NIH adds leasing to 3 pacts

The National Institutes of Health has entered the leasing market with plans to add clauses to contracts in its three multiple-award procurement programs that would allow customers to lease computer equipment.

Vendors are requesting the clauses, and several vendors have been allowed to add the clauses to their contracts on a case-by-case basis, said Elmer Sembly, an NIH program analyst. "We wanted to open it up,'' Sembly said. "What we're in the process of doing is generating some guidelines.''

Contractors participating in NIH's Electronic Computer Store II, ImageWorld and Chief Information Officer Solutions and Partners (CIO-SP) program said their customers are starting to ask for leased equipment because it allows them to obtain the latest technology for less money. "As these budgets start getting pinched, [agencies are] trying to find ways to meet mission-critical applications,'' said Joe Koenig, director of federal business with St. Louis-based World Wide Technology Inc., an ECS II vendor.

Robert Guerra, who heads the NIH chapter of the Armed Forces Communications and Electronics Association, said the agency must offer leasing through its contracts to remain competitive with other indefinite-delivery, indefinite-quantity vehicles.

In the past two years, NIH has positioned itself as an alternative to other contract choices— in particular, to the General Services Administration's multiple-award schedules, which began to offer leasing last summer.

The Federal Supply Service, which runs the schedules, said vendors have reported $9.9 million in computer leasing agreements so far this fiscal year. Some of the deals included in this figure may have been concluded last year but not accounted for by vendors until this year. Current industry estimates of the federal market for leasing range from $80 million to $100 million per year.

Alan Bechara, vice president with Comark Federal Systems Inc., said his leasing business, through GSA schedules and some agency-specific contracts, will double this year. A trend that started as a way for vendors to differentiate themselves to customers may become "a commodity'' if all 46 ECS II vendors offer the option, he said. "There aren't 46 vendors on the GSA schedule with leasing.''

"GSA should not have a monopoly,'' said Ashton, Md.-based consultant Mark Amtower. "Any time there are multiple sources for products, the customer is the winner.''

One factor that has apparently influenced NIH to pursue leasing options on its contracts is demand among customers for "seat management'' services— an agreement under which agencies lease desktop machines, servers and network equipment from vendors that operate and maintain the hardware and software. According to minutes of a meeting last month between NIH officials and vendors, NIH "needs to add licensing language to its contracts'' in order to enable vendors to enter into seat management deals.

The minutes did not specify which vendors were interested in selling seat management to agencies or through which vehicles. NIH officials could not be reached for more information last week.