Tricks of the Trade
- By Brian Robinson
- May 10, 2004
The General Services Administration's technology schedule has come a long way in recent years.
Throughout the years, it has been a place where you could go to buy printer paper, ink cartridges or blank CDs as well as laptop and desktop computers. But recently, officials added services contracts from which you can purchase complex technology integration solutions.
Now it's getting to where there are almost too many choices.
Industry, government agencies and Congress have suffered option shock from confusion over the sheer number of contracting vehicles that are available, according to Howard Ady, BearingPoint Inc.'s governmentwide acquisition contract program manager. It has gotten to the point where GSA officials are now actively trying to streamline the range of vehicles they have to offer.
But there's no turning back. From posting just $4 billion in fiscal 1998, the GSA information technology schedule sales in fiscal 2004 are projected to be close to $17 billion. Some 4,500
vendors hold IT schedule contracts, and that number is growing.
The reasons are obvious. Because GSA contracts are precompeted, agency officials who buy from the IT schedules don't have to deal with the same time-consuming rigmarole they do when handling their own contracting. A procurement can be completed just 30 days after putting out the request for quotes, compared to taking the better part of a year if an agency does it from scratch.
"Speed, cost and the continuing squeeze on agencies' own [contracting] resources are the main reason why the momentum of these kinds of centrally negotiated contracts will only continue to increase," said Steve Charles, executive vice president of immixGroup Inc., a consultancy that helps commercial technology companies do business with the government.
It's certainly easier to purchase through GSA schedules, but it would be a mistake to think it's simply a matter of putting in your order, waiting for the offers to flood in and cherry-picking the best.
Market experts contacted by Federal Computer Week offered some suggestions for both buyers and sellers about how to make the most of GSA schedules.
For buyers: Buyers looking for a few pointers can sign up for online training at the Center for Acquisition Excellence (available at www.gsa.gov) free of charge. Courses provide tips such as how to contact vendors, reduce acquisition cycle time and get the best possible prices.
"I would highly recommend first-time or nonexpert users of the GSA schedules to at least take the introductory courses before going to the [GSA schedules] site," said Neal Fox, assistant commissioner for commercial acquisition at the Federal Supply Service. "We've made it easy to use the schedules, but people need at least to know the highway signage and what things to look for."
The center is also a good source of up-to-date information for experienced buyers because procurement regulations change frequently and their effect on how people use the GSA schedules may not be immediately apparent.
"The only way agencies can answer their own questions on how to use the schedules better is through training and familiarity" with the schedules, said Bill Gormley, president and chief executive officer of the Washington Management Group Inc., and a former assistant commissioner at FSS. "So they should use what the GSA has to offer."
Do your homework
Buying standard items such printer paper or blank CDs might just be a case of comparing prices, but when it comes to services, things get more complicated. Much more information must be on hand before making a decision.
Users of the schedules might be lured into thinking that a great deal of market research isn't necessary, because vendors are prequalified and much of the procurement work has already been done, said Stephanie Ambrose, program manager for governmentwide programs at EDS. But buyers still need to know what each contract offers so they can match them to their needs, she added.
A part of market research also is to evaluate the past performance of vendors, which is particularly important on large projects with complicated sets of deliverables, Gormley said.
Buyers who are careful to check a vendor's track record before awarding a standard contract sometimes do not take the same precautions when buying from the GSA schedule. That is a mistake, Gormley said.
"Nothing should happen automatically," he said.
Keep an eye on market prices
In a standard contract, a buyer and seller agree to the work to be done and the price to be paid, and the deal is done once the ink has dried. It's not so simple with the GSA schedule, which works to the buyer's advantage.
According to GSA rules, contractors are required to reduce the cost of the contract if the commercial list prices for items are also reduced.
For example, if you have a contract to purchase 1,000 laptop computers over a 10-month period, the buyer can contact the vendor in the third month to see if its list prices have been cut a distinct possibility in current markets.
This is something that can save an agency purchaser a bundle.
"Many [schedule] users, particularly newbies, don't know this," said Sally Cook, senior program manager at GTSI Corp. "It really pays [for] a user to keep a sharp eye on market prices vs. the GSA contract price."
Feel free to negotiate
Do not assume that the price GSA officials list for products and services is the price you will end up paying. When it comes to GSA schedules contracting, price is negotiable.
An agency procurement officer can go through one GSA process to get the minimum of three quotes required by the Federal Acquisition Regulation, Cook said. If that brings in prices at around the same level, then at least the buyer knows they are probably being quoted a good price.
But that doesn't stop buyers from going to vendors to negotiate directly with them. Using the schedules to window shop often leads to buyers being able to work out better real prices, Cook said.
Gormley said he often hears people in agencies saying they can find someone to beat a GSA schedule price, but always questions whether they have bothered to call a GSA schedule holder to see what they can do.
"It never hurts to ask," Cook said.
Keep set-asides in mind
All agencies now have to meet certain socioeconomic goals for directing a percentage of their contracting dollars to small and disadvantaged companies. However, finding enough of those companies to meet the goals can be a problem.
GSA has upgraded its online capabilities so that users can easily find such vendors with schedules contracts, Fox said. GSA Schedules e-Library can now be searched by socioeconomic groups so agency buyers can look for companies that provide the products or services they need.
The pool of available companies will likely grow to include even vendors who don't have their own schedule contracts.
Officials from large consulting and integration companies such as BearingPoint are looking for good small and disadvantaged companies in various areas with whom they can do business, so they can help meet socioeconomic goals, Ady said.
If agencies can't find companies to work with directly through the GSA schedules, they can always turn to some of the bigger schedule holders to see if they are teaming with other small and disadvantaged companies.
For Sellers: Knowing how to get the most out of the schedules isn't just for agency buyers. The business of procurement is a two-way street, and if agencies need to know the best way of buying from GSA schedules, then vendors need to know how to sell through the schedules to meet agency needs. There's several things to keep in mind.
Don't let up on marketing
The biggest mistake many company officials make, according to Bob Guerra, a partner with Guerra, Kiviat, Flyzik and Associates Inc., is that they get their contract schedule and then assume the business will start coming to them.
They don't realize they need a marketing strategy to sell through the GSA schedules just as much as they need one for business in commercial markets.
As few as 10 percent to 15 percent of schedule vendors may have a marketing approach for GSA schedules, Guerra said. Usually companies hire consultants and hope they can do the selling, but that's not what really happens.
"It's one of the biggest mistakes they can make," Guerra said. "Marketing is how they differentiate themselves from other schedule holders."
And it's a two-way affair. Marketing, done properly, is also a way for companies to get to know the requirements of agencies.
Think in terms of teams
With services now taking the biggest slice of GSA schedule sales, and agencies' requirements getting more complex, it's increasingly unlikely that any one company will have the breadth of products and expertise to fulfill a contract on its own.
That's why many larger contractors have a list companies they can use as partners or subcontractors. Officials at smaller companies tend not to think that way, so they shy away from quoting on agency business they can only partially meet.
GSA rules allow contract holders to team with one another to provide a total solution if that's the only way they can meet a customers' needs.
That kind of contractor teaming also benefits agency buyers, who, in most instances, would prefer to buy a total solution rather than try to meet each part of their requirement with separate purchases from companies.
Robinson is a freelance journalist based in Portland, Ore. He can be reached at [email protected].