Manufacturers Beat Channel In Quality, Survey Says

Market Connections conducted more than 500 telephone interviews with representatives from 12 of the largest federal agencies. A Quality Perception Index was determined by responses to questions about 16 companies, including manufacturers, resellers and integrators. Consistent with last year's results, the contracting community earned a "C" overall.

"There were a few shining stars that stood out, but there was really very little movement," says Lisa Dezzutti, president and founder of Market Connections. "That means a lot of opportunity for those that manage to distinguish themselves."

Of the companies included in the survey, the biggest standouts were CDW Government (CDW-G) in the reseller category, manufacturers HP and Dell, and integrators Lockheed Martin, Northrop Grumman and Anteon.

"While Anteon did not have a high level of awareness with those surveyed, those that do know them are clearly very happy. That says a lot," Dezzutti says.

In addition, respondents linked GTSI more with services than in previous surveys, reflecting a degree of success for recent attempts to realign the company focus.

While not by a significant margin, manufacturers faired better than the channel in the caliber of solutions, quality of products and services, and past performance--with solution providers falling below the 75th percentile in some areas, compared to the manufacturers that scored in or above the 80th percentile.

"I'm very surprised, particularly that they received higher marks in the area of solutions," says David Kriegman, chief operating officer at Fairfax, Va.-based SRA International. "While some manufacturers try to be integrators, most know they can't do it alone and don't even try. A lot of vendors we work with even point us to small businesses as better for providing specialized, targeted services."

Rick Marcotte, president and CEO of Herndon, Va.-based DLT Solutions, notes that there is much more to the story.

"There is a general perception--or more properly termed, a misperception--that manufacturers have some 'organic advantage' versus resellers and integrators," he says. "In some instances, that is correct--hardware break/fix, for example, where manufacturers can access in-house spare parts, engineering experts and proprietary [historical information]. But in many other cases, resellers and integrators have expertise that rivals or surpasses the manufacturers. There are certain times when the manufacturer subcontracts a service case to DLT, either as a bandwidth issue or an expertise issue."

In addition to possible misperception in the market, higher marks for the manufacturer could also reflect a change in how agencies buy, with federal e-business initiatives like e-Buy seeking to commoditize procurement.

"With the increased utilization of Web initiatives designed to bring as many vendors into play as possible, resellers can only afford to make significant presales investments if they can get price protection on the deal from the manufactures," says Adam Robinson, CEO of Irvine, Calif.-based Govplace. "Innovative solutions require lots of mostly unpaid time up-front to understand the customer needs. The open-bid model has created an environment where the manufacturers have a much greater capacity for profit on the deal; consequently, they can afford to make these investments. This ultimately hurts the agencies, with solutions [that] become primarily single-manufacturer."