Government buying is moving, shaking
GORMLEY: Sales last year for IT were $2.8 billion and this year through May 22 are $3.2
billion. We feel were probably going to do at least $4 billion in sales this year.
I think what were seeing is that while we increased buying by about a $1 billion
last year, were seeing that the addition of services to the IT Schedule is starting
to really kick in.
The movement to blanket purchasing agreements is being viewed and really experienced by
the customer as really putting the customer into an almost commercial environmentat
least as close as we feel we can get at this time in government.
If a customers requirements change or the technology changes, the government
benefits from that in a real-time environment. Historically, the perception of government
has been as a large buyer and has been identified as buying old technology. Thats
changing very rapidly to the government now having the ability to get the latest
technology as its available commercially. Were pretty excited about being able
to offer that.
Services are the fastest growth part of the schedules program. We feel that the IT
Schedule as a whole will reach $10 billion by 2004, and a lot of that will be the growth
GCN: There have been questions
about whether reforms are squeezing out sales by small businesses. How is GSA addressing
GORMLEY: Were happy to see the tremendous growth in the number of small
businesses. Some people felt that when we added services, that would result in a decrease
in small business participation or sales. Our experience has been the opposite.
For all of fiscal 1997, small and woman-owned businesses did $27.5 million in business.
In the first six months of this year, theyve done $33 million. We expect to be at
more than $1 billion this year.
In the schedules area, about 77 percent of our contractors are small businesses, so
they are the primes. The schedules are a very low-cost entry for small businesses to get
into the government market.
In getting through the negotiations and the contracting process, the companies and
small businesses are able to emulate a lot of their commercial practices.
GCN: One of the issues that I
repeatedly hear from vendors is that they like what they hear from you and Frank Pugliese,
GSAs FSS administrator, but they believe it doesnt get down to the level of
the contracting officers. Is that a fair criticism, and, if not, how do you deal with that
GORMLEY: I think if you were to go to the corporate world, those negotiations can get
very pointed and very direct. Ours arent far off from that. Thats the
contracting officers jobto negotiate a fair price for the government.
Contracting officers have a lot of additional potential reviews after they sign a
contract. So they have to be behind their determination.
Ill be addressing this issue with the inspector general. What were looking
for is for the IG to treat us like a CPA company treats its client. Theres a
perception that when contractors make a decision, theyre second-guessed. Some of
that creeps into the negotiations side about whether they are getting a good deal or not.
We want to leave a profit on the table for the company. We understand that. Probably
for everybody that has said theyve had a bad experience, weve had a lot of
folks under their own initiative say how professional weve been. Some people say
they must have gotten away with something. I hate to think that.
With 1,400 vendors, Im sure there will be situations, and, when we identify them,
well work with them. But the productivity of our contracting officers is up 40
percent over last year, so I think what theyve done is nothing short of phenomenal.
Were trying to bring in some resources; weve brought in six folks within
the past four months. That should also help take some of the pressure off everyone, which
we as management should be trying to do. Its just hard to hire in government right
GCN: Lets talk about GSA
Advantage. Ive heard Pugliese say that he wants it to improve. Where are you looking
to take it, and how do you want to get it there?
GORMLEY: He has assigned GSA Advantage to Ed OHare, who is the deputy chief
information officer, which I think is a good move.
What theyre looking to do is making it faster and easier. But were into an
environment where no one has any history.
If there is a way to change how the data is put into Advantage, that is one of the key
initiatives. We need to know how a customer will be able to search for that data and how
it will be laid out on the screen as people go shopping.
Were seeing a steady increase in acceptance throughout government. Government
employees are no different than people anywhere else and acceptance of the Internet is
becoming greater from the standpoint of ordering.
I dont think we should be intimidated by the Internet. I think we need to find
ways to make it easy and find ways to allow electronic commerce to be utilized throughout
government, and thats what were trying to do with Advantage.
GCN: How have companies reacted
GORMLEY: Some companies are excited about it. Some people view it not as an opportunity
but as an additional cost.
GCN: Each IT Schedule contract
mandates that the vendor make its ordering and product information available via
Advantage, doesnt it?
GORMLEY: It doesnt mandate it now. It strongly encourages them to use it.
We like to use the carrot, not the stick. Were relying on Adam Smiths
theory that greed will come along and once folks see their competition on Advantage, there
will be a move by other companies to get on there. Were at about 400,000 products
GCN: There is an ongoing debate
about the number of contract vehicles available to agencies right now. A year ago you told
vendors that they should choose their contracts more carefully. Do you get a sense that is
GORMLEY: If we had different vendors in the schedules program than agencies have in the
indefinite-delivery, indefinite-quantity side, then I think there would be merit to that.
But I think were reaching a point where the government is saying, How many
contracts should we have with the same company for the same thing?
When we talk to customers, we find there are less IDIQs going on, and the next step
will be what happens with the governmentwide acquisitions contracts.
The administrations Mayflower Agreement had good intentions as designed by former
Office of Federal Procurement Policy administrator Steve Kelman. I think the intent of
Mayflowerand even the GWACswas for agencies to open up their contracts
governmentwide based on the fact that they had the resources and could handle the
Im not quite sure where we are with all that. I think that is something Deidre
Lee will deal with as the new OFPP administrator.
I would say in two years, you will see a whole different landscape. Some have said that
GSA will be a monopoly. I hate to have it referred to as a monopoly. We dont view it
as a monopoly. GSA is around to be the acquisition arm of government.
To be fair to everybody, for a while GSA wasnt being responsive. We basically
created a lot of the IDIQs because we werent supporting the customer so they had to
go out and do it themselves.
But I think over the past few years and through all the changes that weve made,
were setting up the best contract vehicles for our customers to use. They have
established sources of supply.
The acquisition folks in the agencies still have a responsibility when they buy off the
schedules. I think over the next few years, the market is going to play that out.