Sharing-in-savings leaves many in the dark

There’s been much talk this year about the potential in government for share-in-savings contracting, in which a vendor provides some or all development funds for a project and gets paid out of the resulting savings.

But many government officials are still in the dark about the method, a GCN telephone survey found. Only 21 percent said they have a solid understanding of how share-in-savings contracts work.

Respondents in the survey sample included a mix of federal procurement officials and agency IT managers who said they buy IT for their agencies.

More than a third, 36 percent, described share-in-savings as a potentially useful method, while 12 percent thought it might be more of a fad. More than half weren’t sure. Another 36 percent thought their agencies might benefit from the approach.

“It provides an added incentive for a provider to keep costs down,” said a Justice Department IT specialist in Washington.

“Our agency is involved in a pilot program to determine its usefulness, but we haven’t analyzed all the data yet,” said an IT specialist at the Environmental Protection Agency in Washington.

The reverse auction, another procurement method that seemed to be gaining traction in government a few years back, isn’t much in evidence these days on the federal landscape.

Only 10 percent of officials in the survey reported that their agencies had conducted a reverse auction and more than three-quarters said they had no plans to conduct one in the next year. More than a quarter thought interest had waned in reverse auctions.

Online procurement, on the other hand, is a regular practice in government, the survey found. A majority of participants, 51 percent, said they buy products online.

GSA Advantage was the most popular site in the survey sample, at 59 percent, followed by CDWG.com, a commercial site for government buyers, at 53 percent.

There is much to like about buying IT online, according to officials we talked with.

“It’s simple, straightforward and convenient,” said a General Services Administration contracting officer in Arlington, Va., echoing a view that was shared by many in the survey.

“It gives you the ability to do price and product comparisons,” added a project team leader for the Marine Corps in Albany, Ga.

Some in the survey saw downsides to buying online—not being able to see and touch a product or talk to a salesperson, for example.

“Sometimes I have questions and would like to speak to a person, but I have to leave an e-mail and then wait for an answer,” said an online publications specialist at the Geological Survey in Reston, Va.

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