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bob7947

FY 2014 Sales Volume on MAS Contracts

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I haven't looked at the Multiple Award Schedule (MAS) sales statistics in years.  In a document that you will find on the Home Page by tonight, GSA states:

In fiscal year 2014:

  • 32.8 percent, or 5,673 companies, reported $0 in FSS contracts.
  • 5.6 percent, or 975 companies, accounted for 80 percent of all FSS sales.
  • The top 20 percent of FSS contractors (in terms of FY2014 sales) accounted for 95.7 percent of FSS sales.
  • Only 2.6 percent of FSS contractors reported more than $1 million in FSS sales.

The total annual sales volume is about $33 billion.  In its latest data, GSA states there are  20,094 FSS contracts held by 17,302 vendors.  These numbers may be different than those used in reaching the bulleted numbers above.

Is anyone surprised by the above numbers?

 

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I never thought much about it, but it's surprising to me. Initially I wondered what percentage of FSS sales were competitively awarded. Turns out 75% were competed during that timeframe.

http://www.gao.gov/products/GAO-15-590

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I worked for GSA for 4 years in the MAS program, and these numbers do not surprise me in the least. Too many companies are persuaded to get a GSA contract by hucksters out there ready to charge them thousands of dollars to help get them on Schedule, promising great profits in return, only to learn that they really aren't that competitive in the federal market.  

We had one case where one of these "consultants" had a company get on Schedule, and then we never heard from the company. Once we were finally able to contact them, we learned they were an Amish-owned company and didn't know they had to do things online (like list their products, respond to RFQs, etc). It was sad because they paid $10,000 to this "consultant" to get on contract.

We would often try to discourage a contractor from getting on Schedule by telling them the facts, but often a consultant would instruct their client to always refer us to them.  There was one company in Florida that kept getting the ire of their Better Business Bureau and each time they got caught, they would simply shut down, create a company under a new name, and go at it again.  It was sad.

There is a sales requirement to stay on contract. You have to have $25k of Schedule sales during the first 2 years, and then $25k each year thereafter. Since many of these small companies are only on Schedule to try to market to a local military base (or other gov't entity), they just can't be competitive enough to meet that criteria.

Now that I think about it, 32.8% with $0 in sales is a low number! GSA must finally be weeded some out. We used to be closer to 40%.

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GSAs practices seem to run counter to certain strategic sourcing principles.  I don't understand the rationale for having hundreds of contracts for some spend categories.  One of the principles of strategic sourcing for certain types of purchases is to leverage spend dollars with fewer suppliers/service providers.

Also, imagine the efficiencies and cost savings that could be achieved by GSA having 5,000 fewer contracts to manage.  

How can GSA not realize the waste of government and industry resource here?

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GSA's MAS program and their Strategic Sourcing programs are 2 related but different things.  The MAS program is what was discussed above, whereas their strategic sourcing programs are either:

a: a smaller subset of their MAS program contracts (like with MRO and OS2/3), and by "smaller" I mean less than 20 in most cases, which is quite a departure from several thousand.

or

b: an open market "solution" (like with their BMO projects)

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1 hour ago, Desparado said:

GSA's MAS program and their Strategic Sourcing programs are 2 related but different things.  The MAS program is what was discussed above, whereas their strategic sourcing programs are either:

a: a smaller subset of their MAS program contracts (like with MRO and OS2/3), and by "smaller" I mean less than 20 in most cases, which is quite a departure from several thousand.

Understood.  My point was that it makes zero sense to have so many contracts.  GSA should look at their MAS program as more of a strategic tool as well.  Why have 100's of furniture supplies available for government use.  I suspect that a fairly small number of suppliers could meet the majority of the Government's needs.  By having so many contractors, GSA is not leveraging the spend that goes through the MAS program.  GSA COs would be able to negotiate better deals if the sales volume was significantly higher.

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Howdy, Desparado,

I always thought that GSA allowed 10,000 agency COs purchase one desk each from the smaller subset of contracts, whereas strategic sourcing would require the GSA CO combine those orders into one 10,000 desk order.  It would require all agencies involved to settle on a specification, evaluation factors, etc.  Or have those things forced on them.  It sounds very, very hard for GSA or anyone else to do. 

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Not especially surprised. Many small businesses want to sell to the Feds but they simply do not know how to do so. They hear about GSA Schedules and think that will be their magic carpet ride to millions of dollars of revenue; but they have no clue about how to convert their contract vehicle to a closed sale and an award. They also have no clue about how to read their contract and how to comply with its terms.

Last year we were contacted by a small business that wanted to sell fuel to the DLA. Long story short: The owner expected that the act of obtaining a CAGE code and registering on the required websites would be sufficient to win the DLA work. Turns out he was wholly unprepared to meet the DLA's expectations (including those involving quality control and interstate transport). We gen'd up a compliance roadmap but he was unwilling (or unable) to execute it.

By "unable to execute it" I mean that he was unable to take the simplest of steps, such as changing his passwords from the ones we established for him to something only he knew. He called us a month after the project was done to ask how to access one of the primary websites--even though we had given him a deliverable with each website, user ID and initial password listed.

Wasted money.

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Apsofacto - Howdy to you as well...  I think it is nearly impossible to get all the agencies to agree on a spec for anything, much less a desk.  Can you imagine a General or a Director being told they have to have the same desk as a worker?  Oh my!!  All joking aside, the requirements are so varied that it would be nearly impossible to do so.  The GSA idea is to reduce the number of contractors from a few thousand to a dozen or so and thereby consolidating the government's requirements and leveraging our buying power. It all sounds nice but in practice it just really hasn't worked well.

H2H - The Schedules program is very flawed in that regard. However, if a CO ever has the audacity to tell a contractor that they can't have a contract, they then promptly call their local congressperson and then the next thing you know, they get a contract... and then we cancelled it 2 years later due to a lack of sales.  GSA is far too political of an agency (hence why I left there).

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There seems to be a government-wide misconception regarding the GSA Schedules program.  This is nothing more than the issuance of fishing permits.  The GSA Schedules CO cannot negotiate volume discounts because there is no work associated with the schedules award.  You are right that it is counter to strategic sourcing, and Desparado notes that that program is separate from Schedules itself.  The same hucksters who convince the Amish to invest $10,000 to get an award are yelling from the rooftops concerning strategic sourcing as a way of limiting or eliminating small business competition, never mind the Congressman who calls GSA and says "why aren't you awarding a schedule to small business x in my district, even though there are hundreds of ukulele resellers in a market where only a few agency look for and buy ukuleles? Substitute ukulele for any commodity and you get my drift.  Too many conflicting priorities; too many unmanaged expectations.  GSA may have a very real problem of trying to be too many things for too many people, as well as communicating poorly, which created channel confusion and mismanaged expectations.

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GSA's primary goal is to please the people in the Beltway. Once the screams of high prices on the MAS Schedules got to be deafening, GSA came up with FSSI. Now that FSSI is getting old, they are pushing the concepts of Category Management and the Acquisition Gateway. Once those get old or contested, they will come up with a new buzzword or concept so they can continue to show shiny objects to OMB and OFPP. This is one of the reasons I left GSA. 

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