Share-in-savings comments sought

Authorities granted under E-Government Act expire in 2005

Share-In-Savings Pre-solicitation notice

The government has questions for agencies and vendors regarding share-in-savings contracts.

Last week, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council published a Federal Register notice posing several specific questions. The purpose of the notice is to help vendors better prepare for share-in-savings contracts and for agencies to derive more value from them. Responses are due by Oct. 31.

In share-in-savings contracts, the vendor's payment is partially based on how much money its solution saves the agency, providing an incentive for vendors to deliver high performance.

Agencies have had the option to use such contracts under the Federal Acquisition Streamlining Act of 1994, but last year's E-Government Act introduced more favorable provisions. Though agencies have tentatively begun using the new rules, officials have not published a final rule.

The concept depends on the government's leverage as an important customer. Under the proposed rules, agencies are obligated to pay only when savings are realized, and then must pay just part of the savings to the contractor.

The authorities that the act grants expires in 2005.

The chief advantage of the e-gov provisions is the elimination of agencies' burden to set aside money in advance, said Steve Kelman, public management professor at Harvard University. Under the older rules, agencies have to set aside part of the cancellation fee to ensure they would have the funds required to cancel the contract if necessitated by future budget cuts.

"It can be a pretty big hit," Kelman said. "It makes agencies less anxious to do share-in-savings."

However, the new rules allow the government to exempt only 10 contracts a year from the upfront obligations. Agencies may award any number of share-in-savings contracts if they obligate enough money to pay the first year's costs and cancellation fees.

Kelman and Alan Chvotkin, senior vice president and counsel at the Professional Services Council, are concerned that the General Services Administration is taking too long to publish a final rule that would give the program a shape agencies and businesses could count on.

"They better get their [regulations] out soon or there will hardly be any time for agencies to do this," Kelman said.

"They're asking the right questions," Chvotkin said. "They could have asked the same questions six months ago."

Kenneth Buck, director of GSA's Share-in-Savings Program Office, said three agencies — the Interior Department, the Food and Drug Administration and the Postal Service — have launched pilot projects. GSA is not merely foot-dragging, he said.

"We just want to make sure we've got it right," he said. "That's why we're taking the time."

Although the authorities under the E-Government Act expires in 2005, Congress can renew it, Buck said. Rep. Tom Davis (R-Va.) has been "real aggressive in pushing this, especially as budgets get cut," he said.

***

Probing Questions

The General Services Administration is seeking comment from vendors and agencies on how to improve share-in-savings contracting. GSA wants to know:

* What type of information will vendors need in the solicitation to adequately prepare a proposal for contract?

* What criteria should be considered in developing an appropriate share ratio and schedule for payment?

* What general criteria should be considered in determining the original, or baseline, cost of a process?

* How, if at all, should the determination of cancellation and termination costs differ from those used in connection with multiyear contracts?

* Should ownership rights of hardware or property acquired under the share-in- savings contract be addressed in the Federal Acquisition Regulation (FAR)?

* What method should be used to determine a contracts' value in regard to FAR requirements that are triggered by the acquisitions' dollar amount?

* Should there be a preference for structuring the contracts as firm-fixed-price or fixed-price with price adjustments allowed?

* Which, if any, performance-based contracting policies should not be applicable to an share-in-savings contract, and why?

* What types of activities in the information technology arena might be conducive to share-in-savings contracting?

Source: Federal Register

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.