Traffic (AGENCE FRANCE-PRESSE)
Agencies have been unable to purchase or lease new vehicles from the General Services Administration since the start of the fiscal year in October because GSA hadn't approved new contracts for the 2010 buying season.
Sales managers from the Big Three automakers — Ford, Chrysler and GM — say they have no idea why their contracts with GSA have been held up for so long.
As Federal Times went to press this afternoon, a GSA spokeswoman said the contracts had just been issued. Details on the contracts weren't immediately available. GSA declined to discuss why the contracts were delayed.
Speaking at an October meeting of the Federal Fleet Policy Council, a group of federal fleet managers, a GSA official blamed the delay on the financial crisis in the auto industry, notably GM and Chrysler filing for bankruptcy in the first half of 2009.
But auto industry officials say it's wrong to blame them, arguing that they submitted the proper paperwork on time for the contracts to be issued before Oct. 1.
"The solicitations were submitted in a timely manner to those guys," said Mitch Mitchell, senior manager of government and military sales at Chrysler. "They review it through whatever cycles and processes they have to do on their end before they make their award."
Automakers and GSA began meeting a year ago to discuss the types of vehicles and requirements GSA expected to be seeking, said Debra Hairston, who manages federal government sales for Ford. Most of the paperwork was submitted to GSA during the summer with the expectation that contracts would be approved before the start of the fiscal year.
"For Ford, we've met the time frame and requirements. It's just a matter of them evaluating the data and basically awarding the contract," Hairston said.
2010 marks the first year of a new five-year contract between GSA and automakers. GSA awards new contracts every five years and modifies the prices for those vehicles during each subsequent year of the five-year contract.
The fact that 2010 begins a new contract makes the process more complicated, but shouldn't have resulted in a major delay in the contracts being approved, Mitchell said.
"I think this timing has been extremely unique," he said.
Without new contracts in place, automakers have not been able to sell any new vehicles to agencies, which are required to purchase their vehicles through GSA. Leasing vehicles through GSA also is on hold, since GSA purchases the vehicles it leases to agencies using the same contracts that are negotiated for all vehicle purchases.
Most vehicles purchased in a given year are ordered in January, when GSA orders vehicles to lease to other agencies, officials said. GSA sales account for roughly two-thirds of the vehicles purchased by the government each year.
GSA purchased 63,500 vehicles in 2009 for $1.4 billion, not counting stimulus-related purchases. Purchases for 2010 should be around the same level, GSA officials have said.
Not having new contracts in place in October shouldn't result in agencies purchasing fewer vehicles, experts say.
James Goodwin, who manages the fleet program at the Veterans Affairs Department, said he expects the agency to order just as many vehicles as it would have even if the contracts had been in place in October. VA ordered about 1,700 leased vehicles from GSA last year and should order a similar number this year, he said.
The only impact could be a delay in VA offices receiving their vehicles once they've ordered, he said. "Worst-case scenario, if it's not spring it'll probably be by July" before VA receives its vehicles this year, Goodwin said.