BPA may shake up GIS industry

SmartBuy deal could turn into business bonanza but vendors wary about facing deep discounts

As Matthew Leopard sees it, the upcoming SmartBuy blanket purchase agreement for geospatial products and support services will redraw the landscape for government use of geographic information
technologies.

It is not just about obtaining volume discounts for federal users. Officials want to persuade agencies to work together to share information, centralize their geospatial management, and obtain greater and faster access to the latest technology, said Leopard, chairman of the Geospatial Common Services Work Group.

The group is coordinating with the Office of Management and Budget and the General Services Administration to develop the SmartBuy BPA for the Geospatial Line of Business. SmartBuy is an initiative to help agencies manage enterprise-level software through aggregate buying of commercial software.

“This could be an exciting time for geospatial contracting,” Leopard said. “We will be expanding the use of geospatial tools to make them mainstream.”

Likening a federal acquisition program to the Super Bowl in size — as Leopard did at an Oct. 21 vendor day — is bound to get attention, something vendors will appreciate.

“SmartBuy will give our products greater visibility,” said William Spencer, president of Planet Associates, a geospatial software company in Arlington, Va.

But GIS companies also have concerns about the program. For example, the government proposes a provision that would let multiple agencies band together on purchases, enabling them to receive bigger discounts than they would get individually.

A second concern is more strategic. Government analysts worry that the contract might slow geospatial innovation, and vendors fret that mapping professionals and surveyors might be negatively affected by the contract’s definitions of products and services.

“There is controversy over SmartBuy,” said John Palatiello, executive director of the Management Association for Private Photogrammetric Surveyors.

An active market
Geospatial technology industry is dynamic and growing rapidly, but it’s also fragmented. Software makers ESRI, Bentley Systems and Intergraph have been the dominant vendors, but in the last four years, Google Earth and Microsoft Virtual Earth have created significant footprints.  Dozens of other vendors are grouped into 11 major trade organizations.

Federal agencies use geospatial software for tasks such as producing maps and conducting geographic analysis. They also buy mapping imagery, data and services. The public-sector market for geospatial IT was estimated at $1.8 billion in 2006, according to Daratech, a research firm.

But Leopard and others believe federal agencies have not maximized the use of geospatial tools to the greatest extent because they make individual purchases.

At the Environmental Protection Agency, officials used to spend months negotiating terms for geospatial contracts in single purchases. Because it established a SmartBuy geospatial contract with ESRI in 2004, the agency now has coordinated geospatial services, including operating a Web site that describes the latest mapping tools and offers users a forum for exchanging information, said Leopard, who is chief of the EPA’s Office of Environmental Information’s services and support branch.

“EPA now has much greater access to the best technology and training, and a more cohesive approach,” Leopard said. “We are trying to see that extended through SmartBuy.”

The multivendor SmartBuy BPA will offer government users a portfolio of commercial geospatial technology options. OMB officials are promoting the geospatial procurement vehicle to provide greater transparency, saving money through volume buys and reducing administrative costs.

Interagency contracting
Whil e its sponsors are touting its benefits, its provisions are spawning discussion.

Federal, state and local agencies are encouraged to take advantage of their purchasing power through interagency agreements on joint task orders in the geospatial SmartBuy program, according to the revised request for information released Oct. 21. The goal is to take advantage of volume discounts.

Applying the volume buying power to task orders is a fairly unusual provision, experts say.

“The idea of combining multiple agency requirements into a single requirement, that is not common,” said Alan Chvotkin, senior vice president of the Professional Services Council, a trade group for federal contractors.

Will it generate deeper-than-usual discounts? “On the pricing side, there is clearly a single-payer discount,” Chvotkin said. But he added that the extent of the discounting likely will depend on the product that the government is buying more than on the acquisition vehicle through which it’s buying the product.

The multiagency agreements could be tricky to implement, said Larry Allen, president of the Coalition for Government Procurement.

“I think the language requiring an additional discount is indeed bold,” Allen  said. “I suspect market forces would dictate whether or not an additional discount is available.”

“Some government buyers are under the false assumption that prices can keep going down, down, down,” Allen added. “At some point, no — the floor is the floor.”

Leopard said the focus is not only on discounts but also joint management. One BPA option would allow vendors to provide unlimited access to one or more agencies for all their geospatial products for five years, along with support service, he said. It could be done on a software-as-a-service basis with users accessing software from the Web as needed.

“This is something different,” Leopard said. “It will remove a lot of barriers to accessing the technology and will require agencies to centralize their administration. This is where we are pushing the envelope.”

Effects on innovation
With geospatial IT changing at a rapid pace, some government practitioners are worried that a huge SmartBuy procurement vehicle might crowd the latest products from small vendors.

“Will it stifle innovation to lock us into a format?” asked one federal agency geospatial executive who asked not to be identified because he was not officially authorized to speak on his agency’s behalf. “This field is very dynamic, and we don’t want to lose that.”

But Leopard said SmartBuy will have the opposite effect and will improve agencies’ access to innovative geospatial products.

For one, it will shorten the time needed to negotiate a contract, Leopard said. Secondly, the SmartBuy vendor list will be regularly updated with new software from existing vendors. Officials were not sure whether new companies will be added to the vendor list, but Leopard said the idea is to put as many vendors on the SmartBuy list as possible. 

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