The GSA’s Federal Strategic Sourcing Initiative (FSSI) is gathering steam and notice recently. If it’s not on your radar screen as a government contractor, it should be.

FSSI was instituted to increase efficiencies and savings around the government’s purchase of commonly purchased commodities. These items include delivery services, wireless plans and office supplies.

Those are laudable goals, which we will explore deeper in future posts. Today we are taking the view of a government contractor, and looking at FSSI as a business opportunity. There has been far less coverage of that nature on this initiative.

Some of the most interesting coverage from that perspective comes from the U.K., in the trade publication Office Products International (OPI). In a December 2011 article the magazine looks at the business volume in office supplies generated by the U.S. federal government.

There’s a lot of money to be made from this channel, and the article looks at the tough competition amongst vendors:

“With 2010 generally being accepted as a historical year for the US independent dealer channel following the award of the US Communities contract to Independent Stationers (IS), how would 2011 pan out now that dealers have had the chance to go after more government business?

Certainly, no-one believed that it was just a question of turning on the tap and allowing business to gush in; dealers would have to go out and win contracts and the big boxes – and Office Depot in particular – would put up a strong fight to hold on to what they had.”

The article portrays Office Depot and Staples as the incumbents fighting hard to maintain market share, with other companies like Independent Stationers competing vigorously. Speaking about Independent Stationers, the article focuses specifically on the new FSSI:

“Importantly, IS was also one of the 15 contractors to be awarded a new Federal Strategic Sourcing Initiative (FSSI) blanket purchase agreement (BPA) which came into effect at the beginning of this year. FSSI is part of the current US Administration’s programme to reduce federal procurement spending by $40 billion annually, and 18 federal agencies employing almost two million staff have been mandated to use the new office supplies BPAs. Furthermore, the total federal market opportunity for office supplies is estimated to exceed $1.6 billion annually.

The uptake of FSSI has hit the federal agency sales of hundreds of smaller resellers that hold what is known as a Schedule 75 award enabling them to do business with the federal government. New Schedule 75 awards and renewals have been frozen, meaning that while it is still possible to use current awards, it is becoming more difficult to do business in the federal arena without an FSSI award.”

That last line is critical — soon there will be no doing business on Schedule 75 (office supplies) without participating in FSSI. In fact, the article notes that companies are executing partnerships to ensure they don’t get locked out.

The TriMega Purchasing Association has piggybacked on the FSSI BPS held by EZ Print to ensure eligibility for future sales. Vendor American Office Products Distributors (AOPD) inked a relationship with BPA holder Sita Business Systems for the same reason.

There are additional ways to improve your chances for FSSI business. Vendors need to be able to offer all possible point-of-sale discounts for SmartPay cards, which requires Level-3 processing. We’ll go into more detail on that point in subsequent posts.

If you sell office supplies to the government, how are you adapting to FSSI? Drop a comment and let us know.