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Industry group encourages DoD to use GSA
Thursday - 6/24/2010, 6:48pm EDT
Federal News Radio
The Coalition for Government Procurement recommends the Defense Department increase its use of the General Services Administration to reduce acquisition costs.
In a letter to Defense Secretary Robert Gates, the Coalition says DoD has numerous overlapping and redundant contracts, which "increase costs to both industry and the government."
CGP, an industry association, says DoD should increase their use of GSA procurement programs instead of creating new contracts independently.
DoD and GSA have a rocky relationship for a while. At one point, DoD was spending up to $150 million annually on GSA fees alone. This led DoD to begin pursuing contracts independently.
Several other agencies followed suit. The result has been serious damage to GSA's bottom line: from 2000 to 2009, GSA's sales almost doubled to $65 billion.
Over the last few years, though, the agency's sales have been increasing at a much slower rate-about 3-to-5 percent.
But the letter says DoD should not fear the three-quarters of a percent Industrial Funding Fee that GSA charges to use their contracts.
CGP says the fee is balanced by the competitive nature of GSA's contracts, which provides for greater savings.
Part of the reason DoD began developing its own contracts is to pay less money to GSA and other agencies.
At one point, the Pentagon spent more than $120 million a year on fees.
"Competition is strong and market-driven so that in most cases, spot discounts are negotiated, whereby DoD realizes ... savings. Therefore, the belief held by some of DoD acquisition workforce, that using DoD contracts is more effective than other contracts, may not always be true," the Coalition's letter states.
CGP says contracting through GSA will result in savings that will "allow substantially increased support for the warfighter, and allow for shorter acquisition lead times. This will result in increased material and logistical support for the conduction of national security efforts."
Rachel Stevens is an intern with Federal News Radio.
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