Need-to-Know Tidbits About Schedule 65IIA

In trying to modify a client’s GSA Schedule 65IIA, we have had to deal with some changes in the solicitation and wanted to make you all aware of potential problems.

First, Contracting Officers are no longer allowing distributors to provide Letters of Supply and now require all such letters to originate from the manufacturer only.

Secondly, the solicitation now requires that the facilities where all devices are manufactured be registered with the U.S. Food and Drug Administration.

This has proven troublesome for resellers on the Schedule, especially those who have previously honored agreements with manufacturers that now balk at this extra level of administrative oversight.

If you have questions or need help dealing with an issue such as this, contact us at admin@ezgsa.com or 301-913-5000.

GSA Presents Technology Matters Concept for the Workplace

GSA has long been a leader when it comes to implementing technology in the workplace: they like to brag that they were the first federal agency to implement the use of email. But they do in fact has a history to trying to model the practices that are successful in the private sector.  Even now, GSA is seeking to learn and implement best practices. Learn more at:

https://gsablogs.gsa.gov/gsablog/2016/10/05/gsa-presents-technology-matters-concept-for-the-workplace/

Disaster Response for Contractors

As a contractor to the US government, what should be our response to disasters? How can we help? We see pictures of the devastation, and it seems very far away. There is a hurricane approaching the coast of Florida. Baton Rouge needs rebuilding. Fires in California have been burning for weeks.

Helping as a contractor is simple: continue offering your products and services; specifically, reach out to state and local governments in regions that need assistance.

The federal government extends GSA pricing to state and local governments during times of emergency recovery. GSA Schedules offer the lowest rates and the least hassle for many  government entities in crisis. By buying through GSA, communities are able to recover sooner and with less expense. When there are serious emergencies, you don’t have to do something extraordinary. Simply being available and offering your business expertise may be the best thing you can do.  

There are certain indicators that we plan on: agency forecasts and contract cycles. But we should also be aware that every year there tragedies happen. Expected, yet unpredictable. These events can  motivate you to help rebuild the lives of others. Offering your products and services through the GSA to areas in need is a great way for you to help immediately.

GSA’s TDR rule changes EVERYTHING

Just over a month ago, GSA published the final Transactional Data Reporting (TDR) rule designed to expunge the Pride Reduction Clause (PRC), Most Favored Customer (MFC), and the Commercial Sales Practices. Starting 22 August, new Schedule awardees whose contract is part of the pilot roll-out will be evaluated against the TDR. Existing contract holders will be allowed to opt in, but it is a voluntary, bi-lateral move.

According to GSA, “This rule asks contractors to electronically report key procurement data; including prices paid, quantity, standard part number and product description for all purchases through GSA contract vehicles. The information collected through the TDR will help contracting officers make smarter purchasing decisions and provide data to assist in negotiating future contracts.”

The upside for vendors taking on this additional burden is that they will be spared from having to worry about violating the PRC, which states that if your commercial MFC price drops below the basis of award rates, an automatic price reduction is triggered. Failing to implement this price reduction may subject the vendor to the False Claims Act, under which they can be sued for fraud. This had been one of the leading complaints from contractors. And while there are new concerns accompanying this rule, it does seek to address a the difficulty of maintaining pricing compliance.

The TDR will require an entirely new way of dealing with GSA pricing and has some significant future effects. EZGSA is developing a white paper concerning the TDR and will post it’s link here in the next week.

Pricing Your Pricing in Your Proposal

Pricing can be the biggest stumbling block for businesses applying for GSA schedule contracts. The notion that the government expects the absolute lowest price in the world, plus the fear of triggering the Price Reduction Clause, lead some to conclude that it’s just not worth the hassle and risk for such low margins.

It is tempting to automatically set your price as low as possible, especially when selling products. Here are three pieces of information that may cause you to reconsider how to structure your GSA Schedule pricing proposal.

Similar Terms, Quantities, and Conditions

The misunderstanding out there is that you need to give GSA the lowest price you’ve given anyone. The truth is that you need to give GSA the lowest price you’ve given to anyone with similar terms, quantities, and conditions.

This is a big difference. Let’s imagine that you give your distributer a 40 percent discount, but only on purchases over $250,000; this distributer takes the risk holding high volumes of your product, promotes and sells your product, represents your brand, and has their cousin Jeff drive down to the warehouse monthly to save on shipping. The government may want that 40 percent discount, but because the terms, conditions, and quantities are not similar, should they actually get it?

If you can establish that the federal government is more similar to a customer that gets a lower discount, you may be able to establish a higher GSA ceiling price.

GSA is going to negotiate during your proposal process

Before your Final Proposal Revisions are signed, your GSA Contracting Officer is going to negotiate. A CO may take the stance that your items are too expensive, no matter how slim the margins. Your company can do better.

COs are required to push that discount rate as high as possible so they can get the best deal for the government, and ergo the taxpayer. S/he will most likely push back on your proffered discount rates. If these rates are already at your limit, you may not be able to successfully negotiate during the proposal process.

Purchasing agencies are required to ask for additional discounts

Your GSA price is a ceiling price, meaning you can’t charge the government a higher rate. But you can always go lower.

“The GSA Schedule CO determines the prices of supplies and fixed-price services, and rates for services offered at hourly rates, to be fair and reasonable prior to contract award. However, ordering activities are always encouraged – and, in some cases, required – to seek additional discounts (i.e., price reductions) prior to award of Schedule orders and Blanket Purchase Agreements (BPAs).”

In order to be competitive, it may behoove you to keep prices high. You may then have room to discount individual orders from agencies.