GSA: We'll change to black

GSA officials ready new business model for its assisted acquisition services business

The General Services Administration is looking at all options for overhauling its slumping assisted acquisition services business. GSA officials said they intend to bring business costs in line with revenue by October, the start of the new fiscal year.

“Expect to see changes in our business models,” said Lurita Doan, GSA administrator, in a statement to Federal Computer Week. “Our fees and fee structures, our workforce, and our systems may all be affected as we work hard to improve GSA acquisition service offerings.”

GSA is taking those steps because it expects its assisted acquisition services business to be $60 million in the red in fiscal 2007, based on $3.7 billion in expected revenue of which GSA’s average fee is 4 percent.

Meanwhile, as  officials figure out what to do, employees in several GSA regions have no work because of the business slump, congressional and industry sources say. Those sources identified GSA’s Northwest-Arctic and the Heartland regions as ones likely to see the most changes. Sources say GSA may consider transferring employees to other offices within the Federal Acquisition Service, such as Integrated Technology Services and Acquisition Management, which need additional employees.

Doan said GSA is not prepared to discuss details of planned changes, but she said officials would announce a new strategic plan soon. A strategic plan is sitting on Doan’s desk awaiting approval, and a meeting to discuss the plan could happen this week, sources say.

GSA officials had said they would decide on a new direction for the agency’s assisted acquisition services business as early as August.

The strategic plan would realign GSA’s resources to deal with the sputtering acquisition services market that is causing the agency to lose millions of dollars.
Capitol Hill appropriators are watching the situation closely. Rep. Jose Serrano (D-N.Y.), chairman of the Appropriations Committee’s Financial Services and General Government Subcommittee, said he received assurances that the fund that includes assisted acquisition services will not lose money this year.

“Should that turn out not to be true, we will work with the GSA and move to take appropriate steps to address the situation,” Serrano said.

A Republican congressional staff member familiar with GSA’s financial troubles said the consensus on the Hill would be “good riddance” to assisted services. The assisted acquisition services office has been a revenue loser for a while, the staff member said.

Some observers say the problems stem from other agencies bypassing GSA and setting up their own contracts. However, others say GSA can adapt to the changes if it can identify niches that other contracts do not fill. GSA is studying the federal market to figure out what other agencies need from GSA.

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