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June 7, 2013
Last month, the General Services Administration (GSA) announced a government-wide agreement for wireless services and devices from AT&T, Sprint, T-Mobile, and Verizon Wireless. The wireless Federal Strategic Sourcing Initiative (FSSI)—more affectionately known as the “new wireless ‘family plan’”—will, according to GSA, save taxpayers $300 million over the next five years.
“By buying in bulk, we’re buying once and we’re buying well,” said GSA Acting Administrator Dan Tangherlini in GSA’s press release. “This common sense approach allows us to do what families and businesses across America do every day. We’re driving down costs, increasing efficiency and improving service and operations. These agreements give agencies the ability to pool minutes, order plans and devices more efficiently and have greater visibility into their purchases.” The GSA claims that “a single government-wide option with the ability to pool minutes is a first for the federal government. Now instead of paying additional overage fees, agencies will have access to a pool of unused minutes within their wireless plan, enabling them to consolidate minutes and save money.”
Buying in bulk is smart, especially when federal agencies spend $1.3 billion on wireless services annually. Obviously there is a need—flashback a few weeks ago to POGO’s blog that “one [unkown] agency pays 13 different prices for nearly identical plans!” Unfortunately, it took GSA 2.5 years and one sustained bid protest (which caused GSA to back off some of the requirements it had sought) to get to this point. (Here I thought it was a chore to wait in line at my local wireless store for 30 minutes for the nextgen mobile phone.) Not to mention that the agreement is with the Big Four wireless providers, which begs questions about the delay in awarding the contract and the true level of competition, as none of the big vendors were eliminated.
GSA has not answered multiple POGO inquiries for more information about the agreement, including if it covers wireless services for tablets, which many agencies are now using. If tablets were not included, that’s a major gap in coverage. Additionally, GSA was silent when I asked about whether there would be additional rounds of competition between the Big Four when each agency places a wireless order.
To add more confusion to the situation, GSA already has Schedule 70 with SIN Code 132-53, with 47 eligible wireless service providers including AT&T, Sprint, T-Mobile, and Verizon Wireless (operating under the name Cellco Partnership). Was it possible to renegotiate those existing contracts and avoid a long, drawn-out procurement? Let’s just hope that agencies use the new plan. POGO’s analysis of wireless service spending shows that agencies are underutilizing Schedule 70. According to GSA’s Schedule Sales Query database, there have only been federal wireless orders totaling $1.9 billion in fiscal years 2009 to 2013 on Schedule 70—which averages to about $450 million per year, well under the annual $1.3 billion spent on wireless service each year that was cited by GSA.
GSA seems to be under the assumption that if they build it again agencies will come, which might not be the case. Case in point, in addition to the new agreement and Schedule 70, the Department of Veterans Affairs (VA) awarded a national mobile devices contract valued at $200 million to AT&T Mobility, Verizon Wireless, and A&T Systems in early May. (Sounds like we have at least three wireless plans rather than a “single government-wide option.”)
So if I have this right, it took 2.5 years to reach a deal with four wireless companies that already had contracts with GSA, just after the VA announced a new wireless deal, and the ordering agencies might have to hold a competition between the four vendors and pick a winner for each order. Sorry to sound like the contractors on this one, but that sounds like a lot of red tape and government waste.
Mobile services are one example of why the government is struggling to make ends meet. The government is unable to clearly identify what services it buys for $517 billion each year. I wish GSA the best and hope agencies use the new family plan, but why do I see a forthcoming GAO report about waste in government wireless services? Just a prediction, but any forthcoming report might want to include a call to use a competitive reverse auction that would start a bidding war that drives costs lower and thereby benefits agencies and taxpayers.
Image from Flickr user Matthijs.
Scott Amey is General Counsel for the Project On Government Oversight. Some of Scott's investigations center on contract oversight, human trafficking, the revolving door, and ethics issues.
Topics: Contract Oversight
Authors: Scott H. Amey, J.D.
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