GSA by the Numbers

The 2013 GSA sales numbers were finally released in late December.  After hovering around the $38B, GSA sales have declined below the $35B mark.  The fact is, GSA sales have been declining for the past 3 years and are expected to continue declining due to several areas that affect the federal marketplace.

Certainly the federal budgeting and sequestration mess affects spending but more importantly to your federal market and GSA is the development and utilization of large IDIQ’s, BPA’s and other GWAC’s executed without GSA involvement.  While agencies have always had BPA’s (Blanket Purchase Agreements) and IDIQ’s (Indefinite Delivery Indefinite Quantity) to facilitate repetitive purchases the real explosion goes back to NMCI, a multi-billion dollar contract for managing desktops in the Navy and Marines.

Another component to consider are GWAC’s (Government-Wide Acquisition Contract) like NASA SEWP that has grown to $2.5 Billion annually and is often utilized ahead of schedule 70 in many civilian agencies.  Other contract vehicles like NMCI (Navy Marine Corps Intranet) managing more than 363,000 computers and Army CHESS (Computer Hardware Enterprise Software and Solutions) which is mandated by the Army as first priority for all IT purchases and Seaport-e the Navy’s attempt at CHESS bite into GSA schedule 70 potential market and contribute to the decline in overall revenues.

Then there are federal buyer’s personal buying preferences – and they all have them.  More and more often I am finding people who prefer to purchase from specific vehicles because they are comfortable with that vehicles process.  In fact, most contracting officers are not aware of new vehicles and often take years before they try them- even if they are easier or faster- simply because they don’t know the internal process. Networx, GSA’s $68 Billion telecom bohemouth contract that was supposed to replace several other contracts was hardly used for five years because there were legacy, well known and well utilized WITS contracts still available.

This practice is for good reason too… Every single vehicle has its quirks – especially in the beginning –  and since there are hundreds of new confusing vehicles and Contracting Officers are under pressure want to get the dang thing awarded quickly, they revert to what they know and like.  Right now isiFederal is sponsoring a market survey of to understand what they like and why so hopefully by May we will have some good insight on what federal buyers like, don’t like and hopefully, wish they had.

Can money still be made using your GSA?

You bet it can.  In fact, the successful contractors, those exceeding the $25,000 minimum (we can discuss whether $25k is successful another day) still average nearly $3.5M annually.  Now, 38% of those dollars are tied up in the top 100 contractors and 77% in the top 1000.  That leaves about 23% or nearly $8B of the $34.7B total to be divided by the rest of the 20,834 contractors.

How GSA contractors are faring…

The total number of GSA contracts in 2013 was 21,834. Now GSA gives new contract holders 2 years to meet the $25,000 minimum and often extends that to 3 years if the contractor can show that they are serious about going after federal business. The problem is 80% of newcomers wind up losing their schedules for non-performance and in FY2013 more than 2,500 were cut by GSA.

What this means for GSA schedule holders…

There are 3 extremely important components necessary for successful federal sales (GSA included):

  1. Understand Your Market.

    Most contractors see the $$$ and have no clue where their real market is or who is responsible for the purchasing. Don’t guess and don’t listen to anyone tell you where the market is unless you see dollars next to names.  Without the names, you cannot market to the right people and without marketing to the right people, you don’t stand a chance.

  2. Plan Long-Term and Budget Accordingly.

    Most successful federal contractors dedicate $150k+ for the first 2 years with little or no sales. That’s right – over $300k. So essentially the $5-$20k for your schedule is only the beginning.  Unless the right people (see #1 above) know that you exist – and like you – chances are you will be on the outside looking in, or worse… eliminated.

  3. Dedicate Resources for the Long Haul.

    Sure you need to be watching GSA ebuy, but what you really need to get ahead of the process and get yourself “liked” in the federal marketplace.  This isn’t a social media fad, this is “liked” where you are getting preferential treatment and moving towards the front of the line when an opportunity is made available.  This is what leads to wins and cracking the real federal code.  Now, this branding, marketing and sales expedition takes experience and knowhow that most companies do not have on staff and don’t realize they need until it is too late.  Federal buyers already have resources that they know and trust and you need to inject yourself and your company into that circle of trust.

Why GSA Schedules Remain Important…

The federal contracting “system” is wired against newcomers and the first way to identify novices is whether they have a GSA schedule or not.  After all, you need a vehicle to in order for buyers to buy and the GSA schedule is still the easiest and most widely understood source for buyers.  Even if you only meet the minimum and wind up not using your GSA for most of the sales, it is still a very important differentiator because federal buyers know that you at least meet the minimum bar for eligibility.  Buyers will also ask about socio-economic circumstances like 8(a) or Veteran Owned status which can significantly thin the competitive pool depending on the agency.

This year the federal government will spend about $475 Billion and $35 Billion or so will go through GSA. Having an un-marketed GSA schedule is like having an expensive book on a shelf that nobody ever reads.  Nothing, even an 8(a) certified Woman Service Disabled Veteran Owned Small HUBZone Business, means a thing if you don’t get your head around the market and then effectively go after that market.  If you want some of the market– get moving and go get it!

in Federal Contracting, Getting (and Keeping) GSA Schedules by David Lowe Leave a comment
About the author: David Lowe

Dave works with companies by incorporating best-in-class business practices like targeting your best customer (customer segmentation intelligence), “Top-Down” sales training and sales management. He builds his practice on the principle of doing the right thing for others--all the time. Personal “bests” include booking $11.8 Million in new private and government business in 18 months (from cold calls) and managing sales representatives to close ratios of 85% (in cell phone sales).

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