NIH predicts sales of $1.75 billion

The National Institutes of Health is predicting that federal agencies will spend $1.75 billion in the next five years on office technology through its Electronic Computer Store II procurement.

In its revised solicitation released late last month NIH placed a spending ceiling of $350 million per year on future ECS II contracts considerably more than the $290 million that agencies have bought from the ECS I contracts in the past 19 months. Because NIH's total technology budget is less than one-fourth of the projected yearly value of ECS II most of the expected sales would have to come from other agencies as has been the case with the current program.

Like its predecessor ECS II would provide federal agencies with microcomputers Unix workstations file servers networking equipment software and peripherals. The competition could draw dozens of bidders and NIH is expected to award multiple contracts.

But the marketplace is divided over whether NIH's expectations for ECS II are too high.

Elmer Sembly a special assistant to Leamon Lee the NIH associate director of administration said the agency is not certain how much business ECS II might generate. He said the agency set the $350 million annual ceiling because "we want to make sure we have enough room."

Sembly said NIH believes sales on ECS I so far are lower than they could have been because the program is new.

Those familiar with federal buying trends contend that it hardly matters what limit agencies place on their contracts these days. The sales any vendors make today depend mainly on how aggressively they market their contracts.

"We'll either hit that amount or we'll exceed it " said Deborah Gordon president of GCG Computers one of 17 ECS I vendors. "It's whatever the vendors are going to make of it."

"Certainly there's a difficulty trying to anticipate the traffic on these contracts " concurred Bob Dornan senior vice president of Federal Sources Inc. McLean Va. He said however that with the General Services Administration predicting its schedule sales to increase from $2 billion last year to $3 billion this year there might not be enough demand from buyers to support ECS as well.

"I just don't see the budget and the business supporting two GSA [schedules] " Dornan said. Like other multiple-award governmentwide contracts ECS competes for agency business with GSA.Terry Kelly a consultant who teaches classes in procurement to agencies and vendors said her conversations with agency buyers led her to believe that "GSA will rule with [the] schedules" because GSA is promoting its program aggressively and because senior Defense Department officials have endorsed the schedules as a purchasing tool.

Bids are due May 29 and NIH expects to make its awards by the end of the fiscal year when the current ECS contracts expire. NIH withdrew the first ECS II solicitation after it was issued in early February because of drafting errors. The new version issued late last month is designed to correct those errors but not make substantive changes to the agency's requirements.


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