Leasing fare added to IT schedule menu
HERSHEY Pa. - The General Services Administration will award next month three or four schedule contracts to vendors who will lease laptops and other information technology products to federal users.
Bill Gormley assistant commissioner of acquisition at GSA's Federal Supply Service said last week at the agency's Information Resources Management Conference here that he planned to award the contracts based on success stories with leasing arrangements in the private sector.
"Leasing seems to be the next wave in the private sector " Gormley said. "If you look at the total cost [from] the time of acquisition to disposal leasing is now proven in the private sector to be cheaper even with laptops."
Gormley announced the leasing contracts in a speech outlining a series of anticipated changes in the multiple-award schedule program. Those changes expected next year would include allowing users in other countries to get access to schedule products merging all of the IT schedules (70 A 70 B/C 70 D and 70 E) into a single schedule and allowing GSA to strike "evergreen" deals with vendors that could continue without renewal.
Agency users at the conference appeared intrigued by the forthcoming leasing contracts.
John Harman chief information officer at the General Accounting Office said he will consider leasing when his agency embarks on a major laptop procurement in the coming months. He said the idea sounds appealing because it could save scarce IT dollars give GAO users access to the latest technology and help in the capital investment planning process.
"If we've got cost studies showing leasing is beneficial then that is one option we will certainly look at " Harman said.
Gormley said he was initially skeptical when approached last year by vendors who wanted to discuss leasing contracts. But after discussing the issue with users in the private sector he changed his mind.
"The vendors keep the inventory for you. They handle disposal of the product and you get the latest upgrades " he said. "When you consider those costs it can cost a lot less to lease."
Gormley said he would limit leasing arrangements to three- or four-year deals.
Bill Stuckert government marketing director at Comdisco said his company is interested in pursuing the leasing schedule contracts with FSS and he has already met with officials to discuss the possibility.
Stuckert agreed with Gormley's assessment that leasing can benefit federal IT users in some cases adding that his company already leases computers to agencies. "If leasing is utilized as part of a total asset management package it makes a lot of sense " he said.
Larry Allen executive director of the Coalition for Government Procurement said members of his organization are looking forward to leasing equipment to federal users. "They see it as another route for them to accomplish sales " he said. "Leasing has worked out very well for copier dealers. Adding this type of service to information technology schedules would be a natural transition."
Gormley said the other changes planned for MAS by April 1997 will benefit agencies.
He said users in the State and Defense departments have been asking for a "worldwide MAS" program to let their overseas users achieve the same deals as domestic users. When worldwide MAS becomes effective next year these agencies will no longer have to cut separate deals for employees in different locations he said.
By merging schedules for mainframes PCs used ADP gear and electronic commerce FSS will reduce its own workload as well as that of its users Gormley said. "It will reduce the number of contracts we award and will allow [agencies] to interface with a single vendor under a single schedule."
Allen said coalition members applauded the move to consolidate the schedules under a single heading. "It's getting to the point where machines are difficult to differentiate as to what would go on 70 B/C or 70 A " he asserted. "So we think that makes a lot of sense."
Allen said members were more divided in their opinions of the other changes. He said questions about the legality of evergreen contracting prevented him from endorsing the idea. He also said there were concerns about how the worldwide schedules program would affect smaller companies.
"Federal employees overseas don't feel that they have been served well by the existing program and GSA is doing this to exploit that market " Allen said. "But some companies especially small businesses may not have an interest in doing business overseas. I would want to make sure they would not be required to do so."
Olga Grkavac vice president of the Information Technology Association of America's Systems Integration Division said her members believed merging the schedules would make them more convenient to use. "Certainly it would provide ease of use to agencies " she said. "But to industry it would ensure that terms and conditions would be similar on all contracts." She said conditions guiding how agencies order and receive products differ from schedule to schedule.