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«TRANSCRIPT OF PROCEEDINGS IN THE MATTER OF: ) ) FSSI INDUSTRY DAY ) ) Pages: 1 through 192 Place: Washington, D.C. Date: January 13, 2010 HERITAGE ...»

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Pages: 1 through 192

Place: Washington, D.C.

Date: January 13, 2010


Official Reporters

1220 L Street, N.W., Suite 600

Washington, D.C. 20005

(202) 628-4888



IN THE MATTER OF: ) ) FSSI INDUSTRY DAY ) ) Auditorium 1800 F Street, N.W.

Washington, D.C.

Wednesday, January 13, 2010 The parties met, pursuant to the notice, at 9:03 a.m.

BEFORE: JUDY POSKANZER, Director, National Administrative and Office Supplies Acquisition Center Federal Acquisition Service


CAROLYN ALSTON, Washington Management Group, representing Coalition for Government Procurement DAVID HAUGH, United Stationers DAVID HARRIS, SP Richards CHRIS BATES, NOPA HOWARD PARKER, Small Business Administration BARBARA PILKINTON, Vip Office Furniture and Supply JUANITA STRICKLAND, Malone Contract Office Solutions HUNTER RASBACH, Unistar-Sparco Computers, Inc.

ERIC BEALE, Ability One PAUL LEVITT, Chesapeake Office Supply of Virginia, Inc.

BILL MURRAY, Office Depot AJAYI AKINKUOTU, WECsys, LLC JIM KERWIN, IMPAC Computer Supplies JIM COPE, Cornerstone Office Systems, Inc.

BONNIE WHITTAKER, Adams Marketing Associates, Inc.

BOB EMBRY, Office Depot VINCE MARTINELLI, Staples JOE BRADFORD, Shelby Distributions Heritage Reporting Corporation (202) 628-4888 STEVE JEWETT, Office Advantage Heritage Reporting Corporation (202) 628-4888 1 PROCEEDINGS 2 (9:03 a.m.) 3 MS. POSKANZER: As I said, we have a very 4 busy day. My name is Judy Poskanzer. I'm the 5 Director of the Acquisition Center in New York as well 6 as Project Manager for the FSSI office supplies BPA 7 for the recompete. I want to thank you all for 8 attending our day here. I'll go over a little bit of 9 the agenda, the Commodity Team, what this is all 10 about, but I want to thank you for being here. First 11 of all I'd like to thank some of the GSA people for 12 helping me with the logistics, I want to thank the 13 marketing group in New York, Sandy Sabers and Laurie 14 Witherspoon, and I want to thank Reese Lessingeer in

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17 our members are over here, and I'm hoping that if 18 there were any other Commodity Team members, if they 19 would sort of come down to the front here, we have 20 some here, because we're here to listen to you. The 21 Commodity Team that is comprised of, the Office 22 Supplies Commodity Team for the FSSI, is comprised of 23 GSA as well as a variety of other agencies, DHS, OMB, 24 NSF, IRS, Navy, I'm going to forget some of them, but 25 there are about 14 agencies that are involved in the

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1 Commodity Team. And we're here to listen to you 2 today, to what you have to say, to formulate what 3 we're going to be going forth with for the recompete

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7 agenda will be as is indicated on the invitation, 8 there are four keynote speakers, and I believe all of 9 you are here, so I'll let you know the order. We're 10 going to have Carolyn Alston speaking on behalf of the 11 Coalition for Government Procurement, she's with the 12 Washington Management Group. We will have David Haugh 13 from United Stationers. Then we'll have David Harris 14 from SP Richards and then Chris Bates from NOPA, and

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17 in the sense that we'll see how things go, if the 18 Commodity Team has questions during the course of the 19 speaking, so we kind of slated the rest of the 20 speakers for about ten minutes, but we'll see how as, 21 you know, we have a certain agenda, we don't want to 22 be here until 7:00, I'm sure you don't want to be here 23 until 7:00, I don't want to be here until 7:00. So, 24 like I said, we're here to listen to you, the goal of 25 the Commodity Team.

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2 key players from the GSA team, myself who I've 3 introduced, as well as, and many of you will know some 4 of the New York Group because, you know, we handle the 5 Schedule 75, which this is derived off of, so many of 6 you know some of the key players on our team already.

7 Bob Woodside will be leading this effort with me, who 8 is not here today and he's been brought on, many of 9 you know Bob from he's in the services side of our 10 acquisition center but he was in the product side and 11 handled 75 for many years, he's on the team.

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13 officer on Schedule 75. Ed Lew, who is not quite here 14 yet, will be the lead contracting officer for this 15 effort. We have Hassan Harris who is from our office 16 in New York, as well as Prince Chaudry who is doing 17 some data analysis for us. And we have some key team 18 members from the Washington office many of you know, 19 we have Jeff Koses who is the program director for 20 acquisition operations, and Walter Eckbreth who seems 21 to work on I believe all the teams, fortunate for him, 22 and he works for Jeff and he's an important part of 23 our team. So with that said, we'll, you know, go 24 through our schedule with many of you and we'll, you 25 know, let you know, call you up one at a time when

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3 from 12 to 1 or we'll try to keep it close to those 4 times. And we'll see, you know, how long we take.

5 But again, you know, I want to repeat that we're here 6 to hear what you have to say to us because we've had 7 all these questions. If some of you have information 8 that you want to relay to us or some of you that might 9 be speaking and, you know, had put together 10 presentations, if you're interested or we would love 11 to see them, you can send them to us after this and we 12 can keep them and relay them to our Commodity Team so 13 we can use that for reference material. So with that, 14 any questions at the outset? Okay, I guess -- yes,

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20 any invitation that you got regarding this event, my 21 name and phone number were there but, okay, I will -yes -- spell it, Judy, J-U-D-Y, Poskanzer, that's P-OS-K-A-N-Z-E-R. I'm at (212) 264-0305, and email is 24 always first name dot last name at GSA.gov pretty much

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7 behalf of Larry Allen who's president of the Coalition 8 for Government Procurement. For any of you who don't 9 know, the Coalition is a nonprofit association of 10 firms that sell commercial products and services to 11 the Federal government. The Coalition has more than 12 350 members now, and they're all sizes -- small,

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15 world, about 70 percent of Schedule sales are 16 represented by Coalition members, and probably about 17 50 percent of sales of commercial items in the 18 government are from members of the Association. So we 19 have a lot of experience with the GSA's Schedules 20 program and with the items that we are going to 21 discussing today. And today we are here of course to 22 talk about comments on the second generation of the 23 Strategic Sourcing Initiative. Our comments from the 24 Coalition's standpoint are going to be in the nature 25 of an overview, and we hope that it will add some

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4 industry, and some of those questions are very 5 detailed about specific commercial buying practices, 6 and we think that the answers to those questions are 7 going to vary by company and probably the detailed 8 responses are best left to those companies. Okay, GSA 9 has a very clear objective on this particular 10 initiative, and that is to get the best price while 11 driving socioeconomic and environmental requirements.

12 I think that it may pay just to spend a couple of 13 moments with some of the history to put into context 14 the current initiative.

15 The government has a long history of trying 16 to drive low prices on products and services in the 17 office equipment area. Office equipment, office 18 products and office supplies have probably been the 19 focus of government procurement since GSA became a 20 centralized acquisition agency on behalf of the 21 government. I think the good news is that it has been 22 a history of continuous improvement. We've gone from 23 reliance on Federal specifications to use of 24 commercial products, from exclusive dependence on 25 government, the big box warehouses that could have

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4 quantity procurements for some of the commodities that 5 we're talking about now, and the result was that it 6 drove a terrific price but it did not provide the 7 choice that agencies now demand. GSA moved on to 8 single award schedules that did have commercial 9 products but didn't offer the choices again that 10 government customers demand. The Agency has now 11 evolved to using multiple award schedule that provides 12 both commercial products, commercial distribution 13 networks, and offers the choice that I think most of 14 the government customers are looking for.

15 And we have arrived at this moment where GSA 16 and other government agencies are learning to use the 17 multiple award schedule to further leverage both the 18 prices and the terms. And examples of it, of that use 19 of the multiple award schedule, includes both the 20 first Strategic Sourcing Initiative as well as BPAs 21 that GSA's own global supply service uses, and a 22 myriad of BPAs that agencies are using themselves.

23 Overall, I think our members are happy to 24 see GSA continuing to use the multiple awards schedule 25 program as a platform for the Strategic Sourcing

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1 Initiatives. We think the multiple awards schedule 2 continues to offer a lot of benefits to government and 3 to industry. First of all, it is a commercial 4 procurement vehicle, and I think importantly it 5 provides easy access government wide. You have the 6 products, you have the services, and you have the 7 possibility of solutions being built off the schedule.

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9 good for a strategic sourcing initiative is because it 10 does provide the two levels of discounts, one being 11 the negotiated standard discounts for agencies and 12 then the possibility of having lower discounts at the 13 task order level. We think this is important because 14 we have found, and I think you'll find that this is a 15 theme throughout our comments, that the more well 16 defined a requirement is the better prices and terms 17 you can get, so the multiple awards schedule 18 initiative allows both a standard discount and it 19 allows agencies to further leverage their requirements

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22 Advantage and e-Buy both allow agencies to streamline 23 the order process. And finally I think that the 24 schedules also have the built in socioeconomic 25 compliance, so whether it's Ability One or a small

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1 business or environmentally friendly initiatives, 2 those can all be and are built into the multiple 3 awards schedule. The feedback from our members falls 4 into three different categories.

5 First, and maybe most important, is that the 6 members believe that the government should expand its 7 objectives and its focus beyond an examination of the 8 lowest price. The best opportunity to lower cost to 9 both the government and to industry is by making the 10 government a more valued partner and sophisticated 11 user rather than by continuously trying to squeeze 12 prices lower and lower, particularly in a commodity 13 area where you have high volume low cost items.

14 We believe that the government should 15 improve how individual agencies order officer supplies 16 and how they use the contract vehicles that are 17 available to them. Secondly, we'd suggest that GSA 18 examine its contract terms to reduce the cost and risk 19 on the contractor, because of course additional cost 20 and risk are also going to drive your prices up. And 21 finally, again we believe that the government should 22 commit to volume for the next generation of the 23 Strategic Sourcing Initiative if they wish to lower 24 the prices.

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1 valued partner, the government can obtain office 2 supplies from any number of sources, some are GSA and 3 some aren't. Even within GSA there are the 4 traditional global supply sources, there is the 5 standard MAS and now the strategic BPA. There is some 6 concern among the members that there is not a 7 disciplined approach for creation of new vehicles and 8 the use of the supply sources by some agencies. Some 9 agencies continue to build their own vehicles without 10 additional information or without additional volume 11 commitments.

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13 compete with each other. Suppliers are continuing to 14 respond to agency solicitation and adding to their own 15 bid and proposal expenses because nobody really wants 16 to miss out on that one opportunity that's going to 17 turn out to be the big one that's going to take off in 18 terms of sales. We would urge that GSA put some 19 clarity around the circumstances when these varying 20 sources should be used, and then to market each one of 21 them appropriately.

22 We believe that in GSA's own programs they 23 should avoid unnecessary conflicts with its existing 24 multiple awards schedules. Those schedule contracts 25 have already undergone rigorous examination and

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1 negotiation prior to award. One way of doing that is 2 to make sure there's a real difference between the 3 BPAs that you are negotiating and these multiple 4 awards schedule contracts that you already have, and 5 one of those differences is to provide some incentive 6 for contractors to offer you better prices and to 7 offer you better terms, and of course again it comes 8 down to commitment.

9 Once a company has a BPA it should be easy 10 to use and not add to the supplier's or the 11 government's expense in ordering. We suggest that GSA 12 examine ways to further streamline the order process.

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