The over $25,000 market used to be thought of as the "public market", but GSA Schedules have changed that. Now buyers think of the public market as a place to be avoided. Why? Excessive time and work requirements are involved in a public bid and, when you’re all done the vendors question your every move and may enter a formal protest. Generally, this is a lose/lose situation for a buyer. Why create work and, more importantly, excessive time delays, when you can make a GSA buy simply and quickly within the rules?
Annual expenditures in the GSA market are in the $25 billion range. GSA buys can be of any size; there’s no limit. End-users are pre-sold using GSA schedule pricing, and request the vendor’s GSA schedule number to avoid a 6 month public bid.
Official buyer makes a sole source purchase (for products in GSA Advantage) in a matter of days or weeks from the "priority source" GSA schedule vendor. (Three GSA schedule holder quotes for services.) GSA buys are based on "best value analysis," thus allowing the buyer a good deal of latitude in selecting the vendor desired by the end-user.
As stated repeatedly in this installment series, most companies cannot be serious players in the federal market without a GSA Schedule. GSA is building a large bureaucracy based on the 1% industrial funding fee charged to vendors on all GSA buys, and they are using the fees, in part, to implement a major GSA Schedule marketing campaign.
The following features of GSA Schedules contribute to their importance:
- Pre-selling by several GSA schedule holders can often take place for the same opportunity, thus creating a "mini GSA competition."
- GSA pricing can be used to create a Basic Purchasing Agreement when an agency wants to order frequently from one more companies.
In summary, GSA schedules work and they are fast. End-users, buyers, and vendors love them. The market is often referred to as the hidden market, because GSA schedule buys (while frequent and often very large) happen behind the scenes.
