Identity Crisis

Senior managers worry about GSA's future after reorganization.

The General Services Administration, the agency created in 1949 to manage buildings and buy supplies for the federal government, is facing an identity crisis.

Two of its branches, the Federal Technology Service and the Federal Supply Service, were combined earlier this year and the Federal Acquisition Service was created in their stead. A description of the new organization was announced in August, but GSA has yet to provide details such as where some of the offices will be located and who will fill top management positions. In the midst of these changes, several high-ranking officials have left the agency-including Donna Bennett, FSS commissioner; Neal Fox, assistant commissioner for commercial acquisition; and Sandra Bates, commissioner of FTS- leaving management holes at the top.

Senior managers at GSA say they lack the information to determine how the reorganization will affect them. And agencies say they often prefer to buy goods and services without GSA's help. In the past few months, GSA lost two large acquisitions to agencies that decided to set up contracts on their own: The Homeland Security Department established a comprehensive express shipping contract directly with DHL in June, and in August, the Treasury Department announced its own telecom competition.

Those who depend on GSA for their careers and supplies are asking themselves what, exactly, the reorganization means for them. "People are totally confused. They don't know where they fit into the new organization," says one senior manager who asked not to be identified. That lack of certainty has led some people to leave, sources inside GSA say.

"We have not told everybody as to where it is they will fit into the new organization. . . . There's probably a little angst out there," says Barbara Shelton, who was appointed acting commissioner of the Federal Acquisition Service earlier this year. She says GSA is in the midst of matching up employees' interests with the new organization's needs.

At the same time, GSA is struggling to meet federal agencies' needs. Agencies, on which GSA depends for fee payments, often say they can work out cheaper deals on their own. Keith Strange, vice president of supply management at the U.S. Postal Service, says he expects USPS to do less work with GSA in the future. "I think, generally, we have implemented more advanced sourcing and supplier relationship processes," he says.

Al Sligh, an acquisition official for Homeland Security, which awarded a contract worth up to $60 million over the next five years to DHL in June, says GSA is not lowering prices enough. He recently asked the agency to analyze the purchases DHS makes through GSA to determine how to negotiate better deals.

The Defense Department, GSA's largest customer, has had a particularly rocky relationship with the agency. Defense's inspector general reported in July that the Federal Technology Service violated acquisition laws. GSA's inspector general reported similar problems in December 2004. Some Defense procurement officials had interpreted an October 2004 Pentagon memo to mean that they should not use GSA contracts. In June, Deidre Lee, former director of Defense procurement and acquisition policy, said that was not the case and GSA should be used when it is determined to be the best option.

In late summer, GSA hired Lee away from the Pentagon to head its integrated technology services unit. Her move is viewed as a way to improve GSA's relationship with Defense. A Pentagon spokesman says the department will work with GSA to make sure procurement regulations are followed properly and fees are reasonable.

"GSA needs to do more to win the confidence of agencies across government," says Warren Suss, president of Suss Consulting in a Jenkintown, Pa., which works with federal agencies and industry. Agencies usually decide to do their largest, most complicated buys on their own, he says, and use GSA only when they are in a rush, or face other restrictions.

Shelton says GSA has made an effort to appeal to client agencies by making its fee structure more transparent. It also has reduced the number of calls to agencies, which had complained that GSA contacted them too frequently. She thinks these changes will lead to more business. "We believe there are certainly pockets that may not quite understand that value. It's our job to make sure they see that value," she says.