U.S. General Services Administration

Federal Acquisition Service

Office of IT Schedule 70 Contract Operations

IT Schedule 70 RFI Response: Proposed SIN 132-4 and 132-9 Retirement

I am President of AscdiNatd, the Association of Service and Computer Dealers International and the North American Association of Telecommunications Dealers, an international trade association based in the United States, made up of approximately 290 Member companies who provide technology business solutions, technical support and value added services to the businesses, not-for-profit institutions and public entities (http://www.ascdi.com/).  I am writing to provide information regarding the Proposed Retirement by the GSA of Schedule 70’s Special Item Numbers (SINs) SIN 132-4 Daily/Short Term Rental and SIN 132-9 Purchase of Used or Refurbished Equipment and to urge the GSA not to make such a decision.

Reducing federal overhead by buying products and services at lower cost

Commercial entities, not-for-profit institutions and public agencies have saved billions of dollars over the past decades by taking advantage of the simple fact that the useful life of technology equipment goes far beyond the programmed obsolescence designed by the original manufacturers of that equipment (“OEM’s”).  Used and refurbished technology equipment performs as well as new equipment and often allows users to avoid costly and disruptive software modifications necessary to adapt legacy programming to new generation equipment.  As it is a stated policy of the GSA to reduce federal overhead by buying products and services at lower cost, elimination of the pre-owned equipment option runs contrary to the GSA policy.

This issue is exacerbated where federal agencies employ legacy systems that are no longer manufactured or supported by the OEM’s.  For example, our Members provide parts and service for legacy supercomputers and mainframes utilized by the Department of Defense in

flight simulators that can only be provided under SIN 132-9.  Elimination of that option could require a ground up replacement of the entire flight simulation system.

Small Business First

Most of our Members qualify as small or medium-sized enterprises (“SME’s”).  The GSA supports the inclusion of SME’s through its policy that “encourages the participation of all the nation’s diverse human and business resources in a revitalized economy.”  Elimination of SIN 132-4 and SIN 132-9 has the effect of eliminating a wide swath of SME’s from bidding on federal acquisitions as they are not the OEM’s of the equipment they provide.  There is a clear conflict between the stated policies of the GSA.

Computers, Not Cosmetics

Used or refurbished does not mean counterfeit.  The AscdiNatd has promulgated and enforces a strict Anti-Counterfeit Policy: http://www.ascdi.com/anti-counterfeit/.  The subject GSA proposal refers to the Presidential Memorandum on Combating Trafficking in Counterfeit and Pirated Goods, which in turn refers to the GAO memorandum on Intellectual Property, suggesting that “Agencies Can Improve Efforts to Address Risks Posed by Changing Counterfeits Market” (https://www.gao.gov/products/GAO-18-216).  But a review of that report shows that the main counterfeit product (in a very small sample) is cosmetics. 

Our Members have put in place systems for determining if product they receive is counterfeit; they can trace supply chains directly to the OEM’s; we are active participants in the Intellectual Property sub-committee of Commercial Customs Operations Advisory Committee (COAC) where we have supported the development of Blockchain and Recordation protocols for controlled tracking of equipment sources; and we have reached out to OEM’s on numerous occasions, offering our full cooperation in preventing the flow of counterfeit IT products.  The protections in place for determining whether an IT product is counterfeit are far more sophisticated than those relating to hand cream. 

Surely the relevant federal agencies, working together with OEM’s and the SME’s who offer used and refurbished product at significant savings to the federal budget, can put in place the necessary safeguards to ensure that the technology products we offer are genuine.  The unfounded claims of OEM’s that there are no protections against the flow of counterfeit technology product other than purchasing directly from them, closing out the opportunity for SME’s to offer products and services to federal agencies, should not force the GSA to abandon its own policies in a rush to eliminate perceived risks. 

I and our Members stand ready to offer further examples and information, and to work with GSA representatives and representatives of the OEM’s to avoid that unwanted result.