GSA’s Big Changes in 2020, Part 1: Federal Supply Schedules Consolidation

Merle M. DeLancey Jr.

2020 may prove to be one of the most active years for federal contractors holding General Services Administration (“GSA”) Federal Supply Schedule (“FSS”) contracts and certain federal contractor registration requirements managed by GSA. This post is the first of a series on GSA’s changes and addresses GSA’s most publicized action—the consolidation of its federal supply schedules into one schedule.

As promised, in October 2019, GSA released a solicitation that consolidated the solicitations for its 24 federal supply schedules into one solicitation to obtain an FSS contract. GSA’s consolidation involves three Phases.

      • Phase I applies to companies that do not already hold an FSS contract. Phase I was the release of the consolidated solicitation for use by companies seeking to obtain a new schedule contract. On October 1, 2019, GSA released the consolidated solicitation.
      • Phase II applies to companies that already hold one or more FSS contracts. Phase II will involve the mass modification of existing schedule contracts. The mass modification will be bilateral and will incorporate the new, uniform set of terms and conditions from the consolidated solicitation into all existing schedule contracts. The modification will result in all (new and existing) schedule contracts containing identical terms and conditions. GSA intends to send the modification to contractors this month (January 2020). Contractors will have until July 2020 to review and sign the modification.

Two notes with respect to Phase II. First, contractors that hold multiple FSS contracts will receive a mass modification for each contract. Second, although a contractor will have until July 2020 to sign the mass modification, as an incentive to get contractors to not wait until the last moment to execute the modification, GSA has stated that a contractor cannot add Special Item Numbers (“SINs”) that were outside the scope of its existing FSS contract until it signs the mass modification.

      • Phase III applies to contractors holding more than one FSS contract. Phase III will involve the consolidation of multiple schedule contracts held by one contractor into one, unified schedule contract. GSA expects Phase III to begin in July 2020. GSA intends to work individually with each company to determine the best option for consolidating its multiple FSS contracts.

A tailored approach could involve allowing one or more of a contractor’s FSS contracts to lapse and focusing on the contractor’s most active FSS contract. Alternatively, the best option for some contractors may involve letting all of its FSS contracts expire and pursuing a new FSS contract under the new consolidated solicitation. If applicable, the best option for a contractor also will involve consideration of any blanket purchase agreement (“BPAs”) held by the contractor. There is no end date for this Phase.

With the move to one federal supply schedule, GSA seeks to ease FSS contracting burdens for contractors and contracting officers. For example, common lease and delivery terms, small business plan requirements, and an economic price adjustment clause should ease contract administration issues and allow for expedited FSS ordering. However, there will be implementation issues consolidating 24 schedules covering diverse products and services into one schedule.

There are fundamental differences between the purchase of products and services and even within the purchase of different services depending upon the solution being proposed by a contractor or sought by an agency. For example, certain terms and conditions applicable to IT products and services solutions are unlikely to be comparable to safety and security solutions or office furniture solutions. While some terms and conditions can be the same for each of these, commercial sales, upon which FSS pricing is based, does not buy each of these solutions the same way. As such, even after schedule consolidation, some flexibility will be required in order for FSS contracts to remain a viable way for companies to sell to the federal government. Ultimately, success or failure of GSA’s consolidation may depend on the flexibility afforded by your contracting officer and whether he/she feels constrained from deviating from the new, common terms and conditions.

In the near term, FSS contractors and companies that are contemplating seeking an FSS contract should consider the following:

      • Companies may want to hold off submitting any new offers for an FSS contract until the dust settles at GSA.
      • After receipt, contractors should carefully review GSA’s Mass Modification to assess any potential impact it may have on previously-negotiated specialized terms and conditions—most notably when price reductions are triggered.
      • Contractors should confirm their internal management systems are prepared to handle schedule consolidations. While some contractors have a centralized contract management structure, most have their applicable business unit manage its own FSS contract. A decentralized approach most likely means that one business unit has little to no contact with other business units that hold schedule contracts.
      • Contractors should coordinate communications with GSA and its current structure. For example, service contracts are handled in Auburn, Washington, while IT contracts are handled in Washington, D.C.; Atlanta; Kansas City; and Fort Worth.
      • Contractors should be proactive in terms of communicating with their contracting officers. There may be ways to influence which contracting officer is responsible for its consolidated FSS.