A taste of its own medicine

The General Services Administration's multibillion-dollar governmentwide information technology procurement program for 8(a) companies is turning out to be a real eye-opener for GSA.

Leaders of GSA's Federal Acquisition Services for Technology (FAST) program last week announced plans to increase the average fee charged to agencies for processing transactions valued at less than a million dollars - a category that makes up the bulk of FAST's business. It seems that financial losses partially due to competition between GSA offices brought about the changes. Some would say GSA and the government as a whole is getting a taste of its own medicine.

The FAST program launched in 1994 in the Kansas City Mo. regional office was hugely successful in terms of orders processed as well as for its support of small disadvantaged and minority-owned businesses. But GSA concerned over possible contracting irregularities pulled the plug on the program last year. GSA then re-established FAST as an agencywide program in which various regions could compete for agency business.

Agencies anxious to make the most of this new contracting environment quickly discovered that they could get an even better deal if they got the GSA regions to bid against one another for their business. Margins for the regions got slimmer and slimmer. Agencies got more bang for their buck but GSA couldn't make money off the program. Higher margins are one result another may be a sales rule that limits FAST offices to selling within their own regions. The push began several years ago for the government to act more like a business. FAST has given GSA some real-life experience in this area.

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