MEMORANDUM FOR AGENCY SENIOR PROCUREMENT EXECUTIVES AND THE ACTING DEPUTY UNDER SECRETARY OF DEFENSE (ACQUISITION REFORM)

{original signed by}
FROM: Steven Kelman
Administrator

SUBJECT: Multiagency/GWAC Program Managers Compact; Planned Establishment of Program Managers Council


I wanted to bring to your attention the recent issuance of "The Multiagency/GWAC Program Managers Compact" (see attached). The program managers of four prominent multiagency contracts and governmentwide agency contracts (GWACs) created this compact to identify a series of principles that will guide their business conduct.

In light of the increased emphasis agencies have been placing on the use of multiagency contracts and GWACs, this office plans to establish a Program Managers Council. The Council will meet periodically to discuss policy and management issues of common concern involving multiagency contracts and GWACs. I am confident that this forum will help agencies to strengthen the processes associated with the award, administration, and use of these vehicles.

Attachment

We, the Program Managers, hereby set forth and agree to the following:


I. PURPOSE

In the interest of economy and efficiency, federal agencies are placing increased emphasis on the use of multiagency contracts and governmentwide acquisitions (commonly known and hereinafter referred to as governmentwide agency contracts or GWACs). When properly developed and used, these vehicles may enable agencies to further leverage the government's buying power and to satisfy their requirements using contractual vehicles issued by other agencies.

In order to affirm a commitment to sound competition and other contracting philosophies, and to improve the processes associated with these vehicles, we, the undersigned program managers, have identified a series of principles that will guide our business conduct. The principles are recorded in this document, which shall be known as the "Multiagency/GWAC Program Managers Compact," hereinafter referred to as the "Compact." We commit to follow the principles contained herein.


II. APPLICATION

The principles set forth in this Compact apply to multiagency contracts and governmentwide agency contracts.

For purposes of this Compact--

Multiagency contracts are multiple award task order contracts that provide for agencies (requesting agencies) needing services, including but not limited to information technology services, to obtain them from another federal agency (servicing agency) that also has a need for such services and has awarded, or will be awarding, a contract for such services. Multiagency contracts are subject to the requirements and limitations of the Economy Act (except where more specific statutory authority exists) and applicable Executive branch policies and procedures, including, for information technology services, OMB Memorandum M-97-07 dated February 26, 1997 (copy attached).

Governmentwide agency contracts (GWACs) are multiple award task order contracts that provide for agencies (requesting agencies) needing information technology services to obtain them from another federal agency (servicing agency) that has entered into a contract(a) prior to August 7, 1996, under a delegation of procurement authority issued by the General Services Administration (GSA) under authority granted to it by the Brooks Act, 40 U.S.C.759, or (b) after being designated as an executive agent for such by the Office of Management and Budget (or otherwise covered by such designation) pursuant to section 5112(e) of the Clinger-Cohen Act, 40 U.S.C. 1412(e). GWACs are subject to applicable Executive branch policies and procedures. However, they are not subject to the requirements and limitations of the Economy Act.


III. PRINCIPLES

Judicious management of multiagency contracts and GWACs requires adherence to the following principles.

A. Structuring Multiagency Contracts and GWACs

1. We agree to assess the potential magnitude of interagency orders to ensure that we have or will have adequate resources to properly administer the combined resultant workload. We further agree to consider, if necessary, placing limits on the size of individual orders, as well as initial limits on the amount of interagency usage, subject to periodic adjustment based on our demonstrated ability to adequately manage the contract in light of the volume of orders received.
   
   
2. We agree to provide electronic access to sufficient information to minimize the burden of using these contracts. We have placed or will consider placing this information on our Websites along with a link to the Acquisition Reform Network (ARNet).
   
   
3. We agree that the functions we perform will be limited to those that are inherently governmental. If fees are established to recover the costs of performing these functions, they shall be at the level necessary to cover actual costs for managing and administering the multiagency contract or GWAC. We agree that fees should be established so that the projected total revenue generated by the use of these contracts do not exceed projected actual costs. We further agree that fees should be adjusted so that total revenues do not exceed actual costs.
   
   
4. We commit to use, the maximum extent practicable, small businesses (including small disadvantaged and women-owned businesses) at the prime or subcontract levels.
   
   
5. We agree to define ordering processes that are easy to understand and the emphasize streamlined procedures and electronic processes. We further agree to explain our approach for ensuring that all contractors are given a fair opportunity to be considered for individual task orders.
   

B. Accepting Tasks

1. We agree to remind the requesting agency¹ of its obligation to determine the economy and efficiency of using those contracts to meet its needs. We further agree to remind the requesting agency that it must follow the requirements set forth in OMB Circular A-76 when applicable.
   
   
2. We agree to remind the requesting agency of its obligation to perform quality reviews of work statements to ensure that tasks are within the scope of the multiagency contract or GWAC, and that they reflect specific requirements.
   
   
3. We agree to remind the requesting agencies of their obligation to ensure that tasks satisfy their internal requirements, such as architectural standards for information technology. We will further remind requesting agencies that their use of multiagency contracts or GWACs does not relieve them of their responsibility to comply with applicable laws, regulations, and policies governing federal procurement.
   
   
4. We agree to encourage the requesting agency to use performance-based work statements to the maximum extent practicable. We further agree, for services that would be in the highest demand, to develop performance-based service contracting (PBSC) templates that could be used by the requesting agency to develop PBSC task orders.
   
   
5. We agree that contracts or GWACs should not be used for the sle purpose of obligating expiring funds at the end of a fiscal year. The requesting agency should have a bonafide need in the fiscal year to which funds are being obligated and follow all other appropriation law requirements.
   

C. Processing Orders

1. We agree to ensure that contractors are given a fair opportunity to be considered and that the exceptions to fair opportunity recognized in FAR 16.505 are used appropriately.
   
   
2. We agree to incorportate a best value approach and use past performance in determining contractors for individual tasks.
   
   
3. We will strive to minimize contractor costs associated with preparing proposals for orders. Where appropirate, we will consider limiting the size of written proposals, or encouraging the use of oral proposals. We furhter agree that proposal detail should be tailored to the minumum level necessary for adaquate evaluation and selection for award.
   

D. Administering Orders

• We agree to record information regarding contractor performance on orders and make it available to source selection officials to facilitate maximum practical consideration of past performance in awarding subsequent tasks.
  

E. Recompeting or Establishing New Multiagency Contracts

• We agree to recompete or establish our own multiagency contract only after we determine that such a vehicle is in the best interest of the government and the most cost effective means of satisfying our requirments. In making this decision, we will consider (1) the economies and efficiencies to be gained by establishing our own multiagency contract, in light of the existence and feasibility of having our needs met through another agency, or multiagency contracts and (2) if the requirements are generally within our mission or competency to award.
  
  

IV. PROGRAM MANGERS COUNCIL

We agree to the establishment of a Program Managers Council that would meet periodically to discuss policy and management issues of common concern involving GWACs and multiagency contracts. OFPP will chair the Council. The council will, among its tasks, develop performance measures and best practices or alternative procedures to implement these principles, as appropriate.


V. JUDICIAL REVIEW

This Compact is intended only to improve the internal management of the Federal programs involved and does not create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies or instrumentalities, its officers or employees, or any other person.


PARTIES TO THE COMPACT

We, on behalf of our programs, hereby express our commitment to the principles contained in this Compact.

{original signed by}	{original signed by}
Mary L. Sloper Program Manager DEIS II	Leamon Lee Program Manager for NITAAC
{original signed by}	{original signed by}
Richard A. Lieber Principal DOT/TASC Acquisition Services ITOP	Charles Self Program Manager FEDSIM

______________
¹"Requesting agency" refers to an agency that wishes to have its needs fulfilled through another agency's multiagency contract or GWAC.

M-97-07


MEMORANDUM FOR HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS

{original signed by}
FROM: Franklin D. Raines

SUBJECT: Multiagency Contracts Under the Information Technology Management Reform Act of 1996


This memorandum authorizes agencies to enter into multiagency contracts for information technology and sets forth good management practices to be followed by agencies that do so.

Authority:

Section 5124(a)(2) of the Information Technology Management Reform Act of 1996 (ITMRA), 40 U.S.C. 1424(a)(2), states that an Executive agency may "enter into a contract that provides for multiagency acquisitions of information technology in accordance with guidance issued by the Director." The accompanying Conference Report, H.Rep. 104-450, states that "the requirements and limitations of the Economy Act, and other provisions of law, apply to these multiagency acquisitions." Accordingly, to the extent practicable, and consistent with the requirements of the Economy Act, 31 U.S.C.1535, and other relevant provisions of law, agencies may permit use of their contracts by other agencies and award contracts for multiagency use.

This guidance is limited to multiagency contracts issued by agencies pursuant to Section 5124(a)(2) of ITMRA. Under Section 5124(a)(3) of ITMRA, 40 U.S.C.1424(a)(3), the Director may authorize an agency to enter into a multiagency contract for procurement of commercial items of information technology that requires each agency covered by the contract either to procure the items under that contract or to justify an alternative source of the items. Similarly, under Section 5112(e) of ITMRA,, 40 U.S.C. 1412(e), the Director may designate one or more heads of Executive agencies as executive agents for government-wide acquisitions of information technology. The C10 Council is encouraged to identify appropriate candidates. This guidance does not apply to contracts under Sections 5124(a)(3) and 5112(e).

Policy:

The ITMRA provides agencies the flexibility to acquire information technology effectively and efficiently. Multiagency contracts permit aggregation of agency demand to encourage vendors to offer the best possible prices, and they serve to reduce the overhead associated with multiple acquisitions, particularly by smaller agencies. In order to realize these benefits, a management commitment commensurate with the potential size of the contracts is essential. This is especially important because customer demand can be difficult to anticipate, and could potentially exceed the agency's ability to manage the contracts, which could disrupt business relationships among agency customers and vendors.

Agency heads must, with regard to multiagency contracts:

• assure that their Chief Information Officers and Senior Procurement Executives work together to assign responsibilities and establish clear lines of accountability;
  
  
• see that the agency component conducting the acquisition has established effective contract management systems and has an adequately trained and sized staff available to administer the resulting contracts;
  
  
• monitor the progress of the contracts and ensure that adequate management resources continue to be devoted, particularly if the contracts prove to be unexpectedly popular or otherwise begin to strain existing management resources;
  
  
• assure agency compliance with Federal Acquisition Regulation section 16.504(a) by setting an initial dollar or quantity limit on such contracts; and,
  
  
• consider placing an initial limit on the amount of interagency usage, subject to periodic adjustment (either upward or downward) depending on the agency component's demonstrated ability to adequately manage the contracts in light of the volume of orders received.
  

Additional Information:

If you need further information regarding this guidance, please contact the Office of Information and Regulatory Affairs, (202) 395-3785. If you need information regarding procurement­related issues, please contact the Office of Federal Procurement Policy, (202) 395­3501.

OMB continues to review procurement­related matters on the use of multiagency contracts and will issue additional guidance in the future as appropriate. This memorandum supersedes OMB Memorandum M­96­36, issued August 6,1996.