ince the 1960s, the General Services Administration has had a reputation as the stolid overseer of the federal government's information technology world: controlling, intrusive and unsympathetic, the bane of agency IT activists.
No more. Under the recent Clinger-Cohen Act, the Office of Management and Budget now carries that baggage. Today OMB constructs the policies, rules and guidelines for federal IT purchases, with the President's budget as its hammer. However, not only has GSA lost those IT responsibilities, it is rapidly shedding its stolid image. More than any other agency, it is in the vanguard of the acquisition revolution.
The area of federal purchasing that has most radically been transformed over the last few years is GSA's Multiple Award Schedules program. For many years GSA has served as the Sears catalog of the federal government. Musical instruments? You'll find them on Schedule 77 II. Sixteen small businesses reaped more than $800,000 last year selling trumpets, tubas and other instruments to the federal government. Wall art? Schedule 72 VIII at $5.6 million.
How about desktop computers and software? Now we are into real money. You find them at Schedule 70 B/C to the tune of $479.2 million. Altogether in fiscal 1996, agencies spent $6.7 billion on products and services through 146 schedules managed mainly by GSA.
The idea behind the MAS program always has been to use the federal government's purchasing power to strike a better deal with contractors. GSA writes, negotiates and manages the contract, with offerings readily available on the Web. Agencies make their choices. In the past, the size of agency buys was limited. Similarly, restrictions on contractors' beating their own schedule prices prevented agencies from negotiating better bargains. Both of these constraints are history.
In fact, agencies are now expected to get contractors to reduce their prices. Moreover, they can buy as much product and service as they want. It is a win-win arrangement for both government and industry. Contractors have an easy vehicle for making a sale. Agencies take advantage of GSA's services to meet their needs quickly and effectively.
If the federal schedules work so well, in a spirit of cooperation, why shouldn't they be offered to state and local governments? More buyers could mean reduced administrative fees, more sales for contractors and better prices for agencies. That was the thinking behind Vice President Al Gore's National Performance Review recommendation to initiate the Cooperative Purchasing program and to open the schedules up to more users. Congress agreed in the 1994 Federal Acquisition Streamlining Act, but then had second thoughts, delaying implementation until the General Accounting Office studied the effects of this expansion.
In spite of a February GAO report, which found no show-stopper problems with the proposal, its future is shaky. Congress axed the program in one of this year's spending bills. Proponents are pushing for a new, scaled-back version of the program, which would offer only certain products, including drugs used to treat HIV patients.
The program is voluntary, and GSA already has said it will structure the schedules only to meet federal needs, so why the fuss? To some extent it's because of the uncertainties of who really gains and loses, and small-business interests are a big concern.
The National Association of State Purchasing Officials also raises a lot of questions about the proposal. Will the approach hurt local economic development and diminish the opportunities of local vendors? Will states now pay higher, not lower, prices because the federal schedule becomes the only source, effectively shutting off multiple bidding? Would this eliminate the benefits of competition from hungrier state and regional bidders willing to beat schedule prices? What happens to those state nonprofit, nongovernmental entities like charities or hospitals that take advantage of state contracts? Will they be able to participate in schedule buys?
Some industries fear giving deep discounts to a broader set of purchasers, saying their local distribution and dealership networks could collapse because of profit loss. Airlines, pharmaceutical companies, heavy-equipment manufacturers and firefighting equipment suppliers all fall into this group. As a result, they could either drop off the schedules or charge their federal customers higher prices.
However, GSA already has agreed to exclude those controversial schedules from expansion. Regarding the state purchasers' concerns, what is the harm in testing cooperative purchasing on selected schedules and seeing how it works?
The alternative is what California has done-set up its own multiple award schedules. California ties federal suppliers and prices to local terms, thus creating, as California procurement official Chuck Grady says, a "mirror image" of the federal program. The program is the most popular purchasing technique in the state. Rather than forcing states to reinvent a proven, successful system, why not cooperate?
Allan V. Burman, a former Office of Federal Procurement Policy administrator, is president of Jefferson Solutions in Washington.
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