States unsure of Schedule 70, report says
- By William Welsh
- Jun 01, 2004
States will continue to make most of their large purchases through the competitive purchasing process rather than use the General Services Administration's Schedule 70, according to a new report from the market research firm Input Inc., Reston, Va.
The report, 'Schedule 70 and Cooperative Purchasing: A Slow Start to IT Spending,' finds that state purchases through the GSA schedule currently represent less than 1 percent of total state and local IT spending.
State and local governments purchased just $33 million in goods and services through IT schedule contracts from October to February, according to the report.
'While some states are slowly beginning to use cooperative purchasing for small IT purchases, many are experiencing challenges and find more favorable pricing by competitively bidding projects,' said Marcus Fedeli, Input's manager of state and local opportunity products.
The shortcomings of Schedule 70 for state and local governments are:
- A failure to provide best value when compared to the competitive bidding process
- A lack of communications between parties that makes buyers unaware of the benefits of cooperative purchasing
- A disparity between state laws and cooperative purchasing
Despite this, Input estimates that by 2006 state and local IT spending through Schedule 70 could exceed $250 million. This will come about in part as states work to change restrictions they have in place that discourage cooperative purchasing.
The federal government extended its buying power to state and local governments through the E-Government Act of 2002.
Congress opened up the GSA Federal Supply Service Schedule 70 to state and local governments to assist them in getting discounts on commercial items they could not obtain on their own because of the small volumes they buy.
Because of these challenges and the many federal purchasing terms imposed on state buyers by Schedule 70, the IT community is likely to see states continue to make big purchases using their own competitive processes, Fedeli said.
'Despite the reported benefits in procurement cost savings, historical jurisdictional friction often causes state governments to avoid undertakings with the federal government,' he said.
William Welsh is a freelance writer covering IT and defense technology.