GSA, Army award $1 billion in hardware, services pacts

The General Services Administration and the Army have quietly awarded more than $1 billion in governmentwide contracts for IT hardware and services to 8(a) vendors, a signal of how agencies will purchase products in the post-Brooks Act era.

Mary Whitley, director of GSA's Federal Systems Integration and Management Center (Fedsim) federal software management center, said her agency this year used the Army's Fort Huachuca Garrison Directorate for Contracting to award more than 24 contracts covering a full range of equipment and services.

She declined to comment on the total value of the pacts but said half of them were worth about $100 million each and the other half "considerably less."

The contracts are designed to meet the needs of agencies with smaller task orders worth an average of $250,000 and to complement other Fedsim multiple-award contracts, including last year's $840 million IT services program and a $560 million program for Global Positioning System services and equipment.

Bob Dornan, senior vice president of Federal Sources Inc., said the government-wide trend toward programs such as the Fedsim multiple-award contracts will create a buying frenzy when agencies begin to realize they can buy equipment and services without any fear of a protest.

"You can place large orders with impunity and above the law," Dornan said. "When these people realize what they can get away with, you will see a huge spending increase."

Whitley said a few of the contracts are no longer used, leaving 24 active vehicles in place. Some additional deals worth about $3 million are still being negotiated, she added.

Fedsim, which nearly doubled its business to $238 million in fiscal 1995, expects to be even busier this year, Whitley said.

"At present, we are right around $150 million, and we are expecting sales of $400 million for this fiscal year," she said. "We have overloaded our own contracting shop."

Because GSA has reduced its staff, Fedsim has been working with other agencies on new procurement initiatives. After a few successful ventures with the Army, Fedsim officials decided to ramp up their joint efforts.

"After we saw how well they could perform, we decided to increase the volume and buy more information technology products and services through their contracts," Whitley said. "They provide us [with] contracting services for a fee, and it is rolled up into the cost I charge to my clients."

In return, she said, Fedsim "brings to the table an office full of technical representatives who help the customer decide what he needs and what is a fair price to pay."

Fedsim usually pushes customers toward the vendor that offers the best price. But Whitley said a contractor's technical capabilities and past performance also figure in heavily.

Users buying off-the-shelf products from these contracts generally pay a .5 percent surcharge and a 2.5 percent charge for services task orders that require negotiation, she added. Fedsim also charges $90 an hour for its consulting services, which vary according to the technical skills of its customers.

Whitley added that agency requirements are not automatically relayed to Fort Huachuca but may be fulfilled via other Fedsim contracts, the GSA schedule or other appropriate vehicles.

The program strongly resembles an aborted program run out of GSA's Kansas City region that channeled work to 8(a) vendors and other contracts. Ironically, Fedsim officials pulled the plug on the Kansas City program last year to replace it with a nationwide program called FAST, which is run out of GSA headquarters in Washington, D.C.

Whitley would not comment on similarities between the joint effort with the Army and the Kansas City program, but she did say she may end up directing business to the FAST program if it offers better deals.

"It may be that in the future I will be taking advantage of FAST if it can provide a better solution, just like we buy from GSA schedules when that makes sense," she said.

Vendors who hold the contracts reported brisk sales, although they noted that the multiple-vendor approach requires them to exert extra effort marketing their capabilities to agencies.

"We've got salespeople out in the field looking for opportunities that can fall under this contract," said George Fuster, president of International Data Products Corp. and winner of a $96 million, five-year contract with Fedsim. "We may find a need out there, and the specification may be written by [the agency] based on our marketing."

Fuster said his company has sold $12 million worth of PCs and servers through its Fedsim contract since the award in January.

Humberto Pujals, chief executive officer of Government Micro Resources Inc., said his company won a $103 million, five-year contract in April to provide up to $20 million worth of IT services and hardware each year.

The company offers its own line of Rembrandt PCs and laptops, advanced workstations from Sun Microsystems Inc. and Silicon Graphics Inc and services covering local-area network integration, asset management and Year 2000 issues.

"We are extremely busy," Pujals said.