Feds go on sked services buying spree

Agencies swarmed to the Federal Supply Service schedules to buy their information technology services in the first two months of fiscal 1999, purchasing almost half as much as they did during fiscal 1998.

Agencies bought $519 million worth of IT services in October and November. In fiscal 1998, the first full year during which IT services were on the schedules, FSS sold $1.2 billion worth of services.

Not only are agencies buying more services— including systems analysis and design, records management and database planning and design— they are looking at a wider range of services, according to vendors. More IT services vendors are flocking to get contracts on the FSS schedules, while current contract holders are adding services to their offerings.

"There's been a lot of emphasis placed on new contracting vehicles to speed the implementation of technology," said Jack Winters, vice president for government and education at IBM Global Services Inc. "I think agencies are beginning to learn to take advantage of those vehicles."

The increased sales are attracting more vendors to the market. Robert Guerra, president of Robert J. Guerra & Associates consulting, said in the past few months his company has helped 20 to 30 vendors get IT services contracts on the FSS schedules. "Historically the GSA schedule was a hardware contract. So last year when they opened it for services, the service vendors didn't have contracts, and now they're getting them," Guerra said.

Unisys Federal Systems, which offers hardware, software and services on its contract, met with FSS last week to talk about adding new services to its contracts "to cover the full spectrum of federal needs," said Ed Hogan, vice president of marketing.

Recently agencies have looked to vendors to provide IT security and networking solutions in addition to the expected Year 2000 and systems engineering solutions, said Bill Adolfson, products manager for General Services Administration schedules at Litton/PRC Inc.

In fiscal 1998, GSA changed the ordering procedures for IT services, requiring that the statement of work be performance-based rather than based on labor hours, as it had in the past. Bill Gormley, assistant commissioner of FSS' Office of Acquisition, said that putting an emphasis on results rather than "running a body shop" based on hourly rates is only one of the reasons for the increased use of the schedules for services.

"There is downsizing [in government] and the acceptance of the schedule program," Gormley said.

The downsizing and federal emphasis on using commercial practices also has led agencies to discover what the corporate world learned several years ago, Winters said.

"I think a number of government agencies are beginning to think about what they really want to major in," he said. "Many have realized they want to be a user of IT but not an implementor."

Agencies finally are becoming comfortable buying IT services, and sales should continue to increase as GSA meets with procurement executives throughout government to train them in the new ordering procedures, Gormley said.

"All through last year people have been getting more comfortable with ordering and using services...and this quarter [government is] reaping the rewards," Adolfson said.

Direct agency purchases are not the only use of services on the schedules. GSA's Federal Technology Service, which uses the schedules and other governmentwide contracts to build solutions for its federal customers, also has increased its use of the schedules.

"I can confirm without doubt that we are increasing our use of services from the multiple-award schedules run by [FSS], and gladly," said Mary Whitley, deputy assistant commissioner of the FTS Office of Information Technology Integration.

In fiscal 1997, GSA's Federal Systems Integration and Management Center (Fedsim) used the FSS schedules for $75 million in hardware and services, and in fiscal 1998 that number jumped to $231 million. Fedsim estimates 60 percent of the revenues from those two years were IT services, Whitley said.