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The General Services Administration has announced a first-of-its kind wireless program for government agencies. The blanket purchase agreement will save $300 million over the next five years by allowing the government to centralize management and consolidate its service plans. Verizon (NYSE: VZ ) , Sprint, T-Mobile, and AT&T have been included among the participating carriers in the new plan.
GSA Acting Administrator Dan Tangherlini says the agreement is a shrewd decision that could benefit the government. "By buying in bulk," he said in a statement, "we're buying once and we're buying well. ... We're driving down costs, increasing efficiency and improving service and operations. These agreements give agencies the ability to pool minutes, order plans and devices more efficiently and have greater visibility into their purchases."
Previously, the government has spent approximately $1.3 billion on wireless services annually, with federal agencies managing more than 800 wireless plans and 4,000 wireless agreements, from assorted carriers. This new consolidation plan is expected to significantly boost the government's fiscal efficiency.
For Verizon, the move for consolidation will provide a stronger direct stream of revenue from the U.S. government. Last year, Verizon's Global Enterprise, which includes federal employees as clients, brought in $15.3 billion, or 39%, of its Wireline segment's aggregate revenue.
The new wireless plan is part of President Obama's Digital Government Strategy and is also a feature of an effort by the Office of Management and Budget to implement strategic sourcing across government agencies.