Skeds loom large in IT 'open season'

Heading into the final weeks of the fiscal yearend buying season federal agencies appear to be making use of the full range of vehicles available to them for information technology products and services according to vendors. The coming weeks especially the last two weeks of September are expec

Heading into the final weeks of the fiscal year-end buying season federal agencies appear to be making use of the full range of vehicles available to them for information technology products and services according to vendors.

The coming weeks - especially the last two weeks of September - are expected to be the busiest as usual as agencies use the last of 1997 dollars to buy PCs and other commodity products. With business off to a somewhat slower start than in past years many product vendors are banking on that year-end crush.

On the other hand services vendors report significantly more activity with business coming from a variety of vehicles. In particular the General Services Administration's multiple-award schedule has become an increasingly important resource.

GSA schedule business through the first three quarters of the fiscal year has already surpassed $2 billion which is equal to schedule business for all of last year said Charles Popelka director of customer service marketing and business development at GSA's Federal Supply Service.

GSA first opened the schedule contracts to services last summer but only this year did most vendors add a full suite of services and begin marketing them as an alternative to agency or governmentwide services contracts. Such vendors as Electronic Data Systems Corp. and Litton/PRC Inc. are seeing the first fruits of this new vehicle.

Overall EDS schedule sales are up 300 percent over last year with a full 55 percent of its business coming from services said Stephanie Ambrose account operations manager for the GSA schedule at EDS. "What we are seeing is a huge increase in the total solutions " with agencies buying product and support services Ambrose said. Blanket purchase agreements especially tend to be oriented toward buying solutions for specific problems she said.

The availability of services on GSA "makes it a little more convenient for some of those agencies that don't have a large IDIQ contract " she said.

Litton/PRC has seen a similar trend and has geared its business strategy accordingly to provide "a solution-focused service schedule " said John Cochran the company's vice president of federal sales. The company put together about 70 labor categories structuring the schedule to match the requirements it had seen in its traditional contract base. Through the end of July the company had done $20 million in schedule services.

Compared with governmentwide contracts GSA "has made the [services] procurement more flexible and more timely" than governmentwide acquisition contracts (GWACs) he said.

However GWACs such as the Transportation Department's IT Omnibus Procurement and the National Institutes of Health's Chief Information Officer Solutions and Partners program remain extremely popular vendors said.

At the same time older IDIQ contracts apparently have settled into an important niche vendors said. For example the Air Force's Unified Local-Area Network Architecture (ULANA) II contract continues to draw business from customers looking for support of major projects said Gary Miller the ULANA II program manager at EDS.

Neil Stillman deputy assistant secretary for information resources management at the Department of Health and Human Services said the ability to buy services from multiple sources "makes it easier for everybody " particularly in terms of the acquisition speed. However agencies must think about the "quality of services" they are receiving Stillman said.

In the next several weeks with the end of the fiscal year looming the interest in services is expected to be eclipsed by the demand for commodity products. That cycle appears to be just kicking in.

Robert Guerra president of Guerra & Associates said the feedback he has received from vendors indicates the buying season thus far is "a little bit behind where it was last year." He attributed the lag to the range of purchasing vehicles available. "There are more alternatives to look at " Guerra said.

Government Technology Services Inc. has seen in-bound sales calls jump three-fold during the course of the summer and the company expects another 30 percent jump over the next several weeks said John Campbell vice president of customer operations at GTSI.

GTSI and other product vendors report an even spread of business across GWACs IDIQs and the GSA schedule.

However as the end of the month approaches much of that business is expected to go to GSA vendors said.

At Comark Federal Systems Inc. the buying season has kicked in over the past two weeks. Alan Bechara vice president and chief operating officer at Comark said the number of calls doubled last week over the previous week.Bechara said the buying season appears to be more compressed this year. He said his company's sales are on track thus far but added that "it looks like it's going to be one heck of a September."

Micron Electronics Inc. is also expecting a September surge to drive its federal sales numbers. "We've seen demand increase across the board " said Ronald Clevenger federal sales manager at Micron describing activity on the schedule and IDIQs.

He said he is expecting the company's federal business to grow 300 percent this year over last adding that he expects September to contribute heavily to the final numbers.

Paul Wohlleben deputy chief information officer at the Environmental Protection Agency said agencies after years of running their own contracts generally are looking for three factors in IT purchases: better delivery the equivalent of spot market pricing and streamlined ordering procedures. With the new wealth of vehicles "my sense is we are doing better in this new environment on all three points " Wohlleben said.

NEXT STORY: Round Two

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