Serving up higher IT sales
- By Diane Frank
- Jan 23, 2000
First listed on the schedule just two years ago, information technology
services have become a powerful engine driving the growth of the General
Services Administration IT schedule.
The GSA IT schedule has become increasingly popular with agency procurement
shops. The most recent GSA figures show that sales through the Federal Supply
Service's IT schedule ballooned more than 50 percent last year, reaching
$7.8 billion in fiscal 1999, up from just more than $5 billion in fiscal
IT services, which GSA placed on the schedule in 1998, is the primary
reason for the run up in sales. Services have quickly become a large portion
of total sales as agencies find that it's nearly as easy to buy services
off the schedule as it is commodity items such as PCs and packaged software.
For the fourth quarter of fiscal 1999 — the government's traditional buying
season, when agencies unload billions of dollars before the fiscal year
ends — services sales totaled just less than $1.4 billion. Hardware and
software sales totaled almost $1.7 billion.
"I think we're seeing the maturing of purchasing services on schedule,"
said Bill Gormley, assistant commissioner of the FSS Office of Acquisition.
"People are finally getting comfortable with what they have to do to purchase
the services their program people need."
"It's a reflection of the way the federal government as a whole is moving,"
said Larry Allen, executive director of the Coalition for Government Procurement,
an industry group that represents 300 vendors on the GSA schedule. "People
are searching for integrated solutions rather than buying pieces here and
there and putting them together. And rather than sinking a lot of administrative
time and procurement effort to administer their own contract, they are going
to the schedules."
Even taking into effect the ease of buying off the schedule, contracting
experts inside and outside government agree that services contracts are
more difficult to assemble than hardware and software contracts.
In the past, agencies often used services contracts to hire people by
the hour, serving as what is often called a "body shop." But under current
federal procurement policy, services contracts must include a detailed statement
of work that outlines the agency's needs and contains specific performance
goals that the vendor must meet. The Office of Management and Budget developed
the new rules to reduce the practice of agencies staffing program offices
with contractors assigned to no specific task.
As more vendors list IT services on the schedule, some procurement experts
worry that agencies are buying the simplified labor-hour services, not the
new performance-oriented service solutions. "They're not really good service
contracts," said Chip Mather, senior vice president at federal consulting
firm Acquisition Solutions Inc. "I think a lot of the orders going against
the schedule are for "time and materials' and "level of effort' contracts."
Mather and others worry that no one may check to ensure that the services
contracts sold off the schedule are following the new rules. "There should
be some oversight and some accountability," he said.
Because of questions raised about how agencies buy multiple-award schedules — such as the GSA schedule, the Transportation Department's Information
Technology Omnibus Procurement contract and others — Congress has authorized
the Office of Federal Procurement Policy to study multiple-award schedule
contracting. OFPP plans to study blanket purchase agreements and services
sales. OFPP does not plan to complete the study until at least the end of
the year, according to sources.
GSA also has been holding training sessions for agencies and vendors
on how to buy and sell services on schedule to ensure that everyone understands
how the schedule is supposed to work, Allen said.
"GSA has been very careful about pointing agencies in the direction
of not [using the schedule as a body shop]," he said. "GSA went out of its
way to put in specialized ordering instructions, and they have a lot of
feet out on the street to train and educate people. If there are people
out there using the schedule as a body shop, then you've got to look at
each individual agency for the fault."
Many of the larger services contracts are BPAs, under which an agency awards
a separate IT contract for specific needs and services to one or more vendors
that are on the schedule. The agencies developing these large-scale contracts
often put months of work into the acquisition plan and statement of work,
"The larger scale the acquisition, the more clearly they are doing intense
presolicitation work," he said.
For example, the Wright-Patterson Air Force Base procurement staff developed
an advisory and assistance services BPA. The new contract will replace the
current indefinite-delivery, indefinite-quantity contract, which expires
this year. The Air Force program office has been working on the acquisition
plan for more than nine months, Gormley said.