Beginning June 11-13, 2018; vendors should begin seeing mass modification invitations addressing Commercial Supplier Agreements (CSA)/End User License Agreements (EULA).
Following the acceptance of the first modification, vendors will see a second mass modification to add the Order Level Materials (OLM) SIN to select schedules. NOTE: The first modification regarding CSAs must be accepted before you are able to receive the OLM modification.
The OLM SIN will allow vendors to include supplies and services necessary to perform a job when supplies and services are not known at the time. Items placed under the OLM on task order are not awarded to your GSA schedule and pricing will be determined on an order level. OLM may only account for up to 33% of a total order.
This change will provide vendors flexibility in bidding opportunities and make GSA more attractive to agencies. OLMs also include the Industrial Funding Fee (IFF), so include fee when calculating costs. GSA will see an increase in revenue as a result, as well.
GSA has created a convenient chart to understand the differences between OLM and others:
The Affected GSA Schedules Include:
- Schedule 03 FAC: Facilities Maintenance and Management
- Schedule 56: Buildings and Building Materials/Industrial Services and Supplies
- Schedule 70: General Purpose Information Technology Equipment, Software, and Services
- Schedule 71: Furniture
- Schedule 84: Total Solutions for Law Enforcement, Security, Facilities Management, Fire, Rescue, Clothing, Marine Craft, and Emergency/Disaster Response
- Professional Services Schedule 00CORP: All Professional Services
- Schedule 738X: Human Resources and EEO Service
If you have questions on the OLM or need assistance, contact Coley GCS at [email protected] or directly by phone at 210-402-6766
The terms & conditions of standard Commercial Supplier Agreements (CSA) have been a point of frustrated negotiations in federal procurement for years. GSA has tried numerous times to create “fail charts” of terms that are at odds with the requirements set by statute as well as in the Federal Acquisition Regulation (FAR). To reduce government cost, time and frustration in negotiations; GSA has signed a final rule addressing certain contract provisions that are standard in commercial contracts are deemed “unenforceable” when applied to Federal contracts.
GSA’s final rule addresses common commercial supplier agreement terms that are inconsistent, or create ambiguity, with Federal law. The primary alterations include a reordering of the Order of Precedence and the addition of the Unenforceable Clauses.
The change and addition will create clarity regarding several unenforceable clauses commonly found in CSA’s that will take precedence over the CSA terms. The unenforceable clauses include elements that may be common in commercial contracts, but cannot be included in Government contracts, due to statutes and regulations contained in the FAR (Federal Acquisition Regulation).
Such Unenforceable Clauses include:
Any language, provision, or clause requiring the Government to pay any future fees, penalties, interest, legal costs or to indemnify the Contractor or any person or entity for damages, costs, fees, or any other loss or liability that would create an Anti-Deficiency Act violation
End User will be the ordering activity and not any employee or person.
Law and disputes. This agreement is governed by Federal law. No state, district, municipality, or territory’s laws will take precedence to Federal law. Additionally, the venue for dispute resolution will be in prescribed by Federal law
Federal law will mandate the time-frames for bringing an action or dispute
Continued performance. The supplier or licensor shall not unilaterally revoke, terminate or suspend any rights granted to the Government except as allowed by this contract. IF there is an issue, the vendor will follow the Contracts Dispute Act.
Agency will determine dispute relief regarding the use of arbitration
Vendors can unilaterally update terms, as long as they are immaterial
No automatic renewals. If any license or service tied to periodic payment is provided under this agreement, such license or service shall not renew automatically upon expiration of its current term without prior express consent by an authorized Government representative
Department of Justice will defend the end user in any indemnification claims
Vendors may audit end user compliance with terms but will do so at vendors costs. If additional charges need to be made, it will be handled through the Disputes clause, FAR 520233-2
General Services Administration’s Final Rule May Increase Contractor’s Cost.
The inclusion of the final rule will reduce time and costs in pre-award negotiations– assuming you accept all clauses without exception. As this clause will help to reduce time in negotiations (and therefore, cost) with the initial award of products or services requiring a CSA; there may be longer-term costs to consider with longer-time frames to resolve disputes and difficult indemnification issues.
All clauses may be disputed, and exceptions requested, however the effort will be costly. With the cost of legal fees to request waivers with unlikely outcomes, the, acceptance of unenforceable clauses can be the cost of doing business with the Federal government.
GSA initially created a class deviation to solve the issues encountered with CSA; but this process was met with criticism as it does not allow for industry input or comments. The latest deviation opened to public comments in 2016 and has reached a final rule February 2018.
If you have questions on our CSA, contract modifications, or other schedule related concerns; please contact us at [email protected] or directly by phone at 210-402-6766.
Executive Order 13706 – Paid Sick Leave for Workers on Federal Contracts
The Department of Labor released the latest Wage Determinations covering the Service Contract Act (SCA, now known as the Service Contract Labor Standards) July 25, 2017. The wage determinations incorporate Executive Order 13706 – Paid Sick Leave for Workers on Federal Contracts, which requires all paid sick leave for all employees working on Federal contracts awarded after January 2, 2017.
The wage determinations did not include this provision until July 25th, so previous contracts incorporating the SCA will not be affected until the wage determination identified in the award or modifications are revised.
Here is what you need to know to be compliant with the new sick leave requirement:
- All new contracts will be affected.
- All non-exempt (SCA, DBA, or Fair Labor Standards Act) employees will accrue a minimum of 56 hours of sick leave annually
- Contractor may make all 56 hours available immediately, or
- Accrued at basis of 1 hour of sick leave for every 30 hours worked, at least to 56 hours annually.
- Sick Leave requirement does not replace any portion of the Holiday & Vacation requirements
- SCA employees must be notified in writing (pay stub) of their available balance every payday
- Accrued sick pay does not need to be paid out on termination, unless employee is rehired within 12 months.
- You may set a maximum of 56 hours to be carried over from year to year
- Health & Welfare benefits are reduced from $4.41/hour to $4.13/hour
Covered employees can use sick leave for any of the following reasons and must provide “certification” from a health care provider for the absence. DOL defines certificate as “any type of written document created or signed by a health care provider (or by a representative of the health care provider) that contains information verifying the existence of the physical or mental illness, injury, medical condition, or need for diagnosis, care, or preventive care or other need for care:”
- physical or mental illness, injury, or medical condition
- obtaining diagnosis, care, or preventive care from a health care provider
- caring for a child, parent, spouse, domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or needs for diagnosis, care, or preventive care
- as a result of domestic violence, sexual assault, or stalking,
If you have not modified your current GSA schedule to include the latest Executive Order, it is important that you begin that process. Coley GCS offers modification and consultation services, as well as training on the Service Contract Labor Standards.
For More information on the New Sick Leave Requirement visit:
Effective January 24, 2018; DoD, GSA, and NASA issued a final rule amending the Trade Agreement Act Thresholds. The threshold establish trigger points as which each trade agreement becomes effective for federal acquisitions. However, Federal Supply Schedules (GSA), IDIQs, and other contract vehicles use the estimated contract values and therefore TAA nearly always applies.
|Trade agreement||Supply contract (equal to or exceeding)||Service contract (equal to or exceeding)||Construction contract (equal to or exceeding)|
|CAFTA-DR (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua)||80,317||80,317||6,932,000|
|Israeli Trade Act|| 50,00|
If you were mandated to accept the Transactional Data Reporting provisions there is now a path to reverse to legacy clauses.
As stated by Mary Davie, Acting Deputy Commissioner of FAS, GSA has decided to make the Transactional Data Reporting (TDR) Pilot Program voluntary for those vendors initially included in the program. Since it’s 2016 introduction by Tom Sharpe, TDR was met with skepticism by industry concerned with how the transactional data would be used and made public. The TDR pilot program has been burdensome for contractors since its roll-out requesting contractors to update or re-work their current accounting and tracking systems to allow for monthly transactional reporting. The benefits are promising, however, with the elimination of the Commercial Sales Practice (CSP-1) as well as the Price Reduction Clause (PRC); this has been an industry request for 20 years. This idea seemed great initially, but as industry questions arose about how Industrial Operations Analyst visits (IOA) will be conducted, direction from contracting officers (CO) was limited. Having spoken with various CO’s at industry days, most stated that there will be available training for the process and until then TDR was not to be accepted until the time of schedule renewal. GSA has now stated that due to its early success and participation, new vendors will have the option to decline TDR thus reinstating the tracking of the CSP-1 and PRC.
Which Contractors can get out of TDR?
GSA will conduct an analysis on which vendors are eligible to revert to legacy clauses. Keep in mind that not all vendors who voluntarily accepted Mass Mod A509 will be allowed to revert to legacy clauses. However, vendors who were mandated to accept TDR will now be able to “opt out” through the modification process and reinstate the CSP-1 and PRC requirements. In a recent announcement GSA published the following:
“For those contractors who were previously required to accept TDR, GSA is extending them the option to execute a one-time reverse modification to undo this action and work with their contracting officer to revert back to operating under the structure and tracking requirements of the price reduction clause”
Future Solicitation may include mod process to “opt in” for TDR. However, if you opt-in, you cannot revert to legacy clauses. GSA doesn’t want people going back and forth. On September 12th, GSA hosted a webinar to help provide additional information about TDR.
Answers Provided on Transactional Data Reporting Updates
How will my reporting revert to the 72a system?
- You will begin reporting in the 72a system on the 1st day of the next business quarter.
- You will continue to use the TDR monthly reporting system until the mod has been awarded.
So, what does reinstating the CSP-1 and PRC mean for future IOA visits or negotiations?
- Reverting to legacy clauses will re-establish the BOA/MFC category, Commercial Sales Practice (CSP-1), and Price Reduction Clause.
- GSA hasn’t specifically stated if discounts will be re-negotiated but a plan of action is a good idea to have in place.
- Master IOA Carrie Cuevas was on webinar and stated she is not aware of any structure changes for IOA visits. TDR review vs Legacy Clauses review.
What kind of modification/documentation is required by my CO to remove TDR?
- A solicitation refresh will be coming Mid October. Look out for Mass Mod
- No Mod type has been identified yet so your PCO will notify you if you are eligible and will provide instructions on how to revert.
- You must respond within 60 days of notification. Otherwise, CO will assume your voluntary continuation on TDR.
What schedules are affected?
- Currently, No additional SINs will be added to the TDR pilot program. Only those are already participating will continue to offer TDR as voluntary.
TDR Pilot Schedules and SINs include:
[gdoc key=”https://docs.google.com/spreadsheets/d/1znlGRf3_GZPXrQA5kD-_vRDItpss11FZTFN9ZtBgHPI/edit#gid=0″ class=”no-datatables”]
In addition to TDR, they mentioned that GSA will continue to push for Formatted Price Tool (FPT) across all product schedules but still deciding which schedules to convert to FPT first. More info to come in FY 2018. Webinars are in the works but nothing scheduled yet.
Find a link to the slides from September 12th at 1:00PM EDT:
When you receive the notification to modify, Coley can assist you if you need help in reversing TDR.
If your GSA contract was awarded using the debarred Federal Verification Co., Inc or one of their 40 plus aliases, your contract may be at risk of non-compliance. Names used include GSA Applications, GSA 1000, GSA Processors, GSA Alliance, Federal Suppliers Guide, Government Awards Consulting, and a variety of others. A list of Alternate Business Names appears here.
GSA debarred this GSA consultant and has requested all affected contractors to update their schedule to remove these consultants from your schedule.
To complete this process, you must have at least one digital certificate associated with a company representative with signature authority. If you (more…)
Failure to comply with the False Claims Act has resulted in another large IT company, CA, Inc. paying $45 million in claims. The Department of Justice found that CA, Inc. neither disclosed all key commercial discounting practices nor offered them to GSA customers while negotiating its GSA Schedule contract.
The allegations against CA were brought to the Department of Justice through a whistleblower lawsuit filed by an employee of CA Software Israel, LTD; Dani Shemesh. The DOJ took the case over and pursued the claim.
CA, Inc. is resolving the allegations through a settlement; there has been no determination of liability.
The CA case highlights (more…)
The General Services Administration (GSA) recently updated its regulations to implement the new Formatted Product Tool (FPT). FPT is a system upgrade to GSA’s eOffer/eMod system, that will replace the Schedule Input Program (SIP) and increase transparency around schedule contract pricing.
According to GSA, FPT will provide contractors with valuable information about their product’s pricing related to other vendors and provide contracting officers with data intelligence to use in price evaluations and negotiations. In other words, welcome to the era of undifferentiated, commodity-based pricing for everything, including Professional Services.
Vendors who currently hold (more…)
On June 23, 2016, the General Services Administration (GSA) regulations to implement Transactional Data Reporting (TDR). The TDR Rule requires vendors to electronically report details, including the price, of all transactions processed through a GSA Acquisition vehicle.
Companies that currently hold or are in the process of obtaining one of the GSA Schedules listed below will be affected by TDR by the dates listed. While GSA eventually plans to apply the TDR program to all GSA Schedules, they are beginning with Schedules 72 and 58 I. A Solicitation refresh and Mass Modification will be issued for Schedules 72 and 58 I in about a week. (more…)
Deloitte to Pay $11M for Alleged False Claims/Price Reduction Clause Violation:
Another example of the importance of compliance under the GSA Schedule contract. The GSA OIG (Office of Inspector General) issued a press release stating the Deloitte Consulting, LLP. Has agreed to pay $11.38 million for alleged false claims/price reduction clause violations.
The Department of Justice and GSA OIG handled the case and alleged that Deloitte failed to disclose more favorable pricing offered to a commercial customers and then did not reduce prices to Federal customer through their GSA schedule commensurately during the term of its GSA contract. Deloitte’s alleged failure to disclose and reduce GSA rates essentially resulted $11M in overcharges to Federal customers over the 6 years under suspicion.
Everyone in business wants to win work, and the Federal Government has been a consistent business partner and revenue source, but it comes with additional compliance costs. For government contractors, compliance and success in the Federal market go hand-in-hand. It is important to invest the resources into systems and processes that help ensure that compliance. Deloitte’s case is just one more in a long string False Claims or Price Reduction Act violations – most are too small to report. Here are some examples of the bigger ones:
- Oracle did not fully disclose commercial sales practices and discounts and paid back $199.5 million in over charges.
- An Office Furniture and products company did not monitor price/discount relationship and overcharged the government, paid back $9 million in over charges
Understanding the Price Reduction Clause Compliance to Avoid Fines
GSA, FAR, and ColeyGCS have training and service resources that can help your company understand the compliance concerns and systems required to remain compliant in Federal Contracting.
In our post How to Monitor Your Price Reduction Clause, we list out how to report deviations that disrupt discount relationships.
Get your GSA Schedule Pricing Relationship Right from the Start
If you’re considering a GSA schedule it is imperative that you get it right from the start. Take a deep dive into your current pricing practices and understand what mechanisms must be developed to ensure you remain agile and competitive commercially and compliant Federally.
At ColeyGCS, we perform an internal audit of our customers’ commercial practices before submission to identify standard practices and system to improve compliance.
If you have concerns about your compliance or simply are not sure one way or the other, please contact your GSA PCO, the VSC or contact ColeyGCS at 210-402-6766. We would be happy to help.
A Florida-based company, Federal Verification Co., Inc., that has done business under 68 different names, including GSA Application, GSA Processors, GSA 1000, GSA Preview, GSA Specialists, and Federal Suppliers Guide has been debarred (blacklisted) from working with GSA (see Excluded Parties List on SAM.gov).
GSA recently notified all active and former clients of “GSA Processors, et. al.” that the company has been debarred following a formal agency protest from GSA and are no longer approved to represent vendors pursuing or modifying GSA Schedules. Vendors that have used “GSA Processors et. al.” have been ordered to remove them from their GSA Schedule.
Federal Verification Co., Inc. has been known in the industry as a “proposal mill” bilking thousands of companies using false guarantees of success and low pricing though telemarketers. They have many complaints through the Florida District Attorney office and been discussed heavily in review sites such as ripoff report. (more…)
For decades, peer-policing for Trade Agreement Act (TAA) compliance on GSA Schedules has been the rule. Recently, GSA stated that there has been continued re-occurrence of non-TAA compliant products being listed and sold on the GSA schedule – a direct violation of the TAA and GSA Schedule contract terms. Consequently, GSA is taking action to clean up the proliferation of non-TAA compliant products on GSA Schedule and has issued a notice to vendors requiring a mandatory and time sensitive TAA reconciliation and contract modification.
Currently, the TAA reconciliation applies to the following GSA Schedules, but they can soon expand to more: (more…)
Several times a year GSA will “refresh” or reissue the solicitation under which your GSA Schedule contract was awarded. When GSA refreshes the solicitation, many of your contract’s terms and conditions may require an additional action or change in the way your contract is managed. As a GSA contract holder, you will be required to accept the new contract Terms and Conditions.
How do you know when a Mass Mod is available?
When a Mass Mod is available, the Administrative Point of Contact of the GSA Schedule will receive an automated email with a direct link to the Vendor Support Center (VSC). The email will also contain a Personal Identification Number (PIN) associated with the contract number to accept the Mass Mod. (more…)
As of November 23, 2015, contractors will now be able to upload duplicate Manufacturer Part Numbers (MPNs) to GSA Advantage. With this change, it will be unnecessary to manipulate MPNs when a contractor has multiple manufacturers that happen to have the same MPN. (more…)
On Labor Day, President Obama passed an Executive Order requiring Federal Contractors to provide all employees to paid sick leave. The order establishes a ratio of 1 hour of accumulated sick leave for every 30 hours worked on a Federal contract or seven days a year. (more…)