The federal government could not function without multi-vendor contracts and more and more dollars are being awarded under this type of contract each year. There are many types of multi-vendor contracts. The two most popular are summarized below.

Government-Wide Acquisition Contracts (GWACs) are used solely for information technology purchases. There are currently approximately 20 GWACs in effect with more and bigger contracts planned for award during the next two years. Approximately $15 to $20 billion is spent annually through GWACs, although precise figures about GWAC award dollars are not available.

Multiple Award Schedule (MAS) contracts are awarded by the General Services Administration (GSA) for a wide range of commercial products and services. MAS contracts are commonly known as "GSA Schedules contracts" and they exist for more than fifty industry sectors, ranging from office supplies to information technology products and services.

The number of vendors holding a contract is unlimited and vendors may submit a proposal at any time. GSA Schedules are particularly appealing to small businesses. Like GWACs, they may be used by any federal agency, and unlike GWACs, by state and local agencies for information technology products and services. Approximately $70 billion dollars are awarded under MAS contracts annually with roughly $20 billion of that for information technology products and services.

Multi-vendor contracts can be awarded by an agency for use within the agency itself, across several selected agencies within a Department (e.g., Department of Defense agencies only) or by any federal agency (as is the case with the GSA Schedule contracts). The dollars spent for this type of contract can be enormous even when used only for a specific agency.

If using a multi-vendor contract, the end user or contracting officer identifies his or her need. Bid requests are then issued to three or more vendors holding the contract in question. The required paperwork is quick and fast, and an order can be processed and filled in several weeks (as opposed to more than two hundred days for a public bid). Under some multi-vendor contracts, the vendor must pay a small fee for the privilege of doing business with the government and to sustain the bureaucracy.

Multi-vendor contracts are used for a wide variety of items and are particularly prevalent for buying information technology products and services. They are used to buy office supplies, military parts and supplies, vehicles, building supplies and recurring services like rental cars. Hundreds of multiple vendor contracts have been awarded by agencies for use by buyers within their own agency (e.g., the Defense Logistics Agency).

This type of contract limits competition and favors the insider. The federal government couldn't function without them and the debate about the competitiveness of this type of contract is centered on how many there should be, not whether they should exist. GSA Schedule contracts are somewhat more competitive than other types of multi-vendor contracts because they are open to all vendors, including small businesses.