Companies angle for GSA schedules

Use of schedule contracts becomes a strategic decision for a new crop of vendors

With new companies coming into the federal market almost daily, the General Services Administration's schedule contracts are taking on renewed importance. Agencies are using the schedules more often, and entrants to the market learn quickly that they have to have a presence on the vehicles — either directly or through a partnership with a more established firm.

"We have access to quite a number of vehicles, and almost all of them are fading away," said Ron Segal, president of systems integrator Spectrum Systems Inc. in Fairfax, Va.

"There are almost no government customers that won't buy through GSA if it's available," Segal said. "The full and open competition still exists, particularly if they're looking for a new vendor or a new direction. But once they've gone through the competition and found the vendor, they'll go through GSA" to continue the relationship.

Using the schedules is usually the first piece of advice officials get when they start talking about taking on federal business, small-business owners say. However, making the best use of the schedules is a strategic decision, too. For some companies, getting their names on the schedules isn't the best route, said Joe Cortale, vice president of federal solutions at Borland Software Corp. in Scotts Valley, Calif.

His company had its own schedule contract when it acquired two smaller firms earlier this year. Those companies had schedule contracts through Spectrum. When Spectrum took Borland on as a partner and supplier of application lifecycle management products, Borland chose to consolidate all of its GSA listings into one — under Spectrum's contract.

Cortale made the decision because Spectrum had a strong presence in the federal market and top-flight expertise, he said. When agencies need the kind of software Borland provides, they will be more likely to turn to the integrator than the software developer, he reasoned.

"If we make it easy for our customers to do business with us, then we're going to be more successful," Cortale said.

In turn, Spectrum has teaming agreements with almost all of the larger integrators, Segal said.

In some ways, it is difficult to track the schedules' growth compared to other contract vehicles, but GSA officials are confident use is growing.

"The schedules certainly have a large chunk of the federal [information technology] marketplace, and [they're] growing all the time," said Neal Fox, assistant commissioner of GSA's Office of Acquisition. "We think the growth in IT sales is not as rapid as it once was" because it grew rapidly in past years and is slowing down as it gains more market share, he said.

Many smaller firms work through a partner's GSA schedule contract. Mirapoint Inc., a developer of e-mail and security systems, based in Sunnyvale, Calif., took the same approach about two months ago when it began a push into the federal market, said Sidney Smith, area sales manager of the company's federal division. Mirapoint recently signed a partnership with Paragon Systems Inc., a systems integrator in Herndon, Va., and joined Paragon's schedule contract.

Small companies are generally better off taking that path, Smith said. "Time to market is probably the first reason," he said. "If you have a partner that is experienced at working with GSA and knows what they need, the time to market is much shorter."

Small companies also generally don't have the accounting structures in place to deal with federal procurement directly, Smith said. Rather than spend the time and money to develop them, it's easier to find a partner.

"I've been with companies like Avaya [Inc.] that had their own GSA schedule [listings], and that's a whole operation there," he said.

However, young companies still sometimes assume that getting listed on the schedules is the goal, rather than the means to an end that it actually is, said Pat Gallagher, vice president of federal sales at ClearCube Technology, which makes blade computers.

"Look at the list of companies that have schedules, and there are thousands or tens of thousands," he said. "That's just the vehicle that allows you to complete the process. If you're not creating demand, not talking to your customers, not understanding their needs, you're not going to get customers."

Companies, in other words, need the marketing hustle even with the schedule. "I think a lot of vendors see the federal government as a highly successful market, and with a minimum of work, they're going to get the customer base," Gallagher said. "That's not the case. They're a very sophisticated customer" and will expect the same degree of technological expertise and responsiveness that commercial customers do, he said.

Federal agencies are becoming more aggressive than they once were, said Spectrum's Segal. Despite a company's listed GSA prices, agencies often require them to compete further and drop prices even more.

"They're buying much more carefully than they ever were before," Segal said. "There's a lot of price negotiation, a lot of trying to save an extra half a percentage point. They're getting very sophisticated at it."

***

On schedule

Products and services available through the General Services Administration's Schedule 70:

* Equipment (purchase, rent, long-term lease).

* Computers, telephones and radios.

* Maintenance (equipment and software).

* Software licenses.

* Application service providers.

* Training.

* Professional information technology services.

* E-commerce services.

* Telecommunications transmission services.

* Mobile and wireless technology.

* Enterprise resource programs.

* Information assurance.

* Financial management software.

* Equipment/software for people with disabilities.

* Seat management.

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