Department of Commerce

Eliminate GSA Schedules and Reform Government Procurement

Currently the GSA Schedules is a joke at best and a total waste at worst in terms of price discount for the goods and services purchased by the federal, state, and local governments.

 

Most of the pricing on the GSA Schedules are only 10-30% off the vendors’ list prices. The U.S. federal government agencies have consistently failed to realize any cost savings in its procurement practice based on the useless GSA Schedules. Instead, it should leverage its purchase power COLLECTIVELY based on the simple principle of economy of scale to negotiate deeper and large volume discounts, just like in the private sector, in its procurement practice at all branches of federal government.

 

The Federal Acquisition Regulation (FAR), among others, needs to be reformed so that the U.S. Federal Government as well as the state and local governments can leverage their purchasing power as a whole to collectively negotiate and renegotiate with all major vendors and contractors doing business with the Government (federal, state, and local) with a new and simplified discount rate based on the vendors list prices.

 

As many of the vendors have very high profit margins (up to 70% or more), a newly renegotiated discount pricing based on each vendor’s profit margins will collectively save hundreds of billions of the tax payers dollars in any given fiscal year. In some cases, such as for the IT infrastructure upgrades, millions of dollars can be easily saved in a single transaction for an individual federal agency just by being able to negotiate deeper discount than what is offered on the GSA Schedules with the vendor(s) involved.

 

In many cases, despite such kind of deep discount (e.g. 50% or more), it is and it can still be a win-win situation for both the vendor(s) and the federal and/or local governments involved.

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Idea No. 11920