Uncertainty over budgets and buying trends prompt a rethink

The General Services Administration (GSA) IT Schedule 70 program, despite a growing number of competing procurement vehicles throughout government, is still the biggest provider of IT products and services to agencies, by far. However, uncertainties thrown up by the current budget malaise and doubts about agency buying trends are also posing questions about its future.

Schedule 70 is a large program in all ways. It offers a broad range of products and services, from computing and networking software and hardware to cloud services and even cybersecurity technology. Around one-third of the schedule’s sales are through Special Item Numbers (SINs), which group together offerings of similar products and services.

In fact, as a way of trying to distance Schedule 70 from its traditional perspective as a products-driven program, GSA executives have begun referring to it as more of a “solutions-based” schedule because they feel it can provide agencies with just about anything they need to implement IT.

The sheer numbers associated with Schedule 70 are also testimony to its popularity. It grew steadily throughout the first decade of this century, topping out at just over $16 billion in sales for fiscal 2010. Sales have declined somewhat since, to $15.4 billion in fiscal 2012, though that still represents some 40 percent of GSA’s total schedule sales and just over 19 percent of the fiscal 2012 federal IT budget. Also, more than 5,000 vendors carry Schedule 70 contracts.

Publicly, at least, GSA executives seem intent on using the Multiple Award Schedules (MAS) overall, and Schedule 70 in particular, to realign sales according to current agency needs. Steven Kempf, then-commissioner of GSA’s Federal Acquisition Service, told a congressional panel in June 2012 that, at the same time it was dropping some of the services on other schedules because of a lack of demand, it was adding to the offerings of Schedule 70.

The current fiscal challenges facing federal agencies require that GSA “refocus its acquisition professionals on helping agencies to use the MAS program more effectively by bringing new solutions to market faster, improving pricing and simplifying the buying experience,” he said.

As an example, he pointed to a new SIN,132-99, that would allow new IT products, services and solutions that were not currently offered elsewhere a ready channel to the government marketplace within Schedule 70, thereby enabling agencies to get hold of the technology faster.

In an interview last year with FCW, Kay Ely, who took over as director of the Office of IT Schedule Programs in 2011, said the reason behind her motto “It’s a new day in IT Schedule 70” was to let everyone know that GSA was listening to industry and its agency customers.

“There are a lot of things from their perspective that we need to do differently,” she said, “and so we are listening and stepping up to that challenge,” including reviewing business processes, balancing the workloads of people who work on Schedule 70 to make them more effective, and communicating to all “that we really are going to do things differently.”

That’s something that is definitely needed, according to many observers. The perception now is that, as budget constraints force agencies to become more focused in meeting their IT needs, they will increasingly look to procurement vehicles more suited to that, such as agency-specific governmentwide acquisition contracts (GWACs). Without a new approach, they fear the recent decline in Schedule 70 sales will continue.

“I think we’ll see more of the same, unless there’s a champion who comes in and does do something different, “someone who reaches out in a very proactive way all around the vendor community and, through them, to key agencies,” said Alan Bechara, president of IT solutions provider PCMG.”

That champion needs to step in and show that Schedule 70 can provide real value and deliver the things agencies need and are now looking to their own GWACs to fulfill.

There are pockets of people within GSA who are doing this, he said, but overall, “this particular problem is starved for some attention and new initiatives to revamp Schedule 70 and make it less cumbersome.”

There are signs that the decline in Schedule 70 sales might be easing, according to Shadi Shakibai, manager of civilian information services at GovWin, the analytical arm of Deltek. But GSA is having to push against some powerful trends.

“When the Obama administration first came in, it expressed concern over the amount of spending done on these task-order contracts, as well as the lack of visibility into that spending,” she said. “That caused a decline overall in agency [indefinite-delivery, indefinite-quantity] spending, and together with a need to reduce costs and streamline agency procurements, this will cause a lot of agencies to redirect work to these other existing vehicles.”

Unless GSA can do something to make itself more visible and work with vendors to improve their price offerings, she said, this trend will continue, “and I’m not sure if Schedule 70 will be such a big thing in the future.”

The General Services Administration’s Schedule 70 is the federal government’s prime vehicle for procuring IT products and services. Traditionally a products-driven contract, more recently it’s switched to being a primarily services-driven vehicle, with services making up some two-thirds of the total sales.

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Schedule 70 currently offers products and services across a dozen broad category areas:

  • Cloud IT Services
  • Computer and Networking Hardware
  • Cybersecurity
  • Data Center and Storage
  • IT Mandates and Initiatives
  • Satellite Services
  • SmartBuy: Commercial Software Solutions
  • Software and Applications
  • Sustainability
  • System Life Cycles Integration
  • Telecommunications, Wireless and Mobility
  • Telepresence

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Around 80 percent of the schedule’s vendors are ranked as small businesses, though they take the smallest amount of dollars from the contract. In fiscal 2011, the top 10 vendors — led by companies such as Dell, Accenture, IBM and CSC — took nearly 30 percent of the total sales. The top 50 vendors claimed 60 percent.

GSA Advantage (https://www.gsaadvantage.gov/advantage/main/start_page.do) is the main online tool through which users can access the schedule. Another online tool, Apps.gov, was closed down at the end of 2012 as a way of streamlining the IT procurement process when it was found that people were using the site mainly to compare prices rather than actually purchase IT.

GSA currently charges a 0.75 percent Industrial Funding Fee (https://72a.gsa.gov/iffrates.cfm) on all schedule sales, which goes to funding the administration of the schedules. The fee is included in the prices that vendors charge customers, but it’s been a bone of contention for some time, particularly because competing procurement vehicles, such as GWACs, generally charge lower fees. GSA has been rumored for some time to be considering lowering the IFF to 0.5 percent.

Around one-third of of Multiple Award Schedule contractors are available through Schedule 70 Special Item Numbers, (http://www.gsaelibrary.gsa.gov/ElibMain/scheduleSummary.do?scheduleNumber=70) which simplify purchases by grouping together offerings of similar products and services.