Schedule 70 IT sales flat in 2009

Federal information technology sales on the General Services Administration’s largest Multiple Award Schedules contracts remained relatively flat in sales in September compared with fiscal 2008, according to a new monthly report.

Federal agencies pushed Schedule 70’s end-of-year federal sales to $15.6 billion, according to the IT Schedule 70 Monthly Report. GSA’s Center for IT Schedule Operations produces the report and released the latest figures Oct. 19.

Overall sales that include purchases by federal agencies and state and local governments reached $16.4 billion, led by a strong performance in September with a 2 percent increase, a $316.5 million increase, the report states.

Total sales so far have again slipped in year-over-year numbers. In fiscal 2008, Schedule 70 had $16.5 billion in sales. And fiscal 2008’s numbers were 2.1 percent lower than fiscal 2007, according to a report from the center on fiscal 2008’s sales.

Ray Bjorklund, senior vice president and chief knowledge officer at FedSources, said sales are declining because agencies are buying more services from other GSA Schedules or indefinite-delivery, indefinite-quantity contracts.

Agencies are buying more cybersecurity services and cloud computing has become more popular under the Obama administration, experts also say.

Bjorklund said agencies are finding other Schedules that offer what they need in the services area, such as GSA's Mission Oriented Business Integrated Services Schedule as well as the other contracts inside and outside GSA.

For instance, the Navy is using its SeaPort-e IDIQ contract and the Homeland Security Department is using its Enterprise Acquisition Gateway for Leading Edge Solutions enterprisewide multiple-award contract. The second round of the contract is in the works.

“There are a lot more options than just Schedules,” and agencies are taking advantage of them, said Hope Lane, officer of government contracts consulting at Aronson and Co.

Schedule 70 sales have leveled off or declined in recent years too because agencies already built much of their IT infrastructure in the mid-2000s. These days, they need services for upkeep of that infrastructure, Lane said.

“It’s the equivalent of building a house and remodeling a house,” she said.

In fiscal 2009, Schedule 70 had $11.3 billion in total sales for services. Sales last year for services were $10.9 billion, according to GSA’s reports. Schedule 70’s hardware and software sales in fiscal 2009 were $2.7 billion and $2.2 billion, respectively, according to GSA’s new report. Hardware decreased from $3.4 billion in 2008, while software increased from $1.9 billion last year, according last year's report.

However, Lane said total sales figures could increase as more 2009 services sales are reported in the coming months. Sales for services arrive later than hardware and software sales.

Lane said she’s not pronouncing a doomsday because Schedule 70 sales have been relatively flat over the past few years. “They could be down,” she said.

In coming years, Lane expects Schedule 70 to come in at between $15 billion and $18 billion, although $18 billion would be a very good year.