C. 251, et seq. and 40 U.S.C
- GSA Advantage & e-Buy
- 		40 U.S.C. 1501
- Federal Acquisition Regulation (FAR) 8.4
- Acquisition Letter (AL) 2005-04
- DOE Strategic Acquisition Transactions Guide
- 	  (Chapter 38 of the Acquisition Guide)

**Notes:**
“Multiple-award schedule” offering many thousands of different supplies / services
	- If ordering supplies/services with no SOW – Fixed priced
	- If ordering services with SOW – Fixed priced or fixed rate.

“GSA Advantage” to find services

E-buy to advertise requirements.

FSS ordering procedures at FAR 8.405
Ordering procedures for services requiring a statement of work now included in 8.405.

## AL 2005-04 Requirements

_**CO must**_**:**:
- Sign all orders
- Follow FSS ordering procedures
- Comply with DOE policies & regulations
- Document:
- Determination that the proposed work is in-scope
- The order is in best interest of DOE
- Any advice provided by GSA Contracting Officer

## FSS Potential Pitfalls

- Lack of competition
- Out-of-Scope:  pre-award or post-award
- Using FAR Part 15 processes
- Introducing FAR Part 19 elements

## Pitfall – Lack of Competition

- DOE Policy & Practice: _Compete_!
- Problems with competition in DOD
-  Sole sourcing
-  Farce competitions

**Notes:**
DFARS 208.404-70 requires DOD to solicit sufficient number of offerors to ensure receipt of 3 offers for FSS purchases over $100K.

## Solutions

-  **Do obtain adequate competition**
**Can use GSA e-Buy tool**
**	**
** ****Allow offerors sufficient time to**
**	****  ****respond**
** ****When in doubt – **
**	****	****Error on the side of getting competition!**

## Obtaining Competition – No SOW

_**Micro-purchase threshold or less**_:
- Any FSS contractor meeting agency needs
_**Above micro-purchase threshold up to max ordering limitation**_
- Consider catalogs or pricelists of 3 schedule contractors
_**Above max ordering limitation**_
- Consider catalogs or pricelists of more than 3 schedule contractors and seek price reductions.

**Notes:**
Orders to be fixed priced

## Obtaining Competition – SOW

_**Micro-purchase threshold or less**_:
- Any FSS contractor meeting agency needs
_**Above micro-purchase threshold up to max ordering limitation**_
- Provide RFQ to at least 3 schedule contractors
_**Above max ordering limitation**_
- Provide RFQ to more than 3 contractors

**Notes:**
Above max – the number depends on complexity and market research

## Pitfall: Supplies Out-of-Scope

- Armed Forces Merchandise Outlet, Inc.
- 		Comp. Gen. B-294281 (Oct 2004)

**Notes:**
Supplies must be within a FSS vendors schedule

## Pitfall: Services Out-of-Scope

**Pre-award**
- 	    OMNIPLEX World Services Corp.
- 		  Comp. Gen. B-291105 (Nov 2002)
**Post-award – Scope Creep**
- DOE work via a Navy order placed using FSS
- GSA’s **“Get it Right!”**

**Notes:**
Preaward – OMNIPLEX
Offeror may not use sub to offer services not on primes or subs schedule contract as this would mean improperly including non-FSS goods or services in an FSS sale.

Scope also issue Post-award 

In 2001 DOE issued an IAA to Navy who place an order for us using its FSS BPA
  -- Needed IT database support for workers compensation claims. 
  -- Over time we placed two more orders which increasingly shifted the emphasis from IT database support to operational support like medical case management.  Clearly out-of-scope.  
 -- The only CO -- GSA CO (very busy) allowed the out-of-scope change.   

-- From our perspective, DOE not at fault.  We had no direct authority or responsibility for managing this contract.  We in essence contracted with the Navy.  

-- Nevertheless, we recognize the requirement was ours and we need to stay involved in the future.   

## Solutions

- Review FSS orders, modifications to orders to ensure
- 	  in-scope
- If not in-scope, use other procedures
- 		(FAR 12, 13, 14 or 15).
- Avoid “scope creep,” adding missing labor categories to order that are outside the contractor’s schedule.
- GSA must do so at the contract level, or
- Look at other schedules

## Solutions Continued

- Subcontractor may provide missing labor categories if within sub’s schedule.
- May include out-of-scope items/services in FSS order if all other FAR requirements are met
- 	(see FAR 8.402(f))

**Notes:**
Other FAR requirements: Publicizing (Part 5), Competition (Part 6), Methods (Parts 13, 14 or 15), small business program (Part 19), price determined reasonable, order clearly identifies non-schedule item/labor, all applicable clauses are included in the order.

Advice:  Don’t go there!

## FSS Pitfall – Using Part 15 Processes

- Discussions
- ACS Government Solutions Group, Inc.
- 	   Comp. Gen. B-282098.3 (Jun 1999)
- Basis of selection
- May use lowest price, technically acceptable, or
- Best value

**Notes:**
Pitfalls using Part 15 in a FSS buy

Discussions -  ACS Government Solutions:

HUD procurement for support setting up and administering single family mortgages.  Procurement in 2 phases
	1.  Qual. Statements and past performance
	2.  Oral presentations and written business proposal
Solicitation contemplated discussions and final proposal revisions.

GAO found that Agency failed to conduct meaningful discussions.  Concern regarding pricing strategy not addressed.

Basis of selection – If you use best value, techincal significantly more important than cost – need to understand potential impact.
  -- A couple cases illustrate this...->

## Potential Pitfall When Specifying Best Value

**Gov’t selected lowest priced, technically acceptable quotation**
- 		Computer Products, Inc.
- 		Comp. Gen. B-284702 (May 2000)
**If best value, RFQ must state selection basis**
- 		COMARK Federal Systems
- 		Comp. Gen. B-278343.2 (January 1998)

**Notes:**
“Computer products” – Navy specified best value with tech signif more import than cost but selected lowest price technically acceptable quote

COMARK – HHS RFQ for desktop workstations contemplated best value selection.  If best value, RFQ must state the basis for selection.  Detailed disclosure of evaluation criteria not required though.

## Solutions

**When using FAR Part 15 Processes -**
** **
**Remember the GAO “Duck Rule!”**

**Notes:**
Where an agency conducts a competition, GAO will review the agency’s actions to ensure that the evaluation was reasonable and consistent with the terms of the solicitation, see COMARK Fe. Sys., Comp. Gen. B-278343-2, Jan. 20, 1998.

## Solutions Continued

_**Pick appropriate acquisition procedures**_

- Complex
- Procurement

- Complex
- Procedures

- SAP

- FSS

- Part 15

**Notes:**
Indicators of a complex procurement:
 -- Large dollar, technically challenging SOW, need for technical proposals

Complex Procedures:  Requiring written technical proposals / oral presentations, detailed evaluation criteria, need for discussions. 

Complexity of the procedures will drive this choice (FSS vs Part 15), however, complexity of procurement will tend to drive complexity of procedures.

GWAC

## Solutions Continued

- Follow FSS procedures, FAR 8.405
- If selection basis other than Low Price Technically Successful, expect to be held to FAR Part 15 standards with respect to:
- Communication with offerors
- Documentation supporting the evaluation of firms
- The selection rationale
- Otherwise, don’t import Part 15 lingo like “discussions,” “competitive range,” etc.

## Pitfall – Introduction of FAR Part 19 Elements

- Setting the procurement aside
- Mentioning S.B. status is a consideration in RFQ or any other documentation
- Resulting problems with NAICs codes

**Notes:**
CO’s who set-aside FSS procurements, or even mention S.B. will be a consideration, draw SBA into process leading to potential NAICS code determinations and size status protests.

## Solution

**DOE established practice: Support SB’s**
**Follow FAR 8.405-5:**
- Consider S.B. status when soliciting quotes
- Don’t mention S.B. status is a consideration
- Rely on schedule contractor’s S.B. representations made at the contract level
- Should at a minimum solicit one S.B.

**Notes:**
Completed FSS Discussion.

## Government-Wide Acquisition Contracts (GWAC)

- 5 agencies providing IT equipment and services
- Special Statutory Authority:
- 	Section 5112(e) of the Clinger-Cohen Act (1996)
- 	 (40 U.S.C. 1412(e))

## GWAC Servicing Agencies

**GSA**
**NASA**
**Commerce**
**NIH**
**Transportation**

## GWAC Implementing Info.

- FAR 16.505, “Ordering under Multiple Award Contracts”
- Servicing agency’s ordering requirements
- Acquisition Letter (AL) 2005-04
- DOE Strategic Acquisition Transactions Guide
- 	  (Chapter 38 of the Acquisition Guide)

## AL 2005-04

_**CO Must**_:
- Comply with DOE policies & regulations
- Document:
- Determination that the proposed work is in-scope
- The order is in best interest of DOE

## GWAC Potential Pitfalls

- Out-of-scope pre-award or post-award
- Roles/responsibilities of client and servicing agency personnel not defined if IAA required
- Servicing agency contract doesn’t provide for DOE special requirements, (e.g., security).

**Notes:**
Try to work with service agency.  If they will not take care of our requirements, must use another vehicle.

## Solutions

- Stay within the scope of the service agency’s contract
- Comply with Federal or DOE regulations, policies and procedures
- Ensure DOE special requirements are incorporated into any resulting contract or order
- Follow FAR 16.505 ordering requirements
- Ensure roles/responsibilities defined if IAA required.

**Notes:**
If the GWAC agency is not providing a COR, then we must!

Done with GWAC’s

## Conclusions

- Use of other Agencies’ contracts is increasing
- These contracts provide additional choices
- Continued availability is contingent on:
-  Compliance
-  Proper documentation
-  Exercise of good business judgment
-  Avoidance of inappropriate use

**Notes:**
We’re doing a good job at this agency but it is critical that we be sensitive to need to document and properly manage our use of other agency contracts.  If we continue to do it right – get it right – we will continue to have these other contract vehicles available as a part of our toolbox when deciding how best to satisfy our contract requirements.  

## Points of Contact

- Economy Act:	 John Bashista 	   202-287-1500
- AL 2005-04:	 Jackie Kniskern	   202-287-1342
- FSS/GWAC:	 Jeff Rubenstein	   202-287-1516
- IAA:		 Robert Webb	   202-287-1338
- 				 Beth Tomasoni	   202-287-1536
- Legal Issues:	 Your Local Counsel
- 				 Gena Cadieux	   202-586-3426
- 				  Joe Lenhard	   202-586-0321

## NNSA Points of Contact

- Steve Law				202-586-4321
- Bobbie Wright			505-845-5518
- Keith Landolt (Attorney)	202-586-5918

## GWAC Information Sources

- General 	      _[http://](http://www.arnet.gov/gwac/govwide.html)__[www.arnet.gov/gwac/govwide.html](http://www.arnet.gov/gwac/govwide.html)_
- GSA	      _[http://www.gsa.gov/millennia](http://www.gsa.gov/millennia)_
- GSA 	      _[http://www.gsa.gov/millennialite](http://www.gsa.gov/millennialite)_
- NASA	      _[http://](http://www.sewp.nasa.gov/)__[www.sewp.nasa.gov](http://www.sewp.nasa.gov/)_
- Commerce    _[http://www.COMMITS.doc.gov](http://www.commits.doc.gov/)_
- NIH	      _[http://www.olao.od.nih.gov/Acquisitions](http://www.olao.od.nih.gov/Acquisitions)_

## GSA Web Sites

- FSS			_[http://](http://www.gsa.gov/schedules)__[www.gsa.gov](http://www.gsa.gov/schedules)__[/schedules](http://www.gsa.gov/schedules)_
- GSA Advantage      	_[http://](http://gsaadvantage.gsa.gov/)__[gsaadvantage.gsa.gov](http://gsaadvantage.gsa.gov/)_
- e-Buy 		   	_[http://www.ebuy.gsa.gov](http://www.ebuy.gsa.gov/)_
- GSA training		_[http://fsstraining.gsa.gov](http://fsstraining.gsa.gov/)_
- GSA Legal Corner	 _[http://](http://www.gsa.gov/schedules)__[www.gsa.gov](http://www.gsa.gov/schedules)__[/schedules](http://www.gsa.gov/schedules)_

**Notes:**
For Legal Corner, click “GSA Schedules” under “Using GSA”, then click “Legal Corner”

Note: Site quickly become out of date.

## Questions Regarding AL 2005-04

- Send to:  _[Jaqueline.Kniskern@hq.doe.gov](mailto:Jaqueline.Kniskern@hq.doe.gov)_
- Answers will be posted on the Professionals web page:
- 	_[http://professionals.pr.doe.gov/ma5/ma-5web.nsf/](http://professionals.pr.doe.gov/ma5/ma-5web.nsf/)_

**Notes:**
End of taping.

Questions.