Input: State and locals gradually warm to Schedule 70

State and local government purchasing through the General Services Administration Schedule 70 is steadily increasing and may eventually lead the governments to use other federal schedules when allowed to do so, reports Input Inc.

The Reston, Va.-based market research firm calculates that orders by state and locals through Schedule 70 rose 46 percent from $72.1 million in third quarter 2006 to $105.7 million in third quarter of 2007. State and local purchasing through Schedule 70 will likely exceed $1 billion by 2012, Input said.

GSA first opened its programs to state and local governments in 2003 through a program called cooperative purchasing. Only information technology is available to state and local governments, through GSA Schedule 70 and IT-related parts of another GSA contract called the Consolidated Schedule.

The road has been anything but smooth. States continue to grapple with a number of obstacles they have encountered in using Schedule 70, such as "most favored customer" pricing clauses, competition with their own preference programs, lack of caps on the industrial funding fee and lingering confusion over ordering policies. For these reasons, local governments are more likely to make optimum use of Schedule 70 than some state customers, Input said.

Some of the contractors that have benefited from the expanded use of Schedule 70 are Verizon Wireless, DLT Solutions Inc., High Performance Technologies Inc. and CDW-G, according to Input.

"It looks like Schedule 70 is finally getting the traction GSA had hoped for back when the schedule was opened in 2003," said Jason Sajko, Input's senior analyst for general government services. "We predict that usage of this and other forms of cooperative purchasing will continue to rise ? with the Western States Contracting Alliance being the other prime example."

Yet orders for products and services on the Consolidated Schedule remain anemic, according to Input. For example, GSA reports no use of their multiple award schedules for disaster recovery.

"The Schedule 70 example shows that it will take time for states and localities to begin adopting a new federal purchasing option," Sajko said. "So we will keep a close eye on the Consolidated Schedule. Down the road, we think that the Networx and Mobis vehicles also will be attractive options for states and localities."