AbilityOne contracts for workers with disabilities opens to competition

An 86-year-old federal procurement program designed to employ workers with disabilities underwent a major regulatory overhaul this month in an effort to make it more competitive on price.

The AbilityOne program is the largest source of employment for people who are blind or have other disabilities. From M16 magazines to baking mix, it supplies $4 billion in products and services to the government each year and employs more than 40,000 workers through partnering non-profit agencies.

The program’s overarching regulatory framework has been largely preserved since it was established in the 1930s, but calls to modernize the program have been voiced for years in order to grow it. As an answer, a new rule finalized in March allows price to be an evaluation factor in contract selection. Because of the program’s unique structure, price is something the program has been able to deemphasize in awards, unlike the rest of the $600 billion contracting sphere.

“The rule is designed to increase transparency, incentivize performance, and ensure that the program remains a trusted source of supply and services for federal agencies, thereby creating and maintaining jobs for people who are blind or have significant disabilities,” said AbilityOne Commission Chairperson Jeffrey Koses in a statement.

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Before the rule, a federal agency would bring a contract opportunity to central nonprofit agencies. Then, they would respond with their bids based on past performance and technical capabilities; price was not a factor at that point. Then the central nonprofits would designate a supplier, and the nonprofit and the government would negotiate a fair price that the AbilityOne Commission then confirms.

Now, for new and existing defense contracts over $50 million and civilian contracts over $10 million, competition inclusive of price can be requested. Competition can only be requested by a senior official or, in the services, a flag or general officer. And again, the commission has final authority.

“The rule is written in a way such that factors and subfactors, including technical capability, past performance, training, and placements, are part of the trade-offs that are weighed along with the proposed price,” a commission spokesman told Federal Times. “This was to ensure that the price does not have a disproportionate role in the overall competitive process.”

However, introducing price to the bid selection process is a huge departure from going procedure, nonprofits said in interviews with Federal Times.

“One of the benefits of this program is, once a contract is on the procurement list, you’re not recompeting,” said Dwight Davis, president of Global Connections to Employment. “You’re just repricing it every five years. There’s a whole difference when you’re talking about running a competition.”

Impasse-related competitions are limited to service requirements exceeding $1 million in total value, which the commission estimates would represent a fraction of all contracts.

And though some nonprofits raised concerns about the commission lacking the resources and funding to take on any potential surges in impasse requests, a spokesman for the commission said officials don’t expect the them to increase given agencies still have to exhaust all existing remedies before competition is considered.

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Further guidance is forthcoming on implementation of the final rule, the spokesman added, but nonprofit business owners said until they see the regulation fully baked, they are unsure how exactly price will be weighed.

The rule also acknowledges that the award process will consider nonprofits’ investments in training and development of their workforces, though the rule declined to adopt the term “social impact” in its language.

Though these efforts are incentivized in the competitive process, they’re still an unallowable cost.

“When you want people to succeed, you have to have the tools available for them to succeed,” said Jewelyn Cosgrove, vice president of government and public relations, at Melwood, another AbilityOne nonprofit. “But in a price-centric in a world where price has heavier weight, we are going to have to look really closely to ‘how?’ And how far do we go in terms of workforce development?”

Though Cosgrove and Davis said the final rule sought to be responsive to concerns raised by the nonprofit community, implementation guidance will be crucial to ensuring minimum disruption to the AbilityOne workforce, which includes more than 2,500 veterans.

“This is a program that is unique in the contracting space,” said Cosgrove. “And it is unique in the disability space. The next two, three years … is going to tell us far more than what we know today.”