GSA Schedule sales slip as buyers shop around: Input

Annual spending through the General Services Administration's Multiple Award Schedule contracts for IT products and services will decline in fiscal 2006, according to a report produced by market research company Input Inc.

After having achieved an all-time high in 2004, Input of Reston, Va., predicts the 2 percent decline in 2005 will be followed by a 1 percent decline in 2006 to $16.3 billion. Decreasing IT services sales on the schedule is causing the decline.

Input predicts a 5 percent drop in the IT schedule's services sales for fiscal 2006, which is a mirror image of the 5 percent annual growth expected for the federal IT market through fiscal 2011.

"Overall, federal IT spending continues to grow at an attractive pace, so the decline in Schedule 70 spending reflects a conspicuous move by buyers to other contract vehicles," said Ashlea Higgs, manager of new markets at Input. "The drag created by slipping IT services sales will be a surprise to some observers, since lower equipment sales were the culprit last year."

Rising competition from department-specific, multiple-award contracts will not ease off in the near future, the report said. The Defense Department, GSA IT Schedule's largest customer, bypassed GSA and awarded more than $50 billion worth of new defense-focused IT contract vehicles in the first half of 2006.