The GSA’s New Plan: The Demand Based Model (DBM)

History:

Started with the downturn in the economy, where many companies folded, and those with stored resources jumped into the federal market because the government was one of the last big & stable spenders. This created a rapid increase in GSA Contract submissions. Over the last several years, the number of companies seeking Schedules contracts has roughly doubled and the volume of contract modifications has roughly tripled. GSA is confronting a serious staffing shortage of qualified contracting professionals.

Under Martha Johnson, major problems started collecting in the Agency, and nothing was done to address or fix them (other than photo-ops to plaster her picture across the GSA website). The GSA scandal caused her to resign (finally), then Dan Tangherlini stepped in with a steel-like, calculated, business-approach, and he started drafting the GSA’s plan of salvation. I think Tangherlini is the man for the job, and have faith in his abilities.

Problem:

Steve Kempf, commissioner of GSA’s Federal Acquisition Service:  “The MAS program is perpetually open to qualified new offers and while vibrant markets exist in some of the schedules, we have reached the point of saturation in others,”

In English: The GSA is successful and great, but there are areas lacking that need to be improved.

Solution:

Demand Based Model (DBM) – intended to allow the GSA to align its resources with areas of greatest need.

Federal Register (7/23/12): “GSA is proposing this operational change to enhance the performance of and modernize the MAS program in three key program areas: Small business viability, operational efficiency, and cost control.”

  • Modernization of the Multiple Award Schedule (MAS)
  • Canceling 8,000 obsolete Contracts
  • Freezing 5 Schedules for 1-3 years (Starting February 2012)
    • 871 (Professional Engineering Services)
    • Allocating of GSA contract professionals to more heavily used schedule areas will hopefully make headway in the incredible backlog.
    • 736 (Temporary Staffing Services)
    • 75 (Office Products / Supplies)
    • 73 (Food Service and Hospitality)
    • 541 (Advertising and Marketing Services)

Results:

There are 3 Upsides and 2 Downsides.

  • Upside 1 – These changes will save the GSA a reported $24 million a year in operating expenses. If managed properly then federal buyers will only experience a small drop in service when buying through the GSA. And there will be a fresher group of contractors to choose from.
  • Upside 2 – Established Contractors in frozen schedules will enjoy limited competition, and a trimming of the fat in their schedules will make for quicker mod turnaround times.
  • Upside 3 – Low performers do sap GSA resources, and the agency as a whole will emerge from this in better shape regarding acquisitions, which have doubled and tripled review times over the past 2 years.
  • Downside 1 – Schedule 871 (Professional Engineering Services) offers many important solutions to federal buyers, especially DoD. These solutions change so fast, and new contractors are always creating new solutions for the federal market. So, in my opinion, freezing Schedule 871 will slow the DoD’s R&D efforts, which poses a national security risk. So, this was not a good GSA Schedule to freeze, but the others are very saturated, and can stand to be frozen for a year or two.
  • Downside 2 – There will be a huge push of submissions before the February 2013 deadline. The GSA will either be deadlocked for years trying to catch-up once the door closes, or they will close the gate and many contractors will be locked out for 1-3 years. In the Federal Register, the GSA says “It is highly likely that nearly all of these offers will not generate business” but doesn’t know yet how this will be handled.

Sources:
http://www.gpo.gov/fdsys/pkg/FR-2012-07-23/html/2012-17882.htm
http://www.gsa.gov/portal/content/136643
http://fcw.com/articles/2012/07/23/gsa-demand-based-model-5-steps.aspx?goback=%2Egde_64283_member_139273744
http://smbiz.house.gov/Calendar/EventSingle.aspx?EventID=297694

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