GSA lowers schedule fee

The General Services Administration is lowering the fee it charges federal agencies to use one of the most popular contracts in government. The move comes after a General Accounting Office report released in July found that the contracts ended fiscal 2001 with a fee surplus of more than $56 million, well beyond what the agency needs to keep the contract program running.

Agencies pay GSA a 1 percent charge of their total purchase to use the Federal Supply Service schedules, a series of contracts awarded to more than 6,000 companies. The contracts are like a government stamp of approval for vendors, who sell all manner of products and services, from office furniture to medical supplies to technology products. GSA sold more than $22 billion worth of goods and services through the schedules in fiscal 2002 and earned about $210 million in fees. The new fee of 0.75 percent will be effective January 1, 2004.

Bill Gormley, a former GSA official who established the schedules program in the mid-1990s, said the fee lowering was "inevitable." He said the agency has discussed the issue for years, and he welcomed the move.

Gormley also noted that agencies would save money by paying less in fees, meaning they'll have more to spend, which should make the private sector happy.

GSA was probably prompted to take action now because of increasing pressure from Congress and the Office of Management and Budget to spend the fee surplus on other government projects, said Larry Allen, executive vice president of the Coalition for Government Procurement, a trade association in Washington.

Allen said the schedules program will probably still run a surplus, but that a smaller pot of money would be less attractive to those who might try to lay a claim on it.

Before the new fee is official, GSA must notify all schedule contractors and change language in the contract terms.