After months of pondering the future of the Procurement of Computer Hardware and Software-3 (PCHS-3) contracts, the Department of Veterans Affairs has decided to drop the program when the PCHS-2 contracts expire in April 2007.

The agency plans to use NASA’s Scientific and Engineering Workstation Procurement IV contract instead, according to an e-mail message sent July 27 by James Stewart from the VA’s Office of Small and Disadvantaged Business Utilization to small businesses owned by service-disabled veterans.

Wayne Simpson, the VA’s deputy director for small and disadvantaged business utilization, said that to make the transition smooth, the VA will move some items to SEWP III. NASA plans to award SEWP IV in November.

The VA will not use General Services Administration contracts and will require use of SEWP IV, Simpson said.

Stewart urged businesses to consider bidding on SEWP IV, but the solicitations for that contract are due Aug. 7, giving firms little time to pull a credible bid together. Small firms “have only a certain amount of bandwidth” to go after contracts, said Mike McMahan, president of SDV Solutions, a service-disabled veteran-owned small business.

“A lot of this could be easily rectified by not making SEWP IV a mandatory contract,” McMahan said. “There are plenty of GSA schedule holders that are veteran-owned and disabled veteran-owned companies that could provide good service, good pricing and good delivery to the VA. We’re doing that to all the other federal agencies.”

Stewart tried to assure the service-disabled veterans that the agency’s move to SEWP did not signal a lack of support for their businesses. If the firms don’t get enough orders to meet the VA’s goals, “VA will consider an alternative acquisition strategy,” he wrote.

Although VA officials are adamant that they won’t use GSA contracts, the demise of a governmentwide acquisition contract is good news for GSA, said consultant Phil Kiviat. “Anytime somebody drops out, it’s got to be good for GSA,” he said. “It just takes competition off the table.”

It’s also potentially good for companies that would not have won a place on PCHS-3, Kiviat said.

“There were a lot of people who felt that keeping another large [multiple-award contract] going was an unnecessary duplication of effort,” said Larry Allen, executive vice president of the Coalition for Government Procurement.

NASA officials declined to comment on the VA’s decision. “NASA will meet directed and funded commitments and agreements to the best of our ability, as appropriate,” said NASA spokesman Doc Mirelson.

Aliya Sternstein contributed to this report.