GSA/vendor spat snares Hill

The General Services Administration and the vendor community have pulled

Congress into their dispute over the GSA Advantage online ordering system,

ending up with an audit and possibly hearings in September.

To the GSA's Federal Supply Service, Advantage is a continually improving

system that allows federal customers to browse, research and buy products

from vendors on FSS schedules. And the key for GSA is the ability to do

all three of those functions.

But the buying — and, more importantly, the selling — are what vendors

are most interested in. Problems with the way Advantage is set up led vendors

to seek the aid of Reps. Tom Davis (R-Va.) and Stephen Horn (R-Calif.).

And now a General Accounting Office audit that could lead to hearings before

the end of the congressional session may also help their cause.

"Congressman Davis has been very interested in pursuing e-government

and e-management issues and making sure that the government keeps up in

those areas," said Melissa Wojciak, staff director for Davis on the House

Government Reform Committee's District of Columbia Subcommittee. "We would

like to potentially request that Chairman Horn hold a hearing in September...to

see how the government is using online procurement and GSA Advantage and

see what agencies are getting out of it."

Davis and Horn, chairman of the House Government Reform Committee's

Government Management, Information and Technology Subcommittee, in January

requested the audit of "the major issues and challenges the GSA is facing"

in electronic commerce. Senate Governmental Affairs Committee members also

have expressed interest in the workings of Advantage, according to Bernard

Ungar, director of government business operations issues at GAO.

The results of the audit, which GAO included in a letter to Horn and

Davis on June 29, focused on three concerns:

n That FSS requires vendors to supply too much detail for product information,

leading to duplication of the vendors' own World Wide Web sites.

n That it takes so long to place product information that orders are

out of date when vendors receive them.

n That compared to the amount of time and money vendors put into Advantage,

they get a relatively low return.

Vendors did tell the GAO auditors that they have "a good working relationship

with FSS," but that still is not enough.

"They have taken some steps, but the troubling thing is that some of

those steps have been backwards," said Larry Allen, executive director of

the Coalition for Government Procurement.

According to GAO, FSS does not believe there is a problem with out-of-date

information on orders but is working to improve the level of product detail

that vendors are required to provide. Ed O'Hare, FSS chief information officer,

said the agency should have new criteria by September to determine which

products can simply be "referenced" to send federal buyers to vendors' Web

sites.

Sales volume, however, is what vendors see as the most pressing problem

and is an area where GSA's expectations for Advantage differ the most from

industry's. Overall, FSS schedules bring in more than $10 billion in IT

sales per year. But in fiscal 1999, the 2,000 schedule vendors on Advantage

had only $86 million in sales, and fiscal 2000 sales at the end of May totaled

just over $64 million.

FSS keeps track not only of Advantage sales but also the number of people

registering to use the site, those requesting information and the number

of searches. "That's what's important to me — the number of users," O'Hare

said. "The real goal of Advantage is to get a lot of people to use it. We're

not going to force people to buy from the Web site."

For vendors, however, research and browsing are not enough. "If I'm

a federal sales manager trying to sell throwing more money at Advantage

within my company, that's not going to float," Allen said. "It's tough for

federal sales people and federal marketing people to sell Advantage to their

corporations."

But there is really no e-commerce Web site that is making as much for

its stockholders as the traditional market, O'Hare said. "These are issues

the whole e-business world is working out; we just happen to be on the

edge of it," he said.

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