GSA takes a second look at a $5 billion contract vehicle

Tom Temin: And the recompete of this contract, the 2GIT, it’s a significant contract. And what’s the significance of the review that GSA is doing? And what does it mean? Is it all on pause at this point?

Paul Murphy: The recompete is under review right now at GSA. They’re considering rolling up two-thirds of the government spending, all the common goods and services purchases under GSA from across the government. And particularly, they’re focusing on IT, and this gives them an opportunity to review all of the big procurement initiatives that are ongoing at the individual agencies. And so right now, they are in a 60-day period. Since the release of the March 20 order, they’re reviewing proposals from the agencies to determine which procurement programs are going to come over. Some may stay. It’s all being negotiated right now. The agencies have to make proposals to GSA. They have to determine what’s appropriate. But when you look at the nature of the opportunities that are existent right now in the agencies, you see that 2GIT could be a vehicle, a template, to roll up IT contracts at different agencies. They’re making a particular focus on IT, and so this suggests that opportunities like CIO-CS at the National Institutes of Health Information Technology Acquisition and Assessment Center (NITAAC). The website [has] been down and we don’t know that the opportunities.

Tom Temin: This is the National Institutes of Health’s (NIH) big multiple-award contract.

Paul Murphy: Correct.

Tom Temin: So what you’re saying is the G2IT could actually attract other programs and become much bigger than the $5.5 billion it was going to look like in the first place.

Paul Murphy: Oh, absolutely. And I think it’s not just CIO-CS, but you have First Source III tied up in protests over at the Department of Homeland Security (DHS). It’s a big small-business IT commodities vehicle. And I’m sure they’re looking at all these contracts and trying to figure out what makes sense to bring over. Again, these strategies [are] under review. GSA has not made any determination that this is going to happen. But the nature of the contracts that GSA is managing — this makes it look like there’s going to be a lot of this kind of roll-up.

Tom Temin: Now 2GIT you’ve described as IT hardware and software. Is that simply for resellers and vendors? Or are services and IT development part of that program also?

Paul Murphy: I think it’s a combination of hardware and supporting services. A lot of these IT contract vehicles do that. Could be value-added resellers. It could be some manufacturers. But the basic idea is to orient government purchases toward commercial solutions. And so companies that have these kinds of capabilities — including supporting services, including supply chain risk management, including the cyber protections — these are all candidates for roll-up and consolidation at GSA. And I might add that this is a huge undertaking by GSA. They’re talking about the consolidation of all the common goods and services purchases. That amounted to about $495 billion last year, fiscal 2024. It’s about just under two-thirds of all the government purchases. The GSA accounted for maybe about $24 billion of that. They have about 5% of the government contract officer workforce. So it’s a huge undertaking for GSA to consolidate all of these contracts and try and incorporate all of the unique kinds of services and products that these agencies have built into their solutions to meet the mission needs of the different agencies they’re serving.

Tom Temin: We’re speaking with Paul Murphy, senior data analyst at Bloomberg Government. And where does this leave, say, something like OASIS, which is more, I guess, service-oriented? Could that also attract other contracts to be kind of like the blob, absorbing them and getting to be bigger and bigger also?

Paul Murphy: I think the writing’s on the wall. I think when you look at the procurement consolidation in the context of the reforms, procurement reforms at DoD and the big announcement on tax day about the reform, the streamlining of the Federal Acquisition Regulation, I think what we’re going to see is larger and fewer contracts going to larger and fewer companies. I think that’s inevitable.

Tom Temin: And the bigger question is NASA SEWP. That’s a pretty big gravitational star all by itself.

Paul Murphy: That’s the elephant in the room, and everybody’s been asking questions about that. I think it’s TBD. Things are in discussion. It may make sense to bring parts of NASA’s procurement shop over, but that’s generally regarded as one of the most successful IT vehicles outside of GSA. Contractors are well served by NASA, according to reports from Joanne Woytek at recent conferences. They do a lot of work with small businesses — very robust small-business component to SEWP. It’s used widely across the government. So that would be a really big roll-up for GSA to consider.

Tom Temin: And what do you think the effect of all of this, should these consolidations happen and other agencies’ IDIQs or even the other GWACs get sort of magnetized like shavings and shoot over to GSA? What about the Multiple Award Schedule system? There’s a lot of IT on that and a lot of other categories for that matter.

Paul Murphy: Well, I think that’s going to be one of the vehicles, the platforms, that a lot of these requirements go to. I think they’re going to try and push, given what they’re talking about in the FAR modifications, the FAR streamlining — given what you’re talking about in the procurement efficiency initiative that Donald Trump announced on March 20 — that there’s going to be a big push to commercial solutions. And of course, going to the IT schedule and all the schedules are already in place with pre-negotiated terms and conditions for a wide range of commercial solutions. The question is, with 5% of the government contractor workforce and some of these contracts that they would be ingesting tailored to particular agency missions, does GSA have the bandwidth to handle it?

Tom Temin: Yeah, that was my next question. Because even in the Multiple Award Schedule program, that has a small army of contracting and procurement specialists that deal with the millions of vendors that come and go on that system over the decades. And each of the IDIQs, each of the GWACs that GSA has, has its own contracting people. And then CIO, SEWP, etc., across the government, they have their own contracting people. No talk about moving all those people into GSA to do their respective work. So the bandwidth becomes, I think, a real question.

Paul Murphy: And it’s coming at a time when GSA is encouraging early retirements and laying off people. Their workforce is declining, other agencies’ workforce is declining. I think it really becomes a question of what missions are these people going to be able to fulfill and whether it makes sense for GSA to swallow all this in one big gulp, or whether maybe to pace it out over time. This is — as you know, there’ve been procurement reform initiatives and FAR reform initiatives for 30, 40 years — and they’ve had varying degrees of success. I think the latest big push was back in the mid-90s. It seems like we’re coming back around after a period of decentralization of contract, and we’re going back around to the centralization, consolidation of government contracting with maybe some additional tools like artificial intelligence to be able to handle the workload of people who are being laid off, who are retiring early. So the question remains: Is this feasible? Can you make up with new technology the customization that individual contract officers have been able to provide?