Tag: Cost Saving

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Moving Toward a Better Marketplace for Desktop and Laptop Procurement

Recently, I talked about how important it is to keep up with the latest technology trends and changes taking place across government for purchasing IT products and services. ITS continually strives to streamline procurement processes and maximize federal spending to achieve better acquisition and operational efficiencies for government agencies while at the same time acting as effective stewards of taxpayer dollars.

One great example of how we’ve been able to do just that for IT hardware products is the Government-wide Strategic Solution (GSS) for Desktops and Laptops. This particular project focused on key areas of importance to me: leveraging the buying power of the federal government, collaborating with other federal agencies and industry, and creating acquisition efficiency.

Leveraging Our Buying Power

First, the Office of Management and Budget (OMB) recognized an opportunity for the government to improve how we buy IT hardware and issued a memo on October 16, 2015 mandating that all civilian agencies use three existing “Best in Class” vehicles to fulfill most of their laptop and desktop needs. OMB stated that cross-agency collaboration and industry feedback were the keys to taking full advantage of the government’s buying power in this space.

Inter-Agency Collaboration

Second, based on the need for increased collaboration and integration between services, OMB created the Workstations Commodity Team (WCT), now known as the Workstation Category Team (WCT). The WCT comprises IT and procurement professionals from NASA, the General Services Administration (GSA), and the National Institutes of Health (NIH). The group spent over two years working with our industry partners and a consortium of over 20 federal agencies to develop a framework and strategy for solving some of the issues, like limited transparency and terms and conditions that were not common, that the government was facing in the IT hardware space.

As a result of the great cross-agency collaboration and in consultation with OMB, the Government-wide Strategic Solution (GSS) for Desktops and Laptops was developed. On February 2, 2016, GSA, NASA, and NIH hosted an industry day. We used this forum to share the updated specifications with industry and to seek their input for moving forward with the first technical refresh under the effort.

Efficiency

Lastly, the GSS currently gives agencies a choice of three desktop and three laptop configurations that meet the federal government’s requirements for more than 80 percent of systems purchased.

In addition to the six standard configurations, GSS for Desktops and Laptops has pre-negotiated policies and terms and conditions, and includes significant small business participation–over 85 percent, ensuring that agencies save time and meet socioeconomic goals.

A significant feature of the GSS for Desktops and Laptops is the continued focus on keeping up with fast-paced technology change. The program incorporates a technical refresh schedule every nine months, so specifications  reflect feedback from customer agencies and industry, aligning available configurations to market conditions and available technology.

Current configurations are now available for purchase on all three contracts. You can access the configurations on GSA Advantage and see all three contracts on the Acquisition Gateway.

By using existing best-in-class contract vehicles, streamlining procurement processes, and maximizing federal spend, we not only achieve better acquisition and operational efficiencies but also act as one and as effective stewards of taxpayer dollars.

The Challenge

Just to give you some perspective on how significant this particular initiative is, in fiscal year 2014 alone, federal agencies awarded more than 10,000 individual contracts and delivery orders for desktops and laptops, totaling approximately $1.1 billion. These products’ prices varied by almost 300 percent. If agencies requested different configurations, the prices went up even more.

Next Steps

On June 1, 2016, OMB released a GSS Desktop/Laptop buying event announcement to the CIO/CAO communities to increase awareness and encourage agency participation in the GSS initiative. GSA, NASA, and NIH will each  conduct buying events for laptops and desktops between June and September 2016. The planned buying events are in support of OMB Memo M-16-02, Improving Demand Management Practices (Aggregate demand to support leveraged buying events).

Accordingly, GSA IT Schedule 70 will conduct its first buying event during 4th Quarter 2016. GSA will request federal agencies to provide estimated quantities by June 17, 2016, in order to obtain maximum volume discounts, which will  streamline agency buying and drive down costs.

GSA’s acquisition will be conducted through the GSA Reverse Auction Platform based on estimated agency requirements, resulting in awards for manufacturer-specific, single-award government-wide Blanket Purchase Agreements (BPAs) for each of the six GSS standard-configurations to the Original Equipment Manufacturer (OEM) authorized resellers. These BPAs will be made accessible via the GSA AdvantageSelect platform, which allows agencies to purchase online without further competition.

ITS will continue to add new industry partners that offer the standard configurations and encourage small business participation. You can also use the GSA Advantage GSS icon GSS icon to identify products meeting the minimum specification on GSA Advantage.

To learn more about the program and how to order, visit the GSS for Desktops and Laptops webpage.
Please follow us on Twitter @GSA_ITS and LinkedIn to join our ongoing conversations about government IT.

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Total Cost Savings Key in Federal Network Connections

(This blog post is part of a multi-week series reviewing data and trends from GSA’s IT acquisition vehicles for FY15. Read previous posts at http://gsablogs.gsa.gov/technology/)

Improving and maintaining reliable and flexible basic connectivity continues to be important for government, including a focus on total cost of ownership savings.

Connections II is the GSA contract agencies use to purchase network integration support and communications equipment to ensure connectivity from the user to the network provider.

FY15 Customer Buying Trends

Federal agencies obligated $172 million to Connections II network integration and support services via 292 task orders in Fiscal Year 2015 (FY15).

While building and campus connectivity remain the primary purpose of the Connections program, as technology continues to evolve we see a shift in what agencies are ordering. For example, traditional building and campus wiring and cabling projects are now becoming wireless.

Agencies are looking to Connections to support engineering, installation, testing, project management, and life-cycle management of Digital Antenna Systems, Wi-Fi, and other wireless technology that become the user interface to the broader networks of the world.

Connections II purchase data tells us that agencies need continued support and resources in this area. Five service types available from Connections II make up almost 80% of demand. Demand for telecommunications, network upgrades, and general network support were higher priority in FY15 than the year before.

Technology Solution Percentage of Total
Telecom Upgrades 20%
General Support 18%
Voice Operations and Billing Consolidation 15.6%
Unified Communications Expansion 13%
Network Cabling 10.5%

 

Connections II contractors offer strong integration skills, which are important during long upgrades or transition, to watch for technology changes and incorporate them into the final result.

Focus on Total Cost of Ownership Savings

Connections II customers are focusing on solutions that save dollars at both contract award and on long-term operational costs (total cost of ownership).

One agency awarded a large task order in FY15 that achieved more than 10% in labor savings and 40% in equipment savings over listed prices. Other agencies are anticipating more downstream savings as a result of consolidation and modernization.

Agencies are able to save millions with more efficient telecom operations and billing management over several years. They also reduce cost of operations and security, and increase network efficiency by modernizing technology such as nationwide Unified Communications Convergence.

Orders Increasing Year to Year

Demand for solutions from Connections II is growing every year. FY15 obligations represent an increase of 31% in obligations from FY14, and 60% in obligations from FY13.

In addition to Unified Communications, we see interest growing for Radio Access Networks (RAN), Distributed Antenna Systems (DAS), and Land Mobile Radio (LMR). This is no surprise with the growth in mobile, since these technologies broaden the area signals can be received by mobile devices. They also assist with emergency preparedness.

Please follow us on Twitter @GSA_ITS to join the conversation.

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GSA AdvantageSelect: The Right Product, Right Now

Visit the GSAAdvantageSelect online portal.

 

For this Great Government through Technology Blog post, we welcome special guest author Erville Koehler, Region 4 Regional Commissioner.

GSA is making it easier than ever to use one of its flagship portals, GSA Advantage!, with the addition of GSA AdvantageSelect: a money saving program that makes shopping for pre-competed IT commodities easier and faster. AdvantageSelect draws concepts from category management, agile development, acquisition streamlining, and world class practices from Government and industry and is a game changing initiative for federal buyers. 

From this portal, a contracting officer or purchase card holder need only enter the quantity they require, and can proceed straight to check-out — so buying a commodity is finally as easy as click and pay. GSA has done the work for you by competing these items up front, applying category management principles and utilizing our latest procurement tools.

GSA plans to test two GSA AdvantageSelect offerings this fiscal year:  

  • 22 inch monitors in August 2015  
  • 14 inch laptop in September 2015 based on Strategic Sourcing Group standard configuration  

Category Management – The Path to Select

As part of GSA’s category management initiative, we met with agencies and vendors to determine basic parameters for purchasing commodities. Conversations ranged from small business utilization to ordering methods to life cycle management constraints. A significant step was the development of standard configurations for items like laptops and desktops.

Taking best practices from places like Army, Air Force, and even commercial entities such as Amazon, we rethought our approach to the commodities market and considered the tools available to us. We realized we already had many of the components to create a better buying portal, we simply needed to modify and re-purpose them.

Agile development – concept to production in less than four months

Agile development techniques were applied to systems development and the acquisition process itself.  Our goal is to test concepts on a small scale quickly, evaluate results, and proceed based on the results. For 22 inch monitors and the standard 14 inch laptop configuration, we are actually testing different procurement approaches and systems at the same time. For monitors, we are using e-buy, included quantity price breaks, and a classic GSA Advantage! upload method. For the laptop, we are using the GSA Reverse Auction Platform, no quantity price breaks, and a new GSA Advantage upload method. Although the tests are small, the data is a critical component in determining  our approach going forward.

Conceptually, the underlying GSA AdvantageSelect procurement will result in a short duration single award vehicle that will be posted to GSA AdvantageSelect.  “Short duration” will likely be defined by category or commodity to be consistent with production from an industry perspective, and life cycle management from an Agency perspective. Monitors which are plug and play could be relatively short (e.g., 3 months), whereas, a laptop which require more configuration might be a little longer (e.g., 1 year).

Moving forward – a place for businesses large and small

After the monitors industry day, interest in GSA AdvantageSelect was high, but small business concerns were raised. Fortunately, the regulatory framework offers an array of options to ensure small business remains a healthy part of the industrial base. In the future, the GSA AdvantageSelect program will expand and include competitive acquisition strategies so that multiple product offerings can be awarded not only using full and open competitive procedures, but also solely within the various sub-categories of small businesses, thus providing our customers with multiple product offerings from the entire socio-economic spectrum of industry.

As we continue testing the portal, meeting with customers, and conducting industry days, AdvantageSelect will evolve. Few things are set in stone at this point, however three goals remain in sharp focus: robust small business participation, savings for commodities purchased, and a streamlined acquisition process.

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IT Acquisition Best Practices & Dispelling Myths

In June, I read a great open letter from Susan M. Gordon, Deputy Director of the National Geospatial-Intelligence Agency, that explained how to make sure we’re doing the best we can to get technology and related services to help us meet our missions.

This blog post is an open letter follow-up with seven best practices for agencies acquiring mission enhancing IT solutions such as software, hardware, telecommunications, cybersecurity, cloud, satellite, mobile, and other IT. These tips should help dispel some common myths.

  1. Make Market Research Personal – Don’t assume market research on paper and the Internet gives you the full picture. You’ll need to talk to experts each time you need an acquisition. Talk to industry, other agencies with similar requirements, and GSA. We administer many government-wide shared IT acquisition contracts. Check out the government’s open and independent resource – the Government Acquisition Gateway and hallways – as a starting point. You’ll find white papers, best practices, potential and existing contracts from GSA and other sources, and community discussion groups where you can ask questions and talk with other agencies.
  2. Always Talk to GSA – Each time you need IT, talk to us about pre-established contracts that might work well for you. It won’t take a lot of time to talk to us – we can use video conferencing or visit you in person. Contact a GSA Customer Service Director in your area to schedule a meeting. In addition to contract vehicles, GSA may be able to share an agency contact with you that recently addressed the same challenges and perhaps developed a best practice in the process. Even if you don’t have a live requirement at the moment, using GSA as a resource for strategic ongoing market research will make for better, well-educated, future buying decisions.
  3. Let Go of Preconceived Judgments – Some people have predetermined notions of many of the pre-established contracts. Letting go of preconceived judgments opens the door to finding the best solutions. For example, you may be surprised to learn how much control you have while using pre-established vehicles, and you may be amazed to find you can often and easily obtain lower pricing through additional negotiations than published, list prices.
  4. Know that Things Change – Don’t think that the government-wide contract you or your contractor checked a year ago is still the same. GSA and other agencies continuously refresh shared contracts and make them more user-centric every day. We’re talking more to government and industry. We constantly seek input on what agencies need today and what industry can offer. We are evolving contracts to meet those needs. For example, this year we’ve added a Cloud SIN to IT Schedule 70 to help agencies find their best cloud solutions easier than ever before. Even though a contract didn’t meet every need in the past doesn’t mean today’s options won’t be your best choices. The GSA of today is not the GSA of yesterday.
  5. Dig Further – If you have an industry partner working with you on market research and acquisition planning who recommends you go open source rather than use an existing contract, do you stop there? As a best practice, don’t. Keep in mind that in-house advisors have more involvement and financial benefit in doing steps required for open-source acquisitions, while pre-established contracts have those steps already completed. For example, if you have a contractor doing market research who recommends going open market for commercial satellite services, consider instead that GSA’s Custom SATCOM (CS2) and CS2-SB contracts have vetted partners and solutions without the overhead and cost of creating an entirely new contract. And remember to evaluate advisor recommendations to ensure they don’t steer toward a specific contract because they’re on it.
  6. Look for Efficiencies – Agencies who use existing contract vehicles with the IDIQ Fair Opportunity process or Multiple Award Contract/Blanket Purchase Agreements (BPAs) save months in acquisition lead time. Why? Because many of the initial steps and approvals required to establish a full stand-alone procurement action, including pre-qualifying industry partners,  have already been done for you. Having to find and qualify contractors can add six months or more to the procurement process.
  7. Lower Agency and Taxpayer Costs – Government-wide contracts can achieve cost savings because multiple agencies are already using them, increasing volume buying from government to industry partners and driving competition to lower costs. I did a recent blog post, for example, about the FSSI Wireless BPAs and how they’re saving agencies on average 27% over what they had been spending on wireless services and devices. Start at the published contract pricing, but always request discounts and lower pricing. Whether you get discounts in initial years or option years, your actual cost will be lower than the initial cost evaluation.

The ultimate motivator and driver for all of us in public service isn’t what we perceive or think is best, but what we find after due diligence is really best for our missions and the American taxpayers.

If you chose not to use GSA for an IT acquisition, it’s ok. But a fresh conversation with GSA should always be part of the equation.

Please follow us on Twitter @GSA_ITS to join the conversation.

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Schedule 70 in the State and Local Market

(This blog post is part of a multi-week series reviewing data and trends from GSA’s IT acquisition vehicles for FY14. Read previous posts at http://gsablogs.gsa.gov/technology/)

State and local governments are adopting Schedule 70 at a rapidly growing rate. They have the ability to receive the same benefits that federal agencies receive when using Schedule 70: fast and easy acquisitions and access to a large range of pre-vetted vendors at prices determined to be fair and reasonable.  The program is called the Cooperative Purchasing Program and allows state and local entities to use Schedule 70 and Schedule 84.

State and local: by the numbers

  1. Growth: The usage of Schedule 70 by state and local governments increased almost 30% last year to $846 million in volume. The projected IT spend at the state and local level has increased over the past couple of years, and the growth of usage of Schedule 70 has outpaced that growth.
  2. Outreach: GSA has increased overall focus on outreach and training to state and local governments on the use of Schedules 70 and 84.
  3. Local vendors: An enormous benefit to state and local governments is access to companies in their local communities.  Schedule 70 has thousands of vendors located across the US and many state/local entities encourage local businesses to consider GSA Schedule as an option.  80% of the companies on Schedule 70 are small businesses and GSA can provide support to those companies seeking to obtain a Schedule contract.
  4. Positioned for future growth: for state and local,  growth in spend is occurring in areas such as software, IT services, systems, and IT outsourcing. These are areas that we expect to see continued future growth in state and local markets.

Improving efficiencies in all levels of government

The state and local IT market is valued at over $60 billion. Although the market is significantly more fragmented than the federal market, GSA is ready to help all forms of government become more efficient, spend smarter, and support delivery of services to the citizens. We will continue to work with local governments and vendors in an effort to drive greater value for the taxpayer.

Please follow us on Twitter @GSA_ITS to join the conversation.

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FY 2014 Delivers Enterprise Growth in Wireless

(This blog post is part of a multi-week series reviewing data and trends from GSA’s IT acquisition vehicles for FY14. Read previous posts at http://gsablogs.gsa.gov/technology/)

As we all know, the explosion in demand for wireless and mobile services is continuing at a pace hard to keep up with. And with that popularity comes government’s continuing need to find ways to exploit those technologies while simultaneously saving money and increasing acquisition and operational efficiencies.

In FY 2014, we saw agencies increasingly turn to GSA’s Federal Strategic Sourcing Initiative (FSSI) Wireless Blanket Purchase Agreements (BPAs). Initially launched in the second half of FY 2013, the BPAs experienced substantial growth in FY 2014, with multiple enterprise level buys (greater than 2,500 units) awarded and task order-level competition yielding very competitive rates and cost savings for most federal users.

Since June 2014, month over month program growth exceeded 30%. Additional awards are anticipated in early FY 2015 increasing agency usage and savings (>20%) for the foreseeable future.

Cost Savings, Choice, and Efficiency

The growing demand of the FSSI Wireless solution is largely due to the >22% cost savings they deliver and the flexible features they offer (including no-charge refreshable devices, open market premium devices, agency-level pooling to reduce overage costs, and adherence to federal policies and administrative priorities). The achieved savings by participating agencies is compared to their prior rates or government-wide average and not list prices.

FSSI Wireless BPA task order competitions have driven rates lower from the award value to rates as low as $42, $40, $38, and $36 per user per month for many common smartphone plans.

This competition lowered the average monthly rate across all federal mobile users to approximately $40 per user. The prior average rate across government based on the contracts we reviewed was nearly $55, which was comprised primarily of devices with limited data capabilities. This means the FSSI Wireless BPAs are producing considerable additional savings for agencies as they deploy devices with a much greater data-intensive footprint.

The BPAs have the added advantage they include government-wide discounts that apply as government-wide usage increases, which adds even greater value.

The more agencies use the BPAs, the greater the current and future cost savings for the government and taxpayers.

Initial savings are through the discounted wireless plan pricing and no-cost devices. Two of the four carriers on contract have committed that the BPA prices are the lowest they offer government buyers.  In addition, agencies can see the published prices on all the BPAs in a single place.

In addition, the pooling option for data and minutes are saving agency dollars by allowing high-volume users to leverage the unused minutes and MBs purchased by lower volume users, further reducing overage costs.

Savings came in acquisition efficiencies too. In the past year, some agencies procured services from the BPAs in as little as 3-5 days.  One agency procured 3500-plus devices in less than two months and indicated they could have executed the order in less time.

Wireless Buying Trends

The most popular data add-on and data-only plans are the 500MB Pooled and Unlimited plans. The most popular voice plans under the BPAs are the 400 Minute Pooled and 100 Minute Pooled plans.

We’re finding agencies default to unlimited when they don’t know what they will use to avoid potential overages. The FSSI wireless contracts offer agencies usage data enabling them to structure the right plan and pooling arrangement that will satisfy individual needs reducing risk of overages.

During 2014, government agencies also took advantage of additional assistance offered by GSA to help manage the mobile component of their IT enterprise by using GSA’s Managed Mobility sources of supply list or the FSSI Wireless BPAs to add mobile management resources they can bundle with wireless service plans.

Overall, 2014 was a successful year for GSA’s wireless and mobile programs.  Building on the FSSI Wireless Program and Managed Mobility Program, we consolidated these solutions and category management approaches under the GSA Enterprise Mobility Program.

Going forward in 2015, we expect wireless BPA usage and savings to continue to grow. Several agencies indicate the BPAs will be their contract vehicle of choice for all future acquisition of wireless services.

Please follow us on Twitter @GSA_ITS to join the conversation.

 

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Alliant GWAC: Exploring Success

(This blog post is part of a multi-week series reviewing data and trends from GSA’s IT acquisition vehicles for FY14. Read previous posts at http://gsablogs.gsa.gov/technology/)

The GSA Alliant GWAC had an outstanding year helping agencies achieve their mission through a fast, flexible, and safe acquisition vehicle. Agencies obligated  $2.682 billion dollars to Alliant during FY14, marking Alliant as the largest utilized single GWAC in GSA history by dollar value. Alliant is GSA’s premier enterprise GWAC, providing flexible access to customized IT solutions from a large, diverse pool of industry partners. Alliant allows for long-term planning of large-scale, complex program requirements. The success can be attributed to several factors that deserve a closer look.

Alliant FY14 Success Analytics:

Since contract inception, more than 60 agencies have used Alliant and awarded an estimated $18.7 Billion in task order value.  Fourteen agencies used Alliant for the first time in FY14. This steady growth can be attributed to numerous factors. For example, approximately 1200 federal acquisition & program professionals have received the Alliant GWAC Delegation of Procurement (DPA) training to including 229 just in FY14 – an 18% increase in buying power! Lastly during FY14, 85 Statements of Work (SOWs) were submitted for review.

Top Agencies and Vendors:

The top three agencies utilizing Alliant (obligated dollars) are the Department of Homeland Security at $2.74 billion, the Air Force at $2.70 billion, and the Department of State at $2.52 billion. The Army comes in at a close fourth at  $2.24 billion, marking a significant task order increase of 47% between FY13 and FY14.

Currently, SAIC is the dominant vendor with over $1.6 billion in obligations spread across 42 task orders. Booz Allen Hamilton Engineering Services follows with $720 million across 43 task orders, increasing its capture by more than 60% over the past three years according to a recent study conducted by Govini. Northrop Grumman follows suit with $550 million across 36 task orders.

Strong relationships between Government and Industry:

As pre-competed vehicles, GWACs can streamline the acquisition process, which naturally leads to saving time and taxpayer money. Our pre-competed vehicle consists of 58 exceptionally qualified contractors. The Alliant program office takes pride in the individual relationships that have been created through the years between the Enterprise GWAC division and the outstanding Alliant contractors. To date, 50 out of 58 primes have received awards, exemplifying the diverse pool of credible talent and the constant interaction between government and industry.

The Enterprise GWAC division recently invited representatives from each of the 58 Primes to participate in Alliant’s twice-a-year Program Management Review (PMR). The event spans two days and allows industry to interact with government and partake in collaborative program updates and breakout sessions.  Success on projects through Alliant is a three-part partnership – GSA, the procuring agency and the company performing the work under the task order. We’ve built this model over a number of years through all of our GWACs, and it’s because of that focus and approach that Alliant has served the federal community so well.

Please follow us on Twitter @GSA_ITS to join the conversation.

 

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Looking at Year-End Telecommunications Insights from Networx

(This blog post is part of a multi-week series reviewing data and trends from GSA’s IT acquisition vehicles for FY14. Read previous posts at  http://gsablogs.gsa.gov/technology/.)

Most federal agencies purchase network services through the Networx telecommunications program. Fiscal Year 2014 year-end Networx purchasing data provides a good picture of the federal networking and telecommunications market.

Last June, we talked about mid-year trends in telecommunications purchases. Today, let’s look at the entire year for FY 2014.

In total, more than 136 federal agencies use Networx. Federal agencies purchased $1.53 billion in network and telecommunications services from the Networx contract in FY 2014. This represents an increase of over $179 million from FY 2013, or 13.2%.  (* See note)

Annual Networx Buying Trends

The two largest in-demand core services on Networx continued to be Network-Based Internet Protocol Virtual Private Network (NBIPVPN) and Managed Network Services (MNS), making up 46% and 12% respectively of Networx purchases. NBIPVPN is a mouthful and you can translate that to secure bandwidth services purchased across an agency.

Demand for these two services grew rapidly. Government agencies increased purchasing of bandwidth by 19% and managed network services by 22% in FY 2014 over FY 2013.

We are seeing federal agencies purchase more high-bandwidth services. This represents a clear shift away from traditional digital signal hierarchy services towards Ethernet-based services. While the inventory of DS-1s (1.5 Mbps services) remained flat, the inventory of 200-500 Mbps Ethernet services in FY 2014 was up over 150% compared to FY 2013. And, we expect this trend to accelerate in FY 2015.

Call center services (such as intelligent call routing to agents) were up 46%. Given the recent modernization of some call centers to Networx, this purchase increase is not surprising. In FY 2015, we anticipate call center services growth will taper as large federal call centers complete their modernization efforts.

One of biggest growth services this past year was toll-free service (TFS). It was the third highest demanded service (9%) on Networx, with purchases up 43% compared to FY 2013. We anticipate this growth trend will decrease or end going forward because it was mainly due to one-time needs in FY 2014 within a few large agencies.

FY 2013 to FY 2014 year-over-year purchase increases are shown below for some of Networx core services.

 Highlights of Network Purchases by Service FY13-FY14  Percentage Growth (FY13-FY14)  Percentage of Networx Purchases
 Network-Based Internet Protocol Virtual Private Network Service  19%  46%
 Managed Network Services  22%  12%
 Toll Free Services  43%   9%
 Call Center Services  46%   3%

 

Consistent with what we found mid-year, increases in bandwidth-driven services more than offset declines in legacy services like long distance voice, which is for the year down 5% from FY 2013. Not surprisingly, long distance voice now accounts for less than 3% of the purchases on Networx.

And, legacy networks based on the Asynchronous Transfer Mode and Frame Relay protocols have largely disappeared from federal purchasing. They now account for about 0.5% of the purchases.

Beyond these core services, purchases of storage services (Network Attached Storage, Storage Area Networks, and Backup and Restoration Services) through Networx had another year of strong growth at 122% over FY 2013.

While storage services account for a small portion of Networx purchases, it is the second year of triple digit growth in storage services.  We expect growth in cloud-based services like this as bandwidth itself grows to accommodate increased government data needs.

Delivering Cost Savings

One of the missions of GSA is to use the purchasing power of government to drive down prices and reduce costs for agencies. GSA closely and continually evaluates how Networx is meeting this mission, especially around the area of pricing.  In FY 2014, the Networx program saved taxpayers and agency users approximately $670 million on telecommunications, compared to best commercial prices.

GSA calculates savings by keeping and using detailed Networx data on both the services agencies purchase and agency usage volume. Third-party market research allows us to compare best commercial rates for these services to Networx pricing.  If you are interested in seeing current year pricing by service on Networx, please visit our Networx Unit Pricer.

In general, purchasing on Networx has become stable. The proportion of services purchased in FY 2014 is fairly close to what was expected. We expect FY 2015 purchasing trends to remain consistent and for Networx to continue to deliver savings.

* The source of the $1.5B is Networx billing data. Federal Procurement Data System (FPDS) data may reflect a smaller volume of federal purchasing due to differences in task order and service order reporting as well as differences between invoice cycles and agency reporting on FPDS.

Please follow us on Twitter @GSA_ITS to join the conversation.

 

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“Easy to Find, Easy to Buy” — Envisioning the Next Step for Cloud Computing on IT Schedule 70

GSA has led efforts to create a 21st century government, including introducing cloud to federal agencies. We offer a variety of contract vehicles that help agencies streamline acquisition of cloud technologies, including IT Schedule 70, the Email as a Service and Infrastructure as a Service Blanket Purchase Agreements (BPAs), and Governmentwide Acquisition Contracts (GWAC) like Alliant and Alliant Small Business.

As the cloud marketplace is maturing, we are seeing an increased focus on IT Schedule 70 as one of the main acquisition vehicles for agencies.

IT Schedule 70 is already the largest, most widely used IT acquisition vehicle in the federal government, and we are continuously looking to improve what it offers. One area we are exploring is looking for ways to help customers find and buy cloud services.

For example, we are considering the creation of a single Special Item Number (SIN) for all cloud services that would provide clear cloud technology differentiation for customers and improve ease of access to acquire cloud services. We recently released a request for information, seeking industry input on this idea.

IT Schedule 70 already offers cloud services, and our industry partners have cloud offerings in several SINs, so why create a new SIN?

Through customer dialogue and market research, an integrated team of acquisition, technology, and program experts across the Federal Acquisition Service (FAS) has identified that there would be benefits to creating a Cloud SIN to all parties involved:

  • GSA Customers – Clear differentiation of cloud services vs. non-cloud IT products and services, and empowered cloud buying through better data
  • Industry Partners – Opportunity to market distinctive solutions and offerings on IT Schedule 70
  • Internal GSA Operations – Enable more granular reporting on cloud sales to enable decision making, and help our customers buy better through data

The goal of this new SIN would be to provide clear cloud technology differentiation and ease of customer access through systems such as eBuy and GSA Advantage!.

Since SINs create logical categories of services within a Schedule, we envision the creation of a Cloud Computing Services SIN will provide a level of differentiation for customers that would more easily and clearly identify cloud services.  Additionally, GSA could establish a set of qualifying requirements that would help customers in identifying cloud services that meet acceptable standards around security, data, and other characteristics.

We are always looking for ways to make sure that doing business with us is as easy and reliable as possible. We believe that adding a Cloud Computing Services SIN would realign IT Schedule 70 cloud technology offerings to better reflect the current cloud computing market and satisfy customer needs.

The cloud market is sufficiently mature to offer differentiated and vetted cloud services through a single SIN, and this makes sense for both GSA customer agencies and industry partners. We are looking for feedback to make sure we get it right and look forward to the conversation. Read the RFI.

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Networx Data Shapes our Understanding of Telecommunications

Big data is being used to help transform government by revealing information and patterns that can bring innovation, better services, and smarter decisions.

To effectively use big data, we must be willing to collect, analyze, and share the information we discover. You already know about some of the ways we’re helping the government buy smarter through big data: GWAC Prices Paid Tool, horizontal and vertical pricing in Schedule 70, and Reverse Auction pricing data.

Here is something you may not have heard a lot about: GSA’s major telecommunications program, Networx, collects data about what federal agencies are purchasing and how much they are paying. Because most federal agencies make network services purchases through the Networx program, these “big data” details from Networx provide a good picture of the federal networking and telecommunications market — and we’re happy to share it.

We’ve just completed an analysis of the first half of fiscal year 2014. And, it’s a good time to look at how federal agencies are using the Networx contracts and the trends we’re seeing in telecommunications buying.

In total, more than 136 federal agencies use Networx. Federal agencies have purchased $762 million in network and telecommunications services off the Networx contract through the second quarter of FY 2014. During the same period last year, federal agencies purchased $630 million through Networx. After accounting for FY 2013 purchases through now expired legacy contracts, this represents a year-over-year increase of 12.8% on the Networx contracts. The projected yearly increase we’re seeing is an indicator that agencies are utilizing Networx more often than ever to solve their network services solutions.

Networx Buying Trends

GSA attributes this growth in usage to a couple of factors. First, federal agencies are using Networx to purchase more services because of increased bandwidth demand. More applications, more video, and more data all drive the need for more bandwidth. When was the last time you were not online? The two largest in-demand core services on Networx are Internet Protocol Based Virtual Private Network and Managed Network Services. Government agencies have increased purchasing of these two services by 24% and 36% respectively in FY 2014.

Second, due to transition and increased activity at call centers at several civilian agencies, toll-free services and call center services have seen year-over-year purchase increases of 62% and 288% respectively.

 Purchase Increases by Service from FY 13 to FY 14  Percentage of Increase
 Network-Based Internet Protocol Virtual Private Network Service  24%
 Managed Network Services  36%
 Toll Free Services  62%
 Call Center Services  288%

Increases in bandwidth-driven services more than offset declines in legacy services like long distance voice, which is down 5% from FY 2013. Legacy networks that are based on the Asynchronous Transfer Mode and Frame Relay protocols have largely disappeared. They are down 8% and 31% respectively since last year and, combined, now account for less than 1% of federal purchases.

 Purchase Decreases by Service from FY 13 to FY 14  Percentage of Increase
 Long Distance Voice Service  -5%
 Asynchronous Transfer Mode  -8%
 Frame Relay Service  -31%

Beyond these core services, purchases of storage services (Network Attached Storage, Storage Area Networks, and Backup and Restoration Services) through Networx continue to grow. Storage services are a small part of overall use on Networx, but GSA considers this a bellwether for enhancement of traditional bandwidth with cloud services like Infrastructure as a Service.

Buying trends on Networx are expected to continue strong in the second half of FY 2014, but at a decreased growth rate compared to the first half of the year. Demand for bandwidth through IP based virtual private networks is expected to grow as an overall trend; however, the large purchase growth in toll-free and call center services will taper as several large federal call centers complete modernization efforts and roll into steady-state operations.

Savings Compared to Commercial Pricing

In the first two quarters of FY 2014, the Networx program saved taxpayers and agency users $332 million. This is slightly more than the $328 million savings we originally anticipated for this point in the year. Networx is on target to meet our goal of saving federal agencies at least $659 million this year.  We base the Networx savings calculations on a comparison of Networx pricing, commercial pricing for similar services, and Networx usage.

The GSA Network Services Program continues to have a two-pronged focus: deliver today and plan for tomorrow. Our focus for today with Networx and our other telecommunications acquisition vehicles (including FSSI Wireless BPAs, Connections II, Commercial Satellite Program, and a full range of regional and local voice, data, video, Internet and other service offerings) is to continue to save taxpayer dollars and deliver what agencies need in telecommunications services.  For example, we are making Networx process changes to lower the transaction cost of purchases and price changes to lower per unit service costs.

Looking to the future, with NS2020, we are in the midst of developing new acquisitions and service delivery models to help structure and enhance future government telecommunications both globally and locally.

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