Government’s Fast-Buying Service Takes Shape With First Customer

Agencies that have been excluded from using streamlined procurement tools proliferating across the Defense Department now have more insight into a new purchasing option that will soon open up the innovation fast-lane to all government buyers.

An unnamed Defense Department organization has issued the first-ever solicitation under the General Services Administration’s new service providing high-speed contracting outside the Federal Acquisition Regulation for innovative commercial items and processes.

But GSA isn’t opening the floodgates yet. It plans a gradual rollout of the new offering to test sales to other agencies and shape the service.

The Defense solicitation seeks to buy an innovative, commercial web-based marketplace, where government buyers can quickly and easily navigate, search and initiate orders for products, services and bundles of configured offerings. (It has no connection to the government-wide commercial e-commerce platform GSA is working on with the Office of Management and Budget under the 2018 National Defense Authorization Act, said Chris Hamm, director of GSA’s Federal Systems Integration and Management Center.)

Hamm emphasized that GSA’s Assisted Acquisition Service, which is handling the new service, “doesn’t have a ton of excess capacity,” so the new service will expand slowly. The news no doubt will disappoint agencies eager to entice nontraditional government suppliers to sell them innovative services and products.

GSA is offering the new service—known as a commercial solutions opening—under the 2017 National Defense Authorization Act, which permitted Defense, the Homeland Security Department and GSA to test CSOs as a way of making the federal market more attractive to new entrants, including entrepreneurs, as well as traditional government contractors selling emerging or innovative goods and services.

GSA and Homeland Security CSO contracts are limited to $10 million, and the pilot programs end on Sept. 30, 2022. The capability is available to all GSA organizations, in addition to the Assisted Acquisition Service selling it governmentwide. Besides the Defense solicitation, Hamm said, GSA will announce a second CSO for a GSA organization in two to three weeks. But AAS probably will do no more than three or four CSOs for other agencies in fiscal 2018, he said.

A Malleable Solution

Vendors interested in the Defense marketplace solicitation have until June 26 to submit briefs describing their marketplaces and companies, and how their solutions “push the state of the art.” Hamm said the Defense client is looking for a malleable solution that can handle basic, fixed-unit-pricing items, but also those that require a calculation to determine the price. The client would like to be able to upload those calculations into the marketplace platform, he said.

If a solution is accepted and contracted for, it will be hosted on Cloud.gov, which is provided by GSA’s Technology Transformation Services office. This should eliminate issues surrounding cloud authority since Cloud.gov is up and running and any agency can use it, Hamm said.

The FBO announcement of the Defense CSO also unveiled a new Part 571 in the GSA acquisition manual for the Innovative Commercial Items Pilot Program. Part 571 defines innovative commercial items as a new technology, or new application or adaptation of a technology, process or method, including those not yet in widespread government or commercial use.

CSO use must be approved by an agency acquisition innovation advocate, of which GSA has two, FEDSIM Director Hamm and Public Buildings Service Acquisition Management Director Mike Wolff, according to the Advocates Council website. Only contracting officers with federal acquisition certification in contracting (FAC-C) Level III can award CSO contracts, according to Part 571.

GSA has created a Procurement Innovation Resource Center to implement the CSO procedure and other procurement tools promoting innovation. The center website emphasizes that CSO is not a form of other transaction authority (OTA), which covers legally binding agreements for research and prototype projects.  

The site also links to a new PIRC CSO Guide and solicitation template.

CSOs function somewhat similarly to traditional requests for information and market research in that they solicit information about what is available in a given market and attract companies, especially nontraditional government contractors, to respond to programs’ statements of need.

The PIRC CSO guide directs acquisition planning teams preparing CSO solicitations to “research the appropriate commercial marketplace and publicize the project in a venue (e.g. GitHub) typically used by that commercial marketplace.”

GSA chose to make its CSO compliant with the Competition in Contracting Act, Hamm said. This includes announcing CSO solicitations on the Federal Business Opportunities website, publishing them on websites used by the targeted vendor audiences (e.g. GitHub, DIUx.mil, 18f.gsa.gov, express.gsa.gov, order.gsa.gov) and performing direct vendor outreach.

Because restrictive government intellectual property terms have driven many companies and entrepreneurs away from working with federal agencies, CSOs allow contracting officers to negotiate those terms more liberally and to ensure vendors retain as much of their core intellectual property as possible. Contracting officers should involve legal counsel early.

If a program overestimates the intellectual property rights it needs, for example, it may end up paying for unused rights and dissuade new businesses from entering into a contract. But if contracting officers underestimate the rights needed, they might not acquire sufficient rights for the item’s full life cycle, which includes operations, maintenance, and follow-on procurements.

The CSO offers wide latitude in evaluating proposals. The acquisition team can evaluate solution briefs against one another or opt to simply evaluate them against the criteria in the solicitation. More than one solution brief may be accepted. The GSA acquisition team will keep the offeror updated on its status and whether additional information is needed.

Pressed to innovate, agencies are facing the same procurement hurdles the Pentagon is trying to surmount with a host of rapid acquisition tools. GSA’s CSO is a route potentially open to all of government, so here’s hoping the Assisted Acquisition Service learns fast and opens it broadly as soon as possible.

Anne Laurent, former executive editor of Government Executive magazine, runs The Acquisition Innovators Hub, a procurement innovation intelligence collector. Brian Friel, co-founder of BD Squared LLC, a federal business development firm, contributed to this report.