States Demand Same Prices Offered to Fed IT Buyers

The New Jersey Assembly this week moved on legislation designed to give state contracting officials more leverage to coax better deals from vendors by asking for the same prices those companies offer federal agencies.

New Jersey is just one of a handful of states peeling back procurement statutes to begin using the U.S. General Services Administration's schedule pricing as a benchmark for their own purchases.

Here's how benchmarking would work. "A state agency would say, 'We are going out to buy computers or copiers or whatever, and we are requiring of those companies that bid on this solicitation for 10,000 copiers that they bid GSA's schedule price or better for the volumes considered,' " said Larry Allen, executive director for the Coalition on Government Procurement.

New Jersey and Louisiana are working in similar fashion to clear the way for such leverage. Specifically, live legislation in New Jersey -- Bill A30, available through search at (www.njleg.state.nj.us/html98/bill9899.htm) -- would allow contracting officers to buy directly from the GSA schedules program should Congress allow state and local governments to do so. Louisiana has already passed such legislation.

The federal government has not yet agreed to open its schedules program to states. Several attempts to do so have failed in the face of political wrangling.

But states have not lost a lot of sleep over their exclusion from GSA schedule buying. And in the case of New Jersey and Louisiana, overtures are more about states driving their own best deals rather than piggybacking on GSA's.

Many states now have an appetite for GSA prices. GSA tends to get deep discounts because rates for products and services are based on volume buying from the entire federal government, Allen said. "The carrot of cooperative purchasing created a lot of intrigue in terms possibilities in states using the GSA schedule. The carrot was pulled away, but now you see a lot of states saying how else can we get to that," Allen said.

"For a long time, a couple of states have been moving toward this kind of benchmarking," Allen added. "For example, Ohio, Florida, California and Massachusetts have master contracts. But lately, we've been hearing that a whole slew of states are looking at benchmarking off GSA."

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