Defense official urges use of GSA contract vehicle

A senior Defense Department official last week urged colleagues to consider using the General Services Administration's recently established information technology contracting vehicle for service-disabled veteran-owned small businesses.

In an April 12 memorandum obtained by Government Executive, Kenneth Krieg, Defense undersecretary for acquisition, technology and logistics, said the department should look at using GSA's Veterans Technology Services governmentwide acquisition contract. This vehicle could help Defense meet its congressionally mandated goal of awarding 3 percent of business to small firms owned by service-disabled veterans.

GSA has approved 43 service-disabled veteran-owned small businesses to participate in the $5 billion governmentwide acquisition contract for systems operations and maintenance and information systems engineering. At the time of the award, GSA Administrator Lurita Doan asked the Defense Department to issue a statement regarding its participation.

"To the extent that any of the [service-disabled veteran-owned small business] teams listed by GSA meets the requirements of a DoD buying activity, I encourage you to accord these teams the maximum practicable opportunity to participate," Krieg stated in the memo.

Krieg said while the department has made progress in meeting the 3 percent goal by awarding contracts to firms owned by service-disabled veterans who served in conflicts since World War II, the department has a long way to go. "We must pursue this goal with vigor," he stated.

"By contracting with these teams of businesses owned by service-disabled veterans, we acknowledge their service as war fighters and appreciate their acumen as entrepreneurs and vendors to the department," he added.

The memo could help boost revenue at GSA, which lost Defense business following the discovery of improper contracting practices and misuse of funds at GSA regional offices. GSA's information technology fund took in $8.2 billion in fiscal 2004 revenue from Defense. That dropped to $6.9 billion in fiscal 2005 and $5.2 billion in fiscal 2006.

But observers said purchasing from the service-disabled veteran-owned small businesses is only a small slice of overall Defense contracting.

"There won't be enough opportunities associated with this initiative to restore GSA's DoD contracting to former levels," said Warren Suss, president of Suss Consulting Inc., a Jenkintown, Pa., consulting firm. "It will do little to address the fundamental change of course at DoD. Instead of making extensive use of GSA contract vehicles, DoD has opted to initiate a series of their own [contract] vehicles, and now they have an organizational stake in promoting the use of their own vehicles rather than using GSA contracts."

David Bibb, GSA deputy administrator, said in an interview last week that the agency's relationship with Defense is "good and getting better."

The agencies signed a December 2006 agreement designed to foster better relations. Bibb said it is too early to see any resulting changes in the level of purchases, but called the agreement a "tangible, symbolic and practical point of departure" for the relationship.

According to numbers from GSA, technology fund revenue from Defense purchases for the first quarter of fiscal 2007 totaled $1.2 billion, which is equal to the revenue in the first quarter of fiscal 2006. In the first quarter of fiscal 2004, revenue from Defense was $2 billion; it was $1.7 billion in the first quarter of fiscal 2005.

Bibb said there is no doubt "that there is a perception in the field that it is not OK to buy from GSA." He said the agreement signed by the two agencies outlines a strategy for resolving that perception.

The primary area of business with Defense that has suffered is the assisted acquisition of information technology, he said. Revenue from Defense there dropped from $6.4 billion in fiscal 2003 to $3.3 billion in fiscal 2006.

"That area is extremely important to all of us," Bibb said. "The world and the government are moving to IT solutions. It is a growth area in the government."

Bob Woods, a former GSA Federal Technology Service commissioner, now president of Topside Consulting Group in Vienna, Va., said he has not seen an improvement in the Defense Department-GSA relationship since the signing of the agreement.

"It's much easier to let the feathers out of the bag than to put them back in," Woods said. "This fix is a long way off. It may take legislation to start the repair."

Bibb said relationships are improved by "working together for results," rather than through legislation.