GSA contract expiration reflects market needs, experts say

The General Services Administration's plan to let many of its governmentwide information technology contracts expire, largely ending the era of big governmentwide acquisition contracts (GWACs), reflects the evolving needs of the market, experts say.

They say the federal IT market’s sales have been driving GSA to end and merge GWACs for several years now. There are too many GWACs, causing too much overlap of services. The result is scattered sales while the cost of running the contracts still dips deeply into GSA’s pockets.

GSA will continue to support only Alliant, its small-business companion contract and a few GWACs targeted to companies in specific socioeconomic categories, said Ed O’Hare, assistant commissioner of the Office of Integrated Technology Services at GSA’s Federal Acquisition Service.

For the long term, though, GSA will likely merge the GWAC program with the widely used Multiple Award Schedules program. “But that will take years, not months,” O’Hare said.

Before ending the GWAC program, GSA will first winnow down the number of marginally performing GWACs, such as Commerce Information Technology Solutions-NexGen, said Larry Allen, president of the Coalition for Government Procurement. In recent years, GSA has taken over several GWACs, such as COMMITS from the Commerce Department, and now the agency needs to streamline its efforts, he added.

GSA has said for more than a year that the overlapping GWACs are expensive for government and industry and should be pared down, said Bill Perlowitz, vice president of advanced technology at Apptis. No one should be surprised that the agency is saying it won’t renew many GWACs, particularly given the Obama administration’s desire for a more efficient government.

“GSA would be streamlining things” to close down or merge GWACs into its schedules program, said Hope Lane, officer of government contracts consulting at Aronson and Co.

Total IT sales figures have slipped slightly in the past several years. The fallout in 2004 over GSA’s mishandling of the Defense Department’s money has caused some DOD customers to turn to other IT contracts, such as the Navy Department’s SeaPort-e, Lane said.

Meanwhile, sales on GSA’s massive Schedule 70 have remained relatively flat at about $17 billion annually for the past three years, according to government figures.

The recently awarded Alliant and Alliant Small Business GWACs, which were delayed for two years, have a wide choice of services, which makes many other GWACs unnecessary, experts say.

"You can get pretty much anything you want from Alliant," Lane said.

Courtney Fairchild, president of Global Services, said GSA’s Alliant contracts, which were awarded earlier this year, were always meant to replace the expiring GWACs.

“I suppose the real question for industry is whether or not government agencies have enough faith in the Alliant contract to switch over,” she said.

Agencies that shy away from Alliant will still have the option to work with one of more than 15,000 companies in the schedules program.

GWACs offer options to agencies that the schedules program can’t, such as cost-reimbursement contracts. Unless GSA can tweak the schedules program’s rules to change that, GWACs will always have a place, Allen said.

In addition, GSA would have a tough time closing the socioeconomic-based GWACs, such as the 8(a) small-business Streamlined Technology Acquisition Resources for Services and the Veterans Technology Services GWACs.

“Would you want to stand before Congress and try to explain why you ended those contracts?” Allen asked.

On the other hand, any attempt to merge the GWAC and schedules programs would be “consistent with the spirit and message of the creation of the recent Federal Acquisition Service,” Fairchild said.

The reorganization of the Federal Technology Service and the Federal Supply Service into FAS allowed GSA to scrap dueling and repetitive contracts that might confuse customers.