Pre-Solicitation Meeting

GSA FSSI JANSAN & MRO
PRE-SOLICITATION MEETING

Prof. Bornstein Questions GSA on the JanSan & MRO FSSI based upon Bornstein & Song Research on FSSI Schedule 75 Office Supplies (OS2) issued in 2010

Washington, D.C. May 15, 2013

Transcript of Pre-Solicitation Meeting:
May 15, 2013

View the entire Transcript of the Pre-Solicitation Meeting

MR. BORNSTEIN: I'm Professor Sam Bornstein with Kean University School of Business. I have two questions. The second one was just brought up. The first one is you have 15 BPAs. Approximately how many vendors is that representing that will be shrunk from to the 15 BPA vendors?

MS. STANLEY: How many vendors?

MR. BORNSTEIN: How many prospective vendors will be included that will be shrunk down to the 15 BPAs?

MS. STANLEY: All of the contractors that are currently on the multiple award schedule programs that relate to these products.

MR. BORNSTEIN: I did a quick analysis of the SINs and it looked like close to 1,300 that will be shrunk down to 15.

MS. STANLEY: Yes.

MR. BORNSTEIN: Okay. I have some experience in researching the office supply OS2 and that was from around 550 down to 15. And in our Bornstein and Song research we noticed that quite a bit of damage based on the displacement of the small businesses and the loss of jobs. So I'm very much particularly interested in this JanSan on that regard as well. One other point. The aspect of products versus services. Will you require that the individuals who do the services use these products under the BPAs?

MS. STANLEY: Are you referring to, for example, cleaning services for the public building services?

MR. BORNSTEIN: Yeah, for an example that was mentioned of the BMO, which I understand is one of the five that will be implemented in fiscal year 2014.

MS. STANLEY: That's correct.

MR. BORNSTEIN: I'm curious as to whether those rendering services will be required to buy from the vendors who supply these supplies through the BPAs.

MS. STANLEY: Not at this time they won't be required to do that.

MR. BORNSTEIN: Okay.

MS. STANLEY: These BPAs are not mandatory at this time.

MR. BORNSTEIN: Really?

MS. STANLEY: We have commitment from the agencies that they're going to use these BPAs but they're not mandatory.

MR. BORNSTEIN: I understood that from the December 5th memo from OMB that FSSI is intended to be mandatory and the SSLC is meeting to make sure that that happens on 90 percent of federal contract spending. That's as I read it. And I think that was the motive, the intent of Joe Jordan when he emphasized the mandatory aspect and that some businesses may not be able to do business with the federal government because of the mandatory aspect.

MS. STANLEY: Jack is going to address that for us.

MR. KELLEY: These are great questions. Right now, today, we're only focusing on the supplies. The vehicle that's going to address services is going to be considered as one of the 2014 initiatives. I will tell you if I had my way -- and I don't always have my way -- but if I had my way we would, in fact, we would make -- I would make whoever ends up here being the suppliers mandatory for the service providers because I would want to maximize the business going through it. Now, you'll be comforted to know that I don't always get my way, so who knows what's going to really happen. One point -- the reason we have engagements like this is to hear these kinds of questions and to hear the concerns that you all raise. This is not set in stone. This is a point in time where we've brought something to the table and, you know, we want to hear about it. My take, and I wasn't, you know, I sat in on a lot of commodity team meetings but I certainly haven't 6 been part of the inner discussions, but my take on why things were organized this way was, as we said before, was to maximize the opportunity for small businesses that only offer at this subcategory level an opportunity to participate. So it's an honest attempt to try to maximize small business opportunities.

MR. BORNSTEIN: My problem, based on my research, and this goes back to the initial inception of FSSI for the office supply is that it's -- unfortunately, it's resulting in a displacement of small businesses and substantial job losses, which is causing great harm to that community. In fact, on DOD EMALL, the only contractors who can deal with office supply and DOD EMALL -- and I'm afraid this will be with JanSan as well -- are those 15 that were awarded BPAs. And that means, and everybody should be aware, that this is a very -- this has to be approached very carefully. And I am always suggesting beyond the small business impact study a cost benefit analysis. I don't want to throw everything at you at once, but there's $182 million claims of savings. My question is what are the costs of those savings -- costs meaning displacement of small business, jobs lost –

MR. KELLEY: Yeah. I think this is not the best place to have that conversation. It's a very complex issue.

MR. BORNSTEIN: I would like to at some point have that discussion because it's directly impacted these people. And I'd appreciate it, Jack.

MR. KELLEY: Happy to have those discussions.

MR. BORNSTEIN: Thank you.

MR. BORNSTEIN: This is Professor Sam Bornstein, Kean University again. With regard to the word "mandatory," I'm very much hung up on that term because it's been used in the December 5, 2012 OMB memo. Mandatory is the direction that the OMB and GSA is going for. My concern is that someone expressed, let's say an agency wants to purchase something and finds a cheaper price on let's say another vehicle rather than through the BPA. I have specific reference to an agency. I believe it was USDA where they were frequently asked questions. The question was phrased, "If we find something cheaper under another vehicle must we use the BPA?" And the answer was, "Yes, you must." I'm very much concerned. I've seen this happen in the office supplies OS2 environment. As a matter of fact, a Navy contract corridor specifically mentions if you're purchasing office supplies it's only from those 15 awarded BPAs on office supplies. And this is causing great torment for those Schedule 75 office supply contactors who don't have BPAs. I'm concerned that the same will happen to JanSan and MRO. And if you can give assurances that the term mandatory does not mean that it will only be restricted to those 15 JanSan or 15 MROs, then I'm comforted. But my concern is that this will follow the same path as the office supply contract BPAs, 15 out of 560. Now it will be 30 out of 1,200-1,300. That's my concern.

MS. LAMBERT: Well –

MR. KELLEY: We're concerned, too. So the point I made earlier is each agency decides what makes sense to it. So if agriculture has decided that it makes life easier for its procurement people to be limited to 15 vendors because then it's a simpler decision for them, they can make the decision quicker, they can move on, then they've made that decision. Now, what I can tell you, you know, we have -- although we care a lot about adoption, you know, we make a commitment to the vendors who win the competitions, that we are going to do whatever we can to give business to them. That's the basis of the competition.

MR. BORNSTEIN: That makes sense.

MR. KELLEY: So we're not doing our job if we're not fulfilling that obligation. And I think in OS2 we've certainly done, you know, we've certainly made some progress in it. Can I tell you that we have 100 percent of the office supply sales going through OS2? We do not. We'd love to have it but we don't have it. The reality is that we move as much of the market as we can through the vehicles to which we've made a commitment to do that and, you know,the rest just, it happens.

MR. BORNSTEIN: And by doing so, we shrink the base of small business contractors and vendors and result in –

MR. KELLEY: Let's have this conversation offline because we're not the only people who buy from small businesses. It's a big economy out there. Let's talk about this separately. You've made your point over and over and over. We've heard it over and over and over.

MR. BORNSTEIN: One last point. Strategic Sourcing Leadership Council had met. There are seven major agencies which account for 90 percent of the total government spending of 500 and some odd billion. And their intent was to mandate strategic sourcing through that vehicle.

MR. KELLEY: So, let me tell you the exact sentence which I wrote in that says that the Strategic Sourcing Leadership Council is to – it roughly says this -- it's to develop vehicles which, you know, are developed in such a way that they could be mandated. There's not an automatic mandate. We want to -- we think we're doing the right thing. Now, you all are helping us understand areas where maybe we haven't thought things through enough and that's critical, but we think we're doing the right thing. We think we're going to save the taxpayers' money. We think we're going to give the agencies better choices. So these kinds of meetings are important for us to hear where we're on the wrong track, and I really value that. But we're not trying to do bad things. You know.

MR. BORNSTEIN: No, I understand. And I also understand the need to funnel the business to the BPA-awarded contractors and vendors. That I understand. But what I'm suggesting is that there that vehicle.

MR. KELLEY: So, let me tell you the exact sentence which I wrote in that says that the Strategic Sourcing Leadership Council is to – it roughly says this -- it's to develop vehicles which, you know, are developed in such a way that they could be mandated. There's not an automatic mandate. We want to -- we think we're doing the right thing. Now, you all are helping us understand areas where maybe we haven't thought things through enough and that's critical, but we think we're doing the right thing. We think we're going to save the taxpayers' money. We think we're going to give the agencies better choices. So these kinds of meetings are important for us to hear where we're on the wrong track, and I really value that. But we're not trying to do bad things. You know.

MR. BORNSTEIN: No, I understand. And I also understand the need to funnel the business to the BPA-awarded contractors and vendors. That I understand. But what I'm suggesting is that there is a middle ground which will increase competition and not limit it to only a few contractors who will be the so-called winners because there will be many nonwinners. But there is a way and I'm hoping that GSA and OMB will consider that.

MR. KELLEY: Well, please share. I mean, I don't want to take up time here.

MR. BORNSTEIN: Another time.

MR. KELLEY: We'd love to hear those. Any ideas you have about doing that –-

MR. BORNSTEIN: I'd be happy to share with you.

MR. KELLEY: We'd love to hear them.

MR. BORNSTEIN: Okay. Thank you.

MR. BORNSTEIN: One quick question.

MS. STANLEY: Sure.

MR. BORNSTEIN: This is Professor Bornstein, Kean University again. Just curious. This might not be a very good sample but how many in the audience are AbilityOne resellers? Okay. Well, again, this may not be representative but within the OS2 universe there were only 40. And that was among the 560-some odd contractors of OS2. And that's why as I remember there was only 47 who applied for the BPA and 15 were awarded. So I think that should be recognized.

MS. STANLEY: Okay.

FSSI Mandatory-Use Fears

The FSSI Mandatory-Use Issue is One of Most Important Aspects of the FSSI for JanSan & MRO and is Feared by Many in the Small Business Federal Contracting Community.

“Mandatory is what we’re moving toward. There will be winners and losers, and not all who want to sell to the government can sell to the government,” stated Joseph Jordan, Administrator of the Office of Federal Procurement Policy (OFPP) at the Office of Management & Budget (OMB). Mr. Jordan is managing the FSSI program which will be applied across all Federal Government Agency spending.

See More…

Important Dates:

Bornstein & Song
JanSan & MRO National
Survey June 2013

Bornstein & Song
National Survey Assess the GSA FSSI BPA Schedule 75 Office Supplies---3 Years Later
June 2013

Submission of Quotes to Request for Quotations (RFQ)
Late July – Early August 2013

JanSan & MRO FSSI Full Implementation

August, 2013

The Federal Agencies issuing Commitment Letters to purchase from FSSI BPAs:

  • Department of Army
  • Department of Air Force
  • Department of Navy
  • Department of Agriculture
  • Department of Commerce
  • Department of Energy
  • Environmental Protection Agency
  • General Services Administration
  • Health and Human Services
  • Department of Homeland Security
  • Department of Housing and Urban Development
  • Department of Interior
  • Department of the Justice
  • Department of Labor
  • Department of National Aeronautics and Space Administration
  • Social Security Administration
  • Department of Transportation
  • Department of Treasury
  • Department of Veterans Affairs
  • Nuclear Regulatory Commission

JanSan & MRO FSSI GSA Schedules:

Schedule 51V - Hardware

Schedule 56 - Buildings and Building Material/Industrial Services & Supplies

Schedule 73 - Food Service, Hospitality, Cleaning Equipment & Supplies, Chemicals & Services

Schedule 75 - Office Products/Supplies & Services & New Product/Technology