GSA to close some contracts to new vendors

Editor's note: This story was modified after its original publication to add information and links to documents.

A senior General Services Administration official told policy-makers June 7 that the agency will identify "oversaturated" Multiple Award Schedules markets as means to help agencies find contractors and save GSA’s resources.

“The MAS program is perpetually open to qualified new offers, and, while vibrant markets exist in some of the Schedules, we have reached the point of saturation in others,” Steve Kempf, commissioner of GSA’s Federal Acquisition Service, said in written testimony to the House Small Business Committee.

So officials are instituting the Demand Based Model, which will allow the agency to align its resources with areas of greatest need.

Under its new model, officials will review the major part of each Schedule and decide whether there’s room for potential innovation and program growth. If there is, officials will keep it open for new vendors to join. Oversaturated areas will closed to new companies for a year.

Over the last several years, the number of companies seeking Schedules contracts has roughly doubled and the volume of contract modifications has roughly tripled. Some of the growth is from new services and products; too much of it isn’t, he said.

Duplication is a major culprit, as some companies offer the same item at different prices on different contracts. He said GSA projects that well over 50 percent of the estimated 3,000 contractors will have no sales or won’t meet the $25,000 minimum threshold that GSA requires companies on the Schedules to earn in their first two years. Meanwhile the government will spend more than $20 million to support and manage those contracts.

In some instances, nearly two-thirds of the contract holders have little or no business, he said.

“In these cases, the sheer volume of contract holders prevents agencies from sifting the wheat from the chaff to find the right offer at the right price,” according to his statement.

Kempf said it’s a disservice to agencies and vendors to sell items where there isn’t money being spent. It also wastes money to monitor and maintain these contracts.

In a separate news release issued the same day, GSA Administrator Dan Tangherlini said the agency will also be working to modernize the schedules program by adding no new contracts for obsolete items such as typewriters and photographic equipment.

 

About the Author

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

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Reader comments

Tue, Mar 19, 2013

GSA also needs to ban some agent/brokers who demands too much money from businesses who dont even have a clue how to do business with the government, They pay this agents who claims that they can add more sales to business owners if they have a contract schedules. Needless to say, that they pay them to get a schedule, yet they can even maintain or monitor their contracts

Fri, Jun 8, 2012 Dayton, OH

As a consultant, I often advise smaller companies to try to work with another schedule holder on a pass-through arrangement as a trial for selling their products(moreso than services). This will give them experience marketing a schedule and also to gain sales and customers before they spend money and time on their own schedule.

Fri, Jun 8, 2012 SPMayor Summit Point, WV

I think GSA is taking an honest and direct approach to dealing with a variety of issues that have impeded its ability to be agile and responsive to the demands of all stakeholders. The process will not be pretty and without its pains - but all this is necessary if GSA is to survive and continue to be a leader within Government. Hopefull, GSA leadership will dialogue with, listen to, and consider the changes suggested by stakeholders because they know less than they might otherwise give themselves credit for [which by the way is true of both governmental and industry stakeholders as well - lest they think this is only a jab meant for GSA].Internal operational efficiencies are needed and must be achieved, not as eye candy for the Hill, President or the press, but as fundamental organization changes needed to manage itself and lead with dexterity and an unclouded vision of what is required. Externally, GSA needs to reassess the methods it uses to stay in touch with stakeholders [for the record I am no great supporter of the CAR function as I believe it is an expensive internal operation that provides less benefit than it costs - recognizing there are elements of the organization that seem to perform in an outstanding manner, but they are too few for the invest made]. Transparent and open communications with industry is imperative and where these lines of communication have shrunk or are non-existant they need to be reopened and managed with greater professional and leadership attention.The one thing GSA leadership needs to make absolutely sure about - they cannot re-invent themselves or their programs by spinning their wheels in place, they need to move forward.

Fri, Jun 8, 2012

Unfortunately, businesses just entering the Federal market are operating under a misconception about GSA Schedules. In many instances agency representatives are quick to tell people that unless they have a GSA Schedule it is a waste of time to attempt to sell to the agency. In fact, there are very few agencies that purchase exclusively off of GSA Schedules. Companies assume it is a hard fast rule that they must have a GSA Schedule and not optional. It is important to thoroughly research what the requirements are inorder to sell to a particular agency and do not makie assumptions on hearsay.

Fri, Jun 8, 2012 Chicago, IL USA

As a GSA contract holder - one of the things to realize is that businesses are constantly being approached by consultants offering to get them on schedule and how profitable it will be for their business. For a new business, this is very appealing. Even though we are on schedule I receive phone calls and emails every day from consultants offering to help get my company on schedule. We have been on schedule since 2005. The truth needs to be told regarding how it is very hard to get any government work and what the real costs are.

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