Neal Fox | Contracting in Perspective: GSA'Why It Works

This is the fifth in an ongoing series of "Contracting in Perspective" columns written exclusively for GCN and GCN.com by Neal Fox, former General Services Administration assistant commissioner for commercial acquisition.

Other federal agencies have tried to duplicate GSA's success at governmentwide contracting, but none have come close. There are several components to that success, some evident and some less so. Even with the unbelievable course of events at GSA a couple years ago, this leviathan has lumbered on, carried forward by its underlying strengths. Let's face it, when discussing governmentwide contracting, GSA is clearly the standard by which all others measure their own success. Will that continue, or has GSA had its day in the sun?

A little history, and maybe even some renaissance literature, is in order. GSA reinvented itself from a stodgy procurement agency into a highly innovative force when the doors of acquisition reform were flung open in the 1990s. This government procurement equivalent of the Renaissance, in essence a revival of thought and learning that marked the transition from medieval to modern times, allowed procurement innovation and new ideas to flourish. GSA stepped up to the task, making the GSA Schedules program into a powerhouse by adding professional services, and initiating the governmentwide acquisition contract (GWAC) era. It seems hard to believe now, but these were bold moves by GSA at the time.

When the 1996 Clinger-Cohen Act revamped information technology acquisition, GSA stepped in to figure out how to provide governmentwide acquisition contracts (GWAC) that could be used by all federal agencies. The resulting GSA GWAC contracts, such as FEDSIM 9600, ANSWER, Millennia and Millennia Lite, have been used by government agencies to procure over $10B in IT services over their short history. Now GSA is poised to put in place the Alliant GWAC, which is slated to be the largest GWAC ever. But why do agencies need GWACs anyhow? Let's take a look.

When GWACs were first authorized by Clinger-Cohen, GSA was the first to embrace them, seeing the opportunity to provide integrated IT services on a single contract, with a quality stamp of approval for the small number of vendors they selected. Back then, many IT vendors viewed the GWAC as a fad that would soon pass; some vendors ignored them and did not send in a proposal. They later regretted that decision, because GWACs gained a significant foothold in the federal IT marketplace, as federal customers found GWACs to their liking. After a couple years, a number of vendors that had refused to bid decided to get in on the GSA GWAC business by buying firms that had won a seat at the table. The GWAC concept had achieved star status in a very short time.

But what makes GWACs work? Customers like them for integrated IT services. To be sure, the same IT services can be obtained through the GSA IT Schedule. But many customers prefer a prepackaged approach, which GWACs provide. The key to their success, as has been discussed in my previous articles in this space, is a small number of high-quality vendors offering the full range of integrated IT services. GSA sweetened the deal by also packaging assisted services along with their GWACs, whereby GSA contracting officers can award task orders on those GWACs on behalf of an agency. This mix of contract vehicle and task order contracting in a one-stop-shopping approach went very well for GSA until a small number of high-profile abuses were uncovered, and was subsequently poorly handled by GSA through an over-reacting Get it Right campaign. Those issues confused the customer and hamstrung GSA contracting personnel over the past couple years. As a result, sales through GSA GWAC contracts have suffered, and GSA-assisted sales have suffered even more, since they were at the root of the abuses. Fortunately for GSA, they had opened their GWAC contracts to direct customer ordering in 2003. That means that federal agencies can now place orders directly using GSA GWACs as though they were their own contracts. This direct ordering now represents over one-third of all GSA GWAC orders, and seems certain to become the primary method of ordering in the near future.

As discussed, when GWACs were new, many vendors failed to grasp their significance. But now, vendors see plenty to anticipate and plenty to fear in Alliant. This giant GWAC represents a sea change in the approach GSA is taking, as they go from many GWACs down to a very few. Alliant will be the only large GWAC GSA intends to award for many years, so it looks like the last train leaving town to vendors who are looking for a piece of the GWAC action. In Alliant, GSA has held true to most of the basics of what makes a GWAC work. They resisted the urge to create functional categories, which will ensure that integrated IT services will be easy to achieve. This might even tempt DHS contracting officers to use Alliant for its largest IT procurements, since EAGLE is divided into five functional areas, which will reduce its value by making integrated IT services more difficult. On the most significant issue, selecting a small number of high-quality vendors, GSA is stretching the limits as they increased the number of potential awards from 20 to 30. This is good news and bad news for vendors. It is good news because the opportunity for selection is increased, but bad news that there will be more vendors crowding into the small space. Customers do not want a crowded field of potential vendors, otherwise they would simply use the IT Schedule.

So will Alliant bring the shine back to GSA GWACs? Maybe. That is not a strong statement because there are several issues that must be settled first. Regardless, vendors cannot ignore Alliant because even today GSA GWACs represent approximately $3.5B in annual business. But the open issues that cloud the crystal ball stem from several sources. DOD customers have historically accounted for over half of all GSA business, and they have been leaving GSA in droves. They may well find that the grass is not greener elsewhere and return to GSA, but that jury is still out. GSA is just beginning to recover from its failed Get it Right campaign, which only served to convince customers that, if GSA thought they were bad, they must be bad. Additionally, the reorganization at GSA broke many things that worked well, and GSA has failed to abandon that poorly planned restructuring. Alliant is a good example of how poorly the re-organization went, since GSA continues to confuse industry over who is in charge of Alliant, as multiple people try to be the public face for the program. With all that said, Alliant represents an excellent opportunity for GSA to put some shine back on the apple. It would provide federal agency customers with a one-stop, integrated IT services contract vehicle populated by high quality vendors, with considerable GSA oversight to ensure all goes well at the task order level. So the opportunity for success is there.

Although not a GWAC under strict definitions, the GSA Multiple Awards Schedules program is based on some specific Federal Acquisition Regulation (FAR) exemptions that make it an invaluable tool for government acquisition professionals. GSA has special authority to manage this unique program on behalf of the government, enabling federal agencies to focus scarce resources on mission fulfillment instead of on procuring commercial products and services. The result is significantly increased speed of acquisition for products and services through the schedules that simply cannot be matched. Customer agencies no longer need to trudge through burdensome acquisition processes, but rather need only compare three or more vendor prices and place the order. This eliminates the need to advertise on FedBizOpps and to engage in drawn-out competitions. Schedules sales have grown at a breathtaking pace, from $1 billion in 1996 to over $33 billion last year. But the significant reduction in agency process costs may be even more impressive, for which GSA has gotten little credit from its critics.

As the Defense Department and other agencies currently look for greener pastures outside GSA, they will re-learn the lessons they have recently forgotten, namely, that there are not unlimited numbers of qualified contracting officers to fill the needs created by more onerous internal agency contracting processes. They will not receive additional manpower authorizations to handle the increased procurement workload, so they will need to decide whether it is worth taking scarce personnel away from the agency's core missions. And their IG and the GAO will not look more kindly on internal contracting violations that will result from their lack of the special authorities invested in GSA. This will cause agencies to return to GSA as their principle provider of centralized, efficient procurement vehicles, as they recall what led them to use GSA in the first place.

Neal Fox is the former assistant commissioner for commercial acquisition at GSA, and is now principal of Neal Fox Consulting (nealfoxconsulting.com). He can be reached at nfox@usa.com.

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