The General Services Administration is advancing on several fronts in its strategic sourcing initiatives--generating ongoing and growing concerns for small vendors, along with opportunities.

The GSA is about to release a solicitation for its third-generation office supply program. It also has initiated a Microsoft software strategic sourcing program and is preparing to make awards for “JanSan” janitorial and sanitation products.

The GSA on Nov. 26 issued a draft Statement of Work for the upcoming Offices Supplies 3 (OS3) blanket purchase agreement. The contract is valued at up to $1.25 billion over five years.

Instead of pools of contractors, as was done in OS2, GSA is structuring OS3 around four contract line item numbers (CLINs).

Also unlike OS2, which was limited to GSA Schedule 75 contractors, OS3 bidding is open to contractors not on Schedule 75.

CLIN 0001 will have 14 awards exclusively for small businesses. It is for the full catalog of office supplies. At least two of the 14 awards will be for “SDVOSBs,” which the Statement of Work described as Small Disadvantaged Veteran-Owned Small Businesses. (Editor’s note: That term appears to be in error in the GSA document. The official SDVOSB program is for Service-Disabled Veteran-Owned Small Businesses. GSA officials were not immediately available to respond)

CLIN 0002 is for paper only, and the anticipated three awards will be set aside for small firms.

CLIN 0003 is for toner and ink only and will be set aside for SDVOSBs (see Editor’s note above), with three contract awards planned.

CLIN 0004 is called “GSA On-the-Go, which will be bid under full and competition to large and small vendors, including consortiums. Contractors will need to propose same-day delivery and expedited deliveries for urgent purchases. The number of awards was not specified.

In addition, GSA will issue a separate solicitation for its Supply Transformation Program for office supplies that comply with the Trade Agreements Act and the AbilityOne program. That program is valued at about $250 million a year.

An industry day will be held on Dec. 10.

GSA said it expects to issue the draft solicitation shortly and the final Request for Proposals by year’s end.

The OS2 program has been fairly successful. GSA made 15 awards on that program in 2010.

The OS2 blanket purchase agreement saved the government $48.6 million on office supplies in fiscal 2013, and $246 million was spent through the agreement, according to StrategicSourcing.gov.

The agency said it expects OS3 to save $65 million annually on administrative costs and an additional $90 million a year saved through lower prices.

Like its predecessors, OS3 is raising anxieties for some small contractors.

It’s especially worrisome for current Schedule 75 contract holders that have worked hard to get on the schedule but now, if they want to be on OS3, are likely to face much stronger competition from large and small vendors not on Schedule 75, Sam Bornstein, professor at Kean University School of Business who runs the BornsteinSongFSSI.com website, told Set-Aside Alert.

“In a nutshell, my concern is there will be winners and losers,” Bornstein said. His research on OS2 found that the 550 Schedule 75 holders not on OS2 experienced an average drop in sales of 60% from June 2010 to June 2013. The 15 OS2 winners experienced an average 145% increase in sales, he said.

Also, the National Office Products Alliance recently issued a warning on OS3. “If OS3 goes into effect...over 500 independent office products dealers will be locked out from doing business with the federal government,” the alliance wrote on its website (NOPAnet.org).

Rep. Sam Graves (R-MO), chair of the House Small Business Committee, told Federal News Radio he had concerns about OS3 as well: "This contract could be detrimental for (Schedule 75)... While a few small businesses will do very well under OS3, hundreds of small businesses will lose the opportunity to compete for federal contracts.”

On the other hand, lawmakers and the Government Accountability Office have pressed the administration to find savings through strategic sourcing.

In related news, the GSA recently issued a request for quotes for Schedule 70 vendors to bid on a blanket purchase agreement for Microsoft software and services. The program is called SmartBUY Large Publisher.

The contract is valued at up to $5.3 billion. Bids are due Dec. 18.

The GSA said the government can save 15% to 20% on the government’s $6 billion in annual software purchases under this and other software BPAs.

Meanwhile, the GSA recently finished receiving bids for the JanSan strategic sourcing BPA. The GSA also is getting ready to make awards for the Maintenance, Repair, and Operations program. GSA said 11 agencies are committed to use JanSan and eight agencies to use MRO.

More information:
GSA OS3 Draft Statement of Work: https://interact.gsa.gov/node/184657#startcomment
FederalNewsRadio article: http://goo.gl/5sjmwi
GSA release http://www.gsa.gov/portal/content/181895