Contract world shrinks

The landscape of governmentwide acquisition contracts (GWACs) is soon to change.

General Services Administration officials, responding to a report from GSA's Contract Vehicle Review Board, plan to consolidate two of the agency's broad information technology GWACs and allow several specialized ones to die in an effort to streamline GSA offerings.

The Applications 'n Support for Widely-Diverse End-User Requirements (ANSWER) and Millennia contracts will be combined into a single replacement contract in 2005, said Neal Fox, assistant commissioner for commercial acquisition at GSA's Federal Supply Service. The agency will stop making new awards under the old contracts six months after the new one becomes effective, even though ANSWER was not set to expire until 2007 and Millennia in 2007.

The contracts cover a gamut of IT services, Fox said. The new one will combine the best features of each, including greater flexibility in pricing to include time-and-materials pricing, and cost-plus and fixed-price models.

Requiring vendors to bid on multiple contracts that duplicate one another increases their costs, he said. The process is also cumbersome and confusing for agencies and increases GSA's costs, he added. The procedure has been a longstanding industry concern.

Agency officials plan to retire eight narrowly focused contracts, primarily by not renewing them as they expire in the next few years. The board recommended, however, that GSA study the value of two of those contracts, specifically those dealing with smart cards and electronic access to government services, before making a final decision to eliminate them.

"What we're trying to do is refocus our strategies along the lines of more broad-based vehicles and fewer specific vehicles," Fox said. "We've found that the specifically focused vehicles duplicate what's in the broader vehicles and confuse our customers."

Vendors that depend on the specialized GWACs should get onto the GSA schedules as soon as possible, he added.

Some procurement experts questioned the wisdom of eliminating the smaller ones. The government has bargaining power with vendors competing for a few slots on a specialized vehicle that it lacks with broader schedule contracts, said attorney Jonathan Aronie, a partner in the government contracts group of Sheppard, Mullin, Richter, and Hampton LLP in Washington, D.C.

Consolidating ANSWER and Millennia makes sense from GSA's standpoint, but the agency should take care to allow ample transition time, said Alan Chvotkin, senior vice president and counsel at the Professional Services Council.

In his inquiries to the agency, Chvotkin said, he has not been satisfied that officials have taken that adequately into account. "I've not heard that clearly articulated," he said. "It's one of those 'of course' answers that I'd like to get and haven't gotten."

Although Chvotkin generally supports the consolidation of redundant contracts, others aren't so sure. Chip Mather, senior vice president of Acquisition Solutions Inc., worries that agencies will be increasingly driven to create indefinite-delivery, indefinite-quantity (IDIQ) contracts that won't be available to other agencies.

There are already barriers, he said. Agencies that want to use Millennia, for example, have to go through GSA's contracting office, which adds as much as 15 percent to overhead costs.

"Vehicles are good, but you need to have access to them. That motivates agencies to create other IDIQ multiple-award contracts," Mather said. But agencies want to use such contracts because that's much easier than conducting a competition for each award.

"Put a gun to my head before I do a full and open competition," he said.

Vendors should also expect to see the landscape change, said Scott Orbach, president of consulting firm EZGSA in Bethesda, Md. "It may open opportunities for some new vendors to participate where they haven't been before," he said.

GSA's Contract Vehicle Review Board, established in 2002 when the agency realigned its FSS and Federal Technology Service, has studied the contracts to identify and eliminate redundancies. The actions do not affect the agency's schedules system, Fox said.

"From the government side, we'll see some simplification of the rules," Orbach said. "You'll see wider competition because those narrower offerings will go away, and you'll see everybody coming from a larger pool of vendors."

Contract review board members will continue analyzing GSA's contract offerings, and the agency may make further changes in the future, he said.