recommended reading

Business starts slowly on GSA's huge IT contract

Business on one of the General Services Administration's flagship information technology contracts has been sluggish this year as federal agencies choose to use internal contracts to buy IT solutions.

Federal agencies have purchased about $171 million worth of IT products and services off the Alliant contract since GSA launched the procurement vehicle in April. Alliant's contract for small business has awarded 13 task orders worth an estimated $167 million.

Alliant is expected to attract $50 billion in business from agencies during its projected 10-year term. Together with the $15 billion Alliant Small Business contract, the program was designed to be the largest and most comprehensive IT services vehicle in the federal government, replacing GSA's three separate IT contracts that were expiring, ANSWER, Millennia and Millennia Lite.

Sales on the three previous contracts averaged between $1.5 billion and $2.5 billion annually. Business on Alliant would have to increase severalfold in the next fiscal year to match the transactions of the older contracts. The three contracts had more than $1.6 billion in sales in fiscal 2009.

The slow start is expected, according to agency officials. Mary Powers-King, director of governmentwide contracts at GSA, said the awards have been fairly evenly distributed in terms of vendors and dollars, with no company garnering more than three task orders so far.

"Things tend to trend up relatively slowly in the first year historically, but we're on track or a little bit ahead of where prior governmentwide contracts have progressed," Power-King said. "We believe after the first year that Alliant will continue to progress."

GSA awarded Alliant contracts to 29 companies in March 2008, but a successful protest required GSA to recompete the pact. The agency ended up awarding contracts to twice as many vendors a year later. Alliant Small Business also was delayed by the protest and began accepting task orders in February.

Alliant vendors are hopeful but cautious, with most companies anticipating that the ramp up would take some time due to the size of the contract and the presidential transition, said Olga Grkavac, vice president at the IT lobby group TechAmerica. "I think anyone can tell you that the delay caused by the protests hurt Alliant, just because they lost momentum," she said.

As a result, Alliant most likely will not reach the same spending levels during the next couple of years as the predecessor contracts because many agencies were forced to create their own multiple award vehicles after the protest, said Ray Bjorklund, senior vice president and chief knowledge officer at consulting firm FedSources.

"Alliant will probably become an important contract vehicle, but if you build your own contracts . . . you're not just going to shut them down because Alliant is ready," he said. "It just makes the ramp up that much longer. I think the vendors and GSA are still a little on the side of wishful thinking."

Paul Barboza, program manager for Alliant Solutions LLC, one of the vendors on the contract, said in an e-mail that his company considers Alliant a success. He said the slow progress has been caused by uncertainty surrounding the transition from the Millennia and ANSWER contracts to Alliant and competition from agencies creating their own IT vehicles.

"When an agency uses its own vehicle, it keeps procurement dollars in-house and avoids contract fees," he said. "Still, there are advantages to using GSA vehicles, as Alliant's performance and universal expectations for its future already demonstrate."

Alliant is only part of a trend of GSA IT vehicles, including Schedule 70, that have experienced flat sales during the past three to four years, according to Deniece Peterson, manager of industry analysis for market research firm INPUT. She said a number of factors have caused sales to plateau, including a lack of confidence in GSA's ability to evaluate vendors. The original Alliant protest was sustained because of concerns with the way GSA ranked bidders' past performance.

"There are a couple of things involved," Peterson said. "Agencies want to save some money and avoid whatever fees GSA puts on them, but it's also flexibility. I have heard anecdotally it's also about having control over whom they're going to work with and having confidence in the criteria used to make the pool of vendors [on a given contract]."

Powers-King acknowledged that her agency has concerns about competition from other agency contracts. "We do have some concerns about the proliferation of other contract vehicles," she said. "Those agencies have their own missions that are not procurement, unlike GSA. We believe we pretty much have anything IT service-related through Alliant. Now with the selection [of Daniel Gordon] to head the Office of Federal Procurement Policy and [if we can get] a GSA administrator on board, those things can be appropriately addressed."

Federal Chief Information Officer Vivek Kundra plans to meet with Gordon on Thursday to learn more about the issues of agencies creating internal contracts for IT.

Grkavac said more IT contracts give federal managers more choices, driving competition and improving service. But, she also said, creating contracts can be expensive for agencies and companies looking to compete to get on the contract. The amount of business that companies win on these contracts is not always sufficient to justify establishing a separate contract.

"TechAmerica's view is that there should be some governmentwide contracts [outside of GSA], but a reasonable amount," she said. "We do think competition is healthy for GSA and industry." Grkavac declined to say whether there are too many governmentwide contracts in place.

Bjorklund said the fees agencies charge to use governmentwide contracts are an issue, but agencies that create their own vehicles are forced to employ acquisition personnel to manage them, creating additional expenses. He said having financial control and oversight of payments to the contractor might be a more likely reason that agencies are creating their own contracts.

"I would submit that because there is such a dearth of fully qualified acquisition professionals to run all these contracts, even agencies perceiving themselves as successful with their own vehicles are kind of stretched thin," he said. "It's tough for them to always be successful, but to their point there is a certain comfort level in having control over your own contract vehicles."

Threatwatch Alert

Thousands of cyber attacks occur each day

See the latest threats


Close [ x ] More from Nextgov

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Modernizing IT for Mission Success

    Surveying Federal and Defense Leaders on Priorities and Challenges at the Tactical Edge

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • Effective Ransomware Response

    This whitepaper provides an overview and understanding of ransomware and how to successfully combat it.

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.


When you download a report, your information may be shared with the underwriters of that document.