VARs Win Big with GSA Schedule Contracts
Statistics show that more and more companies are seeing the benefits of participating in GSA Schedules. Sales from Schedule 70--which provides government agencies with IT and telecommunications hardware, software and professional services--have seen an average of 15 percent annual growth since 1998, reaching $17.8 billion in 2004, according to McLean, Va.-based Federal Sources Inc. (FSI), a government IT market intelligence firm.
Of course, GSA Schedules are contracts awarded by GSA's Federal Supply Service. They often incorporate such features as blanket purchase agreements (BPAs), teaming of resellers, price reductions, and maximum ordering provisions that essentially require agencies to go to the contractor for a discount when a particular ordering level is reached. Generally speaking, GSA Schedules assure agencies the best prices and provide VARs with five-year government contracts with three five-year option periods thereafter. Whether VARs opt to have their own GSA Schedule or piggyback on those of partners, experience with GSA Schedules enhances credibility, being regarded as the "high school diploma" of government contract work, says Alex Hart, director of public-sector channel sales for Symantec.
Growth in sales from GSA's IT schedule contracts are not restricted to the federal government either. Cooperative purchasing allows state and local government entities to purchase IT from contracts awarded under Schedule 70, as well as from contracts under the Consolidated Schedule that contains IT special item numbers. The result was $5 million in state and local sales in 2003, $75 million in 2004, and $65 million to date in 2005, according to FSI. "Over the next three to five years, we'll see a big increase in state and local governments using the GSA Schedule program," said FSI president and CEO Bill Gormley in a presentation at Tech Data's TechEDG conference Wednesday.
VARs reluctant to follow GSA Schedules because of lengthy award cycles can streamline orders to speed up the process, Gormley said. The average number of days associated with winning an Indefinite Delivery Indefinite Quantity contract, for example, is 268; that's compared to 49 days to win a newly established BPA, 15 days a contract from an established GSA Schedule, and 13 days for an established BPA. BPAs simplify the filling of recurring needs for supplies or services, reducing paperwork and saving time. Regardless of contract type, GSA Schedules offer a fairly stable road in to the public sector, Gormley said--which is not always easy to find. "A GSA Schedule contract is the lowest cost entry into the federal government--period."
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