The General Services Administration plans to finalize rules allowing states and local governments to participate in the IT procurement schedule by April 17, meaning purchasing could begin shortly thereafter.
Another market-intelligence firm, Federal Sources, estimates that the federal government spent $13 billion in hardware, software, and services from Schedule 70 contracts in fiscal year 2002.
"Once the cooperative agreement matures," a Federal Sources reports, "states and localities could appreciably increase sales through the schedule annually. However, one major hurdle to pursuing this purchasing agreement is the need for a government body to resolve state and local government disputes with schedule contractors."
That won't necessarily be easy. "The administrative workload of approving a Schedule 70 purchase in New York would dissuade any state agency from working with GSA until the system is modified," Fedeli says.
As Schedule 70 becomes a factor in state and local governments, procurement officers will transform their contracting practices to compete and compare with federal schedules, Fedeli says. Considering that states and local governments spend some $40 billion a year in IT goods and services, IT producers will watch closely on how these governments will react. "To maintain an advantage," he says, "vendors will have to adjust their pricing based on the markets where they choose to compete."