IT budgets approved, agencies go shopping

After seven months in budget limbo, agencies are poised to leap
into a year-end IT shopping spree--for off-the-shelf items at least, vendors and industry
analysts predict.

But agencies are likely to keep some of their biggest information technology
acquisitions on ice until late summer, when the General Services Administration Board of
Contract Appeals finally cedes its jurisdiction over IT bid protests to the General
Accounting Office.

"I do think that some major buys are being held up, and it wouldn't surprise me
that when the GSBCA's jurisdiction goes away we'll see a number of big awards come to
fruition," said Mark Amtower, president of Amtower & Co., an Ashton, Md.,
consulting company. "I am looking forward to a real good year-end buying period for
commercial products."

Federal information technology spending always reaches its height during the final
months of the fiscal year.

But the prolonged battle over the fiscal 1996 budget means some agencies--the
departments of Commerce, Education, Health and Human Services, Justice, State and Veterans
Affairs and the Environmental Protection Agency--got full funding only last month.

These agencies had held off on much of their IT procurement and planning. Throughout
the budget gridlock, systems chiefs reported that they were dropping some projects,
postponing others and moving ahead only on those that were absolutely crucial
['MDUL'GCN'MDNM', Feb. 5, Page 1].

This pent-up demand should prove a boon to GSA's Multiple-Award Schedule program,
especially since the White House and GSA are touting the schedule as the government's best
off-the-shelf buying vehicle.

"Changes in the GSA schedule have made it possible for agencies to negotiate for
even lower prices," said Steven Kelman, administrator of the Office of Federal
Procurement Policy. "The big changes this year are in the micro purchases area.
There's a lot of new flexibility, and the budget agreement should now make it better for
agencies to carry out their procurement plans."

New, three-year MAS microcomputer contracts took effect April 1. Besides allowing
vendors to offer spot pricing and special discounts, GSA also has abolished the maximum
order limits and the requirement for advertising large schedule buys in the Commerce
Business Daily.

As to whether agencies are postponing procurements until GSBCA's demise, Bob Little, a
GCN columnist and former GAO attorney, said he expects agencies that can hold out a few
more months will do so.

"All things being equal, it's human nature to want to delay the award of the most
contentious, best-value kinds of buys until after the changes in protest
jurisdiction," Little said. "It also means that even if there are protests,
agencies will probably find the GAO to be a more friendly forum."

Since 1985, GSBCA has been adjudicating IT bid protests alongside GAO. But GAO becomes
the government's only IT procurement tribunal Aug. 8, when the IT Management Reform Act,
part of the 1996 Defense Authorization Bill, takes full effect.

Because GAO does not have the broad discovery standards of GSBCA, agencies might delay
their more controversial buys rather than risk headlining GSBCA's final act, said Bob
Deller, GCN columnist and director of market research for Global Systems & Strategies,
a Potomac, Md., research and consulting company.

Despite the urge to delay awards, Deller said some agencies cannot do so because of
program requirements and because some are under pressure to generate procurement success
stories.

"At the end of the year, agencies are always looking for the easiest ways to spend
for IT products," Deller said. "But I don't think Education and the Census
Bureau can hold up their work. Plus, there's a lot of pressure on contracts at the Federal
Aviation Administration and IRS. If an agency can wait a little while, it might try."

Another factor influencing major buys is the upcoming shift from the government's IRM
infrastructure to a new chief information officer model. Under the new law, all agencies
must name CIOs to oversee IT programs. That shift might delay some acquisitions and lead
to program overhauls.

"A lot of it depends on the reorganizations within the agencies," said Olga
Grkavac, vice president for systems integration at the Information Technology Association
of America. "We have to see whether the same people will be making the buying
decisions and how they handle the IT programs. Each agency will be doing it a bit
differently."

Despite these changes, Kelman said the most sweeping procurement reforms have yet to
get under way.

OFPP officials are working with the Federal Acquisition Regulation Council to revise
FAR sections 12 and 15, which cover competitive source selection and contract negotiation
rules. By next year agencies will have guidance for using oral presentations, managing
fast-track procurements for commercial items costing between $100,000 and $5 million, and
eliminating requirements for cost and pricing data, Kelman said.