States refrain from GSA buying

Input report

State and local agencies have not really bought into the concept of cooperative purchasing, according to a study by market research firm Input.

State and local agencies have not really bought into the concept of cooperative purchasing, according to a study by market research firm Input.

Since October 2003, when they were given access to the General Services Administration's Schedule 70 contracts, state and local agencies have spent only $33 million worth of technology products and services, which represents less than one percent of total state and local IT spending, Input reports.

"So far, the perception states have of GSA Schedule 70 has not been positive," the report states.

Cooperative purchasing, part of the Electronic Government Act of 2003, was intended to allow the rest of government to take advantage of the prices and volume discounts already negotiated by the federal government for common products and services. That, however, is not always the best value that state and local agencies can find, according to Input.

In some cases, state and local governments have already negotiated with vendors to guarantee the same discounts that GSA receives, Input found. In others, they have found that negotiating on their own brings in a better deal.

In some states, laws either prohibit the use of federal contracts or at least require state officials to use the GSA contracts only if they cannot negotiate a better price on their own, according to Input.

The research firm found some exceptions, including Nebraska and Iowa, which are using the GSA contracts because of the greater number of small businesses participating.

Despite the barriers, Input estimates that by 2006 state and local governments could be spending more than $250 million through Schedule 70. That will require a lot of changes from government and support from vendors.

"As states work to modify legislation and adapt to GSA, the vendor community must take every step necessary to meet the increasing demand for their products and services with competitive pricing," the report states.