Report: Schedule 70 to gradually alter state purchasing

The use of the General Services Administration Schedule 70 by state and local governments will drastically alter the government procurement landscape, but usage is expected to be light in the early years of the program, according to a report by the market research firm Input Inc., Chantilly, Va.

"Similar to the trend we've seen with federal agencies, we anticipate state and local government adoption of the Schedule 70 vehicle to be slow initially, but steadily rise as current legal and accounting barriers are overcome," said Marcus Fedeli, Input's assistant manager of state and local market development services.

Schedule 70 is the primary GSA schedule used by agencies to buy information technology products and services. The schedule was opened to state and local governments as a result of the E-Government Act of 2002. The provision becomes effective April 17, 2003.

Several states face significant hurdles before being able to accommodate the new procurement option. For example, the administrative workload associated with approving a schedule purchase in New York would dissuade any state agency from working with GSA until the system is modified, Fedeli said.

Still, state procurement authorities will transform their contracting practices to compete and compare with Schedule 70 as it becomes a factor in the state and local market, according to Input, which released the report this week.

Contractors that target the federal market may find it easier to adapt their marketing and business development efforts to work with the states as well, Input said.

"To maintain an advantage, vendors will have to adjust their pricing based on the markets where they choose to compete," Fedeli said.