1. Contract Administration Issues
Ralph Lentz
MSC Industry Day
August 18, 2009

2. How to keep your MAS contract!
Complete/current GSA Advantage SIP file
Market your services
Timely submission of IFF on sales
Maintain your contract
Mass modifications
Address or contact changes
Novation or name change
Price changes
Add/delete services
Sometimes there is a misconception that once you have a schedule contract the government business and money will magically follow. You should not expect that to happen.
What you are required to do is submit your services/prices, using the Schedule Input Program (SIP) software or via Electronic Data Interchange for uploading into GSA Advantage. This will allow agencies to access your services through GSA “eBuy” RFQ system. While you have 6 months after contract award to do this, it is to the contractors benefit to be on GSA Advantage as soon as possible. Agencies are encouraged to use eBuy to access schedules services and products. Your Advantage information needs to be updated every time a change is made to anything you are offering.
Unless you have established Government business that you are bringing to your schedule contract you will need to market your services. If you completed a schedule business plan you will have a strategy for doing that. If not, you should develop a strategy for marketing your services. I will talk to some of the resources you might access when I discuss sales.
Timely submission if the Industrial Funding Fee

3. Why Contracts are Cancelled
Lack of Sales (no/low sales)
Contractor request or contractor goes out of business
Multiple contracts, same schedule
Out of scope work
Poor contractor performance (not reporting sales/remitting IFF, not in GSA Advantage, inadequate contract management)
Failure to meet contract requirements can result in contract cancellation. The number one reason MAS contracts are cancelled is due to lack of sales. I will talk more about that on the following slide.
It is not uncommon for us to receive a request from a contractor to cancel their contract. If a contractor is having trouble meeting contract requirements and wants to ensure that their contract is not cancelled they may request the contract cancellation. When a contractor goes out of business a cancellation may be requested or the contracting officer may cancel the contract when no response to correspondence is received.
Due to acquisitions and mergers, occasionally a contractor may end up with multiple contracts on the same schedule. Unless they are separate profit centers with individual identification, the contracts will be typically merged by modifying one and cancelling the other.
While the Center does not go looking for examples of out of scope work, evidence of non-appropriate work may be identified as a result of an IOA review (I will talk about IOAs in a couple of slides) or by way of a customer or contractor. When out of scope work is identified we address the issue with the Agency and the contractor, in order to avoid future problems.
Cancellations also may result from poor contract administration. Any of these and similar issues that are not immediately addressed and resolved will likely result in contract cancellation.

4. Meeting Sales Requirements
Required Sales: $25K 1st two years, $25K yearly after two years
Marketing Resources
The sales criteria is not particularly stringent. The industrial funding fee dollars for 25K does not cover the administrative costs associated with administering the contract. Our center processes approximately one modification for every two assigned contracts and options on 10-20% of all contracts. For our center, that is over 1500 modifications and 500 options.
There have been discussions on raising the criteria but it is currently still only $25K for the first two years and $25K yearly thereafter.
Typically, at least once a year, the center or, if delegated, the designated ACO office will initiate action to identify contracts that do not meet the sales criteria and take action to cancel those contracts. Not all contracts that have been identified are cancelled. Sometimes there is work in process or unreported sales (that’s another problem) or some other business related reason to not cancel the contract.
This year is an anomaly because we (GSS portfolio centers) are not looking to cancel contracts in light of the Recovery Act and the potential for increased contractor work. However, it should not be assumed that we will not resume taking action on contracts that do not meet the sales criteria, in the future.
The key to getting sales, if government sales are not already a part of your business is to take advantage of available resources to target your marketing efforts.
The Small Business administration website is a good place to start, to learn about doing business with Federal customers. They have training, counseling and small business development centers that will help contractors understand the market and navigate some of the intricacies of Federal contracting.
Fedbizopps is the one site for Federal Business Opportunities. This single point of entry to government opportunities that can be identified by entering search criteria. Searching by your schedule NAIC code(s) is key to finding applicable opportunities.
GSA Advantage is the gateway for Federal customers to order products and services. An extension of Advantage, GSA eBuy is an electronic tool for Federal agencies to post Request for Quote (RFQ) / Request for Proposal (RFP) system designed to allow Federal buyers to request information, find sources, and prepare RFQs/RFPs, online, for millions of services and products offered through GSA's Multiple Award Schedule (MAS) and GSA Technology Contracts. Federal buyers can use e-Buy to obtain quotes or proposals for services, large quantity purchases, big ticket items, and purchases with complex requirements. Additional information can be found on the Management Services website, specifically a paper on “How to Market to the Federal Government”.

5. Industrial Operations Analyst Reviews
Administrative Contracting Officer representative
Not an “auditor”
Conduct periodic reviews
Contractor Assist Visit Report
Administrative Report Card
Another player in the administration of schedules contracts are the Industrial Operations Analysts and Administrative Contracting Officers. They are assigned to the Acquisition Management organization and have geographic responsibilities near to where they are physically located. Often confused with “auditors”, who I will address later, the IOA pay periodic visits to schedule contractors asses contract compliance. These reviews result in CAV report that goes to the ACO.
Some of the things that the IOA looks for on their visit include: (reference highlighted CAV report)
The ACO takes the CAV report and adds a few other assessment inputs to generate the Administrative Report Card. The contractor is given an overall rating based on the answers to questions like: (reference highlighted Report Card questions)
Problems identified in either of these reports is forwarded to the PCO for appropriate action. These reports are also reviewed prior to exercising an option.

6. Available Information
View the New Contractor Orientation website at
Vendor Information
Reporting Sales
The Steps to Success
Vendor Training
New Contractor Orientation Webcast
SIP Web Training
The place to go to for information on contract administration and learning more about being a successful schedules contractor is to the Vendor Support Center’s new contractor orientation information.
Drop down menus provides “how to” Information on Getting on Advantage, Reporting Sales, Contract Administration and Business Opportunities.
Under the Publications drop down you will find a document called The Steps to Success: How to be a Successful Contractor”. It looks exactly like this hard copy I have in my hand. You will recognize some of what I have been talking about in this publication. The 8 steps covered in this document include 1. Understanding Contract Requirements; 2. Marketing Your Business; 3. Teaming to Propose a Total solution; 4. Stepping Out From the Crowd; 5. Reporting Required Information; 6. Caring for Your Contract; 7. Getting the Support You Need; 8. Reaping the Rewards.
Under the Vendor training drop down you can find not only the Pathways training but the New Contractor Orientation on-demand Webcast. A SIP Training webcast is also available.

7. Additional Information
Office of Small Business Utilization
Doing Business With GSA
Schedule Specific Help (Example)
Products and Services
Professional & Technical Solutions
Business Consulting (MOBIS)
While the GSA Office of Small Business Utilization primarily provides training on How to Obtain a GSA Schedules Contract, they also provide training on How to do Business with GSA. There is also a link on the GAS SBU website, under GSA Events that will take you to a Marketing to the Federal Government Webinar.
My last example of where to get help is from my center’s site on the gsa.gov website. Following the Products and Services link to the Professional & Technical Solutions link to the Business Consulting (MOBIS) link to the MOBIS Library where you will find frequently asked questions for marketing the MOBIS contract and additional instructions on requesting modifications and other stuff. You can find similar information on other schedule sites.
The message here is that there are many multiple sources information that can be accessed to help navigate the various contract administration requirements and successfully promote your services to federal customers.

8. Options
GSA sends initial letter sent days prior to contract expiration date
Timely contractor response required
Reviewed by contract specialist
Goal is to exercise 30 days prior
Pre-award audits are the exception
Every service schedule contract includes the Evergreen Clause. The base contract is for 5 years with the option to extend the contract for 5 years, 3 times, for a total of 20 years. On some of the MAS contracts we are currently exercising the second 5 year option.
The typical option process starts with GSA sending a letter to the contractor, requesting an updated CSP, subcontracting plan and ??? within specified period of time. The letter is a little different if the sales criteria has not been met. It will provide notification that GSA does not intend on exercising the option unless evidence can be provided that shows sales.
For those that do get a letter requesting information needed to exercise the option, it is important to respond in a timely manner. The GSA contract specialist must review and analyze the information and execute any required modifications, prior to exercising the option. The option modification is a unilateral action. Any changes to the CSP, labor categories, prices, escalation, basis of award or anything else that requires a bi-lateral agreement must be completed and documented by a separate modification, before the option can be exercised.
It is the GSA goal to exercise options 30 days prior to the end of the contract. This provides assurance to ongoing and potentially new customers that the contract will be viable for ongoing work. The GSA contract specialist can only meet this goal if information is complete and timely.
Of course, if a “pre-award” audit is going to be performed, the process will take longer.

9. Options Continued Expect to be asked to “clean up” contract
SIN, labor categories, support products not sold
Update GSA Advantage file
Address unresolved performance problems
Since the GSA contract specialist must review various documents prior to exercising an option, it’s an opportunity to “clean up” the contract.
If there are SINs, labor categories or support products that are not being used or sold, it should be expected that the contract specialist will question during the review process. Why do we do this?
I have talked about the importance of GSA Advantage. If you are not on Advantage you are not going to be visible to the majority of Federal customers who utilize Advantage to access qualified schedule providers. If your Advantage information is not up to date, that’s a problem. It’s a contract requirement and good business practice. Often there is a change to the Advantage file required due to a modification of SINs, labor categories or prices.
The GSA contract specialist will address any outstanding performance issues identified by the IOA or ACO.

10. Pre-Award Audits GSA IG reviews Coordinated with GSA PCO
Audits selected based on sales and PCO identified issues
Notification letters sent 210 days prior to contract expiration date
May result in temporary contract extension
Pre-award audits are audits accomplished by the GSA IG office, prior to the completion of the five year schedule contract period of performance. They are essentially pre-option audits.
Audits are conducted to assist the responsible GSA contracting officer in evaluating the contract compliance and appropriateness of exercising the option. The audits typically focus on the financial aspects of the contract. The auditors will review the Most Favored Customer status, the Basis of Award relationships, price escalation and labor cost or prices. The audit will highlight concerns and make recommendations to the contracting officer. While the contracting officer is not obligated to take action on all audit recommendations, all recommendations must be considered and addressed.
The audits candidates are initially identified by the auditors and provided to the appropriate centers for input. This initial list is generally based on sales. The GSA contracting officer will identify any contracts they want audited based on issues or concerns identified during the contract period. The contracts identified by the PCO may or may not be on the auditors initial list. The GSA IG then determines how many audits they can accomplish and, utilizing the PCO input, will select specific contracts to audit.
The PCO will send out a audit notification letter to the contractor, at least 210 days prior to the contract expiration date. It is important that information be made available to the auditors in a timely manner. The PCO and auditor work together to ensure that the audit covers all areas of concern. While the audit report is not typically provided to the contractor, the results of the audit are discussed in order to resolve outstanding issues. It is not uncommon that negotiations may be required and a modification agreed to before the option can be exercised.
Since this can be a rather drawn out process, it is not unusual to have the contract temporarily extended for six months in order to allow time to complete the audit or negotiations. This highlights the need for contractors to be responsive to and cooperate with the auditor.

11. Why Options are not Exercised
Lack of sales (no/low sales)
Out of scope work
Lack of required documentation (CCR, ORCA, Sub K Plan, CSP, novation, etc.)
Contractor request or contractor goes out of business
Pricing not fair and reasonable
Poor contractor performance (not reporting sales/IFF, not in Advantage, inadequate contract management)
Multiple contracts, same schedule
Response to GSA contract specialist not timely
As shocking as it may seem, not all options are exercised. For some of the same reasons we cancel contracts, we also do not exercise options.
Just because a contract was not cancelled during the first five years and sales were lacking does not mean the option will be exercised.
The number one reason options are not exercised is due to lack of sales. Since the sales criteria requires sales of at least $25K,every year, after the first year, we are looking to see if there has been sales during the past couple of years before the contract expires. The contract will expire unless the GSA contracting officer takes action. If GSA records show a lack of sales and sales for completed work have not been recorded or work is underway and but sales have not yet been recorded, then it is important to let the PCO know immediately upon receipt of a notice letter.
It is not unusual for the PCO to ask to review some SOWs. If in the course of this review, the PCO discovers that most or all of the work done under a specific schedule contract was out of scope work, then the option may not be exercised.
If your CCR and ORCA are not validated and current; if your business size has changed from small to large and you don’t have a subcontracting plan; if your CSP is not current, if a novation should have been accomplished but was not; your contract cannot be exercised. These things need to be current before the PCO can exercise the option.
Occasionally a contractor goes out of business or they realize that they are not going to be able to meet the contract requirements and request that their contract be allowed to expire.
The PCO is required to conduct a market analysis to determine that the prices are still fair and reasonable. If this analysis, or an audit raises pricing issues that cannot be resolved, the option will be allowed to expire.
If there are contract administration issues that have been identified by a Administrative Scorecard and have not been resolved, the option will be allowed to expire. When a Scorecard issue is identified, the contractor will be given time to make corrections but if the corrections are not made the contract will not be allowed to continue.
As a result of mergers and buyouts it is not uncommon for one contractor to end up with multiple contracts. If that happens, the PCO will generally suggest that the contracts should be combined, prior to the end of the first/next base contract period. If each contract represents a different cost center it may be appropriate to continue them as independent contracts.
Finally, there is a deadline that must be met. Expired contracts cannot legally be revived so it is important that all information and actions taken be accomplished in a timely manner. If responses are not received in a timely manner, the option may expire.