Tuesday Insight, May 7th, 2024: The Unintended Consequences of Policy and Data Overreach

May 29, 2024

No discussion of the effective administration of Federal procurement can ignore the reality that the Executive Branch and Congress have leveraged the procurement system to affect important social policy goals. For example, leveraging takes place through the implementation of goals for small business acquisition and acquisition from socioeconomically challenged firms. The Biden Administration continues to focus on leveraging the procurement system to meet small business procurement goals, including small-disadvantaged business, as well as acquiring sustainable products and services, enhancing cybersecurity, and promoting domestic sourcing and innovation. All told, in addition to performing the core task of “buying stuff,” the procurement system plays an important role in addressing multiple policy imperatives determined to be in the nation’s interests by the citizens’ representatives. It is for this reason that the efficient and economic acquisition of goods and services is imperative, not only to meeting mission requirements, but also to addressing key social policy priorities.

GSA’s Multiple Award Schedule Program (MAS), with thousands of contractors offering millions of products and services, is the federal government’s largest commercial item contract vehicle. Notably, the MAS program not only plays a central role supporting customer agency missions, but it also has a long track record of implementing key Administration policy goals, like supporting socio-economic goals. Yet, today, pricing policy and data overreach threaten to limit the Administration’s goals for small businesses, cybersecurity, sustainability, and innovation.

Pricing Policy Overreach

Potential contractors often confront conflicting rules requiring rationalization. It is rare where they encounter the imposition of operational guidance that conflicts with acquisition regulations, but it does happen. Such is the case regarding FAS Policy and Procedure (PAP) 2021-05, Evaluation of FSS Program Pricing. Coalition members have provided feedback on where the PAP conflicts with underlying regulations and imposes unduly burdensome submission/evaluation requirements. We also have discussed its impact on MAS contracting officers and contractors.

The PAP’s impact on the program has been extensive, but it has particularly affected Economic Price Adjustment (EPA) and product/service addition modifications transactions, especially those concerning MAS small businesses.  The policy directive drives the over-submission of documentation, such as invoices, that increases costs for contractors (including small businesses) and delays the addition of products to current contracts. In so doing, it hinders small business opportunities and limits access to sustainable products, cybersecurity capabilities, and innovation from the commercial market.

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