Neal Fox | GSA: Incubator for change

Contracting in perspective

This would be a great time to be at GSA. Things are now bottoming out at the General Services Administration, so there is no way to go except up. The new administrator wants improvements, and fast. The new Federal Acquisition Service commissioner wants the same, only faster. This is the perfect incubator for new ideas that could propel GSA to improve customer satisfaction, an environment that has not existed for many years at GSA.

In such an environment, great ideas should flourish. But there is one big problem. Virtually all the main players are new to their positions, and many others are not up to the task of developing such great new ideas. It is a sad fact that, at the premier procurement agency in the federal government, most of the senior executives are not procurement people by either training or experience. The new FAS commissioner is a notable exception, but those around him are generally not procurement experts. Most left when things went south.

There are a number of important initiatives GSA needs to undertake in its new role as an incubator for change. Ultimately, this is not about GSA but about the customers. It will be interesting to see if entrenched forces make the same tired arguments against the improvements customers need, or whether GSA uses this window of opportunity to make real changes that will benefit the customer and return GSA to its rightful position as the leader in governmentwide acquisition.

As you might already have guessed, I have some ideas. In fact I have 10, just to get things started.
  1. Implement a process for all GSA schedules that would eliminate the need for 95 percent of all contract modifications. Before you say that is not possible, it has already been proven at GSA but was set aside by the established naysayers. GSA schedules persist in using an outmoded contracting method that puts detailed product information and individual prices into the basic schedule contract. A process called Quick-Mod has already been piloted successfully for products on the IT Schedule, and uses relationship pricing (either maximum allowable markup from vendor cost for resellers, or minimum mark-down from retail prices for manufacturers). This new process renders nearly all product modifications unnecessary and brings new products to the customer much faster. It also reduces GSA process costs and allows contracting personnel to refocus on important contract issues and customer service. This change could, and should, be implemented without further delay.

  2. Implement the One Schedule concept. The current rigid barriers between GSA’s 43 schedules have caused contract scope problems for customers and an increased contracting workload for GSA. Many of those scope problems could be eliminated by creating a single schedule that is full-scoped and all-inclusive. It would also minimize the contracting burden for customers who place orders for complex services. GSA workload and process costs would be significantly reduced, and GSA electronic contracting would become much simpler to implement.

  3. Use better ordering procedures to reduce GSA assisted-services process costs on products. Services orders are by nature complex, but product ordering can and should be simplified by electronic processes. GSA loses money on many assisted-services orders for products because it uses manpower-intensive processes. In contrast, GSA can make money on complex services orders, which is where they should focus their manpower. GSA personnel should only place product orders through electronic processes such as eBuy, FedBid (demonstrated by GSA’s Southeastern Region as a best practice), or similar electronic processes that drive out unnecessary and time-consuming contracting actions. Electronic contracting should also be used for Global Supply orders, where GSA is also losing money. This would allow reductions in staff for assisted services (former FTS) and Global Supply as GSA shifts to a full array of electronic processes to reduce the cost of procuring products.

  4. Get out of the Global Supply warehouse business, with the possible exception of true emergency supplies. Buying and storing copier paper, cleaning fluids, etc. in warehouses and re-shipping them to Global Supply customers is an outdated, money-losing concept and should be ended quickly.

  5. Replace GSA Global Supply Expanded Direct Delivery with multiple-award blanket purchasing agreements that can be used directly by customer agencies. The current Global Supply EDD uses single-award BPAs, which violates basic competition rules by awarding one BPA to a single contractor for a certain product line, such as office products, tools and some IT products. It is incredible that GSA considers this to be in the best interest of their customers, or that it is even legitimate for GSA to use single contractors for buying so many products. BPAs for governmentwide use should always be awarded to multiple contractors to enable continual competition.

  6. Allow all voice telecom to be added to the IT Schedule. An old disagreement between the former Federal Supply Service and Federal Technology Service has kept switched voice telecom off the IT Schedule, driving telecom customers to contract vehicles outside GSA. Now that FSS and FTS make up the Federal Acquisition Service, adding switched voice telecom to the IT Schedule should be a slam-dunk improvement. This is another change that could and should be made today. Remember, it is all about the customer.

  7. Manage the GSA schedules as a single program. Do not split the IT Schedule from the others. The schedules are an integrated program and should be managed as such. GSA customers want integrated orders crossing multiple scope areas, and separating IT from the rest of the GSA schedules widens the scope chasm. As noted with the One Schedule concept (Item 2, above), separation of IT from other professional services goes in the wrong direction.

  8. Cancel either the Universal or the Enterprise portion of the GSA Networx telecom contract solicitation. There is a serious danger to GSA lurking in the huge guaranteed minimum sales to vendors on these two separate GSA telecom contracts. The two contracts were supposed to achieve different objectives, but the requests for proposals were poorly conceived and did not accomplish that. As a result, Networx did not achieve the objectives that would justify two separate contracts, since they now duplicate one another to a large degree. Couple that with the danger that GSA could lose hundreds of millions of dollars due to the high minimum-revenue guarantees for vendors, and the need to cancel one of the two contracts becomes clear.

    Interestingly, it would be more advantageous for GSA to cancel the larger Universal contract vehicle with its $525M guaranteed minimum revenues to vendors and keep Enterprise, which only guarantees $50M. Enterprise could meet customer needs and was bid on by the same vendors who bid on Universal, plus a few more. A secondary improvement on Networx would be to drop the complicated and unnecessarily burdensome billing procedures that perpetuate a bloated GSA telecom bureaucracy.
  9. Drastically reduce GSA assisted services (former FTS). GSA assisted services, whereby GSA acts as the contracting officer on behalf of a customer agency, has lost much of its former value to those agencies. And the demand for such services from GSA will never return to the levels achieved during the heady days of illegally parked money and short-cut contracting.

  10. Make sure everyone at GSA knows what their job is. They have become very confused during the past two years through no fault of their own. Turn them loose to do the great work they are capable of doing.

These changes would re-invigorate GSA, return it to fiscal solvency and put it back in charge as the leader in governmentwide procurement. But most of all, they would benefit customers. And it is all about the customer.

Neal Fox is the former assistant commissioner for commercial acquisition at GSA and has formed his own consulting company, Neal Fox Consulting ( He can be reached at [email protected].

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