GSA adds nearly 600 small IT businesses to new contract

Thursday - 8/4/2011, 6:58am EDT

Emily Kopp, Federal News Radio reporter

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By Emily Kopp
Reporter
Federal News Radio

The General Services Administration has awarded 599 small, disadvantaged technology firms a chance to sell to the federal government through the latest 8(a) STARS governmentwide acquisition contract.

The firms named in the STARS II contract come from 38 states and may compete for up to $10 billion worth of contracts over the next five years.

"It's a good day for us and small business," said GSA Federal Acquisition Service Commissioner Steven Kempf, at a breakfast Tuesday hosted by the Coalition for Government Procurement in Vienna, Va.

He said the contract should be ready for agencies to begin using it by mid-August.

Agencies spent more than $5 billion on the first version of STARS between 2004 and 2011 as well as the 8(a) FAST contract, which preceded STARS. Additionally, GSA increased the number of vendors on this latest version of 8(a) STARS from 217 to almost 600.

As it awards the next generation of 8(a) STARS, GSA hopes the GWAC helps keep its customers coming to the agency. Despite the government budget crunch, Kempf expected to meet or exceed last year's sales numbers. He said business revenue through June had been $41 billion, which is $1 billion more than at the same time last year.

"When you consider government is spending less money, and spending it later in the year, I think we've significantly increased our market share," he told the audience of government contractors. "We've seen business volume up in nearly every business line we offer."

Kempf said because of savvy negotiators at GSA the government's money is going further, especially in areas such as travel and shipping. He also said GSA had focused on improving customer service and training.

But an uncertain budget climate also affects sales, according to several others. Agencies were eager to spend their money early this year, said John Nyce, associate director of acquisition services at the Interior Department's National Business Center, during a panel discussion.

"I think, quite frankly, they were afraid they were going to lose it," he said. "We've had an uptick throughout the entire year as far as business." But it may not continue through fiscal-year 2012.

"Recognize that the government has must-pay bills like military salaries, operations, light bills and even copier paper," said Ray Bjorklund, chief knowledge officer at Deltek, a market-research firm. "Other kinds of contract support will likely get hit first."

Kempf added, "Contractors need to sharpen their pencils and provide innovation to support agencies' needs." Contractors that don't meet green energy standards may already feel the pinch. Kempf said his agency has been promoting green where strong standards such as Energy Star exist. In those cases, GSA has stopped adding products that do not meet the energy efficiency requirements to its schedules.

Using the copier schedule as an example, Kempf said, "Your new products turn over quickly so after a year or two, they will be Energy Star compliant." However, he said GSA would not do the same in areas that lacked clear-cut green standards.

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