GSA gets rid of Price Reduction Clause

Said to benefit small vendors

The General Services Administration has released a 37-page final rule that “will result in the most significant change to the GSA Federal Supply Schedules program in the last two decades,” according to Bryan King and Todd Overman of Bass, Berry & Sims PLC, a government contracts law firm.

Companies seeking GSA multiple-award schedule contracts have historically provided baseline pricing, discount and terms information to GSA’s contracting staff when submitting schedule proposals. This Commercial Sales Practices infomation is meant to enable contract specialists and contracting officers to effectively evaluate the offeror’s pricing in order to get the best deal for the federal government.

In the past, price and discount negotiations focused around the prices being paid by the offeror’s Most Favored Customer (MFC). The agency recently adopted a “fair and reasonable” concept but continued to rely on the same Commercial Sales Practices data and submission format.

Under the new approach, called Transactional Data Reporting, individual sales transaction prices will be reported to GSA for government sales of each item on the firm’s schedule contract.

Some 32% of GSA schedule contractors have $0 contract sales, so their reporting burden will be lessened. The other 68% will be required to submit substantially more information than the current quarterly reporting by Special Item Number.

The new procedure is being phased in. Only eight schedules will be covered initially, on a rolling basis, and only for new contractors and those renewing their five-year options. Others may opt-in, thereby voiding the Price Reduction Clause. Of the eight schedules, six are primarily products-oriented while two (03FAC and the PES portion of the Professional Services Schedule) are mostly services. The products schedules cover millions of items and will result in substantial data streams.

More Information: GSA Rule: https://goo.gl/UHXc3U
Bass Berry Sims blog: http://goo.gl/i7l8LY

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GSA gets rid of Price Reduction Clause

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