Critics Question JanSan FSSI's Benefits

In an effort to stall the initiative, GSA schedule holders have joined ISSA, as well as other opponents to question the extent of the market research conducted by GSA in regards to potential economic drawbacks due to the implementation of the legislation.

Critics accuse the GSA of diluting the jan/san industry by forcing broad cost-cutting measures, and thus diverting the focus from the valuable services and expertise provided by cleaning professionals to price.
“The GSA has been successful at removing any value from the deal and stripping it down to cost,” says St. Germain. “What they are really asking for is a barebones, no value-added service approach. That (method) doesn’t always give you the lowest cost — just the lowest price.”

Critics also point to the negative economic impact experienced within the office supply industry, since it underwent federal strategic sourcing about five years ago.

One of these critics includes Prof. Samuel Bornstein, who heads the economic consultancy firm, Bornstein & Song.

In October, Bornstein issued findings that showed the more than 550 office supply vendors who didn’t secure a BPA “suffered nearly an average 60 percent loss of GSA sales, while the 15 FSSI BPA “winners” experienced an increase in GSA sales of almost 145 percent.”

If jan/san sees a similar course, FSSI will mean great news to the 31 total BPA winners, but will significantly reduce revenues for the losing 850 distributors.

Even for distributors who manage to secure BPAs, it is unclear how the technology investments, discounts or fulfillment costs will affect their bottom lines, overall. It’s possible that these few companies may be overwhelmed by the sheer amount of product demanded by the GSA, or the costs for their transportation, Bornstein says.
 
Critics believe this pressure will especially be felt by small businesses.

Yet, according to the GSA, several steps were taken to include small businesses in the JanSan acquisition strategy, with the majority of awards (81 percent) being reserved for small businesses.

“GSA has been successful in implementing similar strategies under the Office Supplies FSSI, currently running over 13 percent in savings,” the agency states.

The GSA has acknowledged the jan/san industry’s concerns, but has called the actions “justified,” especially as it relates to “areas of savings, better terms and conditions, reduced cycle time, and enablement of smart shopping.”

So far, ISSA has managed to delay the award period for JanSan Purchasing — as well as increase the number of blanket purchase agreements, says Bill Balek, ISSA director of legislative affairs, but as he puts it: “the writing is on the wall,” for JanSan FSSI.

“GSA is pretty adamant in pursuing this policy— they’ve pretty much got their marching orders,” Balek adds. “Together, JanSan Purchasing and Requisition will be the way that the federal government will procure jan/san products in the future.”

The GSA maintains that the FSSI is — at least for now — a voluntary procurement program.
“It’s an agency-by-agency decision whether to purchase through FSSI,” Cara Battaglini, a GSA spokesperson, told Sanitary Maintenance, one year ago. “The solution of JanSan is not expected to replace 100 percent of federal spend in this area.”

To date, about 10 agencies have committed to using JanSan FSSI.