GSA questions Schedule 70’s role in IT, aims for change

One of the major strengths of the General Services Administration’s Schedule 70 has always been the breadth of choices it offers agencies. Although it’s built on the back of the IT product offerings it provides, it now touts such things as services and other items as evidence of its evolution to being a solutions provider, where agencies can find anything they need to implement IT programs.

Similarly, the 5,000-plus vendors that currently carry GSA contracts have also been viewed as a strength because agencies would be hard-pressed not to find at least one supplier on Schedule 70 that could meet their requirements.

However, like others in government, GSA is being pushed by budget pressures to streamline its operations. When it comes to the Multiple Award Schedules overall, a growing scarcity of experienced professionals to oversee the contracts is forcing officials to rethink how GSA should manage the programs and if they need to be as extensive as they currently are.

In 2012, GSA began floating the idea of a “demand-based model” on which to refocus MAS vehicles by phasing out contracts that were no longer generating sales and limiting the contractors on the schedules.

In the past several years, the number of companies seeking MAS contracts has roughly doubled and the volume of contract modifications has tripled, Steven Kempf, then-commissioner of GSA’s Federal Acquisition Service, told a congressional panel in June 2012. “Too much of this increase is related to duplication, with numerous contractors offering the same item at different price points,” he said, and with many contractors having low or no sales. “By adding new contractors to these schedules, we are continuing to further divide an ever-shrinking market.”

Speaking at a conference run by the Coalition for Government Procurement (CGP), Mary Davie, who was then acting FAS commissioner, questioned whether it was still GSA’s role to make everything available to government buyers. It’s getting expensive to do that, she said, and also harder to provide the contracting expertise that customers are demanding.

The demand-based model has apparently been downgraded, at least publicly, due to pushback from industry and Congress because of fears about the impact it would have on some suppliers, particularly small businesses.

Schedule 70, the biggest schedule, is no stranger to the contractor bulge. Many observers believe it’s gotten too big and needs to be pared back.

“GSA created an interesting phenomenon that no one foresaw when it opened Schedule 70 up to cooperative purchasing,” said Larry Allen, former president of CGP and now president of his own consulting company, Allen Federal Business Partners. “An awful lot of state governments said that, if contractors wanted to do business with them, they first had to get a GSA contract so it would be easier [for those governments] to benchmark off the GSA prices, and that’s what happened.”

Hundreds of companies have Schedule 70 contracts with no intention of doing federal business, he said. Those are mostly small companies, he said, and GSA has found it is at peril if it moves to shut those contracts down. “But if [GSA] can find a way to get at the real deadwood, then they would be doing everyone a service.”

The problem with the way things stand now, according to many observers, is that the service agency buyers and industry suppliers get through Schedule 70 will suffer unless GSA takes some action to improve the operation of the schedule. Cutting back on the number of contractors would certainly help, as would actions such as setting thresholds on the sales that contractors would have to post each year.

“That would mean that resources at the GSA could then be refocused onto active contracts,” said Alan Bechara, president of PCMG. “And when you refocus, that means that modifications could flow faster, and the interaction GSA has with both contractors and agencies would improve and they would have more time to consider programmatic issues.”

Right now, he said, GSA seems to have barely enough time to keep up with the influx of contract modifications, which are necessary when products, services or prices on vendor contracts change, and those need to be agreed to by GSA.

“The turnaround time is quite lengthy,” Bechara said. “You’re happy if you get a modification turned around in 30 days.”

Under the original plan for its demand-based model, as described by Kempf last year to the House Small Business Committee’s Contracting and Workforce Subcommittee on, GSA would include reviews of schedules’ Special Item Numbers (SINs) to determine whether they represent opportunities for innovation and program growth or whether they are in areas that no longer need additional contractors. Those in high demand would remain open to new offers, while those in “over-saturated areas” would be closed to new offers for 12 months and then reviewed again.

The decision to add SIN 132-99 to Schedule 70 — which would provide for new products, services and solutions not already offered to agencies some other way — came out of such a review. On the other side of the equation, GSA decided to close portions of other schedules for which the demand was obviously falling.

GSA is in a hard place with this, however. It knows it has to do something to improve its schedules’ management and structure, but formal plans such as the demand-based model are finding it hard to get traction.

In a letter last year to GSA Acting Administrator Dan Tangherlini, Rep. Sam Graves (R-Mo.), chairman of the House Small Business Committee, said he didn’t think the demand-based model would help GSA operate more efficiently and save money. He also said the proposal demonstrates a lack of understanding of how small businesses operate in relation to the federal market.

Despite its apparent demotion, the demand-based model gained some support within GSA when it was floated last year, and some observers think it might have done its job within the agency, even if it’s no longer at the top of the public statements of GSA officials.

Allen, for one, said he’s been getting a lot of “anecdotal mentions” from people to the effect that, although GSA seems technically to have abandoned the model, the word still got out to many of its acquisition centers.

“The result is that an awful lot of contracting officers are taking a jaundiced eye to any new offer,” he said. “You now really have got to prove that you are actually going to do business [through the schedules], and that you’ve got the customer contacts and are not reliant on the GSA to do the work for you.”