Memo indicates deal on SmartBuy Oracle license is near

GSA also wants to ink agreements with IBM, antivirus vendors

The General Services Administration has instructed agencies to stop buying software and services from the government's second-largest software vendor, Oracle Corp.

The agency announced earlier this month that it is close to signing a governmentwide enterprise license deal with Oracle under the program known as SmartBuy.

GSA's notice on its FedBizOpps Web site puts agencies on notice that a deal is imminent and they should refrain from buying Oracle software or renewing current deals with the company. Agencies who can justify continuing with their own deals can apply for waivers, according to a memo posted on the CIO Council's Web site last year.

The Oracle deal is the third large agreement in the last month that GSA has said is pending. GSA also announced that it was nearing an agreement with IBM Corp. and that it will issue a request for quotations to antivirus vendors as early as April.

Oracle trails only Microsoft Corp. in sales to federal agencies. Federal Sources Inc. of McLean, Va., estimates that Oracle sells more than $200 million in software and services to the government each year.

'Clearly, getting Oracle and IBM on board is impressive,' said Larry Allen, executive director for the Coalition for Government Procurement, a Washington trade association. 'Getting Oracle on board will give the program a real boost because their senior management started the discussion about SmartBuy with the agencies three years ago.'

Oracle, IBM and GSA would not comment on the pending deals.

But one industry official, who requested anonymity because his company's deal still is in the works, said GSA may be getting a bit ahead of itself.

'This is an offensive movement by GSA,' the vendor said. 'They want to get this program moving, even though some of the deals are not close to being finished.'

GSA officials, however, said previously that they would not release a notice on FedBizOpps unless a deal was imminent.

The vendor also said SmartBuy savings are just a percentage point or two off GSA's Federal Supply Service schedule prices. 'Buying to get 1 percent off is of little interest to the agencies I've talked to,' the vendor said. 'The battle between vendors and SmartBuy is agencies would have to pony up a lot of money to get the vendors' interest, and I don't think that is happening.'

The vendor said GSA wants to use money from the IT Fund to make a small purchase through one of the three upcoming deals to get the program started.

Hord Tipton, CIO of the Interior Department, said GSA has told agencies that if a SmartBuy deal isn't better than schedule or agencies' deals, they won't be forced to use it.

Interior has several departmentwide software license deals for database management software from Oracle, geographic information system software from ESRI of Redlands, Calif., and Windows XP, Office XP and Active Directory server software from Microsoft.

'We had 57 percent savings over GSA costs on our deal with ESRI and if we can save three more percent, that adds up when you are dealing with big numbers,' Tipton said.

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