Selling to the Feds:

Procurement Vehicles

Previously, we talked about the federal procurement sales cycle. You understand that the federal government’s acquisition of goods and services follows an annual cycle tied to its October 1 to September 30 fiscal year. You’ve told your company’s home office not to expect a large volume of sales in the winter and spring months, but to wait until the summer and fall buying season. You’ve explained to them that the government’s fiscal year cycle requires you to plant procurement opportunities in the winter and spring, and harvest orders in the summer and fall.

Now you’re ready to do some planting of your own at some federal agencies that you are familiar with from sporadic orders your company has received in past years. But wait! You need a vehicle! I don’t mean a truck or even a company car. I mean a “contract vehicle,” a procurement vehicle against which federal agencies can place orders. Unless you have a contract vehicle in your pocket, a competitor with a ready vehicle may very well end up harvesting orders for procurement opportunities that you planted.

Even just a few years ago there were hardly any ready-made procurement vehicles in place. Procurement opportunities planted in the spring turned into open competitions later in the year. The most you could do was try to get an inside track on the acquisition. Agencies were required to publish notices in the Commerce Business Daily (CBD) of their intent to procure goods and services estimated to cost more than $25,000. Procurements over $100,000 turned into full-fledged Invitation for Bids (IFB) or Request for Proposals (RFP). Even orders placed against GSA Schedules were routinely published for competition. In addition, a notice of the award of the contract was also either published in the CBD or disseminated among competitors, giving losing bidders notice of the loss and the opportunity to protest the award.

Times have changed. GSA Schedules have effectively consigned RFPs and IFBs to the dustbin of procurement history. Agencies may place orders against a GSA Schedule without first publicizing the procurement in the CBD, no matter what the contract price. All the agency has to do is quietly review the GSA Schedules of two other comparable GSA Schedule contractors. Agencies are no longer restricted by the GSA Schedule’s Maximum Order Limitation; multi-million dollar orders are permitted. And there is no notice of award. Only the GSA Schedule contractor knows that an order has been placed; its competitors are left in the dark.

What’s more, GSA Schedules now include services and leasing as well as hardware sales. Agencies can use a company’s GSA Schedule for one-stop shopping to design an audio-video-computer system, buy the components, and then integrate them into a complete state-of-the-art system. If a GSA Schedule contractor lacks some of hardware or software needed for a complete system, the contractor can “team” with another GSA Schedule contractor, or contractors, to offer a complete solution, soup-to-nuts. If the agency can’t afford the cost of the system, then the GSA Schedule contractor can lease it to the agency over time; the contractor can “sell” (legally speaking, “assign”) the stream of lease payments to a finance company and pocket the purchase price.

Given the growing power of GSA Schedules, a hardware or services vendor is an outright sap not to have a GSA Schedule contract before marketing in earnest to federal agencies. It’s gotten so federal agencies expect a company to have a GSA Schedule. If you don’t have a GSA Schedule for a potential sale over $25,000, you are basically forcing the agency to conduct a procurement for your products. With the government’s downsizing having reduced the number of procurement specialists, agencies are loathe to draft specifications and evaluation criteria, publicize the procurement in the CBD, evaluate offers, and then fend off potential bid protests, just to buy your products. Thanks, but no thanks. Unless your company’s products are so special or unique that the agency has just got to have them, the agency will likely reconsider your products and instead turn to a competitor that has a GSA Schedule contract in place.

There are other procurement vehicles in addition to GSA Schedules. Simplified Acquisition Procedures (SAP) allow an agency to buy goods or services under $100,000 by comparing three sources. However, many agencies still publicize SAP buys over $25,000, exposing the vendor that initiated the buy open to competition. Blanket Purchase Agreements (BPA) provide agencies with a charge account for repetitive buys of goods or services under $100,000. But nowadays, agencies prefer GSA Schedule BPAs, which combine the benefits of both vehicles.

Next are Indefinite Delivery Indefinite Quantity (IDIQ) contracts. IDIQs are agency-specific GSA Schedules, allowing the agency to order a wide range of products from a single vendor merely by placing a purchase order. To get an IDIQ contract, however, requires a vendor to survive a full-fledged competitive procurement, which can take many months. Once the IDIQ contract is awarded, there is usually no guarantee of orders, so the IDIQ contractor may still have to compete with GSA Schedule contractors. Moreover, current procurement law encourages agencies to award multiple IDIQ contracts for the same or similar goods and services. Once these contracts are awarded, the IDIQ contractors compete among themselves for agency orders.

Finally, there are Government Wide Acquisition Contracts (GWAC). GWACs are IDIQ contracts open to many different agencies. GWACs allow the administrating agency to expand the impact of the contract to justify the agency’s procurement shop, and sometimes to collect fees from the buying agency for use of the GWACs vehicle. Getting a GWAC, like an IDIQ contract, is not easy.

Whatever your company preference, the point is that you must have a vehicle ready and available when you visit with agency users and talk to their procurement personnel. You want to make it easy, not hard, for the agency to buy your product. Not having a ready contract vehicle these days is a roadblock, a barrier, a hassle. Even worse, it’s a sign to an agency that your company is not a player; your company is not dedicated to and does not understand the federal market.