70 A contract holders get one-year extensions

Running short of time on negotiations for five-year Schedule 70 A contracts, the General Services Administration will announce May 6 that it is extending all current contracts for a year.

GSA will also have an "open season" that will allow noncontract holders to join the program and let current contract holders modify their contracts as needed to adjust prices and add new products, according to Bill Gormley, assistant commissioner of acquisition in GSA's Federal Supply Service.

That open season will close in March 1997. The extension will let suppliers put the latest products in customers' hands more quickly, said Tony Colangelo, marketing director for Government Technology Services Inc. "The changes will allow more resources on both sides to focus on adding new products," he said. "The customer will really benefit because now I don't have to spend two months with vendors collecting data for GSA." Prices will not be affected because vendors already make immediate reductions without GSA's approval, he said.

The five-year lifespan of future contracts will provide the same benefits as the extension because vendors and GSA will only have to negotiate new contracts every five years, leaving the rest of their time to add new products, Colangelo added.

GSA's decision has received wide approval from industry.

"[Every member] we called was supportive [of the extensions]," said Olga Grkavac, vice president of the Systems Integration Division of the Information Technology Association of America.

ITAA recommended both the one-year extension and the open season as the best ways to ease the transition to five-year deals, Grkavac said.

"As long as their modification process speeds up also, I would rather send in a modification request than a brand-new proposal," said Art Bohn, senior principal contract administrator for Wang Federal Systems.

"I think something like a one-year extension was inevitable," said Larry Allen, executive director of the Coalition for Government Procurement.

The coalition's members like the potential for reduced work on the contracts. "You are not going to have to do a new solicitation from the start every year," Allen said.

The extension is necessary because of GSA's delay in deciding that it wants to stretch the contract duration to five years, according to one industry source. Now there is just not enough time before the current contracts expire Sept. 30 for GSA to negotiate contracts with Schedule 70 A vendors.

After five years, the contracts may be renewed for another five years.

With five-year contracts, vendors will not have to keep negotiating new deals, a process that has been fraught with delays for some smaller companies, said Paul Taltavull, senior vice president of Federal Data.

"There always seems to be a large number of vendors that weren't getting awards in a timely way," Taltavull said. "[Five-year contracts] eliminate a lot of problems with the annual renewal process."

The hope is that GSA's staff, freed from ironing out new annual contracts, will be able to award modifications more quickly, which will benefit vendors and buyers alike. "It may give them a better workload in terms of processing modifications," Allen said.

Vendors will be able to expand their offerings on their extended contracts under the new multiple-award schedule rules, Gormley said. This means that vendors can add services to their schedules, even if those services are not on the current contract.