GSA with the release of Solicitation Refresh 10 to the MAS Schedule back on March 22, 2022, required all vendors holding the SIN 33721P – Packaged Office Furniture to submit Schedule Level Contractor Teaming Agreements (CTAs) to GSA via modification. The CTA agreements for each manufacturer/supplier awarded to Package Furniture Schedule vendor’s contracts must be provided to GSA for approval by September 30, 2022 or GSA will begin cancelling contracts.
As a reminder, these changes are the result of a GSA Office of Inspector General (IG) Audit of the Packaged Furniture Program, and the revisions have been approved by the OIG. Of the many changes the most significant is that the Packaged Furniture contractors will no longer hold a single contract for the products of manufacturers/suppliers as has been customary. Instead, the “Schedule Level Contractor Teaming Arrangement (CTA)” will be used in its place. The former Packaged Furniture contractors will now be referred to as the Team Leads and the former suppliers/manufacturers will now be referred to as Team Members. Letters of supply from the product manufacturers/suppliers will no longer be used and will be replaced with Schedule Level CTA’s.
The Subcategory for Packaged Furniture remains, the four Packaged Furniture SINs remain, and the contracts for those former Packaged Furniture contractors (now Team Leads) will continue unchanged with the current contract numbers. The Team Lead contractors will also keep their current socio-economic status, and the current text files (contract terms and conditions) on Advantage do not have to be changed. The services provided by the now Team Leads will remain unchanged. However, Team Leads are required to offer installation and project management at the minimum, and the Team Leads will be the contract holders for these services.
What Does this Mean for My Contract?
The change for all existing Package Furniture contractors will require the submission of a GSA Terms and Conditions modification via the GSA eMod system to replace the current letter of supply with a CTA agreement for any and all manufacturers/suppliers currently covered by a Team Lead’s Schedule. The GSA IWAC has requested that current Packaged Furniture contractors (Team Leads) undertake the change to the new Schedule Level CTA preferably via one (1) Terms and Conditions modification with the CTA’s for all of the current Suppliers on contact. Further GSA is requesting that all modifications be approved no later than September 30, 2022. As an example, a Packaged Office contractor with six Suppliers currently on its contract will be expected to submit one modification request to change all six Suppliers to Team Members using the new Schedule Level CTA. The GSA provided template is very basic, and additional information or agreements are allowed between the Team Lead and Team Members as their business needs require. The CTA provided by GSA is just an example and use of the exact template is not required by GSA.
Other Packaged Furniture Program Updates
A significant change of the Schedule Level CTA is the reporting requirements for sales and payment of the Industrial Funding Fee (IFF). Since this is CTA, each member of the team will report the sales and remit IFF payment for its own contract. Formerly, the Packaged Furniture contractor reported the sales and made the IFF payment for the entire order including the Suppliers’ products in the order. No more. Since this is a CTA, the Team Lead will report only the sales of the services in the order with the Team Members (formerly Suppliers) reporting the sales under their contracts.
Another change is the type of documentation needed to add a Team Member. The Schedule Level CTA is required along with the text file (terms and conditions) document for the Team Member’s GSA contract. The GSA price lists of the Team Members are not required. Previously, the GSA price lists were required for the Suppliers.
Under the terms of the Schedule CTA, the Government customer can issue a single order to the Team Lead who will have the overall responsibility for performance of the Team Members and the completion of the order. In this case the Team Lead will invoice for the entire order, including the products of the Team Members. Payment by the Government customer will be to the Team Lead who will then distribute the payments due to the Team Members. The Team Lead will perform all of the services needed for the order.
Observations and Comments
The Packaged Furniture program has been very popular and successful for both contractors and the Government customers. The revisions made by the IWAC should allow this success to continue. The new Team Lead will continue to be the party who brings multiple manufacturers and products to the Government customers and will remain responsible for the entire project. This aspect, the Government customer having “one button to push” for performance, has not changed. The Team Leads can still bring multiple GSA sources to Government customers for a “total solution” for their needs.
The change will mean, again, that the Team Leads will be reporting the sales for only their services or other products on schedule outside of the Packaged Furniture SINs, and the high sales of this Packaged program can be expected to drop from the current levels of approximately $200 million per year. In contrast, the sales of the team members can be expected to rise. For those Team Leads who may wish to add products to the schedule outside of the Package Furniture SINs to try and keep additional sales under their own contract can add new SINs and products to the contract through the standard modification process.
The socio-economic status of the Team Lead will continue, but CTA rules will now apply regarding the extent of small business credit agencies can take when ordering under the Packaged Furniture SINs. Under CTA’s the agency only gets small business credit for those Team Leads and Members that qualify as a small business. This could put a new burden on the Government customers for their reporting of sales issued to small and large businesses. In contrast, under the previous Packaged Furniture program, it was the business status of the Packaged Furniture contract holder that was determinative for the entire order including the suppliers who were large businesses, and the vast majority of the Packaged Furniture contractors were small businesses. Agencies were able to receive 100% small business credit for the sales through the small business Package Furniture vendors.
The GSA Maximum Order (MO) amount remains at $5 million (current discussions internally at GSA will significantly lower the MO) for the Packaged Furniture categories even though the Team Lead contractors will be providing typically only services unless the contractors hold products under other GSA SINs. This could be more problematic for Price Reduction Clause compliance, since Basis of Award sales will be subject to PRC compliance up to the $5 million MO.
There may be an issue in the timing of the reporting of sales for the IFF. Under the previous Packaged program, the Packaged contractor reported the sales for the entire project, product and services included. As noted above under the new Schedule Level CTA arrangement, the Team Lead will report only on the services and/or products on schedule outside of packaged furniture SINs on the project and team members report sales made through the CTA. This could lead to the possibility in the early stages of the roll out of there being sales to report in a particular quarter that are for both the old Packaged program (for products and services) and the new CTA program.
The Gormley Group will continue to monitor the roll out of Refresh 10 and discuss other questions with GSA as they occur, please contact your TGG consultant to discuss in more detail for more specific issues related to these changes and the impact on your contract. For those who are not TGG clients please feel free to contact us at info@gormgroup.com or at 202-833-1120 and we will determine how we may be able to help.
GSA Publications and Documents
• Slide presentation by IWAC for the Industry Meeting on the Packaged Furniture Program Revisions
• Proposed changes to Subcategory C07 for Packaged Furniture – Refresh 10 draft
• Sample Packaged Furniture CTA (Schedule Level CTA)