Agencies Push For Bigger Contracts, Fewer Vendors While President Bush has rolled out new policies to combat unjustified contract bundling, many agencies continue to move toward larger, consolidated contracts and fewer vendors as they seek to use their buying power to get lower prices for products and services. The Internal Revenue Service is among the latest to join in. IRS is consolidating contracts under its strategic sourcing initiative, said John Ely, deputy director for procurement. In another sign that contract consolidation is the “flavor of the year,” the Department of Homeland Security plans to “go from many to few” IT contracts as it moves to integrate systems in its various agencies, said the department’s chief information officer, Steve Cooper. He said DHS will create “one infrastructure.” He spoke Feb. 26 at a conference in Washington sponsored by the Armed Forces Communications and Electronics Association. Ely said the prototype for IRS’s strategic sourcing was the agency’s cell phone program. In 2001 IRS had 30 overlapping contracts for cell phone products and services. It has reduced the number of contracts to three. Ely said that saved $5.4 million in the first year. The agency now plans to consolidate its spending on copiers, printers and faxes. IRS has been buying those products primarily through the GSA schedule, spending more than $24 million a year with more than 100 vendors. Ely said consolidating those purchases could save $1 million to $2 million annually. He spoke Feb. 19 at a seminar in Falls Church, VA, sponsored by Eagle Eye Publishers. In another recent consolidation, NASA awarded the $966 million Research Operation, Maintenance, and Engineering (ROME) contract to Jacobs Sverdrup in January. The contract combines 11 existing contracts for a broad range of research facility-related operations, maintenance, engineering and related information technology support services. GSA finally found its first partner for the SmartBuy enterprise software licensing program. It signed an agreement last month with Environmental Systems Research Institute, a geographic information systems vendor. GSA administrator Stephen Perry said the SmartBuy program can “save tens of millions of dollars by leveraging the government’s consolidated buying power.” But industry has been slow to embrace it; the first agreement was signed eight months after the program was announced. Last year a Defense Department official said the department was working on a pilot program to consolidate administrative services contracts, as a first step toward centralizing its purchase of services. GSA’s senior procurement executive, David Drabkin, acknowledged last fall that the push for economies of scale will hurt small firms. “We have to find another place in the market where they can go to get the same market share or more, to make up for what they’ve lost,” he said. (SAA, 11/14/03)