House Small Business chairman skeptical of GSA's new schedules model

Rep. Sam Graves

Demand Based Model"demonstrates a lack of understanding of how small businesses operate," Rep. Sam Graves, R-Mo., suggests.

A senior House member is questioning the General Services Administration's potential Multiple Award Schedule restructuring that cuts unused schedule contracts, saying the reform will have a negative effect on small companies.

In a Nov. 29 letter to GSA Acting Administrator Dan Tangherlini, Rep. Sam Graves (R-Mo.), chairman of the House Small Business Committee, wrote that GSA's Demand Based Model (DBM) of the schedules program will not help the agency operate more efficiently or save money. It also will not help small businesses' viability in the federal marketplace, Graves argued. He even questioned whether GSA recognizes how small companies function in government contracting.

"The DBM proposal demonstrates a lack of understanding of how small businesses operate in relation to the federal market," Graves wrote wrote. He added that the "wildly divergent estimates of cost savings" GSA gave his committee in recent months have left him skeptical "that GSA understands its own cost model or that any cost savings will offset the harm to small businesses and the procurement system that will result from denying small businesses the opportunity to compete for federal contracts."

Over the last several years, the number of companies seeking schedules contracts has roughly doubled and many of the schedule contract holders are small businesses. Nearly 15,700 of the 19,000 contract holders are small business, Graves wrote. In addition, the volume of contract modifications has roughly tripled.

GSA officials would not comment on the specifics of the congressman's critique, but the agency "is reviewing Chairman Sam Graves's letter and appreciates his concerns," a GSA spokeswoman said Nov. 29.

"GSA remains deeply committed to small businesses, and we value the savings and efficiencies they offer the federal government," she said. "As a testament to our commitment the Small Business Administration recently recognized GSA for the agency's leadership in small business contracting." In fiscal 2012, GSA received an A+ for exceeding SBA small business contracting goals.

"We will continue to work with Congress to meet these important goals," the spokeswoman added.

GSA has proposed the DBM as it aligns agency's resources with areas of greatest need. Officials can direct attention to those areas where customer demand is increasing. On the other hand, they can pull away resources from areas where customer demand has fallen off.

Some of the growth is from new services and products, but too much of it is not, in the agency's view. GSA expects that more than half of contracts awarded in 2011 will not have significant sales.

Steve Kempf, former commissioner of GSA's Federal Acquisition Service, told Graves' committee in June the program is offering too much, including some unnecessary products and services, such as typewriters.

In comments regarding GSA's DBM proposal, Graves wrote it ignores the basic principle of the Federal Acquisition Regulation, which promotes open and fair competition, by choosing to not allow qualified companies to compete for work.

Nevertheless, GSA officials recognize DBM's limitations as a remedy.

"It's not a silver bullet," Houston Taylor, associate FAS commissioner of the Office of Acquisition Management, said earlier this year at the Multiple Award Government and Industry Conference in Arlington, Va. "It won't fix everything, but it will allow us to start focusing and concentrating on the customer."

Note: This story was updated to include GSA comments that were not available at the original deadline.

About the Author

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

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Reader comments


I am going to visit my representative, of Maryland to get some answer's regarding GSA SAM, & Small Business Administration. I am upset. I pay taxes I fought in Viet-Nam, and I having a hard time getting my contract to upload on my GSA eOffer Contract. I will expect some change, but it would cost GSA a ton of money to get out that Contract.

Thu, May 30, 2013 JOHN

Thanks for this opportunity to hear my story. The SBA hired SAM, to replace the CCR, which was the Central Contract Registration. Sam's job was to migrate everyone/Vendor to the SAM'S Database, but SAM, lost or held back a lot of vendors data. My data was lost, so three people from sam wanted me to pay them 500, to 599 to fix their mistake's, I refused but Sam has the power, if you want to do Business with Federal Government it's going to cost you 599.99 dollars. We Small Businesses has paid Taxes, and the American People. We, shouldn't haven't to pay funds to do Business with our Government.

Tue, Dec 4, 2012 Northern Virgina

It is great to see someone on the Hill finally providing some pushback in response to this insane DBM initiative. We found no mention of the almost $300 million in Industrial Funding Fees (IFF) collected by GSA on the over $38 billion in GSA sales for FY 2011 from GSA contractors WHO DID have sales on their GSA contracts. The DBM initiative is exactly what the FSSI program is - AN ATTEMPT BY THIS ADMINISTRATION TO KILL SMALL BUSINESS AND JOBS.

Mon, Dec 3, 2012

II suspect that part of this is GSA responding to their inability to respond to the increasing demand for GSA schedules from industry & Government agencies. They have tried several times & spent 10’s of millions to speed & improve the schedule process with little or no success even though they have more than enough funding generated thought the fees they collect.

Fri, Nov 30, 2012 OccupyIT

Thank you, Representative Graves! Given its fee based structure it is understandable that GSA would rather be Enron, trading large blocks with cozy large businesses hawking enterprise snake oil, and not Washington Gas, selling retail to small projects with small business partners innovating to keep programs going. Understandable as well that they continue to relable it (no body seems to remember bundling is bad under the FAR any more) as strategic sourceing, FedSCAM where only the few special firms can get qualified (sorry we're busy certifying our pals), etc. LB have their place but GSA's cost structure should trump public policy to support the small business engines of job growth.

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