00CORP became the Professional Services Schedule, that is potentially saving the GSA $3.95 million dollars in the first five years in administrative costs. Combining all these professional services in one place also simplified the purchasing process of the agency, who have expressed happiness with being able to combine a purchase of multiple services under one PO.
Contractors were either “transitioned” or “migrated”:
Transitioned- vendors who held only ONE contract (like a MOBIS or a PES) were issued a contract modification and moved to PSS
Migrated- vendors who held multiple contracts that were to be moved to PSS were combined into one schedule under PSS. Vendors were required to submit a new contractor using all the current pricing and terms and conditions under the existing contracts.
On March 21, 2017 Office of Audits, Office of Inspector General, US General Service Administration released an Audit of Price Evaluations and Negotiations for the Professional Services Schedule Contracts, specifically focusing on transitioned and migrated contractors. The findings were troubling.
Finding #1: the consolidation process resulted in new contracts awarded without the establishment of price reasonableness.
OIG went over 45 of the 322 newly established PSS contract. These account for over 78% of FY 15 dollars among the 322 contracts. Of the 45, 44 (or 2.5 billion dollars’ worth of sales) we awarded WITHOUT the required price analysis.
Finding #2: the “Pre and Post Negotiation memorandum” template that has been used by PSS COs is not in line with the FAR.
This template that was being utilized by COs for speed and efficiency lacked key information. OIG was unable to determine whether the COs achieved negotiation objectives, meaning they were unable to figure out if the pricing was fair and reasonable.
Finding #3: Contract files lack sufficient information to determine fair and reasonable pricing
Pricing analysis in the sampled contractors lacked detail to support awarded Labor Category (LCAT) rates. The market analysis performed by COs did not have any specifics to comparable LCATs.
And if you are a contractor on PSS, will this affect you?
The Office of Professional Services and Human Capital Categories will be required to perform formal pricing analysis on ALL migrated contracts and create new Pre and Post Negotiation memorandums.
Be aware that this may result in your company having to either lower rates based on their findings or remove those LCATs from your contract altogether. When and if a CO comes back to you to complete these steps, always make sure that you are completely honest about your current pricing. You can also utilize GSA provided tools such as CALC to ensure that your pricing is fair and reasonable.
Do your own research and discuss your rates internally if your contract was migrated to PSS, eventually the GSA will come to do their review, but if you are prepared with evidence of your price reasonableness, the process will be smooth and quick.
