The go-to federal contract vehicle in the past has always been the General Services Administration’s (GSA) Multiple-Award Schedules program. It had been consistently used by defense and civilian agencies to purchase services and products from large and small businesses alike.
However, according to GSA’s own reports, the volume of purchases made through these vehicles is shrinking every year.
Since 2010, budget cuts have impacted GSA schedules. In her article, “GSA Multiple-Award Schedules: How Much More Will They Shrink?,” writer Alice Lipowicz said, “The schedules’ reduced spending trend mirrored the decrease in federal contract spending overall from fiscal 2010 to fiscal 2013 due to severe budget cuts.”
But some forms of federal contracting rebounded last year. For example, small business federal contracting rose by 9.4% in fiscal 2014 in comparison to fiscal 2013, according to the latest White House Small Business Dashboard figures, as of Jan. 19. However, GSA schedules sales did not bounce back in fiscal 2014, but rather continued to diminish, the GSA sales data indicates. The schedules’ aggregate dollar value has fallen each year through fiscal 2014.
The reductions have hit most of the schedules.
The largest schedule, Schedule 70, for sales of information technology, fell by 12% during the period, from $16 billion in fiscal 2010 to $14 billion in fiscal 2014. The second largest schedule, Schedule 874 (MOBIS), for mission-oriented business solutions, lost 23% of its value during the period, going from $5.2 billion in sales to $4 billion.
Other schedule sales reductions were even more dramatic during the five-year-period, including Schedule 874V (logistics), down 50%; Schedule 56 (building materials), down 48%; Schedule 84 (law enforcement solutions), down 44%; and Schedule 72 (furnishings and floor coverings), down 42%.
A few schedules bucked the downward trend. Schedule 599, for travel agent services, rose by 60%; and Schedule 03FAC, for facilities management, rose by 47%, during the five years, according to the GSA sales data last January.
One of the first questions asked by many contracting officers was, “What GSA contract are you on?” This used to be a clear indication that it was the vehicle of choice, but as the numbers show, that is less clear today. Today, contracting officers use other types of contracts to purchase goods and services, and never use the GSA schedule.
Another issue for many vendors currently holding a GSA Schedule contract is the fact that GSA requires a minimum $25,000 in sales on that contract in the first two years, and for every year thereafter.
According to TargetGov research through the GSA eLibrary web site, more than 50% of the companies who hold a GSA schedule have not seen any business at all through it — and are in serious jeopardy of losing the contract. Warning letters from GSA advising of a short probation period before cancellation are now a normal occurrence.
It is critical for those companies wishing to remain on that contract vehicle to proactively and aggressively pursue and win business on their contract before the cancellation takes effect.
Gloria Larkin is president of TargetGov and offers business development services in the government and corporate markets. Visit www.targetgov.com or call 866-579-1346 for more information.