Small VARs: We're Shortchanged

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Small solution providers fear state governments' trend to consolidate IT buying into fewer but larger contracts unfairly favors large vendors and threatens VARs' public sector business.

Solution providers attending a CMP Channel focus group during distributor Ingram Micro's GovEd Alliance Invitational in Austin, Texas, said state contract consolidation could cloud 2008.

Russ Johnson, director of technical services at Hewitt, Texas-based TFE, a solution provider specializing in the K-12 market, said he is being squeezed out of contracts because of the new Texas Department of Information Resources contract, which consolidates dozens of different purchasing contracts down to one centralized contract for IT hardware and software. "Only big, multibillion companies can play on that contract," he said. "We're not a small company, we're not a big company-- I feel as if we're caught in the middle."

Some states are looking out for the little guy. For example, Stephen Goodwin, chairman and CEO of Cartwright & Goodwin, New York, said that both the city and state of New York have toughened up enforcement of small-business and minority contract goals.

In addition, a wave of IT worker retirements expected to hit state and local government in the next few years should create opportunities for solution providers. Bill Julka, president of Smart Solutions, a Canton, Ohio, solution provider, said he's been trying to work with the state of Ohio on initiatives to head off the projected IT worker shortage. He said he's trying to get funding to retain displaced autoworkers, veterans, disabled people and inner city workers to man virtual call centers to support the state's IT infrastructure. "States that don't take action are going to face a shortage of IT workers," he said.