GSA Plan May Negatively Impact Small Businesses

The General Services Administration has proposed a restructuring of the Multiple Award Schedule program that could impact certain small businesses competing for government supply contracts.

The GSA announced earlier this year that it would begin using a new Demand Based Model (DBM), phasing out some outdated and obsolete supply schedule contracts for products such as typewriters and non-digital photographic equipment. This reduction is supposed to save about $24 million per year and phase out more than 8,000 supply schedule contracts.

However, Chairman of the House Small Business Committee Sam Graves (R-Mo) is skeptical of this new plan.

In a November 29 letter to Dan Tangherlini (PDF), Acting Administrator of the GSA, he expressed concern that the restructuring may not only fail to accomplish its goals of improving efficiency and reducing expenses, but that it could also result in fewer opportunities for small businesses to compete for government contracts.

Graves said in his letter:

“I do not think that the GSA’s proposals will enhance small business viability, improve operational efficiency, or result in cost control. Furthermore, the DBM proposal demonstrates a lack of understanding of how small businesses operate in relation to the federal market.”

Small businesses in the federal market that could be impacted by such changes include those that provide office supplies and similar products. Graves wrote in an earlier letter to the GSA that nearly 15,700 of the 19,000 schedule contracts are held by small businesses. He also said that there are about 350,000 total small businesses that are registered to do business with the federal government.

Graves is not the first to express concern about the DBM.

At a June 7 hearing before the Subcommittee on Contracting and Workforce, representatives from several small businesses and professional organizations, including the National Office Products Alliance and the American Institute of Architects, expressed concern about the structuring of the Multiple Award Schedule.

He asked that the GSA continues to consult with the Small Business Committee before making a final decision regarding the DBM, and that it be informed once a decision is made.


Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found exploring all that her home state of Michigan has to offer.

2 Reactions
  1. Unfortunately it is common for a well-intentioned government policy to have unintended negative consequences.

  2. Hmmm, this is interesting, Annie. Thanks for bringing this to our attention.