BPAs should make government 'work better,' not 'commoditize' IT
- By Robert J. Guerra
- Jul 06, 1997
One of the hottest topics around the Beltway these days is the issue of blanket purchase agreements (BPAs) which are the newest form of what we used to know as indefinite-delivery indefinite-quantity contracts. Legitimized by the sweeping procurement reform of the past year BPAs were reinvented to help focus on a specific need. And while some of them did just that most if not all of the BPAs that are being awarded today appear to be nothing more than existing General Services Administration schedules with lower prices.
The BPA has its origins in the procurement reform movement founded in the National Performance Review whose basic tenet was to create a government that "Works Better and Costs Less." Today's BPA efforts need to be refocused on the "Works Better" portion of the NPR by supporting agency missions not on providing more inexpensive vehicles.
Soon after reforms were instituted through the passage of legislation - and after the rewrite of the Federal Acquisition Regulation as it related to information technology acquisition - we saw the Navy's Naval Information Systems Management Center execute a few BPAs that made a lot of sense. They were focused on a specific need structured to support competition and fairly complied with the spirit and letter of the new environment.
In "The Blair House Papers" (see the NPR Web site at www.npr.gov) President Clinton and Vice President Gore directed Cabinet-level executives to "Be Smart About Information Technology." Those executives were told that IT "is a great enabler for reinvention" and that "it allows us to rethink...how people work and how we serve our customers." They go on to say that "GSA has simplified [Federal Supply Service] purchases" and that agencies can pick a contractor on a best-value rather than a low-price basis and buy what they need.
If lower prices are the objective of a BPA let's just have FSS negotiate lower prices. A few weeks ago 63 small disadvantaged companies were "awarded" BPAs estimated at $100 million each. Not to be outdone there are 40 more to come. So now we'll have 103 small 8(a) companies all with the same BPA all with the same products all with the same services and nominally varying prices. When someone wants to buy something under this program it is reasonable to expect that there will be a price competition among these companies. So who won? Where's the "Works Better" part of the equation? Is this really being smart about using IT?
This example merely illustrates how we have lost sight of the "Works Better" part of the NPR goals. While BPAs are wonderful alternatives to long drawn-out costly and combative procurements is this really creating a government that "Works Better " or is it a way to create work and justify jobs that procurement reform was supposed to eliminate?
Moreover we have now GSA regions competing with GSA's own FSS and GSA and FSS both compete with all the agencies that are doing government-wide acquisition contracts and their own BPAs.
Add to that mix the proposal to "privatize" FSS. Does anyone really understand the consequences of privatizing FSS? How would that help us focus on an improved government? There is a parallel lesson to be learned here by observing what has happened to Best Products in the private sector. The catalog sales business is not a lot of fun and it's even less profitable than it is fun. Privatize the FSS and watch everyone's costs go up because you simply cannot run a long-term business on 1 percent margins.
Furthermore this misuse of BPAs puts IT in the same category as any other commodity. The fallacy is that IT is not a commodity. Corn is a commodity. Wheat is a commodity. Have you ever heard of anyone who is concerned about the interoperability of corn and wheat? How about upgradability standards compliance or the reuse of corn or wheat? IT is a key productivity tool. While I can go a week or a month without corn or wheat I can't go even a few days without my PC.
We ought to let FSS do its job it is very good at determining fair and reasonable prices and aggressively negotiating those prices. (Trust me FSS is very good at negotiating prices.) We ought to let FSS do just that.
Let's refocus our efforts on the "Works Better" part of the equation. Let's use BPAs to meet a specific purpose support a specific mission fill a solutions gap or obtain a better value rather than a lower price. Let's use BPAs the way we used to use IDIQs. Let's "Be Smart About Information Technology" and stop trying to "commoditize" something that is not a commodity. It is not too late to get on the right track.
-- Guerra is president of Robert J. Guerra & Associates and a 30-year veteran of the IT industry. He has held executive positions at Xerox Federal Data and Everex Federal Systems.