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GSA Schedule Review Panel Implications

Posted By Courtney Fairchild, Global Services, Friday, April 16, 2010

MAS Review Panel Implications

Recently the Multiple Award Schedule Advisory Panel issued its final report to the Administrator of GSA. There was much consideration and merit to the recommendations from the expert panel of advisors. Some of the recommendations may be easily implemented and some are more unrealistic given the current set of contracting resources available to GSA and ordering agencies. Because the panel was original commissioned by the former Administrator Doan there are also some questions as to how important they will be to the new Administrator, Martha Johnson.

You can review all of the panel’s recommendations by clicking here. We will outline a few of the major recommendations with an eye towards what they could mean for the government and contractor.

Eliminate the Price Reduction Clause for services and solutions contracts. Adopt an 803- like approach to compete orders for all agencies when using the Schedules: Section 803 is part of the National Defense Authorization Act 2002 and requires that for orders over $100,000 the ordering agency solicit bids from all GSA contract holders. Adoption of this practice would increase the level of competition through the use of e-Buy instead of allowing the possibility of obtaining just three bids under the current practice. On the bright side for contractors, this would no longer tie hands for commercially-focused companies in terms of pricing. The only caveat is that the contractor’s pricing practices would come under view again by GSA with future negotiations for GSA contract extensions.

GSA Administrator clarify (for GSA COs) the policy and methodology for obtaining "fair and reasonable price” for Schedules: As it stands right now the negotiation process varies widely from Contracting Officer to Contracting Officer and Schedule to Schedule. While widely used there are also no clear definitions of "Basis of Award” or "Most Favored Customer” on the part of GSA. The Administrator’s clarification on the topic would create uniformity across contractors and result in greater transparency and equity in evaluation of GSA Schedule contracts.

GSA should develop a data collection system that would allow GSA to use the data gathered from individual agency orders in order to leverage its negotiation of Schedule prices: If this data collection system is created, it would give GSA Contracting Officers access to view all spot discounts given to ordering agencies by contractors on GSA Schedule buys. The result will likely be that contractors are required to lower GSA Schedule prices permanently due to the discounts offered off GSA Schedule prices. While this makes good sense for GSA in terms of negotiating lower pricing it may also hurt ordering agencies if it ultimately causes contractors to eliminate the discounts offered when using the GSA Schedule. It also brings into question the level of reporting necessary on the part of the ordering agencies as well as the staff required to maintain the database at GSA.

Instruct GSA COs to use both vertical pricing (based on basis of award customer) and horizontal pricing (based on a market price comparison) in determining price reasonableness: Currently GSA Schedule pricing is negotiated only on a vertical pricing (commercial practices) basis. Each contractor is compared to its own pricing practices to determine fair and reasonableness. While also doing a competitive analysis may benefit GSA in terms of lower pricing, the inclusion of this analysis would require much more time on the part of an already overworked and overloaded staff at GSA. There also remains the fact that comparing prices for services is also extremely difficult when attempting to create an apple/apple comparison for different labor categories.

It will be exciting to see if and how GSA decides to implement any of these recommendations; so as always, it is in the best interest of the contractor to remain attentive and knowledgeable about any changes in GSA contracting policies and how they may be affected

If you have any questions you can contact Courtney Fairchild of Global Services at cfairchild@globalservicesinc.com or 202-234-8933.

Tags:  Global Services  GSA Schedule 

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