Are you ASTRO ready? Prepare your purchasing and estimating systems for potential point-earning opportunities
The General Services Administration (GSA) is in the process of developing a draft RFP for ASTRO, which will support a wide variety of manned, unmanned, and optionally manned system-related programs primarily within the Department of Defense. The GSA division writing the ASTRO RFP is the same division that recently took over administration of the OASIS program and the new on-ramps that permitted earning points for having approved purchasing and estimating systems. It could be likely that ASTRO will follow suit, especially considering that GSA has already included such an opportunity in an ASTRO RFI.
CohnReznick can help assess or audit your firm’s purchasing or estimating systems for compliance so you can be prepared to earn the most points possible.
The ASTRO procurement is in process within GSA’s Federal Systems Integration and Management Center (FEDSIM). This large indefinite delivery/indefinite quantity (IDIQ), multiple-award procurement is being eyed to support primarily Department of Defense elements with operations, maintenance, readiness, development, research and development, hardware, and systems integration of manned, unmanned, and optionally manned systems, robotics, and platforms, as well as the services that support those systems, robotics, and platforms within the realm of Intelligence, Surveillance, and Reconnaissance (ISR). FEDSIM is the same division that recently took over the administration of OASIS. The latest OASIS on-ramp RFPs have been expanding on the latest federal government award approach to awarding large-scale IDIQs that include contractor self-scoring to aid in proposal evaluation. Within these OASIS RFPs, GSA has not only allowed extra points for approved estimating and purchasing systems, but also allowed contractors to submit audit reports from qualified private auditors (QPAs) in lieu of being able to provide formal approval from the Defense Contract Management Agency (DCMA) or another cognizant agency contracting officer. Therefore, based on FEDSIM’s recent acquisition strategies, one can reasonably conclude that the ASTRO RFP is likely to mirror the OASIS score sheet and include similar point-earning opportunities for estimating and purchasing systems.
Indeed, it appears that GSA is already considering these elements for ASTRO: The RFI No. 4 draft evaluation criteria, released in late November, indicate that offerors should have a DCAA-approved accounting system or be able to pass a DCAA audit prior to award, and that additional points will be offered for firms with an “Approved Purchasing System; Current FPRA, FPRR, and/or Approved Billing Rates; EVMS; and/or Acceptable Estimating System.”
Per documents and presentations released to date, ASTRO will be divided into multiple service subcategories, or pools, similar to OASIS. Companies are only eligible for task order awards for the pools into which they qualify and are selected for an IDIQ. GSA anticipates a wide variety of contract type awards in each pool, to include cost reimbursable, time and materials, and firm fixed-price. Therefore, having a government-approved accounting system or one that can be approved in the near future will be critical for maximum point earning as well. However, as of now, it is not certain whether GSA will accept QPA audit reports for accounting systems.
Firms should also recognize that FEDSIM is contemplating an innovative scoring method for this acquisition, per RFI No. 4. GSA used the term “Bootstrap Bonus” to refer to its approach to attracting a variety of types and sizes of contractors for this acquisition. The RFI says, “For each Pool applied for, if an Offeror is above the small business size standard, but less than 5 times the small business size standard, their total evaluated proposal point score will be increased by 20%. For Offerors more than 5 times the small business size standard, but less than 10 times the small business size standard, their total evaluated proposal point score will be increased by 10%.”
According to most current public information, the final RFP is expected to drop in January 2020, with proposals due in February 2020. Given that a draft RFP has not been released yet, we think it’s a safe bet that this acquisition will slide to the right by a month or two. Nonetheless, if your firm is contemplating submitting a proposal on ASTRO and wants to earn more points for a compliant purchasing and/or estimating system (and possibly accounting system), then you need to act sooner rather than later. For those who have received acceptances for either or both systems in the past, make sure those acceptances are current (three to five years is usually the standard), and make sure there have been no major system changes since acceptance.
To pursue current certification, first, government contractors must understand that audits of these systems are significant undertakings and absolutely cannot be done overnight. Second, to prove compliance, the contractor needs to have a history (DCMA likes using the term “artifacts” in its Contractor Purchasing System Reviews) of estimates and purchases performed under DFARS system compliant processes.
In other words, simply rewriting policy and procedure manuals or buying a software package likely will not make your firm compliant. Firms need to both enact compliant practices and demonstrate the effectiveness of the internal controls and compliance with criteria for these systems in accordance with the DFARS standards. Additionally, qualified, independent accounting firms will need at least 4-6 weeks to perform a purchasing or estimating system audit in compliance with Generally Accepted Government Auditing Standards (GAGAS).
We recommend that firms take the following actions if they want to get these significant points:
1) Perform a high-level assessment of your purchasing and estimating systems against DFARS criteria (252.244-7001(c) for purchasing and 252.215-7002(d) for estimating).
2) Determine what corrective actions are necessary, if any, and how long it will take to implement them.
3) Ensure that there will be sufficient documentation to audit and that your firm obtains a final GAGAS audit report in time for your ASTRO proposal submission. Artifacts are examples of direct purchases under a federal government contract or estimates made on a federal government RFP based on compliant procedures.
4) By the time the firm has reached the documentation accumulation stage, it should have already selected an independent public accounting firm to perform the audit. This firm should have significant experience issuing GAGAS reports, particularly business system audits, to help guarantee report acceptance by GSA. Also, if performing an estimating audit, those involved in the audit process are the same people who will be pulling together your ASTRO response, and you should consider this overlap in your planning process.
5) Consider the “Bootstrap Bonus” and do the anticipated point “algebra” given your size. Where do you fit in with the RFI No. 4 draft criteria and the potential 10-20% bonus? How can you further enhance your position?
Also note for those future award winners that many components of the work solicited under this RFP may be eligible for the R&D tax credit, the value of which should be assessed upon award so you can take full advantage of any potential savings.
For information about how to have your firm’s purchasing and/or estimating system assessed or audited, contact:
Kristen Soles, CPA, Partner, Government Contracting Practice Leader
Jeff Shapiro, CPA, Partner, Government Contracting Industry
Jeffrey W. Rossi, CPA, CFE, Partner, Manufacturing and Distribution Practice co-leader
For information on the R&D tax credit for government contractors, contact:
Scott A. Hamilton, CPA, Partner, Tax
InsightUnderstanding the cost evaluation process of a competitive procurement
InsightGovernment contractor valuation tracker for CY 2021James Kazmier, Jimmy ZhouIndustry valuation key indicators, benchmarks, and trends for GovCon management teams and investors. Learn more.
InsightDoD IG small business subcontracting audit findings: What it means for prime contractorsKean ReillyThe DoD IG’s audit findings revealed that DoD contracting personnel were inadequately verifying compliance with subcontracting limitations. Learn more.
On-demandPrepare for the unexpected - Contract terminations, changes, and claimsAt times, it can be a challenge doing business with the federal government. Dealing with a last-minute termination or a change in contract can cause unwanted business disruptions. Knowing how to respond when these incidents occur can be useful to your business.