Agencies Seek to Leverage Buying Power The Defense Department is developing plans to centralize its purchase of services, a strategy that could lead to additional contract bundling. The effort is part of a growing emphasis throughout the government on volume purchasing to save money. DOD is analyzing how it could buy services from “lawn-cutting up to IT services and everything in between” department-wide, rather than through many individual contracts, said Dominic Cippichio, deputy director of defense procurement. He spoke Oct. 29 at the fall conference of the Coalition for Government Procurement in Arlington, VA. He said the goal is to improve coordination among the armed services and to “achieve the efficiency and leverage of the whole department’s buying power.” But Cippichio acknowledged that the strategy raises concerns about bundling. “If it’s an area where we are buying a lot from small businesses, we might do a set-aside (or) we might take a regional approach,” he said. As an example, he said an Army post and a nearby Air Force base might award a single contract for grounds maintenance at both installations. The effort is still in the acquisition-planning stage. “We are very decentralized in our approach, and we needed a more strategic look at this,” he said. “We looked at what services we were buying, who bought them, for how much and tried to analyze the data to find areas that could be coordinated better.” DOD is working toward launching a pilot program for department-wide purchase of administrative services next fall, Cippichio said. Other candidates for pilots are management services and information technology services. GSA’s senior procurement executive, David Drabkin, also highlighted the need for the government to use its market clout. “We are not getting the best prices in some cases because we are not taking advantage of our market share,” he said at the same conference. For example, he declared, “There’s no reason to buy shrink-wrapped software” off a store shelf. Under prodding by the Office of Management and Budget, GSA is negotiating with vendors to buy governmentwide software licenses. OMB estimated the project, known as SmartBuy, could save $100 million a year. GSA is also pushing a program that allows buyers to bundle purchases through more than one GSA schedule into a single order. The program, originally called the Corporate Schedule, is aimed at companies that hold multiple schedule contracts. Neal Fox, assistant commissioner of GSA’s Federal Supply Service, told the conference that the Corporate Schedule has existed for several years, but has not been widely used. It has been renamed Consolidated Products and Services Schedules and contracting officers will be trained on how to use it. Other departments are also taking steps to centralize and consolidate contracts. The Veterans Affairs Department announced last year that it would buy more of its supplies and equipment through national contracts and reduce the number of vendors it uses. (SAA, 6/14/02) When the Homeland Security Department was formed this year, its component agencies began examining their individual contracts to see which ones could be consolidated into single department-wide awards. GSA’s Drabkin acknowledged that the government’s push for large-volume discounts 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. But he denounced what he called “a misperception…that small business is being discriminated against, being cut out of federal contracts, being pushed out of the marketplace. That’s just not true. “Anybody who thinks that there’s a contracting officer in the federal government who is not concerned with small business hasn’t talked to a contracting officer. It’s on everybody’s mind.” His statement sounded like a rebuke to criticism by Angela Styles, OMB’s administrator of federal procurement policy until September. On her last day in office, Styles warned of “a very negative culture toward small business” in the federal government. “Small businesses are getting the dregs of procurement,” she told the annual meeting of Women Impacting Public Policy. “And I think there is a very strong perception that these (small) businesses are getting business they don’t deserve, getting business they couldn’t receive through competition.” (SAA, 9/19)