Jennifer Schaus & Associates SERVICES FOR US FEDERAL GOVERNMENT CONTRACTORS
WEBINAR WEDNESDAYS – 2018 WASHINGTON, DC OFFICE PHONE: 2 0 2 – 3 6 5 – 0 5 9 8
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
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Join Us for Our 2018 Series of Complimentary Webinars on various US Federal Government Contracting Topics. Presenters are industry experts sharing knowledge about the competitive government contracting sector. Find all of our Govt Contracting webinars (free download) at www.JenniferSchaus.com
Contact Us @ 2 0 2 – 3 6 5 – 0 5 9 8
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
REMINDERS: All webinars are complimentary. All webinars are recorded. They are found on our website and on YouTube. Please send your questions to the speaker directly. Thank you for participating.
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT JENNIFER SCHAUS & ASSOCIATES: - Based in downtown Washington, DC; -
A la carte services for Federal Contractors;
- Proposal Writing to GSA Schedules, 8a Cert, Contract Admin & more!; Educational webinars; -
Networking events and seminars;
WEBSITE: http://www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
GSA CLASSES TUESDAY - September 18 - CGSA Schedules For Beginners Register: https://tinyurl.com/ybrcrh2b THURSDAY - October 04 - GSA Schedule for Beginners Register: https://tinyurl.com/yazpw7da MONDAY - November 05 - So I Have a GSA Schedule, Now What? Register: https://vaptap.ecenterdirect.com/events/2414
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CONSTRUCTION CONFERENCES THURSDAY - September 13 Federal Government Construction Contracting Summit Register: https://construction091318.eventbrite.com
November 13-15 GroundBreak - The Construction Conference Register: https://www.procore.com/groundbreak/schedule
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT OUR SPEAKER: Jon Williams Partner, PilieroMazza PLLC Education:
The Catholic University of America, Columbus School of Law, J.D., and Communications Law Institute, Certificate, 2001 Experience: Over 15 years of legal experience advising contractors on a wide range of government contracting matters and Federal Acquisition Regulation compliance, including the federal procurement programs for small businesses (i.e., the 8(a), HUBZone, WOSB, and SDVOSB programs) Contact Info: Phone: (202) 857-1000 Email: jwilliams@pilieromazza.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT PILIEROMAZZA: PilieroMazza PLLC is a full-service law firm with offices in Washington, DC and Boulder, CO. We are most well known as a government contracting firm and for 25 years we have helped our clients navigate the complexities of doing business with the federal government. We also provide a full range of legal services including advice on corporate, labor and employment, SBA procurement programs, and litigation matters. Our clients value the diverse array of legal guidance they receive from us and our responsiveness as we guide their growth and secure their success. Our primary practice areas are: • Government Contracting • Small Business Programs & Advisory Services • Labor & Employment
• • •
Business & Corporate Litigation Intellectual Property & Technology Rights
Sign up for our newsletters and blog at www.pilieromazza.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
Category Management: What You Need to Know Wednesday, September 12, 2018
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Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
What Is Category Management? • Government initiative to reduce contract duplication and save money on common goods and services (i.e., “categories”) purchased by the government • Started in December 2014 •
Successor to Federal Strategic Sourcing Initiative (“FSSI”)
• Three goals of the initiative: • • •
Save $ Reduce the number of new contracts Increase the amount of spending under government-wide management
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
How Does it Work? • Government will move to “best in class” or “BIC” contracting solutions that will be used government-wide •
Today, many agencies buy the same goods and services, under different contracts unique to each agency
• Category management will: • • • •
Consolidate government purchasing of common goods and services into fewer contracts that all agencies must use Create consistent terms and conditions Organize procurement resources to focus on specific spending areas Emphasize leveraging government buying power
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Who Is Leading the Way? • Led by the Office of Management & Budget (“OMB”), Office of Federal Procurement Policy (“OFPP”) • Teams with expertise manage each category •
Each category team is expected to gather and compile data, analyze and assess the data, and identify opportunities to use category management strategies
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
What Are the Categories? • The first category OFPP focused on was Information Technology (“IT”) and then nine more were added •IT •Facilities and construction •Professional services •Medical •Transportation and logistics
•Industrial Products and services •Travel •Security and protection •Human capital •Office management
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
FY17 common spend - $303B Facilities & Construction ≈$81.2B Led by GSA • • • • •
Construction Related Materials Construction Related Services Facilities Purchase & Lease Facility Related Materials Facility Related Services
Professional Services ≈$71.1B Led by GSA • • • • • • • •
Industrial Products & Services ≈$11.1B Led by GSA • Basic Materials • Fire/Rescue/Safety/ Environmental Protection Equipment • Hardware & Tools • Industrial Products Install/ Maintenance/Repair • Machinery & Components • Oils, Lubricants, & Waxes • Test & Measurement Supplies
Business Admin Services Financial Services Legal Services Management & Advisory Services Marketing & Public Relations Research & Development Social Services Technical & Engineering Services
IT ≈$56.7B Led by GSA • • • • • •
Travel ≈$7.5B Led by GSA • • • •
Employee Relocation Lodging Passenger Travel Travel Agent & Misc. Services
IT Software IT Hardware IT Consulting IT Security IT Outsourcing Telecomms
Medical ≈$43.5B Co-Led by DoD and VA • Drugs & Pharmaceutical Products • Healthcare Services • Medical Equipment, Accessories, & Supplies
Security & Protection ≈$5.4B Led by DHS • • • • • •
Ammunition Protective Apparel & Equipment Security Animals & Related Services Security Services Security Systems Weapons
Human Capital ≈$4.5B Led by OPM • • • • • •
Compensation & Benefits Employee Relations Human Capital Evaluation Strategy, Policies, & Ops Planning Talent Acquisition Talent Development
Transportation & Logistics ≈$28.5B Led by DoD • • • • • •
Fuels Logistics Support Services Motor Vehicles (non-combat) Package Delivery & Packaging Transportation Equipment Transportation of Things
Office Management ≈$2.3B Led by GSA • Furniture • Office Management Products • Office Management Services
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Spend Under Management (“SUM”) • SUM = the percentage of an organization’s spend that is actively managed according to category management principles •
Belief is that increasing SUM will eliminate redundancies, increase efficiency, and deliver more value and savings.
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Tiers • OMB uses the following tiered rating scale to evaluate agency spend: • • • •
Tier 3, Best-in-Class (BIC) Solutions – Dollars obligated on Best-in-Class contracts Tier 2, Multi-Agency Solutions – Dollars obligated on multi-agency contracts that satisfy rigorous standards set for leadership, strategy, data, tools, and metrics Tier 1, Mandatory-Use Agency-Wide Solutions – Dollars obligated on agency-wide contracts with mandatory-use or mandatory-consideration policies, along with standards set for data-sharing and other criteria Tier 0, Spend NOT Aligned to Category Management Principals – Dollars obligated on contracts that do not fit into one of the three tiers above. Agencies should analyze Tier 0 spend to find opportunities for shifting to higher-tier solutions
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
What Are the BICs? • Full list is available at: https://hallways.cap.gsa.gov/app/#/ gateway/best-class-bic/22574/list-of-best-in-class-solutions • Examples for IT: • • • •
VETS2 Alliant/Alliant 2 and Alliant/Alliant 2 SB NASA SEWP GSA Schedule IT 70
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
President Trump’s Management Initiative • Issued earlier this year and sets aggressive category management goals • • •
Increase spending through BICs to 40% by FY20 13% decrease in unique contracts by FY20 Save $18B in FY20
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Spending on BICs is Trending Up • According to spending data from Bloomberg Government: • • • • •
FY17 BIC spending was up $26.8B, a 12% increase year-over-year BIC total spending was 57% higher than FY13 and now stands at the highest level in five years Small business BIC spending is up 54% in five years More than 36% of BIC spending goes to SBs SB share of BIC spending is up 3.8% in the last three years
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Downsides of Category Management • The data shows it is creating have’s and have nots • • •
Reduction in contracts for certain goods and services makes it critical for companies in those industries to have the right contracts Increased importance of teaming, joint ventures, mentor-protégé, and strategic acquisitions to ensure you have access to BICs Companies that are unprepared could be shut out of their markets
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Adverse Effects On SBs and the Industrial Base • A relatively small number of companies are getting most of the $ • •
According to SBA, # of SBs winning prime contracts has decreased by 25% since 2010 Category management should focus on the number of SBs receiving BIC spend, not just the percentage of BIC spend going to SBs
• According to spending data from Bloomberg Government: • • •
Even with recent gains, SB share of BIC spending is below FY13 Only 138 companies (out of 3,257) win 80% of BIC money In FY17, the top SBs on BICs hold double the dollar share compared to the top SBs on non-preferred contracts in BIC markets
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
What Should Be Done? • SBA provided the following 7 recommendations to OFPP: 1. 2. 3. 4. 5. 6. 7.
Ensuring accountability for small business participation by developing key performance indicators and expanding the metrics to include specific goals for each socioeconomic category Performing data analysis of how many socioeconomic small firms already are included in best-inclass (BIC) contracts and whether both the total contract value and vendor base are enough to support all the goals of category management Clarify through policy or communications that category management, reducing contract duplication and the emphasis to use best-in-class contracts do not conflict with current acquisition regulations and laws Develop a more transparent methodology to calculate cost savings, which is particularly important given the regulations require a cost-benefit analysis for consolidated requirements Ensure each BIC has on-ramps, particularly for firms in the socioeconomic programs Satisfy mandatory set-asides requirements under policy and law Require prime contractors to provide data on how they are meeting their subcontracting plans
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
What Should Be Done? • OFPP says many of the best in class vehicles have groups or pools for small businesses, which will help category managers to meet and exceed the goals • Small business advocates want more data and tools to hold the government accountable
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2018 - WASHINGTON DC
www.JenniferSchaus.com
Key Takeaways • Category management is changing the way the government buys and appears here to stay with the Trump Administration’s aggressive goals to continue saving money, reducing the number of contracts, and increasing BIC spending • While there have been some positive gains for SBs, this is concentrated in a small percentage of firms, with many others being left out • If you are in the targeted industries, it is critical to know the BIC vehicles and have a strategy to obtain those contracts or partner with firms that do
THANK YOU FOR ATTENDING!!
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QUESTIONS? CONTACT OUR SPEAKER JON WILLIAMS AT (202) 857-1000 AND AT JWILLIAMS@PILIEROMAZZA.COM This material is presented with the understanding that the author is not rendering any legal, accounting, or other professional service or advice. Because of the rapidly changing nature of the law, information contained in this presentation may become outdated. As a result, the user of this material must always research original sources of authority and update information to ensure accuracy when dealing with a specific legal matter. In no event will the author be liable for any damages resulting from the use of this material.
SERVICES FOR US FEDERAL CONTRACTORS
OFFICE: 2 0 2 – 3 6 5 – 0 5 9 8