This is a 3 part series covering (1) The State of the Federal Market, (2) Is Now the Time to Get a GSA Contract? and (3)Survive and Thrive in this New Federal Market. All Posts are addressed to Government Contractors.
This is likely a polarizing topic right now. With the State of the Federal Market where it is, many will likely jump to the conclusion that getting involved with a federal contracting vehicle of any sort is a burnt run. However, there is much to consider when thinking of getting a GSA Contract.
The decision to get a GSA Contract depends on several considerations, but the biggest one right now is “Will the GSA be used more in the future by federal buyers?” With shrinking budgets, established government contractors are forced to pursue more business just to maintain current profit levels. Getting a GSA Contract is the low-hanging fruit, because around 12% of federal acquisition already goes through the GSA, and as noted above this number is poised to increase.
The Future of Acquisition through GSA
The GSA has been around since the Truman Administration, and is firmly wedged into overseeing several vital aspects of federal acquisition. So, even a few scandals cannot threaten the GSA’s existence. Furthermore, the scandals actually removed a figurehead administrator and placed Dan Tangherlini in her place, improving the oversight and efficiencies within the agency. The future of the GSA looks bright under Tangherlini’s reign, here are some of his Multiple Award Schedule (MAS) initiatives:
- Cancellation of non-productive GSA Contracts – many contractors have seen cancellations this year when their option to renew was not accepted, mostly due to lack of GSA sales.
- Comprehensive and Integrated Contracts such as OASIS – pulling together complimentary services to offer a quick and easy way for federal buyers to do their jobs.
- Green Initiatives – Obama set a really high bar for green goals, and the GSA is the leading agency in executing the measures to meet these goals.
The GSA is Poised for a Boost
The GSA is very geared towards increasing the 12% market share of federal acquisition.
Last year, only about 12 percent of federal procurement spending that could have gone to GSA actually did, according to the agency. Tangherlini said his hope is that, within 10 years, the agency can get that figure closer to 90 percent.
The GSA boasts many advantages to other contract vehicles, such as: risk reduction, savings, flexibility, efficiency, value and control. However, the biggest advantage the GSA has in increasing federal acquisition market share is their nationwide sales force. Federal buyers unfamiliar with the GSA can call on technical advisers and the GSA is continuously reaching out to Contracting Officers to elicit their business. The GSA survives off of a 0.75% fee on all sales, which drives them to increase their market share.
The GSA is also a leader in innovation, they have paved the way for many government agencies to crossover to cloud computing, Integrate business and IT services, advance green solutions, and realize cost savings through Blanket Purchase Agreements and like contracts.
How will the Sequester Effect the GSA?
There is uncertainty on how the sequester will effect federal acquisition, and it is impossible to foresee how 2014 will unroll. However, we can use simple logic to predict some changes.
With tighter budgets, CO’s will be tasked with stretching each dollar as far as possible. Therefore, acquisition options will be chosen with a higher level of scrutiny on cost savings, whether it by order-by-order or long term. It would be expected that as acquisition challenges ensue, agencies will be forced to evaluate their purchasing procedures.
Because of the advantages outlined above, the GSA is in a good place to stand-out to many federal buyers as the best overall option in the harsh upcoming environment. And with a thought leader heading the GSA, there is a very good chance this increase will be experienced for years to come.