GSA inks second SmartBuy deal

General Services Administration officials have signed their second SmartBuy deal, with Manugistics Group Inc., a provider of supply-chain management software.

SmartBuy is GSA's enterprise licensing program, designed to allow the government to harness its volume buying power to negotiate lower prices for some types of software.

As this second contract proves, there is no one way to develop a SmartBuy deal. The first contract, with geographical information systems developer ESRI, was based on pooling the anticipated demand of three agencies that already used the software. The Manugistics contract will instead be based on three tiers of sales volume. As the government buys more licenses, Manugistics, based in Rockville, Md., will drop the price.

"The more software the government buys from Manugistics, the larger our discount becomes," said Neal Fox, assistant commissioner for commercial acquisition at GSA's Federal Supply Service. "This is a different type of agreement than we used the first time around."

The ESRI agreement used the company's GSA contract as it was, with discounts applied to the schedule prices. The Manugistics deal involves changing the schedule contract to include the volume discounts.

"You have to make the agreements match the company business model and also the way our customers want to buy the software," Fox said.

GSA was unable to work out a rebate arrangement, so agencies that buy the software later, after the first or second tier has been reached, will get better discounts than earlier buyers, he said. However, he emphasized, "Everyone gets discounts, from day one. The first customers come in right away and already have a significant discount."

Control of SmartBuy will move from GSA's Office of Governmentwide Policy to the Federal Technology Service April 1.