FCW Time Machine: 2002 | A good problem to have

Editor’s note:

In 2002, the General Services Administration had a good problem. Its schedule program was so successful — and still is — that Federal Computer Week wrote an editorial Sept. 23 of that year in which it advised GSA on how it should spend that surplus.

People have plenty to say about the General Services Administration’s schedule program, but one thing is for sure: Since procurement reforms kicked in, the schedules have consistently attracted more and more buying from agencies, indicating that GSA must be doing something right. So much so, in fact, that GSA’s income from the fees it charges to agencies to buy from the schedules has far surpassed the costs for GSA to run the schedules and manage the contracts.

In fiscal 2001, GSA’s fee revenue from the $16.5 billion in schedules sales, which included $10.9 billion in information technology goods and services, was $168 million — $56 million more than the GSA schedule costs, according to the General Accounting Office. In fiscal 2000, fee revenue outpaced costs by $55 million. In fiscal 1999, GSA took in $39 million more than costs.

Agencies have given an affirmative vote with their charge cards for GSA’s service and prices. But the problem for GSA is that, like a nonprofit organization, it isn’t supposed to make a profit. Like most nonprofits in that situation, GSA found other functions to invest in, many of which weren’t performing as well as the schedules.

Such investments may be a good idea, but as some federal IT experts suggest, the money may be put to good use by paying for acquisition training and education. Given the importance of procurement reform and the need to spread the word about how it can improve the way government works, education would help pay for itself several times over. Vendors and IT managers alike still complain that many government IT buyers continue to buy IT products and services the old-fashioned way, asking for specialized requirements, or still do not know how to use the schedules effectively.

GSA officials say they also are looking into cutting the fees, freeing money for other agency needs. That may be helpful, but funneling some of the money into training may have a bigger multiplier effect, especially because procurement reform has brought about such drastic changes that many contracting officers and IT managers still do not know how much freedom they have. Telling them how to find better deals and how to work the new system could free up millions more dollars.

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