The differences between the single-award system and the multiple-award system are illustrated by the way the GSA awarded a contract recently for electric typewriters having letters on a single element rather than on bars.

Eight companies bid, ranging from Olympia, which submitted a bid of $320 per typewriter, to Xerox, which bid $896. IBM offered its Selectric III model for $575 -- the third highest price -- and won the contract.

"The secret to that award is the life-cycle costing of the various machines," explained Harold R. Roach, director of GSA's general products commodity center. Over eight months, GSA officials tested the typewriters and eventually decided that the Olympia model would cost the government $813.10 over 10 years, while the IBM model would cost only $613.57 -- the cheapest by far. IBM's "was found to be the most durable, to have the least amount of maintenance problems and to have supplies that cost the least," Roach said. Now agencies that want to buy electric typewriters will have to buy the IBM model.

Under the multiple-award system, the GSA would simply have negotiated contracts with each of the firms so that agencies could purchase their model at the wholesale price.