PC Connection Plays Catch Up

Merrimack, NH-based computer reseller PC Connection suffered a decline in government sales during the past year, but not because of the Iraq war: The government had cancelled the General Services Administration (GSA) contract of the cataloger’s GovConnection unit in November 2003.

According to a statement from PC Connection, the government found that “GovConnection’s contract management systems and procedures may have resulted in the sale of unqualified items or the underpayment of required fees.” To be listed on a schedule, a vendor has to prove that it is giving the government its best price on the merchandise it wishes to sell the feds.

Second-quarter government sales alone tumbled 16%, to $63 million for the quarter ended June 30, compared with $75 million for the same three months of 2003.

PC Connection was granted a new GSA contract on Aug. 18, however. “We we are in the process of ramping [our federal government] business back up,” says the cataloger’s chief financial officer, Mark Gavin. “It’s going to take some time for us to get it back to where it was.”

SmartPay Expenditures Continue to Rise

SmartPay, the government-issued credit card, was implemented to facilitate governmental purchases of less than $2,500 — the amount that does not require government buyers to purchase from a vendor on a General Services Administration (GSA) schedule. During the past fiscal year, the amount spent via SmartPay rose abut 7%, but the number of cardholders declined more than 12%.

SmartPay Statistics
Fiscal year # of transactions # of cardholders Total $ spent via SmartPay
1989 47,595 13,032 $9,088,038
1990 331,957 21,431 67,779,471
1991 730,564 35,234 167,747,687
1992 1,097,500 48,819 307,450,342
1993 1,736,373 84,284 537,501,272
1994 2,765,615 96,090 921,639,498
1995 4,246,329 130,353 1,591,836,136
1996 7,000,000+ 185,000 2.97 billion
1997 11,500,000 240,000 4.95 billion
1998 16,400,000 340,000 7.95 billion
1999 20,600,000 500,000 10.2 billion
2000 23,500,000 490,000 12.3 billion
2001 25,000,000 410,000 13.8 billion
2002 26,000,000 390,000 15.2 billion
2003 26,500,000 360,000 16.2 billion
2004* 26,500,000 315,000 17.4 billion
* estimate based on sales to date this year Source: Amtower & Co.

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