U.S. GSA SCHEDULE CONTRACT

1. U.S. GSA SCHEDULE CONTRACT I. U.S. GSA SCHEDULE CONTRACT OPPORTUNITIES The U.S. Federal Government is the single largest buyer on the face of the earth. Every year, it buys hundreds of thousands of different products and services. Until recently, foreign firms were not allowed to participate in this gigantic market.However, with recent changes in the acquisition regulations, it is now possible for firms in Korea to market their products and services directly to the U.S. Federal Government. How can a Korean business, like yours,participate in this market? You can do it directly or partner with a U.S. firm. We specialize in assisting firms of all sizes through the navigation of the various regulatory and procedural steps required to set up contractual relationships with the overseeing agency of the U.S.Federal Government.

2. U.S. GSA SCHEDULE CONTRACT The procurement for and by the Federal government is accomplished through a variety of contracting procedures, which are governed by a host of regulations. The most popular procurement vehicle used by the U.S. Federal Government is the GSA Multiple Award Schedules Program. This is because the General Services Administration (GSA) acts as the business manager and purchasing agent for the Federal Government market, both domestic and oversees, through the process of competitive bidding and contracting. During Year 2003, the GSA contracted for over $28 billion worth of goods and services under the GSA Federal Supply Services (FSS). The size of this market is expected to expand immensely in the near future as there are considerations for allowing state and local governments to have access to this increasingly popular procurement vehicle.

3. U.S. GSA SCHEDULE CONTRACT Before a business can sell to the federal government through the GSA, it must have a GSA Schedule Contract for specific products and services. How does one become approved for the GSA Schedule? One of the divisions of the GSA is the Federal Supply Service (FSS), which oversees administration of the awards and schedule contracts. Included among the list of schedules are the Information Technology (IT) Schedules, which cover all computer and computer networking related products. This area of business should be of particular interest to Korean firms; given their competitive advantage with respect to many IT related products and services. During 2003, the IT purchases by GSA were well over $16 billion. This figure is expected to almost double over the next two to three years with the expanding role of technology in the daily operations of the Federal government. Currently, there are approximately 100 FSS Schedules covering a broad range of products and services. As the needs of the Federal Government change and as new products and services enter the market place, the schedules are likely to change as well.

4. U.S. GSA SCHEDULE CONTRACT With the right guidance and market research, the potential rewards for Korean firms for participating in this giant market are indeed high, especially since many Korean firms enjoy a cost advantage over their U.S. counterparts. The GSA purchases goods and services on a worldwide basis for both civilian and military agencies of the government. This means that Korean firms will have a special advantage in marketing their products and services to the U.S. Army, U.S. Air Force and civilian installations based in Korea. This can be done under Federal Supply Schedule (FSS) as well as through contractual possibilities with Federal Technology Service (FTS) under its business lines: Network Services, Information Technology Solutions, Security System Integration, etc. It is important to note that once your firm is awarded the GSA Schedule Contract, with proper assistance and guidance, you can expect a long-term presence in the market of 10 to 20 years and beyond.

5. II. HOW CAN YOU GET A FOOTHOLD IN THIS MARKET? U.S. GSA SCHEDULE CONTRACT The following is a brief description of the process for businesses of all sizes to market their products and services to the U.S. Federal Government. To make this process more scalable to your needs, it is broken down into four phases: Phase I – Preparation of Proposal, Phase II –Negotiation and Discussions, Phase III- Post-Award Efforts, and Phase IV – Marketing, Teaming Arrangements and Internal Training. In addition, under appropriate circumstances, you can also offer marketing and teaming opportunities to other Korean and U.S. firms under your own contracts with the GSA.

6. U.S. GSA SCHEDULE CONTRACT Phase I – Preparation and Submission of Proposal In this initial phase, directly or indirectly, you shall prepare and submit a proposal offer to the GSA. This effort will include planning, analysis, data collection, organizing, and bringing attention to other myriad details that form the basis of preparing and submitting an offer. Phase II – Negotiation and Discussions Once an initial proposal offer has been submitted for evaluation to the government, the government generates requests for contract clarifications that often result in contract revisions in order to ensure compliance with government requirements. You will work closely with the GSA contracting officers and guides its clients through the process of proposal clarifications, revisions and ultimately in the preparation of Best and Final Offer (BAFO), pre-award audits, and negotiations for contract award.

7. U.S. GSA SCHEDULE CONTRACT Phase III - Post-Award Efforts In this phase of the process, you will comply with all aspects of contract requirements and/or contract modifications as may be required or otherwise in your best interest. GSA's acquisition regulations require that the contractors, at all times, offer to the government their best possible price. You will continue to comply with needed contract modifications resulting in price increases or decreases, spot price reductions, addition of new products or services and deletion of old lines of products or services, and otherwise maintain an effective Price Reduction Compliance Program. You must also comply with Industrial Funding Fee (IFF) reporting requirements and spot and post-award audits.

8. U.S. GSA SCHEDULE CONTRACT Phase IV – Marketing, Teaming Arrangements, and Internal Training21 Whenever there are mutual interests, you will also offer firms in the U.S.A. as well as in Korea teaming opportunities under their own GSA Schedule Contracts (For example, DUCOM’s available GSA Schedule Contracts: GS-35F-5423H, GS-23F-0307K & GS-07F- 5947P), whereby they will undertake all marketing aspects of the contract as well as pre- and post-award negotiations and general supervision of the contract in all areas. The regulations require that the teaming partners have an approved GSA Schedule Contract. In conjunction with Phase I through Phase IV directly or indirectly, you should conduct internal training for your staff on a host of issues pertaining to GSA Schedule Contracts- such as reporting requirements, Terms and Conditions, FAR Regulations, Blanket Purchase Agreements (BPAs), Teaming Arrangements with other companies to increase the scope of delivering product and service solutions, Certificate of Competency Program (COC), Leasing, Ordering Procedures, GSA Advantage! (an on-line ordering system- now, contractors are required to submit their products and services and associated prices through this electronic medium), Economic Price Adjustment (EPA), Price Reduction or the Addition of Schedule Items/Special Item Numbers (SINs), and cost-benefit analysis, Trade-Ins, etc. You will also provide regular news bulletins to help your staff stay abreast of the new regulations or general issues of interest to your business in this procurement arena.