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Posted: 7/21/2011 - 2 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]

GSA Administrator Martha Johnson announced July 20th that her agency’s IT Multiple Award Schedule will offer only products that comply with either ENERGY STAR or the government’s own Electronic Product Environmental Assessment Tool (EPEAT). It will be interesting to watch whether the greater impact of this move falls upon GSA or its contractors.

Johnson’s announcement came as no surprise to anyone who has heard her speak over the past two years. Dozens of companies, in fact, have already moved toward offering ENERGY STAR-only IT products or similar “green” solutions. While GSA will have to use some common sense in circumstances where there is no identifiable “green” benchmark, I am not sure that Johnson’s announcement will cause a tidal wave of anxiety from contractors.

The impact on GSA, however, may be more substantial. The IT Schedule is not currently operating at peak efficiency. It is lethargic and its total sales have stagnated for the past several years. While annual sales are on track to reach almost $17 billion this fiscal year, the IT Schedule has been losing market share to contracts like NASA SEWP, specific agency MACs, and even GSA’s own Alliant contract. The IT Schedule team does not move at the speed of customer need these days. Adding a new stumbling block to a contract method already hobbled may not be the best prescription for IT Schedule health.

Why does this matter to GSA? The Industrial Funding Fee generated by IT Schedule sales pays not just for that program, but subsidizes a substantial part of the agency’s staff offices, such as the chief acquisition officer, chief information officer, general counsel, and others.  Adding a new requirement to your IT program in a market filled with options that are already more nimble may impact operations throughout your agency.

The Federal IT market is full of contracting options. There are hundreds, if not thousands, of IT acquisition vehicles. These are vehicles that offer solutions to customers across the full spectrum of potential needs. If some government buyer has a legitimate need for IT equipment that isn’t ENERGY STAR compliant, they will still get what they want, but it won’t be from the GSA Schedule.

I have never been a big fan of limiting customer choice via contracting. Presuming that you know what is best for your customer and will offer only those solutions, is an approach that has a long track record of failure in the government market. Customers vote with their purchase cards and buy as they see fit, not from an agency that makes them eat their vegetables.

None of this even begins to touch on Johnson’s similar announcement that contractors will be required to step up their “take back” capabilities as well. That is an added cost to contractors that will make the IT Schedule even less attractive.  

So, contractors and Federal buyers will continue to do business in the Federal IT market.  Will GSA, however, become simply so over-burdened with unique requirements and costs that it offers the best sustainable program that no one will buy? Stay tuned

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