Critical information has come to me from Professor Samuel Bornstein and need to alert the JanSan industry of changes to the Federal Procurement process that will cut off opportunities and possibly cause massive job losses.
FROM PROFESSOR SAMUEL BORNSTEIN:
Attention all vendors selling Janitorial and Sanitation (JanSan) or Maintenance and Repair (MRO) products, supplies and SERVICES to the federal government 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 General Services Administration (GSA) leases or occupies over 8,100 Public Buildings Service (PBS) leases and 1,500 government owned buildings. This alert applies to all vendors selling JanSan and MRO to federal government agencies.
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 and 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 and MRO next month.
GSA’s FSSI JanSan and 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+ 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. My Bornstein and Song research indicates that the FSSI program must be reevaluated due to the negative impact on these businesses and the US economy. My intent is to prevent this from happening to you!
Now, the GSA and OMB are 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 purchase products and services from ONLY those vendors who were awarded the FSSI BPAs. In fact, this new policy was made clear by Mr. Joseph Jordan, the Administrator for the Office of Federal Procurement Policy (OFPP). “Mandatory is what we’re moving toward,” Jordan said. “There will be winners and losers, and not all who want to sell to the government can sell to the government.”
I am doing research on the Federal Strategic Sourcing Initiative (FSSI) program, and would like to alert all JanSan and MRO vendors of this FSSI program which will have a major impact on your business with the federal government. I welcome your input as to how this program will impact your business.
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 next month, your input will be most valuable.
Samuel D. Bornstein
Professor of Accounting and Taxation
Kean University, School of Business, Union, NJ
Partner-Bornstein and Song, CPAs and Consultants, Oakhurst, NJ
Email: bornsteinsong@aol.com
This issue will impact many of you as the federal government spent $1.6 Billion in JanSan & MRO. Based upon the savings expected, JanSan & MRO Vendors will lose approx $220 Million in federal government sales.
ReplyDeleteThe magnitude of this number illustrates the urgency. The FSSI JanSan & MRO issue will impact thousands of federal government vendors, but they don't yet know about it because it has gone mostly unnoticed and is not grasped by these vendors who are more interested in running their businesses. I am motivated by the fact that the Office Supplies vendors were also unaware of the FSSI for Schedule 75 OS2 until it was too late to act.
A thought came to mind, which will illustrate the urgency. Since GSA states that the JanSan & MRO spend is $1.6 Billion and they are looking for "savings" of 10 to 20%, it would help to quantify the amount that the GSA expects to shrink the JanSan & MRO government sales. The range of reduction in sales which will be expected for FSSI JanSan & MRO is between $160 Million and $320 Million. Based upon the publicized savings which GSA claimed for the FSSI on Office Supplies, which was approx 13.8% savings, we can extrapolate this to be approx $220 Million in lost federal sales for JanSan & MRO. This means that these JanSan & MRO vendors must act, or else they will suffer the same fate as their colleagues in Office Supplies.