GSA to close some contracts to new vendors

Editor's note: This story was modified after its original publication to add information and links to documents.

A senior General Services Administration official told policy-makers June 7 that the agency will identify "oversaturated" Multiple Award Schedules markets as means to help agencies find contractors and save GSA’s resources.

“The MAS program is perpetually open to qualified new offers, and, while vibrant markets exist in some of the Schedules, we have reached the point of saturation in others,” Steve Kempf, commissioner of GSA’s Federal Acquisition Service, said in written testimony to the House Small Business Committee.

So officials are instituting the Demand Based Model, which will allow the agency to align its resources with areas of greatest need.

Under its new model, officials will review the major part of each Schedule and decide whether there’s room for potential innovation and program growth. If there is, officials will keep it open for new vendors to join. Oversaturated areas will closed to new companies for a year.

Over the last several years, the number of companies seeking Schedules contracts has roughly doubled and the volume of contract modifications has roughly tripled. Some of the growth is from new services and products; too much of it isn’t, he said.

Duplication is a major culprit, as some companies offer the same item at different prices on different contracts. He said GSA projects that well over 50 percent of the estimated 3,000 contractors will have no sales or won’t meet the $25,000 minimum threshold that GSA requires companies on the Schedules to earn in their first two years. Meanwhile the government will spend more than $20 million to support and manage those contracts.

In some instances, nearly two-thirds of the contract holders have little or no business, he said.

“In these cases, the sheer volume of contract holders prevents agencies from sifting the wheat from the chaff to find the right offer at the right price,” according to his statement.

Kempf said it’s a disservice to agencies and vendors to sell items where there isn’t money being spent. It also wastes money to monitor and maintain these contracts.

In a separate news release issued the same day, GSA Administrator Dan Tangherlini said the agency will also be working to modernize the schedules program by adding no new contracts for obsolete items such as typewriters and photographic equipment.

 

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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