GSA Will Monitor Pricing on Schedules The Government Accountability Office has recommended that GSA increase its audits of schedule contractors to be sure the government is getting most favored customer prices, which are required on schedule contracts. GSA said it agrees with the recommendation and has hired more auditors. The GAO investigators said, “GSA’s efforts to ensure most favored customer pricing have been hindered by the significant decline in the use of pre-award and postaward audits of pre-award pricing information, two independent pricing tools that have helped GSA avoid or recover hundreds of millions of dollars in excessive pricing.” In 2004 the number of pre-award audits fell to 40, about one-fourth as many as were conducted 10 years earlier, although sales under the schedules increased eightfold during that period. Post-award audits were discontinued in 1997, but GSA has proposed a new rule to resume those audits. GSA has set a goal of conducting 70 pre-award audits in fiscal 2005. GSA said it began using prenegotiation panels to monitor pricing in 2003, but GAO found that the agency’s IT Acquisition Center, which accounts for more than half of schedule sales, had never convened a panel. The other three centers did not report results of their panels’ evaluations. The investigators said GSA management exercised “insufficient oversight” of the prenegotiation panels and the post-award quality reviews. “As a result of these weaknesses, GSA cannot be assured that fair and reasonable prices have been negotiated for its [schedule] contracts,” they concluded. GSA’s inspector general found that 60% of contracts it examined last year did not document that the prices were effectively negotiated. GAO commented, “Specifically, the contract documentation did not establish that negotiated prices were based on accurate, complete, and current vendor information; adequate price analyses; and reasonable price negotiations.” But GSA said the investigators did not find evidence that any contractors were paid unreasonable prices. The report, “Contract Management: Opportunities to Improve Pricing of GSA Multiple Award Schedules Contracts,” (GAO-05-229), is available at www.gao.gov.