Giving feds what they want

Timing is everything. And when it comes to General Services Administration Schedule 70 sales, CDW-G Inc. officials couldn't agree more. A newcomer to GSA's top information technology sales list, CDW-G posted the second largest year-to-year gain in schedule sales — behind Accenture — amassing $81.9 million between July 1, 2000, and June 30, 2001, the latest 12-month figures available. In the previous 12 months, CDW-G's GSA schedule sales were $31.7 million.

At the same time Gateway Inc., which has consistently ranked fifth on the list, slipped to ninth place, with $157.5 million in schedule sales for the 12 months ended June 30. A year ago, Gateway's Schedule 70 sales for the July-June span totaled $226.3 million. Gateway officials declined to comment on the company's ranking.

CDW-G's 158 percent gain, propelling it to No. 21 on the list, means it not only outstripped ManTech International Corp. — a list stalwart that ranks 24th this year — but knocked off the list other longtime placeholders such as Government Micro Resources Inc.

That's not bad for a company that didn't even have a sales force in the field three years ago.

CDW Computer Centers Inc. launched CDW-G, its first wholly owned Subsidiary, in September 1998 to focus specifically on the public-sector market, said Larry Kirsch, CDW-G senior vice president. "We wanted to bring our best business practices to the public sector," he said. "We also realized that government people were flocking to our commercial division because they weren't being served as well as they could have been by people who were by nature public- sector resellers."

Founded in 1984, CDW Computer Centers has never exactly become a household word. Still, the company pioneered practices now considered standard for "direct" computer sales: maintaining a vast product inventory, providing a highly trained, knowledgeable telephone sales staff and offering customers custom computer configurations, lifetime phone and online technical support, and next-day shipping.

The company launched its Web site in 1995 and began offering online ordering a year later. Today, it has more than 2,700 employees and net sales of $3.8 billion in 2000.

Since its inception, CDW Computer Centers had sold to the federal, state, local and public education sectors. But as the federal government moved toward procurement reform — first with the Federal Acquisition Streamlining Act of 1994 and then with the Clinger-Cohen Act of 1996 — a synergy between the company's way of doing business and the federal government's needs began to appear, Kirsch said.

"Take the things we do regarding configurations at no charge. That was unheard of three years ago in the public sector," he said. "Toll-free lifetime tech support, our ability to customize on the Web — our government customers were saying, ‘You mean you do that normally? That's included in the price?' Some of them were shocked."

Even with a successful commercial business model to fall back on, CDW-G had to learn to deal with the vagaries of selling to the federal government, Kirsch admitted. Company officials had to learn about governmentwide area contracts, blanket purchase agreements and indefinite-delivery, indefinite-quantity contracts — not to mention customers who expected to be approached in a certain way, or not approached at all.

"We came from an environment that wasn't as contract-centric," Kirsch said. "There were a lot more rules to be applied. And we had to address the nuances of who we were dealing with as a customer, and what constraints that customer was under that were different from our commercial customers."

CDW-G's efforts have proven so successful that the company almost doubled the space in its shipping and receiving warehouse in Vernon Hills, Ill., this year. Its only outside sales office is located in Lansdowne, Va., about 30 miles outside of Washington, D.C.

Browning is a freelance technology writer in the Washington, D.C., area.