GSA ponders fate of assisted services

Officials agree that something must be done to stop the steady hemorrhaging of dollars

The General Services Administration is debating whether to pull the plug on its assisted acquisition services after an internal study revealed concerns about the services’ future.

Mary Davie, Federal Acquisition Services’ assistant commissioner for the Office of Assisted Acquisition Services, said the study proves that changes are necessary.

“We have recently completed the study of who’s delivering assisted services in FAS and are beginning to discuss how to proceed,” Davie said. “The entire FAS central office and regional leadership have been briefed and agree that we need to make some changes to better serve our customers.”

Officials have said publicly they expect GSA to lose $46 million this year on the agency’s assisted-services business, based on $3.7 billion in revenue. GSA keeps only a small percentage of that revenue as service fees. Industry experts and officials say actual losses this year could reach $70 million.

GSA has been discussing whether it should continue to offer assisted services and client support centers, said a federal official with knowledge of GSA’s situation. No decision has been made, sources said. One source said top GSA leaders — Administrator Lurita Doan, Deputy Administrator David Bibb and FAS Commissioner Jim Williams — have discussed abandoning the business altogether or completely restructuring the line of business.

Several industry experts said GSA would have to reduce its workforce because of the shortfall in assisted-services revenue, and they warned that such a move would set off a political firestorm.

GSA officials agree on the importance of providing assisted services, but they must figure out how to do so and still break even financially, said the official, who requested anonymity because of the sensitivity of the matter. GSA lost money on assisted services in fiscal 2006, but the agency covered the deficit by merging the General Supply Fund with the Information Technology Fund.

Part of the reason for GSA’s issue is new business is tough to generate, said Larry Allen, the Coalition for Government Procurement executive vice president. “They have to be realistic,” he said referring to GSA’s discussions about assisted services. GSA could get healthy again quickly by leaving the assisted-services business and focusing on its schedules.

Emily Murphy, former GSA chief acquisition officer and now an attorney at Miller and Chevalier, said GSA’s predicament allows it time to prepare for agencies’ demands when the expected federal workforce retirement wave hits.

“This gives GSA a chance to pause and reform strategically,” Murphy said.

If GSA dropped its assisted-acquisition services business, the decision would affect other governmentwide acquisition providers, such as GovWorks, National Business Center and the National Institutes of Health’s acquisition services.

“We would expect an increase in usage,” said Victor Powers, the NIH Information Technology Acquisition and Assessment Center’s program director.
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