Feds push cooperative purchasing

The federal government plans to aggressively market cooperative purchasing to state and local governments until it receives widespread adoption, said Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee, at a technology conference yesterday in Washington.

Most state and local governments likely will embrace cooperative purchasing through the General Services Administration's Schedule 70 over the next four or five years, he said.

"It's clearly the wave of the future. ? All states eventually will embrace it," Davis said.

Davis made his remarks at the annual State of the States briefing hosted by the McLean, Va., market research firm, Federal Sources Inc.

Congress opened up Schedule 70 to state and local governments through a provision in the 2002 E-government Act as a way to assist them in getting discounts on commercial items they could not obtain on their own because of the small volumes they buy. Davis co-sponsored the legislation.

Cooperative purchasing has gotten off to a sluggish start since it was opened up to state and local government two years ago. It accounts for only 0.25 percent of total state and local information technology spending, according to FSI.

State and local governments have bought about $73.6 million worth of IT products and services through Schedule 70 since October 2002, according to FSI. Davis said he expects state and local spending through Schedule 70 to reach $500 million by 2006.

Not all states have embraced cooperative purchasing. Those that haven't must overcome cultural and legal barriers that prevent their departments and agencies from using Schedule 70. Depending on the state, this can be remedied through either administrative or statutory action, Davis said.

Congress will explore additional provisions that will make using Schedule 70 more enticing to state and local governments, he said, noting that more of them eventually will embrace cooperative purchasing because it makes good economic sense.

As for the private sector, Davis said it is one of the easiest and most convenient ways for companies to sell IT products and services to state and local governments.

"It's a great opportunity [for companies] to penetrate the state and local market," he said.