Universal Price Codes

As part of our ongoing efforts to modernize government IT procurement and management, the Better Contracting Initiative (BCI) has been a cornerstone of our strategy at the Governmentwide IT Program Management Office. Today, I am excited to discuss the strides we are making under the BCI, particularly Priority 2, which focuses on negotiating common enterprise-wide software licenses.

We’ve embarked on a journey to streamline how our federal government procures and manages its software assets. Our new Governmentwide Acquisition Strategy initiative not only aims to enhance operational efficiencies but also to achieve substantial cost savings and increase buying efficiencies.

Strategic collaboration and enhanced efficiency

Our approach under Priority 2 of the BCI involves collaboration and strategic negotiation directly with Original Equipment Manufacturers (OEMs), which are essential in managing the government’s vast array of IT resources. By centralizing our engagement processes and encouraging industry to view government agencies as “one customer,” we are ensuring that all government agencies, large and small, benefit from the best possible terms and prices, avoiding the inefficiencies of fragmented and duplicative contract terms.

IT Vendor Management Office’s role in the Governmentwide Acquisition Strategy initiative

The IT Vendor Management Office (ITVMO) has been instrumental in this effort, spearheading direct engagements by developing partnerships with OEMs, conceptualizing solutions for governmentwide challenges, negotiating resolutions, and establishing guidelines that will serve as the benchmark for software procurement across federal agencies. The Governmentwide Acquisition Strategy initiative is truly a governmentwide endeavor.

Steps to success

The ITVMO first identifies target OEMs by soliciting quantitative and qualitative data from all 24 Chief Financial Officers (CFO) Act agencies. Using analysis of governmentwide spend and the gravity of common OEM-specific challenges, the ITVMO recommends an OEM to address, which is then validated and approved by government leadership.

The ITVMO then collects contract data from all 24 CFO Act agencies and performs significant analysis on terms and pricing to identify inconsistencies and abnormalities (both good and bad). With the help of a Governmentwide Integrated Project Team, the ITVMO builds a list of best-in-class terms and target pricing to pursue via a variety of recommended solutions.

After a comprehensive review and discussion of these recommended solutions through a Civilian Service Acquisition Workshop, which further supports implementation of BCI through Prong #3 focusing on getting requirements right the first time which will avoid waste and save financial resources, the CFO Act agencies and the ITVMO works to finalize a set of governmentwide requests for the OEM.

Finally, the government engages the OEM in a collaborative fashion by walking decision-makers through the government’s challenges and recommended solutions for the purpose of cooperative adjustment and, ultimately, acceptance of our governmentwide concepts through modifications to all governmentwide acquisition vehicles so that all federal entities get the benefits of our “one customer” approach.

Consistency in contracts = Better contracting

The initiative is part of a broader effort to not only manage costs but also to ensure that the software we procure is secure, reliable, and meets the diverse needs of the federal workforce. To that end, we’ve made significant progress in identifying key areas where terms and conditions can be standardized to benefit all agencies. Our focus has been on improving license flexibility and mobility, enhancing cybersecurity measures, and implementing cost-effective pricing strategies. The feedback from various stakeholders has been overwhelmingly positive, indicating strong support for a more unified approach to software licensing in the federal sector.

Looking ahead

As we continue to advance this initiative, the insights gained from our ongoing discussions and negotiations will inform our strategies, ensuring that the federal government remains a prudent and effective purchaser of IT resources. To that end, the ITVMO is putting together a guide for agency acquisitions, specific to critical OEMs, to ensure broad recognition and adoption of the best-in-class practices we learned about throughout the Governmentwide Acquisition Strategy process. The goal is not only to save money but also to improve our IT infrastructure, making it more responsive to the needs of our agencies and the public.

The Better Contracting Initiative is a testament to our commitment to innovation and excellence in government IT procurement. With Priority 2, we are setting new standards for how the government collaborates and negotiates in the IT realm, ensuring better outcomes for all our stakeholders. Stay tuned as we continue to make strides in transforming government IT procurement for the better.

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Since 1949, GSA’s mission has been to deliver the best value in real estate, acquisition, and technology to government and the American people. We pursue this mission relentlessly, and have always welcomed input from all stakeholders as we seek new and effective ways to bring more value to our federal customers. That’s why we appreciate the recommendations presented in a recent audit by GSA’s Office of Inspector General (OIG). Conducted between 2011 through early 2016, this audit found that some contracts on GSA’s IT Schedule 70 offered identical products at widely varying prices. And that some items were being offered at prices higher than commercial sales.

We agree with these concerns, which is why we have been working for the past three years to fundamentally transform the Multiple Award Schedules (MAS) program, reduce prices, and streamline processes. I’m a consumer too. I’ll come back to a store when I know I’m getting the best deal — anything to avoid going from store to store comparing prices. And that’s exactly what IT Schedule 70 shoppers have told us they want, too. As FAS Commissioner Tom Sharpe laid out in his October 2015 blog, we’ve responded to our customers by working to meet that challenge. Over the past few years we’ve been adding new tools and innovations to IT Schedule 70 so that we can give our customers what they want: better pricing, better values and a better shopping experience.

We heard from procurement leaders across government that price variability on Schedules was a problem. In response, we spearheaded the Competitive Pricing Initiative (CPI), which looks at the current prices of identical products offered by suppliers through MAS and identifies opportunities for more competitive prices. Since it began in FY 2015, CPI has led to price reductions on roughly 1.4 million items across all of GSA’s 15 products Schedules –savings we passed directly to agencies.

Our customers told us it was difficult and time consuming to compare prices between different contractors. To fix this, we asked vendors to standardize part numbers and collected existing Universal Price Codes (UPCs). Now government buyers can more easily find and compare products and prices on Schedules.

To help small businesses that don’t have the resources to conduct extensive analyses, we added a Horizontal Pricing Analysis application to our e-toolbox. This market-research resource provides MAS contracting officers (COs) with additional data to pass on to MAS suppliers so they can be as competitive as possible.

To help our COs navigate pricing in a rapidly moving IT market we implemented GSA Price Point (XSB), an automated tool that lets them compare products and evaluate prices of all existing and future GSA Advantage! product listings and contract price modifications.

And we developed the Formatted Product Tool (FPT) to help our MAS contractors and COs negotiate competitive prices for products on Schedule. FPT automates price comparisons for identical items, removes burdensome processes for both vendors and federal buyers, and improves our customers’ GSA Advantage! experience.

All these tools and capabilities help government contracting professionals negotiate prices that are in line and competitive with government and commercial marketplace prices. They also provide transparency and better value to both the government and Industry. Central to GSA’s mission is that we deliver value to the federal government and the American people. While IT Schedule 70 is not perfect, we recognize the challenges we’re facing and have have taken concrete steps to make pricing more competitive and to provide the tools to help buyers make smart purchasing decisions.

However, we are aware that we must continue to address the very issues identified by the IG and continue to transform the MAS program, reducing prices and streamlining processes.

Since that study began in 2011, we have fundamentally changed the way we do business with industry and how our contracting officers work. We have made significant improvements as we tackle pricing issues across the Schedules program. At the same time, we have also cut the time it takes to award contracts, determined a new path for startups to get on Schedule faster, and strengthened our focus on compliance. With the new Transactional Data Reporting pilot we’ll start to collect and share more information on what the government buys and how much we pay for products and services. After looking at all the changes we have implemented, and looking forward to the improvements we’ll be making down the road, I am more confident and proud than ever that IT Schedule 70 will continue to provide the very best value to all of our important stakeholders.

Tag: Universal Price Codes

Better Pricing, Better Value, & Better Shopping Equals A Better Schedule 70