State and local governments boost GSA schedule technology purchases

Technology orders from state and local governments via a General Services Administration supply contract rose 45 percent during fiscal 2007, according to a new report. Much of the increase was driven by rising demand for wireless services and green computing products, along with greater adoption of cooperative purchasing vehicles by the more than 87,000 local governments nationwide.

According the report from Reston, Va.-based market research firm INPUT, orders on GSA's Schedule 70 IT contract rose to $361.2 million last year, up from $248.5 million in fiscal 2006. Wireless services saw the biggest percentage increase, jumping to $87.4 million from $46.1 million. In addition, state and local governments spent nearly $250 million for IT equipment, software and services in fiscal 2007.

The Schedule 70 contract is essentially a catalog of products at pre-negotiated prices that any federal, state or local agency may use as a method for purchasing IT products.

"To some degree, this is definitely the GSA seeing traction with their marketing efforts," said Jason Sajko, the report's author and a senior analyst at INPUT. He noted that GSA and organizations such as the National Association of State Procurement Officers have been educating local officials about these programs at trade shows and conferences.

While more than 500 companies use Schedule 70, 62 percent of the spending by states and localities in 2007 was captured by 10 companies. Verizon Wireless was the largest, at $78.9 million, followed by DLT Solutions at $37.5 million, HPTI at $28.2 million, Mythics Inc. at $22.3 million and CDW-G at $19.8 million. Verizon's total was comprised entirely of wireless services. The remaining companies leaned mostly toward IT products and services.

Sajko said the rising demand for environmentally friendly computing products provides real growth potential for cooperative contracting vehicles. State and local governments are embracing standards that differentiate products based on energy usage, disposal and environmental responsibility.

"It's really impressive how quickly this movement toward green purchasing has happened over the past year or so," Sajko said. "It's still relatively young, but we're encouraging vendors to position themselves by getting green products into their catalogs and market them to states and localities that are interested."

The federal government is similarly pushing environmentally friendly technology purchases. GSA has set goals to replace certain products with green alternatives by 2010.

Sajko noted that Schedule 70 is receiving some competition from other cooperative contracting vehicles, such as the Western States Contracting Alliance, which serves 30 states. There's "definitely room for more than one contract" in a market that covers more than 87,000 localities, he said. "I try to stress to vendors to be on multiple contracts and be aware of the various advantages."