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Perplexed by the GSA-Sun issue

So there has been a lot of buzz around the whole GSA-Sun Microsystems fiasco this week. Earlier in the week, GSA Administrator Lurita Doan requested that the whole Sun issue be resolved by a third party. GSA submitted letters to Sen. Charles Grasley asking him if there was some way for a third party to resolve this controversy.

That came after Grassley asked GSA to cancel Sun's schedule contracts.

Then, today, Sun announced that GSA doesn't need to cancel Sun's schedule contract, because it was pulling them.

So, congratulations, Sen. Grassley.

The entire case has been a mess – and to be honest with you, I don’t get it. I understand that the WP and so-called public interest groups believe this is a clear-cut case of the government getting… well, screwed.

Again, I simply don’t understand what all the hubbub is about. In fact, I’d really love to somebody to explain it to me. I have asked around – and nobody can provide me with a clear answer. As far as I have been able to assess, Sun has been accused of failing to provide the government its best price on its GSA schedule contracts. Under the schedule contract program, of course,

As they say, mistakes were made. Sun should have found some way to settle and moved on. After all, most people assume that Sun probably did not offer the government its best prices, as is the requirement in GSA schedule contracts. But I’m completely perplexed when Sen. Grassley talks about the amount of money the government lost. How does he come up with that number? Is the government better off with Sun off the schedule contracts? And I am completely baffled why anybody would want a GSA administrator to step in to pull a contract. In fact, Grassley went nuts when Doan just make inquiries about what was going on with the Sun contract.

Some important points to remember:

* This case dates back to the mid-1990s -- the high-tech glory days. During that time, pricing was all over the place. So was Sun offering its lowest prices on the schedule contracts? My guess is probably not. So you deal with it and move on. I don't get why it has become a political issue.

* The schedules... If anybody actually paid the schedule contract price, they deserve to pay the higher amount. But that is a contracting officer issue. Sun products are on multiple contract vehicles, so it is relatively easy to compare pricing. And, in most cases, the schedule contract prices are a starting point for negotiations. Again, I don't get why this is such a huge political issue. And it is important to remember that winning a schedule contract doesn't win you any business. In fact, to the contrary. So Grassley keeps saying this contract has cost the government millions of dollars. I have no idea where he gets those figures.

* Grassley... I totally don't get Grassley. Frankly, I don't think he knows what a good procurement idea is and I'm not sure he has much productive to offer on procurement issues. Furthermore, it is curious to me because, as a Republican, he seemingly wants a big bureaucracy that would control procurement, contracts and pricing. And he is inherently distrustful of markets. The government cannot control prices. When it comes down to it, it can't control corporate waste. What it can control is the amount it spends on programs, and the best way of determining that is through competition. It just doesn't make sense to create an arduous process in the hopes that you will eliminate waste, fraud and abuse. Guess what? It won't work. What we need is a robust and thriving market of vendors competing for government business. That competition is the best check on prices and ensures best value. Markets work. And for a Republican to essentially be working against a market approach really, frankly, shocks me.

Furthermore, he seems to have a general distrust of... well, almost everybody. Therefore you have to have "accountability," a code word for controls, regulation, and process. We can spend all sorts of money eliminating waste, fraud and abuse, but would that result in a better product? If so, I'd like to see an example of where that kind of system has worked effectively. It isn't the system the corporate world uses. The corporate world trusts markets and competition to provide them with the best value. Why wouldn't the government follow that model, which seems to have been very successful.

Generally, people think this is worse for GSA then it is for Sun. The GSA schedule contracts have generally been seen as the gateway to the government market -- a relatively easy way to enter a multi-billion market. I think the schedules continue to be one of the most viable ways for creating an effective market, but this move is an ominous and troubling sign.

Posted by Christopher Dorobek on Sep 14, 2007 at 12:17 PM


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