The General Services Administration is taking a relatively novel approach to small business participation in its just-issued solicitation for the Office Supplies-3 Federal Strategic Sourcing Initiative (OS3 FSSI).

      The GSA’s RFP for OS3 included no formal set-asides for small business, a break from usual practice that is stirring concerns among small vendors.

      As an alternative to set-asides, the GSA said it would evaluate small and disadvantaged bidders preferentially in OS3.

      Two other features of the RFP also are likely to be worrisome for small contractors: the GSA’s decision to make OS3 a full and open competition, and its decision to open OS3 bidding to companies that don’t have contracts in the GSA Multiple-Awards Schedules program.

      GSA issued the RFP on Jan. 31. The agency expects to make 21 awards under OS3, which is valued at about $1.25 billion over five years in four categories: general office supplies, paper, toner/ink and On-the-Go fast delivery.

      The GSA announced its small business approach for OS3 on Jan. 30, referring to it as “a significant issue.”

      “We would like to inform industry that due to FAR 25.401 (a) (1) we will not be having formal set-asides for small business, but instead have socioeconomic status as a strong evaluation factor for CLINS (Contract Line Item Numbers) previously identified as set aside for small business,” GSA officials posted on the GSA Interact website for OS3.

      The GSA said it used a similar method in boosting small business participation in Office Supplies-2.

      “This procedure was successful in awarding Blanket Purchase Agreements under FSSI OS2, while achieving aggressive small business spend goals,” according to a GSA posting on GSA Interact.

      OS2 expires in May and is expected to reach nearly $800 million in sales. As of last June, 76% of sales were going to small businesses, according to the GSA.

      However, small vendors are raising an alarm about OS3’s absence of set-asides, and about its emphasis on full and open competition.

      One of the concerns is that the combined impact of having no explicit set-asides, along with full and open competition, may result in fewer awards to small businesses.

      “This change may have unforeseen and unintended consequences for decreasing or even eliminating small business award dollars for OS3 vs. OS2,” Joel Herringa, a government accounts manager, wrote on GSA Interact on Jan. 31. While the approach may have worked for OS2, it may not be effective for OS3 because of a possibly larger number of large businesses eligible to compete for OS3, he added.

      The National Office Products Alliance, a group of small vendors, in a letter in December urged GSA to reconsider full and open competition for OS3 and urged GSA to make OS3 a total small business set-aside. The group maintains that completely open competition in OS3 would be the nail in the coffin for vendors who hold GSA Schedule 75 contracts for office supplies.

      “The possibility of awarding part of the OS3 BPA to 12 small businesses while excluding over 400 small businesses that hold a Schedule 75 contract and currently sell to the federal government, has the potential to detrimentally impact the small business community,” the office products group wrote in the letter. “Making OS3 an open competition almost guarantees that Schedule 75 will be eliminated.”

      Schedule 75 has been closed to new entrants since 2010, when the first office supplies contract was awarded.

      The Coalition for Government Procurement, another group representing GSA Schedules vendors, believes that OS3 would set up a “duplicate” GSA schedules program for office supplies.

      “One of the most troubling aspects of the draft RFP is the creation of a new contract vehicle that duplicates the MAS Office Supply Schedule,” Roger Waldron, coalition president, wrote to the GSA on Dec. 9.

      GSA officials said they met with the office products group, coalition and other industry members before releasing the final RFP. Once the RFP is made public, the agency said it temporarily halts communication with industry.

      The GSA said it made several changes, including removing a price reduction requirement and adding two small business awards in the toner/ink pool, in response to concerns from those contractors.

      The agency expects OS3 to save $65 million annually on administrative costs plus an additional $90 million through lower prices.

More information:
GSA Interact website for OS3, includes links to RFP: https://interact.gsa.gov/node/453425
NOPA advocacy on OS3 http://www.nopanet.org/NOPA-Government-Advocacy
CGP advocacy on OS3: http://goo.gl/dpz4At