Changing Face of IT Contracting: GSA Schedules Grab Growing Share of Dollars GSA schedule orders accounted for nearly one-third of federal information technology spending in fiscal 2002, according to an analysis by the market research firm Input of Chantilly, VA. “The 1996 reform of the GSA Multiple Award Schedule has changed the face of government IT spending,” the analysis said. Input said IT spending through multiple award schedules grew to 31% of total dollars in 2002, from 7% in 1997. During the same period, full and open competitions shrank to 41% of the dollars, from 57%. Set-aside contracts remained relatively steady at around 5% of the total. If the trend continues, Input said spending on multiple award schedules will be nearly equal to the dollars awarded in full and open competitions within two years. “Government contracting was once ruled by those who could build lasting relationships and provide valued products and services,” Input said. “As with everything in today’s society, government contracting has become a fast-paced game which no longer relies on tried and true relationships. Rather, it is about who can deliver the goods or services on time and at the lowest rate. “Also, in an era of competitive acquisitions and strategic partnerships within the vendor community, a predominant reliance on multiple award schedules by vendors often makes it more difficult to sustain a long-term contract backlog, thereby increasing corporate risk.” In a separate report, the General Accounting Office said orders for IT services placed against GSA schedule contracts grew more than tenfold from 1997 through 2001, from about $405 million to $4.3 billion. Total federal spending for IT services nearly doubled during the same period, to more than $17 billion, GAO said. Counting all federal IT services contracts, GAO reports small firms were awarded 14% of the dollars in 2001, or $2.5 billion. Medium-sized firms, defined as those with annual revenues between $21 million and $500 million, received 21% and large businesses received 62%. GAO said the two largest IT services contractors, American Management Systems Inc. and Lockheed Martin Services, received a greater percentage of contract dollars than all 2,167 small firms combined. “The federal supply schedule was a more important source of contract dollars for medium-size businesses compared to small or large businesses in fiscal year 2001,” GAO said. “Medium-size businesses received about 39% of their contract dollars through the federal supply schedule, small businesses about 35% and large businesses about 18%.” GAO conducted the study in response to a request from Rep. Tom Davis (R-VA), chairman of the House Government Reform Committee.