Avnet Government Solutions’ recent deal with Catalogic Software underscores the role distributors play in providing an onramp to public sector opportunities.
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Specifically, Avnet Government Solutions has added Catalogic to its General Services Administration (GSA) schedule contract. Independent software vendors and hardware manufacturers often enter the government market through specialized distributors that hold the key contracts. And contracts don’t get much bigger than those the GSA maintains. The GSA manages numerous schedules, through which government agencies may order a range of equipment via multiple contracts. Items available on GSA schedules range from dental equipment to light trucks, but the schedule technology companies typically care most about is GSA IT Schedule 70, which encompasses all manner of IT gear. Federal, state and local agencies did more than $14 billion in business on Schedule 70 during the federal government’s 2014 fiscal year.
IT providers often tap distributors’ Schedule 70 contracts rather than holding their own contracts. The reason is simple. Obtaining a GSA contract involves a multistep process and many companies lack the resources (or the desire) to create a dedicated government sales team to bid for and manage contracts.
While Schedule 70 has traditionally been a contract vehicle associated with product vendors, IT services providers also participate. And they too work with distributors. For example, QTS, a data center and cloud services company, earlier this year announced the availability of its services through Carahsoft Technology Corp.’s Schedule 70 contract. Carahsoft represents such companies as EMC, F5 Networks and Hewlett Packard Enterprise on its GSA schedule.
As intellectual property becomes more important to service providers of all kinds, will more channel companies with an interest in the public sector seek out distributors’ GSA contracts? The distributor approach would certainly offer one way to stake out a broader market for the software and other IP that a channel partner creates. And a distributor relationship would represent a lower-risk alternative to a DIY government sales operation.
Here’s an important point to keep in mind, however: Schedule 70 is classified as an indefinite delivery, indefinite quantity (IDIQ) contract, sometimes referred to as a governmentwide acquisition contract. The “indefinite” part means that having a GSA contract, or access to one through a distributor, provides no guarantee that government agencies will actually place orders on it.
Companies that participate in IDIQ contracts must continually market their products and services — or find a partner able to lend a hand.