SmartBuy deal: volume discounts for guaranteed purchases

The first enterprise software agreement under the SmartBuy program provides six agencies with deeper volume discounts and gives the vendor, ESRI of Redlands, Calif., a guaranteed number of software licenses that agencies will buy over the next five years, General Services Administration officials said today.

ESRI, which develops geographic information systems software, last week became the first contractor to sign up for the struggling program. GSA officials said they expect the deal to save agencies $57 million over the next five years.

"This is a specific arrangement with one contractor for those agencies with specific needs for those contract services," said G. Martin Wagner, GSA's associate administrator for governmentwide policy. "We feel pretty good about the deal. It will help us with our efforts to use standards and focus the government's geospatial efforts."

To complete the deal, which has been in the works for much of the last six months, GSA worked with the three agencies?the Census Bureau and the departments of Agriculture and Interior?that already had separate enterprise agreements with ESRI. The improved contract terms were integrated with the existing enterprise agreements, said Kathy Beasley, a SmartBuy contracting officer.

Then GSA worked out enterprise agreements under the SmartBuy terms with three other federal organizations?the Environmental Protection, National Security and National Geospatial-Intelligence agencies.

"To enter into an enterprise agreement, you have to be able to identify your base needs and then forecast your needs over the next four years," Beasley said. "Other agencies are welcome to come on board and take advantage of the SmartBuy conditions, but first they should define their requirements and make the commitment to refurbish their base over the next four years."

Beasley said agencies should negotiate a contract with ESRI and add SmartBuy terms later.

Agencies that do not need or want enterprise agreements still are able to buy ESRI software from GSA's Federal Supply Service schedules, Beasley said.

Wagner said the deal is not necessarily a model for future agreements.

"We will be pursuing different avenues based on different ways agencies buy software and based on different vendors' marketing approaches," he said. "Other agreements will be easier now that the first one is finished, but we also are looking at other models such as tiered pricing or volume discounts."

The biggest hurdle to reaching the agreement was getting all the agencies on the same page, Wagner said.

"It was frustrating to deal with the internal bureaucratic mechanics of the process," he said. "We have to have a smoother way of working this stuff through. I'm actually embarrassed by the trouble we had doing simple interagency agreements."

Wagner said the work over the past nine months showed agencies need better software asset management, which is essential in developing future SmartBuy agreements.

"We have to work more closely with the CIO community and be more demand-driven," Wagner said.