Price Reduction Clause changing

The General Services Administration is proposing big changes in the way federal contractors should deal with the Price Reduction Clause (PRC).

The clause, found in all Federal Supply Schedule contracts, prohibits contractors from offering discounts to customers unless they also give comparable discounts to the government.

On March 4th, the General Services Administration announced a new approach--which Venable LLP called “a radical shift” -- with significant new reporting requirements.

“GSA proposes to reduce PRC burdens, while substantially increasing sales reporting burdens,” K&L Gates LLP wrote.

Under the new terms, vendors would need to “report transactional data from orders and prices paid by ordering activity,” according to the Federal Register notice. This would include transactional data elements such as unit of measure, quantity of items sold, universal product code (if applicable), prices paid per unit and total price, according to an analysis by Reed Smith LLP.

The rule will be phased in for FSS contract holders and will apply immediately for “GWAC” and “IDIQ” contracts. The GSA has set up a public meeting on April 17 to review the new rule with vendors.

More information: Federal Register: http://goo.gl/xCxxO7
Reed Smith: http://goo.gl/8pn9u7
Venable: http://goo.gl/MXEimX
K&L Gates: http://goo.gl/EtbmGF

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