If you sell to the federal government, you've
undoubtedly been asked: "Are you on the GSA Schedule?" Answering
"no" doesn't necessarily preclude you from government business,
because you can team with other companies and use their contracts. But
if you want to maximize federal revenues, consider setting up your own
General Services Administration (GSA) contract.
In many ways, a GSA contract is "your ticket to the dance,"
says Jason Bystrak, senior manager of channel marketing at Ingram Micro.
"You almost have to have one to be considered a serious player by
government procurement officers."
The GSA is the federal government's procurement and property management
agency. The GSA Schedule is a collection of 43 indefinite delivery/indefinite
quantity (IDIQ) contracts (also known individually as schedules); each
covers a group of products or services. Information technology products,
for example, have the contract called Schedule 70. About 27 percent of
federal IT purchasing went through the GSA Schedule in 2006, according
to INPUT, which does research and consulting on the government market.
Procurement officers prefer to purchase through the GSA because of the
convenience of pre-established pricing, terms and conditions. And by having
a GSA Schedule, you build up a performance record with the government,
making it easier to go after other government business. That includes
state and local governments, adds Bystrak, because about 40 states permit
purchasing from the GSA Schedule.
How should you decide whether and when to get your own GSA contract?
With pros and cons on both sides, there's no easy formula. This article
explores the issues and offers advice on getting started.
Making the GSA Decision
First and foremost, follow the lead of your customers. If your most important
customers are asking for GSA, it's a no-brainer.
"We reached a point where, in order to go forward into certain types
of accounts with certain manufacturing partners, and to grow into certain
types of business, we needed a GSA Schedule," says Wick Townsend,
senior vice president for business development at Dataline, a $100 million
federal government solution provider. The company has had its own GSA
Schedule for seven years. "Customers wanted to deal with us as their
prime contractor," Townsend says, "and the OEMs and software
suppliers that we worked with wanted us to step up and offer our own prime
On the other hand, customers may want to buy through a different contract,
in which case you can partner with another company.
Help from Ingram Micro
Ingram Micro's GovEd Alliance offers several resources to help
solution providers set up and maintain a GSA Schedule:
- GSA Pass Through Program. This program helps solution providers
obtain Letters of Supply from manufacturers, a requirement to
include products on a GSA Schedule. Some manufacturers will support
any resellers, others only selected partners. Ingram Micro also
helps resellers maintain their GSA contracts by regularly passing
through manufacturer-certified information such as updated pricing
and product documentation. These notifications include all data
requirements on listed products, such as country of origin, warranty
length, Special Item Numbers, Energy Star and Section 508 information.
"A lot of legwork goes into keeping this information up to
date," says Kate Carroll, senior manager of GovEd Alliance
business operations at Ingram Micro. More than 80 manufacturers
and about 100 resellers participate in the program, which costs
$500 annually ($375 for GovEd Alliance members).
- Discounts. Ingram Micro negotiates 10 percent discounts for
GovEd Alliance members for products and services that will help
with GSA contracts. These include the services of JDS Marketing,
which will negotiate a GSA Schedule and help manage and maintain
it; and SenSoft International's online contract management services,
which help automate data uploads to the GSA web site.
- Partner Locator. This is an online tool enabling GovEd Alliance
members to enter information about their businesses, including
details on their GSA and other contracts, and whether they hold
small- or disadvantaged-business certifications. The listing then
gives prime contractors and subcontractors a way to partner up.
"We encourage resellers to team with each other," says
For more details, Ingram Micro's customers can contact our GovEd Services team.
You'll need to determine which manufacturers you want on your schedule,
and which you will be allowed to include. The GSA requires solution providers
to obtain a Letter of Supply (LOS) from their manufacturers. The LOS guarantees
a source of supply for the contract period, usually five years, and provides
commercial data supporting the prices being offered.
But large manufacturers won't always cooperate, either because they prefer
to sell direct to the government through their own contract, or because
they sell only through a few hand-picked solution providers.
But a lack of certain large manufacturers doesn't mean you should forgo
your own schedule. Sometimes having a schedule opens opportunities to
team with large systems integrators on big government projects. In some
cases, it pays to have high-quality, smaller manufacturers that aren't
As an example, GovBuys, a five-employee solution provider, recently got
included in a group of blanket-purchase-agreement contracts for data encryption
products worth more than $79 million. Having an encryption product called
WinMagic from a small Canadian company on its schedule was the key, says
Gary Block, president of GovBuys. "They wanted the WinMagic product,
so that's how I got into the mix," he says. "Now I've got Lockheed
Martin calling me."
"You almost have to have a GSA
contract to be considered a serious player by government procurement
- Jason Bystrak, Ingram Micro
Ensuring Your Competitiveness
There's no sense setting up a schedule if you won't be competitive. Once
you determine which manufacturers to include, research those already on
the GSA Schedule to ensure that you can meet or beat their pricing. This
information can be found on GSA Advantage! (www.gsaadvantage.gov,
the GSA's online shopping and ordering system).
Debbie Wolland, president of consultancy JDS Marketing Group, sometimes
advises solution providers against getting their own schedules if their
manufacturers have little or no control over pricing in the commercial
marketplace. That's because under the GSA, you have to sell at or below
the lowest commercially available price. If there's a price war going
on, a GSA contract could slice your margins to the bone.
Making a Commitment
If you want your own GSA Schedule, be prepared to commit time and money
to establishing and maintaining the contract. Key steps include:
- Filing the paperwork, including paying for a third-party survey of
your past performance
- Negotiating with the GSA, which drives a hard bargain
- Maintaining your contract by updating price lists and product information
on a regular basis
"You almost have to have a full-time person to manage your GSA Schedule,"
notes Bystrak. Solution providers without a government expert on staff
often turn to consultants for help.
Working with someone who knows the process and has experience with the
GSA can pay off in the long run. "Otherwise, the GSA will have its
way with you during the negotiations and you'll end up with much less
favorable terms and conditions than your competitors," says Mark
Amtower, founding partner of consultancy Amtower & Company, which focuses
on doing business with the government. (Note that Ingram Micro offers
the GSA Pass Through Program, a service to help solution providers negotiate
and maintain their contracts. (For details, see the "GSA
Help from Ingram Micro" section above.)
You'll also be required to adhere to stringent terms, conditions and
government regulations -- such as filing quarterly sales reports with
the GSA and paying an industrial funding fee of 0.75 percent of sales
(which supports GSA operations). You are also subject to auditing by the
GSA, so you must keep good records and be willing to open your books to
public scrutiny. The GSA requires you to match or beat the discounts you
give to your best customers, so you'll have to make that information public.
"Disclosure of those practices sometimes scares people off,"
says Dataline's Townsend.
You also must carefully adhere to the laws regulating sales to the government.
The Trade Agreements Act, which implements many multilateral and bilateral
international trade agreements, specifies that only products made in the
U.S. or in countries specified in the act can be sold under GSA contracts.
And the Federal Acquisition Regulation (FAR) is the primary regulation
governing all federal executive agencies in their acquisition of supplies
and services with appropriated funds. There can be substantial penalties
for violating the government's rules. In 2005, for example, OfficeMax
paid $9.8 million to settle allegations that it submitted false claims
when, under its GSA contract, it sold products made in countries not permitted
under the Trade Agreements Act.
|Tips for Initiating Your
Ingram Micro's GovEd Alliance offers several resources to help
solution providers set up and maintain a GSA Schedule:
- Download and read a copy of the GSA solicitation for information
technology products and services from www.fedbizopps.gov.
Click the button at the bottom for vendors and then Find Business
Opportunity on the left. Scroll down to Search by Solicitation/Award
number, enter number FCIS-JB-980001B and then click Start Search
at the bottom of the page.
- Obtain a Past Performance Evaluation (PPE) report on your company
from Open Ratings. The PPE form is included in most contract solicitations.
If not, you can get one from Open
Ratings or by contacting Carolyn Kell of Dun & Bradstreet
at firstname.lastname@example.org or (800)
999-3867, ext. 6746. You'll need to provide at least six references,
- Sign up for Ingram Micro's GSA Pass Through Program to get Letters
of Supply and pricing data needed for your GSA submission.
- Complete the solicitation and make sure your offer complies
with the Most Favored Customer policy applicable to all multiple-award-schedule
contractors. Compare your prices to competitors' to make sure
you're in the ballpark. (You can do this research at GSA Advantage!,
- Submit your offer with your current commercial price list, discount
schedule and, if required by the solicitation, references from
Remember to Market
Once you get your GSA contract, you'll have to market it. Simply having
a contract is not going to attract new business or higher sales, experts
say. "I hate it when people get a schedule and then expect the phone
to start ringing off the hook," says Wolland.
Townsend, whose company generates 40 percent of revenue through its own
GSA Schedule, agrees. "The GSA Schedule is simply a vehicle, a way
to purchase," he says. "If you don't have a customer-facing
sales and business development group, then GSA will do nothing for you."
Your primary marketing responsibility with the GSA is simply educating
your customers, says Bystrak. Make sure clients know you have a GSA Schedule
and how easy it is to purchase from it. This is especially important at
the state and local level, where procurement officials may not be aware
of the GSA option. When the GSA became available to states as a purchasing
vehicle, "it opened up a lot of business for us," Townsend says.
"But since it's relatively new, you need to educate."
Solution providers should become deep information resources for government
procurement officers, Amtower suggests, and should be proactive in keeping
the government current on the latest developments. Manufacturers are not
always good at informing the government about the latest products, price
changes, programs and market trends. That's where solution providers can
add great value.
It's also best to target your marketing to specific agencies, instead
of trying to reach the entire government. "Focus on small beachheads,
maybe a couple of agencies," says Amtower. "Start there, find
the sweet spots and expand those over time."