Mark Amtower explores where GSA should put its energies in reforming its schedule program.
The General Services Administration recently announced the intention of cleaning up the outdated and oversaturated GSA Multiple Award Schedules program.
GSA’s goal is to move to a demand-based model that would maximize the use of GSA’s limited internal resources.
According to GSA memos and information gleaned from other sources, these are the pending changes which may be coming to the GSA Schedules:
- Ending contracts that are not meeting minimum sales criteria.
- Deleting some outdated Special Item Numbers (SINs) and/or GSA Schedules.
- Closing overpopulated GSA schedules to new offers for annual periods of time.
Let’s look at these in order.
First, ending contracts that are not meeting minimum sales criteria.
GSA already has a mechanism for this. Every schedule contractor has two years to reach a minimum of $25,000 in annual sales on their schedule, or they can be removed. This is not an onerous requirement, but historically GSA has not been enforcing this. GSA could remove at least 20 percent of those with schedules if they enforced this. This alone could go a long way to freeing up some time for GSA employees.
GSA does address this in their memo.
Second, deleting some outdated Special Item Numbers (SINs) and/or GSA schedules.
Periodically GSA has done this, or consolidated disparate schedules into a single category. The example GSA employed in a memo was typewriters, which few, if any use. If anyone required a typewriter, they could purchase it on the open market with a SmartPay card.
I won’t get into SINs, but as for under-performing schedules, we can use an arbitrary baseline of any schedule with under $50 million in annual sales.
Three schedules fit these criteria:
- Schedule 67 ($39,677,024) Photographic Equipment - Cameras, Photographic Printers and related Supplies and Services (86 vendors for FY 2011).
- Schedule 71 II K ($34,088,087) Comprehensive Furniture Management Services (487 vendors for FY 2011).
- Schedule 751 ($3,228, 314) Leasing of Automobiles and Light trucks (24 vendors for FY 2011).
One can make a strong argument for retaining Schedule 67, as it only has 86 contractors and there is an ongoing need for this type of product and service. It could be merged into another schedule, but it should not be dropped completely.
Many of those on Schedule 71 II K are on Schedule 71 (Furniture), so perhaps a consolidation is the way to go.
As for Schedule 751, according to those I have spoken with GSA maintains a near monopoly on leasing vehicles anyway.
By comparison, Schedule 70, for FY 2011 had 5,562 vendors and $15,921,929,172 in total sales, but many vendors with zero sales.
Third, closing overpopulated GSA schedules to new offers for annual periods of time.
While on the surface this seems OK, I think a better approach would be to eliminate under-performers rather than not let new companies on the schedule. Closing the schedules seems more like a punishment to new companies.
Research over the past ten years indicates that the top 2 percent of vendors on any GSA Schedule take 65 percent of the sales from that schedule. My goal with clients has been to migrate them closer to that top rung, but while they may grow, not all companies will get to the top.
Regardless of which changes actually occur, make no mistake the GSA schedules are changing. If you are low in the GSA food chain, you really need to move up to save your schedule. If you are mid-way or higher in the food chain, you need to be poised to take any market share that might become available.
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