By Stephen Barr
Washington Post Staff Writer
Saturday, September 8, 2007

About 250 employees of the General Services Administration are being transferred out of an acquisition program where work has fallen off, officials announced yesterday.

The program, Assisted Acquisition Services, is projected to lose $50 million by the end of the fiscal year, Sept. 30, said James A. Williams, commissioner of the GSA's Federal Acquisition Service.

There are about 600 employees in the assisted acquisition program, who conduct and manage procurements for other federal agencies. Many federal agencies are short-staffed in their contracting offices and can turn to the GSA for help buying large, complex products and services, especially technology.

Agencies that rely on the GSA to provide project managers and contracting expertise pay a fee to the GSA for handling their procurements.

The Defense Department, one of the GSA's biggest customers, has decided to do more of its procurement work itself, partly at the urging of Congress. Relations between the Defense Department and the GSA soured for a while last year after the contracting activities of some GSA field offices were investigated.

Williams said the GSA continues to have "a strong customer base," but acknowledged that a drop in work left the agency with more people than it needed in the assisted acquisition program.

In addition to reducing the program's payroll, the GSA plans to trim other expenses so the program can break even by Oct. 1, 2008, Williams said.

The program operates out of 11 regional offices and Washington. The agency said employees will be offered positions elsewhere in the organization. It hopes to avoid geographical moves that could disrupt families.

The GSA has encountered business slumps before, and Congress has looked for ways to help the agency stem revenue loss and improve financial controls. A congressionally approved reorganization plan allowed the agency to create the Federal Acquisition Service by consolidating a technology group and a supply service. The FAS, which began operating last year and broke even in fiscal 2006, has made it easier for the GSA to change and add to the types of services it offers.

But the revenue decline in the assisted acquisition program is troubling, said Larry Allen, president of the Coalition for Government Procurement, an association of companies that sells products and services to the government.

"This whole assisted acquisition services model has been the linchpin on what FAS was based," Allen said. "With retrenching like this, it will make it more difficult for FAS to achieve its overall goals."

John M. Hanley, president of the National Federation of Federal Employees' GSA National Council, said the union had not been officially notified of the staffing realignment.

"This cut will reduce GSA's capacity to provide acquisition services," Hanley said. "When the demand for services does increase, GSA's capability won't be there. Our basic position is that getting rid of these people is an over-reaction to a temporary lull in the business."

David Marin, Republican staff director at the House Oversight and Government Reform Committee, said the GSA "needs to be sized and shaped to meet the needs of its customer agencies, or it can't survive."