Indie IT resellers call on US government to rethink policy

Independent IT resellers in the US are calling on the government to rethink its policy over awarding contracts.

According to a report in the Wall Street Journal, some of the smaller dealers say their sales have been suffering in recent years as the government and bigger companies choose only to deal with authorised resellers from the major manufacturers.

Reseller XS International, which has 10 employees, told the WSJ that its sales had shrunk by 50 percent in the past two years. 

The Georgia-based company’s CEO Todd Bone said it relied on government contracts for 70 percent of its business. But he had recently been shut out of bidding for a Securities and Exchange Commission (SEC) solicitation for HP servers because of not being an authorised reseller.

“In the last 10 years, we’ve had no problems,” he said. “And now we have problems.”

Other indies told the newspaper that in recent years large manufacturers had encouraged customers, including the government, only to buy goods through authorised channels. According to them, the manufacturers said this was to help fight counterfeiting.

The legitimate indies, understandably, think they should be able to bid on such contracts and are calling on the government to find ways to work with them – even if this involves inspecting their operations or asking them to get some type of certification.

The SEC declined to comment to the WSJ on the XS International contract but a spokesman said one issue was manufacturer support – its contracts require five years of support while indies “typically supply no more than one year”. 

So even if the bids from indies are lower, it seems that the resellers don’t get a look in if they don’t pay to become an authorised reseller.

Over in the UK, reseller Jigsaw Systems told TechEye that authorised resellers definitely had the advantage when it came to bidding for contracts from the government.

A spokesperson for the Nottingham-based company, which is an authorised Apple and Adobe dealer, said that bigger customers, including the government, wanted to see accreditation.

She explained: “We try wherever we can to get accreditation. It gives us a bit of kudos.

“It also gives the end user or customer more confidence in dealing with us – knowing that we have the full support of the vendor.”

She added that governments and large companies often had their own rules when awarding contracts and mostly only dealt with authorised dealers.