Changes Coming To Government Procurement of Cleaning Supplies and Services
If you are selling cleaning supplies to the Federal Government or subcontracting cleaning services, changes are coming to the jan/san industry which will have a major impact on your business. There will be a few select winners but many losers.
This is intended as an alert to the jan/san industry of changes to the Federal Procurement process that will cut off opportunities and result in the displacement of businesses and job losses for the U.S. economy at a time when jobs are critical to economic recovery.
This alert applies to all vendors selling cleaning or Maintenance and Repair (MRO) products, supplies and services to the federal government under GSA Schedule 51V - Hardware ; Schedule 56 - Buildings and Building Material/Industrial Services and Supplies; Schedule 73 - Food Service, Hospitality, Cleaning Equipment and Supplies, Chemicals and Services; Schedule 75 - Office Products/Supplies and Services and New Product/Technology; Schedule 81 IB - Shipping, Packaging and Packing Supplies.
The GSA is working with Office of Management and Budget (OMB) and all Federal Government Agencies to create 10 new government‐wide Federal Strategic Sourcing programs (FSSI) for commonly purchased products and services. One of these new programs will be for Janitorial and Sanitation supplies and services (JanSan) and Maintenance, Repair & Operation supplies and services (MRO). If you are selling products or services in the above named GSA Schedules or you are hoping to in the future, you are at-risk of losing a substantial amount of your government business as GSA implements the FSSI for JanSan & MRO in the coming months.
GSA’s FSSI JanSan & MRO initiatives will impact more than 20 federal agencies, both military and civilian, as active participants in this FSSI program. The FSSI program is intended to leverage the purchasing power of the federal government by awarding Blanket Purchase Agreements (BPA)s to a select few vendors who will provide the federal government with the lowest price.
This FSSI process was first initiated in 2010 for Schedule 75 Office Supplies vendors where FSSI BPAs were awarded to only 15 vendors out of 560-plus who were previously doing business with the federal government. The outcome was the displacement of a significant number of small and large businesses with the resulting job losses which accompanied the financial distress from the loss of government sales. There were a few winners but significantly more non-winners.
"To echo the stories of the many small business owners that have had to face the decline in sales due to the FFSI contracts, we have also had to face the harsh reality this arrangement has had on the business," says Maureen O'Toole of Alpha Sum Business Machines. "We are grateful for our GSA contracts, a lot of time and resources went into getting and maintaining these contracts. We work hard to provide quality goods at reasonable prices, so you can imagine how disheartening it is to see the rewards going to Office Depot, whether they have the best pricing or not."
Bornstein & Song research indicates that the FSSI program must be reevaluated due to the negative impact on these businesses and the U.S. economy.
Now, the GSA and OMB is targeting JanSan and MRO vendors as the first of 10 new FSSI programs. In fact, OMB plans to make FSSI mandatory for all federal government purchases. By making this FSSI program mandatory, this means that it will be mandated for all federal agencies to purchases products and services from only those vendors who were awarded the FSSI BPAs. In fact, this new policy was made clear by Joseph Jordan, the Administrator for the Office of Federal Procurement Policy (OFPP).
“Mandatory is what we’re moving toward,” Jordan says. “There will be winners and losers, and not all who want to sell to the government can sell to the government.”
Bornstein & Song has been researching the FSSI program from its inception as a vehicle for savings. They focused on the initial FSSI for Schedule 75 Office Supplies (OS2) which was implemented in 2010. The federal government touts the savings, but does not recognize the downside, the economic cost of job loss to the U.S. economy.
Based upon the research, and the negative impact that the FSSI has caused for a significant number of businesses and their employees who lost their jobs, it behooves us to alert all jan/san and MRO vendors of this FSSI program. It is too late for the Schedule 75 Office Supplies businesses, but it is fortunate that the FSSI program for jan/san and MRO is in its formative stages.
Distributors and building service contractors have a unique opportunity to make their concerns known to the GSA while this program is in its formative stages. The GSA is holding a FSSI JanSan and MRO “Pre-Solicitation Industry Meeting” on May 15, 2013, which will precede the Request for Quotations expected in June with implementation in August, 2013. As this program is being formulated in the coming months, your input will be most helpful.
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