GSA recasts statements on the end of the GWAC era

No merger of GWAC and schedules, agency says

The General Services Administration has been trying to temper concerns about a possible merger of two of its major programs, denying that a senior agency official had intended to give that impression in remarks he made at a conference last month.

Despite the agency's efforts, however, some experts say blending governmentwide acquisition contracts and the GSA schedules would be a good idea.

Ed O’Hare, assistant Federal Acquisition Service commissioner for integrated technology service, said June 24 that GSA will let some GWACs expire and not renew them. He also said officials have discussed eventually merging the $2.88 billion GWAC program and the widely used $36 billion multiple-award schedules program. However, he said the agency would keep Alliant and Alliant Small Business, its newest and most comprehensive GWAC programs. O'Hare made the remarks at Washington Technology's Top 100 Conference.

After Washington Technology reported O'Hare's comments, GSA officials quickly began try to reframe them. Program managers issued in-house memos to calm confused employees, and officials posted numerous comments on Web sites, including Facebook, GovLoop and Twitter, stating that the GWACs and schedules aren’t merging.

GWACs and schedules are indefinite-delivery, indefinite-quantity contracts. The GWACs specialize in information technology, offering vehicles for specific types of acquisitions, and several agencies are authorized to create and manage them. The National Institutes of Health and NASA are among the agencies that have successful GWACs outside GSA. The Office of Federal Procurement Policy must grant permission for an agency to launch a GWAC.

The GSA schedules program encompasses a wide variety of products and services.

In addition to the Alliant and Alliant Small Business GWACs, GSA would keep several socio-economic-based GWACs, including the 8(a) Streamlined Technology Acquisition Resources for Services and Veterans Technology Services. As for the others, “we’re going to let them all just expire naturally,” O'Hare said at the conference.

That means Millennia, Millennia Lite and Applications ’N Support for Widely-diverse End-user Requirements would disappear after they expire in 2010. GSA has said Alliant and Alliant Small Business were meant to replace those three contracts. The Commerce Information Technology Solutions NextGen contract would be another GWAC to go. GSA took over the contract from the Commerce Department in March 2008. During that time, GSA was attempting to get control of a larger slate of GWACs, including NASA’s Solutions for Enterprise-wide Procurement contract.

However, GSA officials have responded to reports of O'Hare's comments by downplaying any notion of the end of the GWAC era.

“GSA is not shutting down or ending the GWAC program,” Mary Davie, assistant FAS commissioner for assisted acquisition services, wrote in a comment on FCW.com.

On the GovLoop social-networking Web site, Davie wrote: “I think [O'Hare] was simply trying to say who knows what the future of contracts will look like and perhaps there may be a new breed of contracts that have characteristics of the GWACs and schedules.”

Casey Kelley, manager for GSA’s Alliant GWAC program, issued a memo aimed at reassuring employees that the program was safe “and that there is nothing to be concerned about.”

GSA officials reached out to other media outlets but initially excluded Washington Technology and FCW. Washington Technology Editor-in-Chief Nick Wakeman, who first reported on the comments, sent an e-mail to O’Hare the day the story was published to check whether the information was correct. He received no response from O’Hare.

However, in an interview with NextGov the day after the conference, O'Hare said his comments were a projection of what the market could look like in the future, not a statement of policy.

Late last week, GSA spokesman Bob Lesino replied by e-mail to three of FCW's followup questions to O'Hare. The e-mail said “a different approach that may in the future look like a hybrid of GWAC and schedules is a possibility” because of concerns about agency spending.

But industry experts and government contractors say the way to meet customer needs might just be a merger of the GWAC and schedules programs. Overall, most contractors and industry experts expressed no surprise over O’Hare’s statements.

Companies spend a lot of time and money to compete for spots on the multiple-award contracts, and the more contracts there are, the more they have to spend, experts say. But the contracts give the winners only an opportunity to compete for engagements under the contract and don't guarantee any business. Reducing the number of redundant contracts would be a net gain for contractors, they say.

GSA has said for more than a year that the overlapping GWACs are expensive for government and industry and should be pared down, said Bill Perlowitz, vice president of advanced technology at Apptis. No one should be surprised, he said, particularly with the Obama administration’s desire for an efficient government.

Experts say the sputtering sales in the federal IT market have been driving GSA to end and merge GWACs for several years now. The abundance of overlapping GWACs results in scattered sales while the cost of running the contract still dips deeply into GSA’s pockets.

“GSA would be streamlining things” to simply close down or merge GWACs into its schedules program, said Hope Lane, officer of government contracts consulting at Aronson and Co. GSA would be planning wisely to do so, she said.

As GSA banks on the Alliant contracts, “I suppose the real question for industry is whether or not government agencies have enough faith in the Alliant contract to switch over use,” said Courtney Fairchild, president of Global Services. Agencies that shy away from Alliant will still have the option to work with one of more than 15,000 companies with a GSA schedules contract.

The stars are aligned for a merger to happen. At the conference last month, O’Hare said FAS officials are interested and that the reorganization GSA underwent a few years ago created a structure that makes it possible.

“We talked pretty energetically recently in FAS, [saying] wouldn’t it be nice if we could combine the schedules and GWAC programs, and only have only one program, called ‘GW-edule’ or a ‘Schr-AC,’” he said then. “I think there’s a pretty good energy within FAS, that GSA could do just that.”

He said any such merger was still years away, however. It would be "one of the long-term payoffs" of the reorganization, in which GSA's two major acquisition organizations merged to become FAS.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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Reader comments

Mon, Jul 6, 2009

GWACs and schedule contracts are ripe for abuse no matter how GSA operates these programs. Ordering officials need to become better acquainted with the ordering instructions for these vehicles and keep CICA in mind when including other direct costs and open market items in orders.

Thu, Jul 2, 2009 Editor

EDITOR RESPONSE: I am interested in discussing this issue with you further. Please send a note to editor @ fcw . com.

Thu, Jul 2, 2009

There are a lot of unreported perspectives when it comes to the controversy over GWACs and Schedules.
Private sector IT companies don't like GWACs because they have to sharpen their pencils more in order to get a GWAC contract than they do to get a Schedule contract. And then they have to sharpen it again when they compete for specific task orders.
Under GWACs, industry profit margins are likely more slim, but when it comes time to bid on task order business, the field of industry competitors is narrowed to only those who hold that GWAC contract. This is true with Millennia and Millennia Lite.
Of course, the lobbying by industry, and the industry-friendly political environment presented so many obstacles along the way to awarding Alliant that many more companies were awarded Alliant contracts than held Answer, Millennia, & Millennia Lite, combined. This end result probably dilutes the value a GWAC can bring to both the govt buyer and the industry partner. And it looks and feels more like a Schedule, but not because GSA wanted it to be that way. Industry lobbied and protested to the point that the larger field of Alliant contract holders is now what they must live with. Industry lobbied away the ban on task order protests under GWACs, too - that was a major distinction between Schedules and GWACs and one that industry despised.
And let's not forget those companies who’ve profited from providing help to other companies who want to be on the Schedules -- they want to eliminate GWACs because they cannot manipulate the full and open process they way they have pulled strings over they years trying to cajole Schedule offers from the backlog of offers to the top of the stack.
Let's face it, small businesses say they want a level playing field but we know that all businesses want competitive advantage.
With all these perspectives, the stewards of the taxpayers' money are supposed to cater to industry, please the politicians, and try to get the best deal for government at the same time. It's a balancing act that creates some degree of aggravation for all parties. And rather than trying to present information that aides the balancing act, the reporters prefer to report just one side of the story and promote discord and drama. Capitalism at its finest.

One more factoid -- Lurita Doan, not GSA, went after SEWP. GSA was stuck with COMMITS -- the business case for it was never a break-even scenario.

Thu, Jul 2, 2009

Gosh -- the decision to award Alliant as a replacement for Millennia, Millennia Lite and ANSWER was made back at the end of FY2003 or the start of FY2004. At that time there were 12 IT GWACs at GSA as well as the IT Schedule (70) and the Corporate Schedule (one schedule for companies with products and services that were represented in more than one Schedule’s subject matter area), and two government-wide BPA’s (ACES and SAFEGUARD).

Most of them that were reviewed and slated to be the last of their breed have quietly expired (e.g., Seat Mgmt, ODIN, Virtual Data Centers, Disaster Recovery, FAST, HubZone, and Smart Card). The Schedule-based Reverse Auction has gone away. With Millennia, Millennia Lite, ANSWER and COMMITS expiring soon, there will be a relatively small number of IT GWACs under GSA management. Today, GSA still has the two Schedule programs that include IT (70 and Corporate), and there will be Alliant, Alliant SB, 8A STARS, and VETS.

Nobody sees any significance in mentioning that GWAC contracts are fully competed acquisitions that respond to stated govt requirements. If anyone believes the award of a GSA Schedule contract involves full industry competition to meet a set of requirements, they are seriously ignorant of the FAR. With Schedules, commercial entities propose offerings they want to sell to govt. To award a Sched contract, Govt only needs to determine that the prices are reasonable. No bona fide need or requirement, and no true competition comes into play until a customer agency comes forth with a statement of work and multiple quotes are obtained from Sched holders or E-Buy is used to find the best value solution.

Gosh, when reporters were hot on the Sun Microsystems story the idea of lower prices through competition was pretty important. Now, the idea of no competition seems to be the hot notion reporters want to feature.

No one notes that IT GWACs are designed to provide solutions to more complex sets of requirements than one would generally use Sched 70 to acquire. Other contracting features can be brought into play with GWACs that can’t be done thru Schedules (e.g., cost reimbursible features). Different kinds of contracts are offered by GSA to enable govt agencies access to the full range of contracting types and options to achieve the best match with their particular set of requirements.

There are more facts but not enough space in a comment. Overall, reporters have done a lousy job of doing their homework and reporting more of the facts and truths government IT purchasing programs. It seems that lack of competition in the Govt IT news media market is producing negative consequences, too.

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