NASA, GWACs, and What the Private Sector Can Learn from Them

The government often turns to the private sector to access the expertise and capabilities it doesn't keep in-house. Although this practice is commonplace today, it wasn't always as streamlined as it is now. In the old days, individual government agencies had to rely on procurement methods that went through a significant amount of red tape just to access the services and technologies they needed.

Acquisition was typically a paper-based process facilitated by a single agency. Individual procurement actions were painstaking and had to be assessed on a case-by-case or vendor-by-vendor basis.

As you can imagine, this led to some significant bottlenecks at a time when government technology adoption, like spaceflight, was extremely competitive.

Thankfully, government procurement has improved significantly since then. Over the past few decades, changes in government procurement have become digital, streamlined, and cost-effective. These changes can provide some important lessons for the private sector.

NASA's Procurement Innovation and the Introduction of SEWP and GWACs

Several of the nation's technology, policy, and procurement leaders convened at the National Aeronautics and Space Administration (NASA) Goddard Space Flight Center in 1992.

According to Federal Computer Week (FCW), "The goal was to create a procurement method that would allow NASA to make critical purchases in a matter of months by reducing the red tape that delayed the acquisition of emerging technologies. NASA leaders eventually requested procurement authorities from the General Services Administration so that they could establish pre-competed, indefinite-delivery, indefinite-quantity (IDIQ) contracts, which allowed them to negotiate their own prices and pre-qualify sellers."

This program eventually became known as NASA's Solutions for Enterprise-Wide Procurement (SEWP). Many aspects of SEWP are still active today, but it also served as the start for another series of innovative programs: governmentwide acquisition contracts, also known as GWACs.

Every iteration of SEWP introduced new improvements. Agencies and governmental departments switched from paper-based procurement to electronic procurement. Technology updates also became electronic, enabling government procurement departments to execute updates in less than an hour.

Soon, departments were able to focus on agency-wide initiatives rather than individual procurement actions.

Now, a governmentwide acquisition contract enables multiple government agencies to align their needs and purchase goods and services from approved vendors. Agencies are no longer restricted to individualized procurement contracts.

GWACs Offer Lessons in Cost-Savings and Streamlined Procurement

GWACs are inherently focused on cost savings, which is why they serve as an important lesson for the private sector. GWACs offer competitive rates on fees, and they enable agencies to emphasize category management and better designation for specific procurement vehicles.

According to FCW, "NASA's SEWP has always had the lowest fees of any GWAC, starting at 2.6% in 1993 and dropping to 0.34%," which is the current rate.

Perhaps most importantly, GWACs represent large, pre-competed contract vehicles that multiple agencies can take advantage of. This significantly reduces the effort and time agencies need to spend on procurement. Without these vehicles in place, some procurements could take several years to complete.

GWACs can also be lucrative for businesses. Government contractors can leverage GWACs to provide their IT expertise to government agencies that don't typically have expertise on hand that's comparable to the private sector.

Applying These Principles in the Private Sector

The private sector is typically marked for its competitiveness, but collaboration is also important, especially when it comes to saving money and solving supply chain challenges. Organizations that procure the same types of services regularly could consider banding together to create procurement vehicles like those used by governments.

This would allow vendors to consolidate their business, while also generating savings and faster procurement processes for procurement organizations.

This concept can be applied within the organization as well. Inter-departmental or multi-regional contracts at the enterprise level could function in a similar way to the inter-agency contracts featured in GWACs. This would make it much easier for the organization to obtain the goods and services it needs without the cumbersome process of approving individual procurement actions within each department.

Don't Miss the Next ProcureCon Event

Although governments aren't always viewed as hubs of innovation, they can often offer lessons that can help the private sector. It will be important for procurement organizations to stay apprised of how governments are procuring goods and services in the future.

These and other procurement topics will be widely discussed at the next ProcureCon conference. Find the next event using the WBR Conferences search tool.