Cooperative buying rule resolves main obstacles

Proposed rule

State and local governments will be able to add items and conditions to the General Services Administration's schedule contracts to meet their own requirements under an interim rule published last week.

The change resolves what has been a major obstacle for the cooperative purchasing rule.

State and local governments can add items and conditions as long as the terms don't conflict with provisions of the federal contract. The original proposal would have forbidden any changes to the GSA terms.

"That was an interesting addition. The states demanded that," said Bruce McLellan, executive director of the Coalition for Government Procurement.

The interim rule means that state and local governments can now begin buying information technology using the schedule contracts.

Public comments on the interim rule are due by July 7, after which GSA officials will begin working on a final rule. The interim rule tries to address the most troublesome objections that critics raised about an earlier proposal published in January.

Donna Bennett, commissioner of GSA's Federal Supply Service, has advocated broader use of the program. State and local agencies would have a better chance of finding "fair and reasonable pricing" on the schedule contracts, Bennett told a gathering of government chief information officers attending the CIO Summit last week in Savannah, Ga., an event sponsored by FCW Media Group.

Like many state and local officials, Robert Taylor, CIO for Fulton County, Ga., was skeptical, "in part because we want to focus on our local businesses." But Taylor also questioned whether governments get the best price when they stick to local vendors.

Local officials said they would have to compare the prices they negotiate with the schedule price to determine the best deal. "Some of the prices are good, and some I think we can use," said John Gray, senior buyer for Howard County, Md.

"GSA schedules offer states a great opportunity to streamline buying from qualified offerors who have proven past performance," said Robert Guerra, a partner with Guerra, Kiviat, Flyzik & Associates. "That gives the states a real leg-up in their buying of technology."

The new rule also removes language that would have required contractors to lower their prices if a dealer sold their products at a discount.

Use of the provision is voluntary for contractors, who have to determine which offerings they want to make available to nonfederal buyers.

Judi Hasson contributed to this report.

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Federal buying power

Cooperative purchasing lets state and local governments use the General Services Administration's schedule contracts to buy products and services. Congress passed the provision notice as part of the E-Government Act of 2002.

GSA schedule contracts seek to take advantage of the federal government's enormous buying power. Vendors also generally like schedule contracts because they streamline the government contracting process.