b. In conjunction with Item 22, Item Reduction Program, page 13, FSS will develop the necessary management tools to control the overall size of the multiple award schedule program. In this respect, FSS should: (1) establish as a management goal a percentage reduction in the number of basic equipment items covered by the multiple award schedule program (not counting accessories, repair parts, attachments, special features and supplies for basic equipment items) per fiscal year; (2) develop on a time-phased basis commercial item descriptions (CIDs) to facilitate making single award contracts based on head-to-head competition. FSS should, therefore, begin developing CIDs for those basic equipment items which represent a large total dollar volume of business which would be most susceptible to head-to-head competition, i.e., items. for which there is close competition in the commercial market; and items that are sensitive; (3) develop and implement a detailed test plan covering two or three basic equipment items, one of which will be electric typewriters that appear to have the best potential payoff. Your plan shall be coordinated with the Office of Acquisition Policy prior to initiation of the test program; and (4) begin to develop the necessary means for using life cycle costing techniques as the primary award criteria for reparable items while retaining acquisition cost as the primary award criteria for nonreparable items. C. Improve existing methods of schedule maintenance to stabilize the production of new annual contracts over the entire year. This will preclude the need for both short term contracts and for contract extensions because of delays in issuing annual contracts. d. Each maximum order limitation will be supported by a detailed justification which will consider production capacity of the contractors, potential price breaks for large quantity buys, and the potential gains through increased competition on individual buys. e. Each minimum order limitation will be supported by a detailed justification which will consider actual quantities ordered. To the extent practicable, both the maximum and minimum order limitation should be tailored to the individual contractor. f. Finally, review your methods of determining the extent of geographical coverage of your schedule contracts, especially where warranty/service work is involved. You should balance the administrative efficiencies of negotiating single large area contracts against the potential benefits of competition that would be available if smaller geographic areas of coverage were used, e.g., metropolitan areas. Smaller geographic area coverage would also permit greater involvement by smaller business firms. Implementation: Develop a Plan of Action (POA) to apply the policy on all schedules Furnish a copy of the approved FSS POA to AP within 75 days from the date of this document. Formally monitor the implementation of the policy with interim reports furnished to AP quarterly. The first progress report will cover the period July 1979 through September 1979. This report, as well as subsequent reports, will be due to AP within 10 days of the end of the quarter. Furnish a final report to AP on the overall results of implementation of the policy on all FSS schedules within 15 months from the date of this document. 17. Policy on marketing research activities FSS should develop a marketing research capability to accomplish the following: a. Identify what user agencies purchase from the multiple award schedules and what their future requirements will be. This will include quantity, quality, where, and when the supplies and services are needed. b. Identify what existing or new products are available in the commercial market which may satisfy the using agencies needs. c. Meet with the chief logistics or material management officer of at least the major using agencies on a regular planned basis to review the effectiveness of our supply support activities, soliciting ideas on how that support can be improved, and to discuss changes in future support require ments. d. Develop a program to identify new products and industry capabilities or changes in existing products or capacities, such as potential material shortages, changes in lead times, etc., which will impact our support capability. e. Secure the following information: market, sales and discount data from offerors; methods of commercial distribution; prices at which items are available, particularly in retail outlets; and prices obtained by state and local governments. f. Integrate and use the information thus obtained as the foundation for developing the business strategy for subsequent contract and supply management efforts. . Develop a Plan of Action (POA) to apply the policy on all schedules . Furnish a copy of the POA approved by FSS to AP within 75 days from the date of this document. Formally monitor the implementation of the policy with interim reports Furnish a final report to AP on the overall results of implementation of the policy on all FSS schedules within 15 months from the date of this document. 18. Policy on availability of schedule items at lower prices As FSS negotiates its schedules, they will include a provision in each of their schedules and contracts to the effect that whenever agencies can purchase items identical to those on our multiple award schedules at lower prices than FSS has negotiated, they may do so provided that they supply FSS with a copy of their purchase order. (See FSS Procurement Letter No. 283, dated January 10, 1979.) Upon receipt of the purchase order, FSS will analyze the causes of the price difference and take whatever action is appropriate under the circumstances. In addition, FSS will notify other agencies of the price difference if they feel other agencies would benefit. Implementation: Develop a Plan of Action (POA) to apply the policy on all schedules Furnish a copy of the POA approved by FSS to AP within 75 days from the date of this document. . Formally monitor the implementation of the policy with interim reports furnished to AP quarterly. The first progress report will cover the period July 1979 through September 1979. This report, as well as subsequent reports, will be due to AP within 10 days of the end of Furnish a final report to AP on the overall results of implementation 19. Policy on "sensitive" items FSS will continue to provide supply support for sensitive items which remain in the multiple award schedule program, subsequent to implementation of the item reduction program required by Item 22, provided purchasing agencies provide sufficient justification. (See Administrator's memorandum, dated March 15, 1979.) The following are examples of the types of justification which would be considered adequate to support retention of sensitive items in the multiple award schedule program: b. c. Support for law enforcement, security, or safety reasons. Support for morale and welfare where lack of such support would have a serious adverse impact on Government operations, especially in remote locations of the United States and overseas. d. Where lack of support would adversely impact U.S. prestige, foreign aid and security assistance programs. e. For rehabilitation, medical, or educational purposes. Implementation: FSS is requested to Develop a Plan of Action (POA) to apply the policy on all schedules Furnish a copy of the POA approved by FSS to AP within 75 days from the date of this document. . Formally monitor the implementation of the policy with interim reports . Furnish a final report to AP on the overall results of implementation 20. Policy on aggregate discounts FSS has been provided with detailed guidance on the appropriate use of aggregate discounts. (See AP memorandum, dated by 20, 1979.) Essentially, the policy requires FSS to negotiate schedule contracts based on the lowest net price for the estimated volume of Government purchases and, either obtain a discount provision in the event actual purchases exceed the volume used to negotiate the basic contract pricing structure, or place in the contract file a formal waiver of the aggregate discount requirement approved at a level higher than the contracting officer. Implementation: FSS is requested to Develop a Plan of Action (POA) to apply the policy on all schedules as they come due for award with special emphasis and attention on the major schedules. This POA is to be prepared within 60 days from the date of this document. . Furnish a copy of the POA approved by FSS to AP within 75 days from the date of this document. . Formally monitor the implementation of the policy with interim reports . Furnish a final report to AP on the overall results of implementation of the policy on all FSS schedules within 15 months from the date of this document. 21. Policy on comparing models, characteristics, and prices FSS should develop and publish simplified product comparison charts, especially for schedules that contain many equivalent or closely substitutable items. These charts should provide, as a minimum, the following information in matrix format: contractor's name, model number, key features, unit prices for varying quantities, and other appropriate terms and conditions. Implementation: FSS is requested to Develop a Plan of Action (POA) to apply the policy on all schedules as they come due for award with special emphasis and attention on the major schedules. This POA is to be prepared within 60 days from the date of this document. The plan should include what FSS feels they can provide to identify the information addressed in the policy under their schedule contracts in a useful and economical manner. |