DOD, GSA Sign and Make Up GSA and the Defense Department have signed a new agreement aimed at clarifying rules for interagency contracting and mending GSA’s fences with its largest customer. The memorandum of agreement, announced Dec. 12, is intended to settle disagreements between the two agencies over acquisition rules. Auditors from both agencies have found irregularities in DOD’s purchases through GSA contract vehicles, and resulting policy changes led some DOD buyers to cut back their use of those vehicles. The loss of DOD business has hit GSA hard. The agency reported sales through its governmentwide acquisition contracts fell by almost one-third to $2.4 billion in fiscal 2006. Sales of IT services on GSA schedules dropped 6.5% year-over-year, according to an analysis by the market research firm Input. In the agreement, GSA accepted the Defense Department’s view that money cannot be parked in GSA accounts and carried over into a new fiscal year. GSA has returned hundreds of millions of dollars to DOD because the department’s lawyers said authority to spend the money had expired. GSA Deputy Administrator David Bibb said, “We at GSA believe this [agreement] sends a strong signal of each agency’s intent to work closely with one another.” The agreement details 22 areas on which GSA and Defense will work together. One area is to ensure consistent practices across all 11 GSA regions. Some of the regional offices were the focus of critical inspectors generals’ reports in the past. GSA Schedule Sales Flat Total GSA schedule sales increased less than 4-tenths of one percent in 2006, slowing dramatically after years of double-digit gains. GSA said sales totaled $34.8 billion, up from $33.6 billion in fiscal 2005. The drop in IT sales dragged down the numbers, because the IT Schedule 70 is by far the largest of the schedules, with $16.3 billion in sales last year. It was the second straight year of decline on Schedule 70. Overall federal spending on IT is growing, indicating that customers are going elsewhere. While GSA officials expressed confidence that the new agreement will make their contract vehicles more attractive to DOD buyers, some authorities say the damage to GSA’s business could be long-term. “Rising competition from department-specific multiple-award contracts, one external factor contributing to the IT Schedule’s descent, will not ease off in the near future,” said Input analyst Ashlea Higgs. “We see more and more vendors increasing their business development investment in non-Schedule task order vehicles and in teaming with their peers to stay in front of agency buying preferences and contract consolidation, respectively. Non-Schedule contract vehicles capture a bigger share of IT spending each year.” Schedule sales grew at double-digit rates each year from 1997 through 2005. SEWP Stays at NASA GSA Administrator Lurita Doan lost a battle in her drive to take over other agencies’ government-wide acquisition contracts. The Office of Federal Procurement Policy has reauthorized NASA’s Scientific Engineering Workstation Procurement (SEWP) for the fourth time. Doan had argued that SEWP duplicated GSA’s contract vehicles and that GSA was better able to manage those procurements. In announcing his decision Dec. 18, OFPP Administrator Paul Denett said SEWP provides “high-end technology solutions that were not readily available on other federal interagency contracts.” “There is a need in the federal marketplace for the SEWP IV GWAC,” he said, “and...NASA is well-suited to serve as its executive agent.”