FSS to open schedules to state, local buys

The General Services Administration's Federal Supply Service soon will open up 10 percent of its schedule contracts to purchases by state and local governments, as a first step toward expanding the schedule program beyond the federal government.

William Gormley, assistant commissioner in the FSS Office of Acquisition, said the agency will proceed with the action in light of President Clinton's veto of the Defense authorization bill, which included language placing a one-year moratorium on the expansion.

A `Need to Get Involved'

"We have a window of opportunity," Gormley told a group of industry representatives at a GSA conference last week. "The states are clamoring to use the schedule program, so we need to get involved today.

"Our objective is to get 10 percent [of the schedule business] identified and publicly address how to enable you to sell to state and local governments," he said.

Gormley said state and local representatives have expressed "extremely high interest in ADP" schedules, making those contracts likely candidates for the expansion program.

In a later interview, Gormley said he plans next month to issue a public notice to industry and state and local governments for assistance in identifying 10 percent of the volume of GSA's 120 schedules for use in a cooperative purchasing pilot test. He said the pilot would probably not call for a dollar cap for purchases by state and local users, adding that he hopes to focus the tests on the least controversial schedule programs, including ADP.

The move to cooperative purchasing will fulfill a goal of the Clinton administration and Congress of allowing the government to act more like a private business, Gormley said. "This basically is bringing the federal government into line with what the private sector and state and local governments have been doing for years," he said.

He added that federal users may benefit from lower schedule prices if vendors are able to offer greater discounts as a result of increased sales.

But Taylor Caswell, legislative director for Rep. Bill Zeliff (R-N.H.), said some small businesses have expressed concern that an expansion to the state and local level could adversely affect the distribution of their products. An industry source said some businesses—mainly outside the information technology arena—have established relationships and distribution channels within state and local governments and do not want to jeopardize them with competition from federal distributors.

Zeliff, who wrote the language calling for the moratorium while the General Accounting Office studies the effects of such a move, remains opposed to GSA's plans, Caswell said.

"We've been in close contact with the White House, and the White House wants to move ahead with 10 percent," Caswell said. "The will of the House of Representatives was made clear, but [the White House has] the legal authority to [expand the program]. Unless Congress puts this [language] in other legislation, there's nothing we can do at this point."

Ken Salaets, director of government affairs at the Information Technology Industries Council, said he believes GSA made "a politically wise decision" to move forward because the decision will allow the agency to gauge interest in the program," adding, "You can't study something if it's not in place."

Salaets said GSA has strong support from industry to offer federal schedules to state and local buyers and that objections from Congress were not unanimous. "I don't think the opposition from the Hill was that solid. Cooperative purchasing was not a major issue in the conference session."

Gormley said vendors are likely to benefit from the schedules expansion. "It saves them the duplication of effort. You think dealing with the federal government is hard; try dealing with 50 state governments."

Larry Allen, executive director of the Coalition for Government Procurement, said members of his organization are split on their support on the move.

Reactions from state and local governments also are mixed. Jim O'Neill, director of purchasing and risk management for the city of Fort Collins, Colo., said local governments such as his are even more likely than the states to use the federal schedules because they typically do not have the buying power to get similar deals on their own.

Paula Moskowitz, director of New York state's Standards and Purchase Group, said most state governments are eager to have federal schedules available as an additional buying option. But she added that state governments are not likely to use the federal contracts in many cases where the states get better prices on their own.

Moskowitz, who also chairs the Federal/State Relations Committee of the National Association of State Purchasing Officials, said states are also concerned about GSA's 1 percent surcharge on schedule items. In addition, she said, some states may hesitate to use federal suppliers in favor of local businesses. "No state wants to disadvantage its home-grown businesses," she said.

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