FSS' Pugliese: Doing It His Way

By Nick Wakeman, Staff WriterCellular phones, engineering and technical services and training are just a few of the new offerings Frank Pugliese, General Services Administration schedules chief, sees driving further rampant growth of his piece of GSA.Commissioner of the Federal Supply Service since 1994, Pugliese has overseen the explosion in the use of the schedules from $4 billion in 1995 to more than $10 billion projected for 1999. His prediction for fiscal year 2000: a whopping $13 billion."Our business model is to try to figure out how to bring stuff to market in the most effective and efficient way, and see what value we can add, and then get out of the way," Pugliese told Washington Technology. "That is why [the schedules] have been so wildly successful. I'll even say, unbelievably successful."In recent years, the Federal Supply Service has added IT services to the schedule and watched it flourish with $1.2 billion in sales during 1998, the first full fiscal year services were sold on the schedule. More than $2.4 billion is expected in 1999."We are very bullish on the GSA schedule. It is a very important part of our business," said Steve Carrier, vice president of business development at Logicon Inc. of Herndon, Va., the government systems integration unit of Northrop Grumman Corp. of Los Angeles.Like other IT service providers and systems integrators, Logicon has seen its business on the schedule swell from next to nothing three years ago to a significant portion of revenue today. Carrier estimated that 15 percent of Logicon's $1.1 billion revenue comes from the schedule and blanket purchase agreements, or BPAs, which are based on the schedule."The important thing is that our customers are using these things more and more, so we have to stay in step with our customers," Carrier said.On the product side of the IT schedule, Dell Computer Corp. of Austin, Texas, has been the shining star. The company is expected to hit $1 billion in schedule sales in 1999, Pugliese said. In 1997, Dell did $270.4 million on the schedule. The figure jumped to $461.8 million one year later. Dell officials declined to comment for this story. According to data from the market research firm Input, Vienna, Va., Dell had $612 million in schedule sales as of May 21.Other winners on the IT schedule include Gateway Inc. of North Sioux City, S.D., with $167 million; Micron Electronics Inc. of Nampa, Idaho, with $160 million in sales; and IBM Corp. of Armonk, N.Y., with $149 million.Several systems integrators, such as Computer Sciences Corp. of El Segundo, Calif., and Litton-PRC Inc. of McLean, Va., have restructured operations in the past two years in part to better position themselves to take advantage of the schedule.Pugliese rattles off a mantra of reasons when asked why the schedules are so popular: ease of use, flexibility, choice, total solutions, growth of BPAs, teaming, the addition of services, streamlined ordering, and, one of his favorites, rapid refreshment of technology."That last one is the most important," he said. "What used to drive me nuts is by the time the government figures out what to buy and figures out how to buy it, then buys it and gets it, it is no good anymore."While FSS has made vast strides in improving the service it provides to both contractors and to the agencies who buy goods and services through the schedules, Pugliese said he and his staff are always on the lookout for new business areas."Our folks are constantly talking to the customers," he said. "This is not rocket science. If you want to know what the next big thing is, usually it is your customer telling you, 'You know this is what I need, but I don't know how to do it or how to get it.' "Pugliese's predictions of continued strong growth are not surprising to some in industry. "They have been growing by eating up market share and creating a larger market for themselves," said Robert Woods, president of business application solutions for the government division of Affiliated Computer Services Inc. of Dallas. Woods ought to know: He was commissioner of the Federal Technology Service at GSA until December 1997.One of FSS' latest moves is the creation of a schedule for engineering and technical services. Many in industry expect the engineering schedule, which should be operating by September, to quickly become a multibillion-dollar market.In July, FSS added cellular phone service to the information technology schedule. FSS avoided the cellular phone market for several years, leaving it under the purview of FTS, its sister branch of GSA.FSS and FTS had a gentleman's agreement that FTS would handle cellular and FSS would stay away from it, Pugliese said. "But [FTS Commissioner Dennis Fischer] and I agree that this didn't make sense anymore," he said. "The way we were trying to sell cellular is not the way people buy it."Cellular and paging services providers can now apply to put their products and services in the IT schedule. "When you sell cellular, you don't just sell the phone. You sell the phone, the services, the accessories, the batteries," Pugliese said. "And we weren't doing it that way."FSS also is pushing trends such as "corporate contracting" and further streamlining how contractors update their offerings on the schedule, he said.The corporate contracting approach means that a large company can consolidate its various dealings with FSS so that the agency does not have to negotiate with as many as 10 different people in different parts of the same company, Pugliese said."You ought to be negotiating with us in one place with one person," he said. While FSS has made some attempts in this area, he said, turf issues inside the companies have caused problems."The West Coast folks didn't want the East Coast folks in charge, and vice versa, so it didn't happen," he said. "But we are still trying to move that way."Pugliese also said he wants to make it easier for companies to update their offerings on the schedules by allowing electronic submissions of new offerings and streamlined approval processes. A company could submit a new pricing list electronically for FSS' approval. "If you don't hear from us in 48 hours, those are the new prices. What would be the danger of that?" he said.Market forces would keep companies from overcharging the government. "In IT, the market would control the process," he said. "Nobody is going to be even $50 higher than their next competitor."Competition also keeps FSS focused on serving the agencies that buy through it and helping the companies that hold a GSA schedule, Pugliese said. With the proliferation of large task order contracts from GSA's FTS branch and from other agencies, government buyers have plenty of choices. In short, nobody is forced to use the GSA schedule."The beauty of being non-mandatory is you either put up or shut up," he said. "You show that you add value, in which case they will like to use you, or they will walk away from you."XXXSPLITXXX- 54 Newark, N.J. Wife, Rachel; two dogs and two cats "How To Think Like Leonardo Da Vinci: Seven Steps to Genius Every Day," by Michael J. GelbAndrea Bocelli, "The Opera Album"Charleston, S.C.60 hoursLatest Global Positioning System monitors