Should State And Local Government Be Able To Access GSA Schedules?

Last week, the acting head of the General Services Administration (GSA), Jim Williams, recommended that state and local government should be given full access to the schedules of goods and services that contractors sell to the federal government.  According to Williams “GSA should leverage its tremendous purchasing power horizontally across the entire Federal Government and vertically across state and local entities to provide customers with goods and services at the lowest price”.  There are already a couple of GSA schedules that are open to non-federal government agencies (notably IT products) but this proposal would take state and local government procurement it to a whole new level.

The advantages for state and local government are twofold.  First, lower prices because GSA providers negotiate discounted pricing that they might only offer their best customers.  Second, buying from a GSA schedule means a relaxation in the formal bidding rules and a more simplified procurement process.  Equally the advantages to businesses already on GSA schedules are obvious – they should be able to sell more of their goods and services because there will be a larger number of buyers.

But while this might initially look appealing, is it really in the best interest of local government?  And how will it affect the many small local businesses that bid on city and county contracts if the federal government opens up the GSA schedules?

Here are 3 reasons why Mr. Williams’s proposal might not be so compelling:

1. Competition could be reduced:  My bet is that the majority of the many millions of vendors who bid on local government contracts today won’t attempt to get on a GSA schedule.  Why?  Because it is a protracted process, involving a great deal of paperwork, requiring a lot of patience and ongoing administration and once a company is on a schedule it does not guarantee sales.  GSA schedules are not small / local business friendly.  The vendor that has a small pest control business, landscaping company or other type of business whose goods and services are regularly purchased by municipalities will likely lose an opportunity to bid because they won’t be on a schedule.  That means competition, the one thing local government purchasing professionals are continually looking to increase, may actually fall
2. Local communities might suffer in the long term:  If local vendors aren’t on GSA schedules and therefore aren’t awarded contracts it is the community that will suffer.  Local government is the biggest business in town and it plays an important function when it directs its spending on local vendors.  By doing so, it helps people in the region get employed who spend money and pay taxes locally, all of which are ultimately reinvested in the community.  It is easy to see what might happen if the county or city starts to buy from vendors that are from out-of-town.  Sure they might get a marginally better price but that saving might prove to be much more costly in the long term
3. Local purchasing procedures may be eroded:  Government purchasing rules are often bemoaned by both vendors and agencies.  One of the most compelling reasons for agencies to choose cooperative purchasing and be in favor of opening up the GSA schedules is streamlining the procurement process.  But the strict procurement rules that are in place in many local government agencies were created for good sound reasons.  They ensure that the process is transparent and open, that the best vendor is chosen and provide a check on those in power.  If local government entities significantly increase their buying from co-operative agreements (especially when set-up outside of their regions) there is a chance some of these benefits are lost

In conclusion, I think government at all levels must proceed with caution before wholeheartedly supporting any proposal to open up GSA schedules to state and local entities.  PublicSpend is a big champion of the local small vendor.  It is these businesses that are the backbone of the American economy and we need to ensure that they have the best opportunity to succeed.  We believe that state and local government support by buying from local companies is crucial.

Tagged as: GSA, GSA Schedules, Jim Williams