As reported in earlier installments, the federal government's use of multi-vendor contracts to buy products and services is steadily increasing. Getting on the GSA Schedule is one of the few ways a small and medium-sized company can compete with experienced federal contractors. We have recently discussed some of the obstacles businesses face in obtaining a GSA Schedule contract. The difficulties are compounded by the fact that GSA is becoming less supportive of small businesses. Theories abound as to the reasons for the recent shift in GSA's attitude towards small businesses. This installment will look at some of the possible explanations for this shift.

Most would agree that GSA is not intentionally biased against small businesses. The agency instead appears to be trying to ensure its financial survival. Small businesses, as a general rule, do not initially generate large GSA Schedule revenues and they have a particularly hard time winning federal contracts if they are new to the market. In fact, it can often take one to two years of pre-selling the federal government before a small business sees its first GSA Schedule order. It has therefore been speculated that small businesses are being turned away by GSA in favor of larger businesses (i.e., those that generate more revenue in the form of payment of GSA's Industrial Funding Fee).

More specifically, GSA will not openly reject small business proposals based on the size of the vendor's business alone. GSA's bias is evidenced in a much more subtle manner. The following demonstrate GSA's increasing bias towards small businesses:

• The recent requirement, in some GSA Schedule solicitations, that a company must be in business for a set number of years before its offer will be considered
• The increasing number of proposal rejections based on insufficient past and projected sales for an item being offered.
• The increasing frequency of proposal rejections when, in the past, contracting officers would have requested that the vendor modify or amend its offer
• GSA's implementation of more stringent and rigid price negotiation policies

In the short term, we suggest that small businesses hang tough in their negotiations with GSA. It should be noted that all offers can be re-submitted. In the long term, small businesses should call their congressional representatives to voice their concerns.