MILLER ON PROCUREMENT.

***NOT ON GSA***

If you are not on GSA, it seems to take a government employee with exceptional skills to know how to deal with that. Often no such employee is in sight.

Take this example. A firm came to me at the end of a fiscal year and said we have to get a schedule quickly because USPS wants to give us an order. Getting a GSA is sort of like finding a wife. It may take an hour or 25 years but the duration of the quest is uncertain.

He only had about six weeks until Oct 1 and there was no way unless the White House calls GSA.

With no GSA, USPS ordered an inferior product at twice the cost from a vendor which had a GSA.

One fact one can learn from this is that tomorrow may be too late to get involved in federal. If you delay, you may be opening the door so your competition will get entranced. There is a way out of this that the courts have addressed but so few people read these decisions and the government agencies usually just have no clue.

You simply create an RFQ, incorporate by reference the terms of your prefered GSA schedule and do a quick and dirty competition. I have employed this many times and it is quite simple.

Of course, this is another area where GSA should amend FAR 8.4 to encourage this since I have seen more than a thousand cases where the buyer, Miss Jones at CINCPACDINKELT, says I can't buy the Cisco items from you Jim because you have no GSA so I will buy them from xyz via their GSA and pay $80,000 more.

I even won a court case on this exact issue against NASA. The rocket scientists could not seem to master even this simple concept. The truth is they wanted to do business with their favorite -IBM in this case - rather than buy their IBM from my clients. Isn't that sad. This was not a case of trying to talk them into 3COM instead of Cisco. This was still the same brand with a different sales person from a different firm.

I have seen the exact same thing happen with Xerox gear when Xerox and a firm called Copylease both had Xerox gear on the GSA. And guess what, we had to threaten GSA FSS with a lawsuit before they would let Copylease put the same items on a GSA. Sad but true.

***MIDDLEMAN***

GSA has a bias. They don't like middleman. Firms like CompUSA and GTSI offend their business senses, such as they may be. They naively believe that if they could cut the middleman out, they could save a bundle.

The reason middleman exist is because of expertise, willingness to take a risk, willingness to manage cash flow etc. They don't comprehend that it can cost from $300,000 to $30 million to set up an effective federal operation. Most firms never succeed and even if they do it can take 5-10 years to get it tuned.

Many very large Fortune 500 firms have a zero federal IQ and don't market to the feds or do so only when the phone rings.

Just the issue of cash flow is typical. Most federal employees think cash flow only consists of the answer to the question, is the budget approved yet? Years ago a friend of mine took a one year leave from GSA and went to industry as an interchange executive. When he got back, I asked him what was the most important thing you learned.

He said, " I now understand cash flow".

If a firm succumbs to the GSA siren song they had better be sure they can do for themselves what the reseller has done for them in the past. Many firms think they can and find out they can't. And if you are a manufacturer who has a list of $1000 and always sells to the resale firm for 30% off and sells nothing or only 5% at retail yourself GSA will try to put you on schedule at 25% off. How will you deal with that? On a competitive bid you can charge what the traffic will bear ( see B-183942) but now you really have upped your overhead if you have to win bids. And this requires much greater expertise than schedule deals.

Vendors and GSA would both be wise to understand there is no free lunch.