Can Business Partners Put Your GSA Schedule At Risk?

It goes without saying that the GSA Schedule contract is between the listed business and the government. However, in reality, there are other parties who, while not held to the terms of the contract, still have a significant impact on the ability for a business to execute their contract. Suppliers or manufactures, for example, can change their rates; but it is incumbent upon each contract holder to adjust their commercial pricelist and avoid overcharging the government.

Even seemingly small changes by business partners can have serious repercussions.  This week an EZGSA client presented this problem: their major supplier, Motorola, was removing the MRSP from vendor pricing sheets. The cost to the vendor didn’t change, but there would no longer be a listed price. Yet because our client’s GSA prices were based off of a discount to the MSRP, the old GSA prices were now rendered null and void.

To continue selling to the government without addressing this would violate at least the Price Reductions Clause, and probably the False Claims Act, both of which subject the offending company to numerous penalties. And those penalties can compound the longer they are left unaddressed. Thankfully, we were able to identify the issue promptly and work with the Contracting Officer to create a new basis of award for the client.

Be aware of any changes made by the companies with which you do business. If you see something that seems out of the ordinary, ask for help. Price changes may be the result of manufacturing changes, which may indicate that the Country of Origin has changed. A new price list may require a new letter of supply. Any number of changes to how businesses choose to work with you may result in your needing to change the GSA Schedule terms and rates.

For more information or assistance, contact EZGSA at Iwohner@EZGSA.com or 301-913-5000.