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By Steve Kelman

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Is GSA gunning for other GWACs?

Joanne Woytek, the head of the NASA Scientific and Engineering Workstation Products governmentwide acquisition contract, wrote on my Facebook wall – wow, what a way to communicate this message! -- that an official from the General Services Administration (not Administrator Martha Johnson) plans to meet next week with Dan Gordon, administrator of the Office of Federal Procurement Policy, to request that Gordon deauthorize the governmentwide Chief Information Officer-Solutions and Partners contract run by the National Institutes of Health.

Woytek believes that if CIOSP is put out of business, GSA’s next step will be to put SEWP out of business as well.

I am a big fan of GSA and its own governmentwide vehicles, including the schedules, but I strongly believe GSA’s effort to put competing governmentwide contracts out of business is seriously mistaken.

The basic reason is simple: Competition among contract vehicles (including the default alternative of using one’s own contract shop) promotes customer service and innovation, just like competition in other markets. When GSA last monopolized governmentwide vehicles, up through the early 1990s, it provided poor customer service, poor pricing and little innovation. GSA’s loss of its monopoly during the Clinton administration was actually the best thing that ever happened to the agency – they came up with new contract vehicles, much faster service, and other innovations and in the process ended up doing much more business than before.

In the current marketplace, competing vehicles such as CIOSP and SEWP provide good alternatives for government customers. CIOSP has pioneered use of reverse auctions as a second-stage pricing device to keep prices refreshed in real time. (Full disclosure: I serve on the Board of Advisors of Fedbid, which provides reverse auction services for CIOSP.)

And SEWP fills all orders within a day, quickly updates with new products and provides an especially good source for engineering-related information technology. Both CIOSP and SEWP have lower fees than GSA.

I believe that all of these GWAC’s should do more than they do to provide (for a fee) assistance to customers beyond just executing a transaction, but this is very unlikely to happen in a monopoly environment.

There is of course a tradeoff between leveraging buying power and allowing the proliferation of vehicles. But it’s not as if most of the GSA contracts do such a great job getting good prices for the government. To do that, you need to negotiate volume commitments using one of these vehicles as a base.

GSA should be careful about what it asks for. Many of those who would welcome shutting down CIOSP or SEWP don’t like any kinds of GWAC’s, including those that GSA runs. These people don’t like fees, and they don’t like competition for the in-house contracting shop.

Let GSA win by providing better service and better prices to its customers, not by forcing its competitors out of business.

Posted by Steve Kelman on Mar 31, 2010 at 12:08 PM


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Reader comments

Tue, Apr 6, 2010

Actually it occurs to me after reading all the comments and reflecting on GSA, that we ought ot let the process work itself out. GSA can't help but step on its on feet. It has let the opportunity to take a leadership role in the commercial segment of the gov't marketplace escape its grasp. It has refused to shape the markets to meet gov't customer's needs. It hasn't picked a leader, Administrator or CAO, that know anything about acquisition, markets or what it's customers really want. In fact for a while it was telling its own folks it wasn't an acquisition agency. It lacks vision and no matter what they tell anybody else, are focused on revenue, not what's best for the gov't. Steve, leave them alone, they'll run themselves out of business and then Congress will have to invent another GSA. Maybe next time they'll "get it right!"

Fri, Apr 2, 2010 Steve Kelman

This continues to be an interesting dialogue. A few commenters have taken up the separate issue of individual agency IDIQ's, versus using a GWAC as a basis for an agency-specific contract. Agencies will often want their own contracts, but I am inclined to think they ought to be negotiated using a GWAC or the GSA schedules as a base, rather than starting from scratch. To the commenters who say "nobody is suggesting a monopoly" or that GSA isn't trying to stop these competing GWAC's, there certainly have been such efforts, and they would, if successful, result in a GSA monopoly over GWAC's, though GSA could still, to some extent, provide competition to in-house contracting shops.

Fri, Apr 2, 2010 M Reston, VA

Steve, you are missing three important points. First, the proliferation problem is among agency specific IDIQs. This forces costs for vendors up as they must pay more to sell their offerings to the same customers. Second, many of the new IDIQs have a mandated monopoly over their agencies. So there is no additional competition, rather there is less. Finally, you really must get a handle on the Direct Order Direct Bill aspect of GSA vehicles. Any Contracting Officer can use these vehicles and modify them to make them their own. GSA does not have to be the contract office running the acquisition. This is really big from a government efficiency standpoint and many folks clearly just don't get that. I wish you got GSA to weigh in. No one I know at GSA has ever complained about CIO-SP2 or SEWP or their succesors. The original story does not add up. Real competition would be a good thing. But IDIQ proliferation has meant higher costs for all (especially that poor taxpayer), more bureacracy, more acquisition systems, fewer Contracting Officers functioning as Contracting Officers, and LESS competition.

Fri, Apr 2, 2010

No one is suggesting a monopoly, but how many are enough? SEWP and the GSA Schedule are very similar; likewise the GSA Alliant and the proposed CIO-SP3 are similar. Having the Schedules, SEWP, Alliant and CIO-SP3 should be sufficient for offering good alternatives to government customers. However, someone (OMB?) does need to reign in the MA/IDIQ contracts that are being generated by agencies. Many offer the same services as the above mentioned contracts and appear not much different than GWACs (open to all federal agencies, etc.). A good example of this is the current effort by Department of Veteran Affairs called Transformation Twenty-One Total Technology (T4). Another example is the Army ITES-2S (Information Technology Enerprise Solutions - 2 Services) contract....etc. Too many competing vehicles makes it confusing for the agencies in determining which is best, both in terms of satisfying their requirements (all have similar scope), support services, and fees for use of vehicle. Since these contracts are of long duration, industry is compelled to compete for all or most of these contracts to ensure that they can respond to task orders being generated by their current and new customer base, not knowing which contractual vehicle will be used in the future for soliciting the services. Too Many - Higher Costs to the Government (awarding and maintaining another contract) - Higher Costs to the Tax Payers - Higher Cost to Industry - and then loop back to Higher Costs to the Government - Higher Costs to the Tax Payer. Doesn't make sense!

Thu, Apr 1, 2010

Less than a year ago, OMB cited NIH and CIO-SP as an example of best acquisition practices. After reading Steve's comments, I felt compelled to do more research, and sure enough, interagency GWACs were cited again and again for creating efficiencies in the acquisition cycle. They provide responses from qualified contractors as opposed to less-than-informed competitors; they decrease the workload for an overburdened acquisition workforce and speed the time to award. If time is money, the benefits of NIH's CIO-SP contract are invaluable. Not to mention that vendors who low-ball bids in order to win in full and open competition can make up the difference after award with mods and teaming chaos. If GWACs are best practice, than certainly competition among them is healthy. SEWP has set standards for customer service that has led others to raise their own. NITAAC's integrated solutions rival GSA's, but with more "name brand" vendors. Considering, too, the recent Health Care Legislation, this seems hardly the time to cut NIH out of the loop. Who else is uniquely qualified to address the demands of health care reform. OMB needs to heed their own best practices, and stop dragging their feet on CIO-SP3.

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