BPAs, services, more firms send schedule sales soaring
- By Brad Bass, John Moore
- Apr 27, 1997
The General Services Administration predicts that information technology schedule sales spurred by a surge in new purchasing practices will expand to a record of nearly $3 billion in fiscal 1997.
Government and IT industry officials attribute the rocketing success of the multiple-award schedule program to a variety of causes but those most frequently mentioned are the growth of blanket purchase agreements (BPAs) among Defense Department and civilian agencies the addition of IT services to the schedules program and the increase in the number of manufacturers which now offer products via schedule contracts.
GSA is basing its sales projection on recently released data showing ADP schedule vendors' sales for the first six months of fiscal 1997. Those numbers however may not be completely accurate. Officials at Gateway 2000 Inc. which GSA ranked as the leading schedule supplier with sales of almost $190 million said the company's actual numbers were far lower than those reported by GSA. The company however declined to release its GSA sales figures.
Jan O'HARA federal sales manager at Toshiba America Information Systems Inc. said the company generated sales of about $16 million for the first half of fiscal 1997 compared with GSA's figures of more than $30 million.
In addition BTG Inc. the sixth-ranked Schedule B/C vendor in fiscal 1996 does not even appear on GSA's list this year. BTG has been exceptionally active this year with BPAs awarded by the Navy and other agencies.
But Roger Harden director of marketing at third-ranked Dell Computer Corp. said the sales figures reported by GSA for his company's sales correspond closely to those reported within the company. GSA reported sales of $146.5 million for Dell.
Extremely Successful Year
Despite confusion over the numbers all of the vendors interviewed said their firms or letter-of-supply holders were having an extremely successful year. They agreed that reforms that went into effect last year are responsible for the dramatic growth that sent GSA schedule sales for the first six months of fiscal 1997 soaring to $1.5 billion worth of IT business.
Agencies have turned to the schedules through a steady stream of BPAs which allow agencies to negotiate additional discounts with schedule vendors while avoiding the lengthy procurement cycles associated with indefinite-delivery indefinite-quantity (IDIQ) contracts.
Dendy Young chief executive officer of Government Technology Services Inc. said federal program managers are under pressure to perform and they realize that "if they want to do something quickly they can now do it through the GSA schedule." He said he expects to see more major procurements canceled or converted to BPAs in light of the schedule option.
At the National Oceanic and Atmospheric Administration information resources management chief Robert Kidwell said the agency initially intended to award an IDIQ contract for desktop equipment but chose to award three BPAs to schedule vendors this month.
NOAA selected Gateway Dell and BTG to provide about $50 million worth of desktop hardware through March 31 1999. Purchases will be restricted to users in the Commerce Department and will be conducted electronically through NOAA's IT Electronic Store (www.rdc.noaa.gov/~nites).
NOAA IT officials chose to go with BPAs after speaking with Navy personnel who have relied on BPAs more than any other agency. The Navy has taken advantage of the convenience of schedule contracts through a series of BPAs that offer discounts of up to 50 percent below published MAS prices.
Capt. David Capizzi a supply officer at the Naval Information Systems Management Center said the service last week brought on-line its Information Technology Electronic Commerce system which will allow any user with a purchase card to buy up to $100 000 worth of equipment from Navy BPAs. The ITEC Web address is www.nismc.navy.mil.
William Gormley assistant commissioner for acquisition at GSA's Federal Supply Service confirmed that the program has been bolstered by an onslaught of new vendors. "We have a breadth of products and services that have never been there before " he said. "[Vendors] who have stayed away from us have basically joined the schedules program because they are getting so many customer inquiries."
Larry Allen executive director of the Coalition for Government Procurement said the members of his organization who hold schedule contracts are reporting remarkable sales growth largely due to the addition of IT services. "IT services are proving to be extremely popular with agencies " Allen said.