US federal agencies spend billions of dollars each year procuring products and services from big tech companies, including Microsoft, Google, and others. While these companies already offer special pricing for these agencies, the final price will depend on the volume of their order. For example, an agency with 2,000 employees may end up paying more per user license fee for a software than an agency with 20,000 employees.
The U.S. General Services Administration (GSA) is an agency that offers centralized procurement and shared services for the federal government. It takes care of more than $110 billion in products and services via federal contracts.
GSA has now negotiated with Google to lower the costs of the Google Workspace bundle for government agencies. As per the new agreement, Google will now offer the Google Workspace Enterprise Plus and Assured Controls Plus bundle to federal agencies at a temporary price reduction of 71% off the current Multiple Award Schedules Program (MAS IT) pricing.
GSA and Google have reached an agreement to offer pricing based on the volume of the entire government rather than on an agency-by-agency or transactional basis. Instead of individual negotiations, this new agreement delivers uniform pricing and standardized terms across all federal agencies. So, this discounted price will be applicable to all agencies regardless of their order volume.
GSA is now negotiating with Google to offer similar pricing for its Google Cloud Platform (GCP) services. While this discount sounds like a good cost-cutting measure for government agencies, this seems to be a temporary measure. This reduced pricing will be effective only until September 30, 2025.
GSA Federal Acquisition Service Commissioner, Josh Gruenbaum, said the following regarding this new agreement with Google:
“This new deeper discount reflects Google’s willingness to treat the federal government as a single, unified customer. Now, every federal agency can benefit from enterprise-level pricing — no matter how small the order. All federal agencies will now be offered volume discounts at the scale of government. This agreement marks a milestone in GSA’s ongoing initiatives to lower IT costs, enhance IT acquisition efficiency, optimize collaboration tools, and strengthen cybersecurity across agencies.”
It remains to be seen whether Microsoft and Amazon, the other two major IT suppliers for government agencies, will offer similar deep discounts to create cost savings for the federal government.
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