Executive Order Aims to Consolidate GWACs at GSA

First, the EO directs that within 60 days, the head of each agency must submit to the GSA Administrator proposals to have GSA “conduct domestic procurement with respect to common goods and services for the agency.” The EO defines common goods and services to mean “the common Government-wide categories defined by the Category Management Leadership Council led by the Office of Management and Budget (OMB).” Currently, OMB identifies ten such government-wide categories:

1. Facilities and Construction
2. Professional Services
3. IT
4. Medical
5. Transportation and Logistics
6. Industrial Products
7. Travel
8. Security and Protection
9. Human Capital

10. Office Management.¹

Of these ten, three are not currently led by GSA: Medical is co-led by the Department of Defense (“DoD”) and the Department of Veterans Affairs (“VA”); Security and Protection is led by the Department of Homeland Security (“DHS”); and Human Capital is led by the US Office of Personnel Management (“OPM”).² The consolidation of procurement in GSA pursuant to the EO would appear to take leadership over these categories away from these different agencies in favor of GSA.

Within 90 days of the EO, the GSA Administrator must submit to the Director of OMB “a comprehensive plan” for GSA to “procure common goods and services across the domestic components of the Government.” Notably, the EO does not define the term “domestic procurement.” The EO’s silence on this point leaves open questions on whether and how the EO applies to international procurement activities, such as the procurement of goods and services for overseas operations.

Second, the EO directs that within 30 days, the Director of OMB must “designate the [GSA] Administrator as the executive agent for all Government-wide acquisition contracts [(“GWACs”)] for information technology.” The GSA Administrator must then “rationalize” these various IT GWACs to “identify[] and eliminat[e] contract duplication, redundancy, and other inefficiencies.” The EO permits the GSA Administrator, in consultation with the Director of OMB, to “defer or decline” this designation for particular GWACs “when necessary to ensure continuity of service or as otherwise appropriate.” Within 14 days, the Director of OMB must issue a memorandum implementing this IT GWACs portion of the EO.

To be sure, this is not the federal government’s first attempts to reform the federal acquisition process. But curiously, the consolidation of procurements in GSA appears to be a step towards returning the landscape to the world before the passage of the Federal Acquisition Streaming Act (“FASA”) and the Federal Acquisition Reform Act (“FARA”), two of the key measures in the 1990s to improve the efficiency of federal procurements. Indeed, prior to FASA and FARA, GSA was the mandatory, government-wide source for the procurement of goods and services, as well as for the acquisition, management, and disposal of real property under the Federal Property and Administrative Services Act of 1949—i.e., the role the EO imagines GSA will again play going forward.

Importantly, the EO does not carve out an exemption for procurements conducted by DoD or DHS, despite the long-standing recognition in the federal procurement space these agencies have unique procurement considerations—not least because they often engage in procurements with critical national security implications—that may not be well-suited to the standardized procurement processes intended for non-defense agencies. Nor does the EO address how the proposed consolidation would impact GSA’s delegation of authority to the VA to maintain a separate and distinct Federal Supply Schedule (“FSS”) program for certain categories of goods, including drugs or medical devices. It is also unclear how the Trump Administration’s on-going efforts to downsize the GSA will impact the implementation of this EO.

The full implications for federal contractors will become more evident once there are concrete steps to implement the EO and fill in the EO’s gaps in details. But contractors can expect that non-GSA GWACs—such as NASA’s Solutions for Enterprise-Wide Procurement (“SEWP”) or the National Institute of Health’s (“NIH”) Chief Information Officer-Solutions and Partners (“CIO-SP”) vehicles—could be discontinued in favor of GSA-administered contracts. Contractors should also be prepared for greater competition over fewer contracting opportunities in the future if non-GSA agencies can no longer issue their own multiple-award contracts.

Relatedly, there may be an increase in bid protests of task order awards if GSA-issued GWACs replace DoD or NASA-issued vehicles. FASA’s threshold for GAO protests of task orders is tied to the contractual authority for the individual procurement action, not the agency that is the intended beneficiary or the source of funds for the task order.³ The FASA protest threshold for civilian agency remains at $10 million, as compared to the newly raised $35 million threshold for DoD or NASA.⁴ If DoD GWACs are consolidated into GSA-administered contract vehicles so that GSA issues task orders for DoD’s benefit, task orders that may not have satisfied the $35 million FASA threshold for GAO protest jurisdiction under 10 U.S.C. § 3406 may meet the lower $10 million threshold for civilian agencies under 41 U.S.C. § 4106. This could increase the number of task order protests that may be heard at GAO.

Jenner & Block will continue to monitor developments in implementation of this EO and related developments.