The federal government has put an increasing emphasis on a type of pre-negotiated contract that is awarded to a number of vendors before specific purchasing requirements are known (called a "multi-vendor contract"). When the need for a product or service arises, the end user can turn to the list of pre-approved vendors and make a purchase quickly and efficiently. The time and expense involved with a public bid are avoided because the vendors holding this type of contract have agreed-upon price lists which become the basis for bids on individual task orders (services) or delivery orders (products).

Multi-vendor contracts are gradually becoming the federal government's preferred method for buying products and services, particularly in the information technology sector. The percentage of federal purchases made through multi-vendor contracts is likely to increase dramatically in the future.

End users like multi-vendor contracts because the products or services needed are acquired very quickly. Contracting officers favor multi-vendor contracts because they can buy what end users want expeditiously within the rules, using minimal staff resources, and with less paperwork. Federal contracting organizations are experiencing ever-increasing workloads while losing staff and they could not function without multi-vendor contracts.

The competitiveness of federal multi-vendor contracts is a sensitive issue in the federal sector. There is no debate over the issue that most multi-vendor contracts favor the large federal prime contractors. Awards made to large information technology prime contracts under the Alliant Information Technology multi-vendor contract awarded by the General Services Administration recently are under protect by a number of losing companies.

Popular types of multi-vendor contracts are discussed in the next installment.