In July 2004, the General Services Administration, along with the Department of Defense, launched a new program aimed at improving procurements and educating GSA and DOD contracting officials alike on the proper use of GSA's contracting vehicles such as the Federal Supply Service's GSA Schedule program. In the GSA compliance program, aptly named, "Get It Right," GSA is trying to improve compliance with federal contracting regulations and ensure the integrity of GSA's contract vehicles and services.
The Get it Right plan was implemented in response to certain well-publicized problems and also in response to directives from the Office of Management and Budget, which essentially warned GSA to play by its own contracting rules. Through the Get it Right plan, GSA and other agencies using GSA contract vehicles aim to do just that.
What well-publicized procurement problems, you ask? Stories of misuse of GSA Schedules have proliferated ever since GSA Schedules first became available for the purchases of services in the mid 1990s, when the use of GSA Schedules skyrocketed. Examples of such alleged misuse include purchases by federal agencies of labor categories not listed on a vendor's GSA Schedule, use of small business contracts to sell goods and services of large businesses, and of course, most recently, the now infamous story of how the DOD purchased interrogation services from CACI International's GSA Information Technology Schedule contract for use at the Abu Ghraib prison in Iraq.
Now that GSA is getting it right, how about your company? How is your contract compliance? While GSA says that it is not trying to lay the blame for the misuse of GSA Schedules at the feet of the vendors, we all know that bad, smelly stuff tends to roll downhill. And not surprisingly, we have noticed in our government contracts practice a sudden and keen interest in contract compliance issues that for years were never of concern to a contracting officer, but are now of utmost importance.
As GSA continues to implement Get it Right, contracting officers will undoubtedly be more diligent in administering a vendor's contact and ensuring that the vendor complies with all the requirements of its contract. To be prepared, the first thing you need to do is review your contract and develop a list of compliance issues and requirements and determine whether or not they specifically pertain to your company.
And what exactly does "contract compliance" mean, anyway? I'm glad you asked. Contract compliance means a company's a) being aware of its obligations under a contract, b) understanding the requirements of each of those obligations, c) designating one or more individuals to be responsible for those obligations, and d) monitoring performance of those obligations. Compliance may also include e) the establishment of the systems necessary to track obligations. Using GSA Schedule contracts as an example, some of the more major requirements that are found in almost all GSA Schedule contracts include the following:
Paying the Industrial Funding Fee
A vendor must report quarterly on the vendor's sales revenue (even if revenue is zero) under the GSA Schedule contract and submit the appropriate Industrial Funding Fee.
Maintaining a GSA Pricelist
A vendor must develop and maintain a GSA Schedule pricelist in electronic form on the GSA Advantage! Web site and in hard copy. Any changes to the pricelist must first be submitted and approved by the vendor's contracting officer.
Accepting Online Modifications
From time-to-time, modifications to specific GSA Schedules are posted online at the Vendor Support Center at http://vsc.gsa.gov. While an e-mail notification is usually sent to the vendor point of contact for the contract, it's always a good idea to check the site monthly to see if there are any new modifications that pertain to your contract.
Small Business Subcontracting
If you are a large business, your company was required to develop a Small Business Subcontracting Plan prior to contract award. As part of this plan, not only must your company use good faith efforts to subcontract with various types of subcontractors, but you must also report on the actual percentage of contract dollars that were allocated to these subcontractors.
Affirmative Action
Vendors of a certain size are required to develop and implement affirmative action programs for each establishment. Developing the affirmative action plan requires a voluntary survey of a vendor's employees and retaining certain employment related records, among other things.
Flow Downs
There are various FAR clauses in your GSA Schedule contract that must be incorporated or "flowed down" to your subcontracts (talking about stuff going downhill) if the subcontracts exceed certain monetary thresholds. Examples include FAR Clause 52.222-26, Equal Opportunity, which must be incorporated in any subcontract unless an exception applies, and FAR Clause 52.222-37, Employment Reports on Special Disabled Veterans and Veterans of The Vietnam Era, which must be incorporated in any subcontract that exceeds $25,000 unless an exception applies.
The compliance issues set forth above are only a sample of the potential compliance requirements that may be contained in a GSA contract and, to be clear, each contract must be individually reviewed to understand the full range of responsibilities that are imposed on a contractor under a specific contract. Yet, in light of Get it Right, recent renewed interest by contracting officers in various contract requirements, and the potential penalties that can accompany failure to comply with these requirements, such as debarment, suspension, or cancellation of the contract, contract compliance, if compliance is good for GSA's goose, is also good for a contractor's gander.
