OMB to review interagency purchasing deals

Meanwhile, fate of many popular cross-agency contracts is in limbo

Governmentwide acquisition contracts (GWACs), which consolidate purchases across agencies, may be consolidated further to save money.

David Safavian, administrator of the Office of Management and Budget's Office of Federal Procurement Policy, said last month that he plans to review every GWAC program. His announcement follows a January report from the Government Accountability Office that put interagency contract management on GAO's high-risk list. Procurement experts say the review would follow a trend to consolidate government purchasing wherever it makes sense.

All GWAC authority held by the General Services Administration, National Institutes of Health, Commerce Department and NASA will expire at the end of June if not renewed, Safavian said.

Industry analysts say they are not surprised that government officials are scrutinizing popular GWAC programs. "There's a fair question to be asked about whether we have the right GWACs — the right number providing the right offerings," said Alan Chvotkin, senior vice president and counsel at the Professional Services Council.

Chvotkin said NASA's Scientific and Engineering Workstation Procurement (SEWP) and Commerce's Commerce Information Technology Solutions contracts serve specific needs for certain sectors and should not be lumped together. Some GWACs may be redundant, he said, but he does not foresee officials canceling GWACs as a procurement policy.

Other industry observers said GSA's current restructuring and congressional reaction to a proposal to merge GSA's IT fund with its services fund will determine GWACs' future.

Expect GWAC movement in 2006, said Hope Lane, director of GSA schedule services at Aronson and Co., a consulting firm. "If there's a strong reorganization plan and it's implemented well, then we'll probably see more of a push for consolidation," she said, adding that action is unlikely to occur in the next six months.

Meanwhile, GWAC administrators must offer convincing evidence that their authority to manage multiagency contracts should be renewed, Lane said. GSA contract officials have been criticized recently for doing a poor job of complying with federal procurement regulations. The lapses included the use of money earmarked for IT to pay for construction work.

Analysts differ on the outcome that future streamlining of GWACs could have on government procurement.

Leamon Lee, president of LML Group and former associate director of administration at NIH, predicted dire consequences if GSA takes over more GWACs, noting that the contracts have stimulated valuable competition within industry. Lee, who oversaw three successful NIH government contracting vehicles, said cutting competition for GWACs outside GSA would increase costs for agencies and turn off some companies that might not want to deal with GSA.

But some experts see an upside for agencies and industry if GWACs are consolidated. Scott Orbach, president of EZGSA, said he expects that most GWACs will be consolidated and administered by GSA, relieving vendors of the costs of entering into and maintaining such contracts.

"SEWP does not need to be in NASA," Orbach said. "SEWP could easily be in GSA." But a few GWACs will remain or be integrated into other GWACs because GSA cannot handle intelligence, military or top-secret contracts, he said.

"The contract management cost would be lowered for industry with a one-stop uniform source of GWACs," Orbach said.

NASA officials insist that the current number of GWACs is not a problem and that SEWP does not fall into the category of mismanaged multiagency contracts. SEWP program manager Joanne Woytek said NASA reports to OMB and follows all OMB guidelines.

SEWP contract-holders said they would be unhappy without their GWAC. Officials at Unisys, a veteran of all three SEWP versions, said Woytek runs a tight ship.

"She makes sure integrity is first and foremost," said Judy Harvell, Unisys' SEWP program manager. "I've used a lot of GWACs in the past, [including GSA's,] and this is the easiest one to use," she said. But Harvell said the Army and Air Force, not NASA, are her largest customers.

Problems with interagency contracts

Interagency contracts can save the government money by concentrating its purchasing power, but federal auditors have put interagency contracting on their high-risk list because:

  • More taxpayer dollars are being spent under such contracts.
  • In some cases, agencies with limited procurement expertise are administering the contracts.
  • Accountability is not always clearly established under such contracts.
  • Source: Government Accountability Office

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