GSA Shares its Purchasing Power

SACRAMENTO, Calif. -- Virginia Congressman Tom Davis has a soft spot in his heart for local government, in part, because he was once chairman of the Fairfax County Board of Supervisors. Consequently, when an earlier attempt to provide state and local government access to the Federal Supply Services schedule for IT contacts failed to make it out of a congressional committee, he launched a second attempt that produced positive results as a part of the 2002 Electronic Government Act.

Wild, Wild West
David Marin, spokesman for Davis and the congressman's point person on the bill, says the opportunity to leverage the federal government's buying power is significant. "By giving access t o GSA schedules you can help those state governments more rapidly deploy e-government and other solutions," he observed. "This also accomplishes the cross-government integrated digital environment that officials at every level say is needed."

In addition, the federal marketplace can provide some uniformity to a previously unwieldy system. "Basically he [Rep. Davis] has seen for years that procurement at the local and state levels is like the wild, Wild West if you are a government contacting company," Marin said. "There are different rules for different localities and that makes it hard for vendors and local governments to get the best bang for their buck." Davis is chairman of the House Government Reform Technology and Procurement Policy Subcommittee.

Since May, a growing number of non-federal government agencies have been taking advantage of the GSA's "most favored" status that offers competitive pricing on over 500,000 IT services and products. In July, GSA estimated that at least 30 states are positioned to buy off the contract. Some state and local governments will require changes to existing procurement laws before they can use GSA Schedule 70.

According to Pat Mead, assistant commissioner for acquisition management, GSA Federal Supply Service, state and local governments purchased approximately $7.5 million from the schedule in just under two months time. "We are actually surprised it is that much," Mead said. "It will take time to develop and not all states have legislation that allows them to do this."

But, Mead adds that the economic incentive should spur increasing participation. "The benefits are there and state and local budgets are under a lot of pressure these days," she said. Not only does the federal schedule offer its leveraged pricing to buyers, it streamlines the process by eliminating the need for state and local agencies to run through paper-based and time consuming procurement processes. "It helps reduce the prices, ultimately, to the taxpayer," Mead said.

Learning Curve
John Adler, state procurement administrator for the state of Arizona recognizes these benefits but says state and local government buyers need to educate themselves before dealing in the federal marketplace. He says procurement officials should be aware of several factors, such as the opportunity to negotiate even better prices with GSA vendors and also how Schedule 70 buys might impact their local vendors. Adler was so concerned about educating the state's buyers that he wrote a paper on the topic.

"I tried to get on top of this GSA thing before it got on top of us," he said. "I wanted to make sure our political subdivisions understood what they could and couldn't do with respect to purchasing."

Adler acknowledges that access to 3,000-plus contractors with savings leveraged by the federal government's $40 billion of annual purchases is, indeed, a good thing for state and local agencies. But, he has some caveats. Adler says that jurisdictions need to be certain they have the political ability to use the GSA schedule and they need to be aware that "GSA contracts are ceilings and, depending on circumstances of the buy ... pricing may be negotiated downward."

In addition, Adler thinks that using the GSA contract could mitigate a