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Thoughts on FSSIs

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I'm processing three actions right now that have been affected by the 'Strategic Sourcing" fad, only in my case it's a DHS Directive (060-01) driving the wagon. The Directive states that DHS components SHALL direct any acquisition that fits into the listed categories to a DHS contract vehicle. The whole DHS world is divided into about 25 categories, and all but 3-4 of those have mandatory internal sources unless a waiver is signed by the DHS Strategic Sourcing Manager.

Good bye GSA Schedules, NASA SEWP or any other sources, including true full and open competition. The only thing I can use the GSA Schedules or any other source for now is market research or pricing infomation.

Is this a wonderful country or what!!!!????

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I think the original premise for strategic sourcing - as applied to commoditized products and servies - had merit and was based upon solid economic underpinnings. Turned into a bureaucratic 'instrument of terror' (I jest here) - there is potential for significant unintended consequences. Notably, the short-sighted goal of claiming participation to the exclusion of conventional acquisition planning. Not every requirement will fit into a strategic sourcing category and requirements sponsors and procurement staff should both have a clear understanding of their agency protocols. There are benefits to be attained under a well-executed acquisition strategy that fits such a solution.

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FSSI is an initiative grounded in common sense but becoming dangerously unstable as those well-intentioned expand its possible use to professional services.

I believe it is commonly acknowledged that SSI is well suited to products and commodities - as is the FAR. However, the FAR has had minimal change or adjustment for the increased purchase of services particularly professional services. To me this means the application of commodity buying techniques to services predicated on the FAR is awkward at best.

Unfortuately, those who advocate for SSI actions tend to focus on lowest price whenever they speak of SSI. While lowest price might be the goal of the bidding process a fair and reasonable price is the price characterization in the FAR for other procurement approaches. As a GSA executive noted the purpose of SSI is to acquire and manage the Government's requirements, implicitedly suggesting that lowest price need not be the sole goal of this initiative.

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responding to Vecchia,

it looks like DHS has exempted themselves from hassles like full and open competition, transparency, socio-economic programs and fair and reasonable pricing. Contracting Nirvana, n'cest pas ?

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What is the difference between ordering off the GSA FSS (Federal Supply Schedule)/GSA Schedule, and placing an order off one of the GSA FSSI BPAs? Why would an agency choose one over the other? Depending on the dollar value, it looks to me from my reading of FAR 8.405-3© that ordering of any BPA does not get rid of competition requirements. What is so great about FSSI?

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The main selling point of the FSSIs as awarded by GSA is that they took their existing Schedule contractors, conducted a competition which resulted in a much small pool of awardees and by doing so reduced the prices.

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Office supply FSSI are not BPAs anymore. They are IDIQ contracts outside of the FSS program.

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From my experience, the FSSI contracts have saved from 10 to 15 percent from already competed prices. Further, the process for ordering was relatively straightforward. They are like shake and bake mashed potatoes.

Much to the chagrin of contract specialists of old, I see the simplistic ordering procedures of FSSI as a glimpse into the future of acquisition. Once GSA expands these FSSI contracts to other arenas (software, computers, periodicals, furniture, information security, audit services, groundskeeping/janitorial services, data analytics, etc.), agencies will be able to save time and money, and minimize the continual training and workforce competency issues discussed so often in this forum.

If you cannot provide the robust training and professional knowledge to the acquisition workforce, make the job easier.

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Most "contract specialists" are really purchasing agents and should be GS-1105s. See https://www.opm.gov/policy-data-oversight/classification-qualifications/classifying-general-schedule-positions/standards/1100/gs1105.pdf.

You need some contract specialists to set up devices such as FSS contracts, GWACs, MAACs, MACs, FSSIs, etc. The future is that most people in "contracting" will really be "order specialists." Lower entry-level educational requirements, grades, and pay, and less extensive training. What I hope will happen is the development of a separate purchasing regulation for people doing FAR 8.4, 13, and 16.5 acquisitions. The FAR should address people who do the more complex work of awarding big new contracts. Contracting offices and purchasing offices should be separate.

Wifcon Forum already seems to be dominated by people with purchasing agent/order specialist questions. This reflects the workload.

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My understanding may be limited, but is this really Strategic Sourcing?

I thought someone would have to consolidate a bunch of disparate requirements, standardize some specs perhaps, gather them all into one larger order and procure them at once.

Looks like GSA has established another round of vehicles to order off of. That is what we had before, except fewer of them, and there seems to be more care taken in negotiating the prices. That is something to be proud of, (a movement away from the "hunting license" model) but not my understanding of what SS was.

I've been out of the Federal game a while, but if I'm off track I may not be the only one. Just curious what you all thought.

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A few weeks ago, FITARA became law. FITARA, found in Sections 831-837 of the NDAA FY15, appears to require that federal agencies must use GSA's FSSI BPAs/IDIQs or they have to justify why they are not using them. Any thoughts on this?

See Section 836 of the NDAA FY15 online at this link:

http://www.wifcon.com/dodauth15/dod15_836.htm

and see the entire NDAA FY15 in PDF on GPO's site at this link:

http://www.gpo.gov/fdsys/pkg/BILLS-113hr3979enr/pdf/BILLS-113hr3979enr.pdf

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I await the FAR change, however many years that takes.

We do usually use the FSSI when it meets the requirment. We have our office supplies automated so that the contracting office is not involved very often (automated purchase card orders go directly to the vendor from the automated system). We have courier services through them (12% claimed savings). Not sure how we can integrate the professional services FSSI with our requirements yet.

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Regarding the question is this truly strategic sourcing, the FSSI contracts are unique. First, they are tailored to a very specific industries, whereas other purchasing vehicles are generally broad. This greatly reduces choice, and simplifies the acquisition process. Second, they include discount tiers that decrease the price the more you purchase with them. The NDAA codification that makes these contracts mandatory sources will strengthen the FSSI program and save the taxpayers money.

I do not agree that "most" contract specialists are really glorified purchasing agents; though some probably take on that role. Further, not all "ordering" is 1105 work. The 1105 purchasing agent typically does not possess the skill set to successfully conduct negotiation of price or technical terms. The 1105 knows how to prepare forms; conduct basic price comparisons, and document/organize the contract file. Complex price/technical analysis and negotiations are too advanced for many purchasing agents.

When my office consolidated its requirements on one of the FSSI contracts, we were able to negotiate the quoted prices down even further, and achieved better technical terms, using a combination of negotiating tactics. We used a tradeoff process to select the successful vendor. I have never met an 1105 that would be able to handle that independently.

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mettec:

You have to adapt your ideas to present realities. The 1105s that you have met are not the 1105s that we need today. They are the 1105s of yesteryear. The purchasing agent of old will not be the purchasing agent of tomorrow.

i agree that not all ordering is purchasing agent work. But while some orders entail complex deal-making involving data rights, multiple delivery schedules to multiple locations, GFP, etc., the vast majority do not. Purchasing agents should know more than just how to prepare forms and conduct basic price comparisons. They should be capable of making complex tradeoffs and price compositions and negotiating price reductions (although many source selections and much pricing could and should be automated). They should not be the 1105s of old. But that does not mean that they should be capable of dealmaking that involves complex multiple incentive arrangements, contract type comparisons, and data rights agreements for the acquisition of major systems or that they should be compensated the same as those who are.

Most pricing involves only simple arithmetic. As for negotiation tactics, I have encountered complex negotiation tactics in the covered bazaar in Istanbul and the big bazaar in Cairo. It is silly and financially and organizationally wasteful to put people in the same job category (a) who are issuing orders, including large dollar orders, for commercial administrative, O&M, and iT support services and ( b ) who are acquiring the next strategic bomber, launch vehicles or launch services, NASA space missions, IT system developments, or global performance-based logistics services from multiple-partner contractor teams pursuant to DODI 5000.02 or similar policy and procedure.

We are overtraining the mass of 1102s by driving all to Level III certification, and undertraining the 10 - 20 percent who need much better and more extensive training. We cannot afford it and we cannot manage it.

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What is the difference between ordering off the GSA FSS (Federal Supply Schedule)/GSA Schedule, and placing an order off one of the GSA FSSI BPAs? Why would an agency choose one over the other? Depending on the dollar value, it looks to me from my reading of FAR 8.405-3© that ordering of any BPA does not get rid of competition requirements. What is so great about FSSI?

You do it to save time, to save money, and to provide some visibility from an agency-wide perspective concerning what you actually have. So long as the requirements are met through the RFQ of the FSSI it greatly reduces the amount of time needed to develop an RFQ, conduct a competition, and evaluate responses.

In some of their vehicles they also offer the promise of triggered discounts at tiered levels, which means that all agencies get that automatic additional discounts so long as agencies use it. This is one of the big differences between the FSSI vehicles and what DHS is doing, and further DHS is cheating other agencies the opportunities for additional discounts by going it alone and not leveraging what exists. That and the prices paid against the FSSI BPAs are better than what DHS had been able to achieve....at least this is true for wireless services.

You are correct in that competition is still required, but this is what drives discounting. The FSSI pricing on any vehicle is a list price for an item of one. Discounts come with actual work. The FSSI program offices have information concerning prices paid, so this can also be used for agency COs and their negotiation positions if handled tactfully.

Lastly, most agencies have difficulty with strategic purchasing. Their are different pots of money spread out among different sub-agencies, bureaus, sub-bureaus, offices, and divisions. This is both a procurement problem and an inventory control problem. Agencies have no idea what they have as the information is siloed throughout their organization. If you are a fragmented organization the logical steps to take are to consolidate under a single vehicle to provide a level of transparency in terms of what you have and what you use, and then further consolidate from there. The FSSI BPAs are a means to do that, but the actual capability to do that rests with the agencies, their internal structure, internal politics, and corralling their funding sources.

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Well, here are a couple thoughts- just to roil the waters:

  • FSSI isn't (yet) true strategic sourcing. It is, thanks to the NDAA, a form of forced centralized buying and leveraged pricing. In industry it might be referred to as consortium purchasing.
  • This form of strategic purchasing isn't a new "hot thing" in the Government. It is the latest iteration of an old "hot thing". Since there is no effective corporate memory in public organizations they tend to invent the past. FSSI may be a more sophisticated version of past approaches to consortium purchasing/strategic sourcing (I am not fully familiar with what level of market/value/relationship/and life-cycle analysis GSA has actually done-lowest purchase price is not necessarily strategic thinking). It may also just be yet another GSA marketing variation using the FSSI logo to capitalize on this Administration's rediscovery of the concept.
  • Having said that, it doesn't mean that there is anything wrong with GSA's FSSI. It may be a very useful tool. It could be our most effective tool. However, just because it is titled as such we shouldn't be misled into thinking that it is the only example of Government consortium purchasing, nor should we be confused that it embodies all the elements of strategic sourcing.

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Hello, metteec,

Thanks for that additional information about the FSSIs- I was not aware of the tiered discounts. My understanding of SS aligns more with what johnmjohnson and odessa describe above ("Discounts come with acutal work"; "consortium purchasing"). Is there anything about the FSSIs which assist one agency to jointly purchase with another? If all requisitions go to some holding tank at GSA for 30/60/90 days where they are consolidated and purchased together at one time, then that would be SS as I understand it.

What you describe is very important- seems to be mostly along the lines of reducing transaction costs, which is a huge issue in itself. It's praiseworthy these vehicles tackle that problem. Just a different issue from SS I think. . .

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