GSA mulls how to keep acquisition shops in business

ORLANDO -- The General Services Administration is considering several  ideas for putting its acquisition services business back in the black, according to agency officials attending a GSA conference here.

In a May 15 memo, Jim Williams, commissioner of GSA's Federal Acquisition Service, wrote that FAS is likely to expand its offering of consulting and professional services, while restructuring its fees and streamlining its business model, with hopes of erasing its deficit.

Many agencies still turn to GSA for help with managing acquisitions, but the assisted services business is struggling.

FAS expects to lose up to $60 million this fiscal year, based on $3.7 billion in expected business, of which GSA gets an average of about 4 percent. 

GSA officials conceded the losses hurt the agency.

“We cannot sustain these types of losses year after year,” Ed O’Hare, assistant FAS commissioner for Office of Strategic Business Planning and Process Improvement, said May 15. “We must do something about this.”

“We clearly need a plan that will put us in the black,” he added.

Mary Davie, assistant FAS commissioner for the Office of Assisted Acquisition Services, said options include recovering costs with a national pricing policy and with a pricing and cost-recovery playbook. Meanwhile, the agency can increase its revenue with more market research.

To decrease costs, GSA wants a common set of "e-tools" to make it easier for client support centers to collaborate on service offerings. This will also make it possible to shift work from overburdened client support centers to those with available resources.

The agency is also considering other cost-control measures, including a hiring freeze. The adjustments could affect employees, but O’Hare said the measures would not include reductions-in-force.

However, canceling the agency's  assisted services business is not under consideration, as was reported last week in the media, GSA officials said.

“I am not proposing to close [assisted acquisition services] to eliminate budgetary shortfalls,” Williams wrote in his memo. “At present, no decisions that would impact our employees have been made.”

O’Hare and GSA’s strategists want to finalize a plan by June to move forward on recovering assisted services. The plan will not entail scraping for business across the government in an attempt to generate more revenue.

Instead, O'Hare said the agency is pulling back and looking at how to realign to deliver the services customers need and are willing to buy.

In many cases, agencies have set up their own contracts rather than go through GSA's governmentwide vehicles. However, GSA can still play a role in those situations by working with those agencies to identify niches their contracts do not cover, in which the agencies might need help buying products and services.

O'Hare said agency officials will decide on the new direction by as early as August. After meeting this month to diagnose assisted services’ core problems, GSA will appraise operations and performance, start plans for increasing revenue and review the staffing situations. O’Hare said he expects to have assisted services meeting its costs by fiscal 2008.