In a recent blog post, Steve Kelman took issue with GSA for the way they intend to evaluate past performance under the One Acquisition Solution for Integrated Services (OASIS) procurement (see “GSA is Saying What?"). Specifically, the evaluation scheme in the draft request for proposals (RFP) shows that GSA intends to weigh past performance with federal customers more heavily than past performance with nonfederal customers (the draft RFP is available for viewing on FedBizOpps). Kelman says that GSA’s approach is “not a good idea” and is hopeful that the OASIS program will “rectify this mistake.”
Kelman seems to acknowledge the uniqueness of the Government as a buyer and describes the accompanying problems as follows—
One of the problems with the government's procurement system is that government-unique regulations create a barrier to commercial, predominantly private-sector oriented companies doing more business in the government marketplace. This is a problem because -- like any tariff barrier -- it creates a hothouse environment where competition is lower and insiders can gain business based on mastery of procurement rules more than satisfying their customers. And the commercial environment is one where performance is strongly prioritized, and failure to perform is punished more swiftly than in a government environment. It's good for the government to hire firms that are used to such an environment.
Further, Kelman states—
Some government folks feel more comfortable with government-unique contractors who know the government's environment better. But if I were in the government and wanted to put a premium on performance, I would want to be sure I had access to predominantly commercial firms. At a minimum, such firms should be in a multiple-award mix, to increase the range of options available to government customers.
Kelman’s argument boils down to this—nontraditional Government contractors (what Kelman terms “commercial firms”) would be just as good, if not better, than traditional Government contractors (what Kelman terms “government-unique” contractors) at performing the work. That may be so, but it would be naïve to ignore the risk posed by an offeror with no Government contracting experience. Such an offeror will be faced with having to comply with a plethora of rules and regulations that would be new to them. In a blog post, Vern Edwards describes the situation as follows (see “Tips for the Would-be Clueless Contractor”):
Many small to medium sized companies go into government contracting without any idea of what they are getting themselves into. That might be okay with very small sales, but, otherwise, contracting with the U.S. government is the most complex business in the world. It’s right up there with trading derivatives. There are countless rules and contract clauses, many of which are exceedingly hard to understand.
As a buyer, there is value in an offeror having sold to you before—if for no other reason that the parties have a better idea of what to expect from each other. If this were not true, preferred supplier programs would not be so popular with the “commercial firms” that Kelman advocates for. If you are an extraordinarily unique buyer, like the U.S. Government, there is even greater value in an offeror that has sold to you before.
I don’t fault GSA for having a preference for offerors with more Government contracting experience. This is especially true given that the OASIS contracts will be noncommercial and will provide for orders on a cost-reimbursement basis. GSA did not make Government contracting as complicated for contractors as it is. If we want to criticize the procurement system, there’s plenty to talk about. But we shouldn’t react with feigned surprise and indignation when an agency is taking reasonable steps to operate within it.