Lack of cost savings is one of the key reasons that agencies have moved to in-house contracts for their technology purchases, pushing GWAC IT sales down 15 percent annually between fiscal 2005 and 2007, according to FedSources.
Agencies are moving away from governmentwide acquisition contracts and toward their own multiple award contracts for their technology needs, according to acquisition specialists.
Comment on this article in The Forum.Technology purchases on GWACs decreased 15 percent annually between fiscal 2005 and 2007 -- from $4.46 billion to $3.19 billion, said Ray Bjorklund, senior vice president and chief knowledge officer at FedSources. During the same period, civilian multiaward contracts increased 12 percent annually from $1.04 billion to $1.31 billion, and technology purchases from Defense Department multiaward vehicles increased about 20 percent annually from $7.94 billion to $11.48 billion.
"GWACs are going down because agencies are doing it themselves," said Bill Gormley, president and chief executive officer of FedSources. "Growth [for these contracts] is dependent on what the customer is using, and the customer wants someone who shows them the attention they need." Gormley cited a 13 percent decline in outsourcing by agencies to other agencies as evidence of the trend toward conducting IT acquisitions in-house.
Speaking at his organization's April 10 Federal Outlook Conference, Bjorklund said, "For quite a while GWACs were very popular, but now they are fizzling." He added that the lack of cost savings was one of the key reasons that agencies were choosing to look in other directions.
Bjorklund and Gormley also discussed the General Services Administration's $50 billion Alliant contract, one of the largest IT GWACs currently under development. The program schedule was set back recently when a judge ruled to uphold a protest against the source selection process used. GSA currently is reevaluating Alliant bids using alternate criteria.
"Alliant's been under development for four to five years; no agency is going to wait that long," said Gormley on the prospects for the contract once it's finally awarded and open for business. "They are looking at a long path for success. This has a significant impact on the industry," he added. "This is a three-party relationship: GSA, the customers and the contractors -- and two are frustrated."
When asked if the Alliant contract was too ambitious in scope, Bjorklund said, "Yes, I agree it might be a little too big, too versatile." He added that the large figure attached to the contract all but guaranteed that any company in the arena would be forced to pursue the contract. "Give GSA credit for trying to be all things to all people, but the size is like a big warm light attracting moths," he said.
Bjorklund also said Alliant bidders have spent billions on bids and proposals, costs that ultimately the government will have to pay for when they are rolled forward into future pricing.