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Contract Awards

FY26 NDAA Delivers a Turning Point for the GSA Price Reductions Clause

A provision in the proposed Fiscal Year 2026 National Defense Authorization Act (FY26 NDAA) signals another decisive step in GSA’s long-running effort to move away from the Price Reductions Clause (PRC) in the Multiple Award Schedule (MAS) program. The House has already passed the bill, and if enacted, it would further weaken a clause that contractors and GSA alike have long viewed as overly burdensome and a barrier to participation in the MAS marketplace. (JD Supra December 17, 2025)

How the Price Reductions Clause Has Worked

GSA uses the PRC to ensure MAS pricing remains fair and reasonable. Under this approach, contractors disclose their Most Favored Customer (MFC), negotiate a Basis of Award (BOA) customer or group, and agree to give MAS customers pricing that is equal to or better than the BOA. If a contractor later gives the BOA better pricing, the PRC requires that reduction to flow to all MAS customers. (ibid)

In practice, this structure has created significant compliance risk. A single commercial discount, sometimes granted by an individual salesperson, can trigger sweeping price reductions across the MAS contract. Contractors have long described the PRC as one of the most complex requirements in federal contracting. (ibid)

Why GSA Has Tried to Move Away From the PRC

GSA has increasingly acknowledged that the PRC discourages participation in the MAS program, particularly for small businesses. To reduce this burden, GSA introduced the Transactional Data Reporting (TDR) pilot in 2016. Under TDR, contractors no longer track BOA pricing or comply with the PRC. Instead, they report detailed sales and pricing data monthly, allowing GSA to assess price reasonableness through market data rather than rigid price controls. (ibid)

GSA has repeatedly asked Congress to clarify its authority to abandon the PRC, noting that MAS pricing requirements represent its most burdensome information collection and can slow the addition of new products and services agencies need. (ibid)

Why the PRC Has Persisted Until Now

The primary obstacle has been a longstanding disagreement between the GSA and its Office of Inspector General (OIG). The OIG has argued that federal law requires MAS contracts to result in the “lowest overall cost alternative,” effectively mandating the PRC. GSA has disagreed and has pushed Congress to replace that standard with a “best value” approach. (ibid)

What the FY26 NDAA Changes

Section 812 of the FY26 NDAA adopts GSA’s position by changing the statutory standard for MAS contracts under Title 10 from “lowest overall cost alternative” to “best value.” This change aligns MAS contracting with broader federal acquisition principles and removes a key statutory argument for retaining the PRC, at least for defense agencies. (ibid)

What This Means for Contractors

The shift to a “best value” standard strengthens GSA’s ability to fully retire the PRC and expand TDR across the MAS program. GSA has already announced plans to make TDR mandatory for all Special Item Numbers beginning in FY26 and has confirmed its intent to transition all Schedule contractors away from the PRC within the next year. (ibid)

Price will still matter, but GSA will likely rely on reported transactional data and market research rather than automatic price reductions. Contractors with legacy PRC-based contracts should evaluate whether transitioning to TDR makes operational sense and engage early with their contracting officers. Companies considering entry into the MAS program should prepare to demonstrate price reasonableness even under TDR, as GSA can still request supporting pricing data when needed. (ibid)

Looking Ahead

While the NDAA provision applies directly to Title 10 acquisitions, similar language exists in Title 41 for civilian agencies. Congress may ultimately align both statutes to avoid a split standard. As GSA continues this transition, contractors can expect reduced PRC-related audit exposure; however, new compliance expectations regarding data accuracy, pricing support, and documentation will take its place. The era of the Price Reductions Clause is not over yet, but FY26 brings it closer than ever to an end. (ibid)

Do you have questions about how your contract will meet the new guidelines if the Most Favored Customer rules change? Give us a call.

FAR Council Locks In the “Two-Point” SAM Rule

Federal contractors finally have the clarity they’ve needed. After years of inconsistent interpretations and protest risk, the FAR Council has confirmed exactly when an offeror must be active in the System for Award Management (SAM) to qualify for award. (Federal News Network November 6, 2025)

The answer is now simple: You must be active in SAM at two specific moments — when you submit your offer and when the government makes the award. A temporary lapse in between will no longer knock you out of the competition. (ibid)

How We Got Here: A Long Trail of FAR Confusion

The trouble began with a 2018 amendment to FAR 52.204-7. Many interpreted the new language as requiring continuous SAM registration from proposal submission all the way through award, a period that often lasts months or even years. (ibid)

Bid-protest forums like the Government Accountability Office (GAO) and the Court of Federal Claims reinforced that strict reading. Under their approach, even a brief lapse in SAM, caused by something as minor as a banking change or an unintentional delay, could make an otherwise qualified offeror ineligible. (ibid)

Contractors felt the pressure. The rule didn’t improve the government’s ability to select the best solution; it simply turned SAM upkeep into a high-stakes technical trap, especially for small businesses with frequent changes in ownership, banking, or certifications. (ibid)

Recognizing this problem, the FAR Council issued an interim rule in November 2024 clarifying that offerors only needed to be active at submission and at award, not every moment in between. (ibid)

The Final Rule: A Clear, Two-Point Requirement

On August 7, 2025, the FAR Council finalized that approach with no changes. The final rule confirms:

  • Offerors must be active in SAM at two moments only:
    (1) when they submit the offer, and (2) at the time of award.
  • No continuous pre-award monitoring is required.
  • Mid-evaluation lapses are no longer automatically disqualifying as long as registration is active at the two required points.
  • Offerors must still keep SAM reps and certs accurate at all times. (ibid)

This shift materially reduces protest risk and prevents the loss of competitive proposals over minor administrative oversights. It also restores fairness to the process, ensuring that meaningful competition, not website maintenance, drives award decisions. (ibid)

What This Means for Contractors

The rule divides SAM responsibilities into two clear phases:

Pre-Award: Follow the Two-Point Rule

  • Be active at submission.
  • Be active at award.
  • Document both moments.

A simple screenshot or PDF of the SAM “Active” status at each point can quickly resolve any protest issues.(ibid)

Post-Award: Maintain Continuous Registration

Nothing changes here. Contractors must keep SAM active throughout performance and through final payment. A lapse during performance can still cause payment delays and contract complications. (ibid)

Also unchanged: your obligation to keep all reps and certs accurate.
An “active” but inaccurate SAM record creates a different kind of compliance risk. (ibid)

Strengthen Your Internal Processes

The two-point rule lets contractors shift focus from constant monitoring to smart coordination. This is a perfect time to align your teams:

  • Business Development should share projected submission and award timelines.
  • Compliance should flag any upcoming changes that may affect validation.
  • Both teams should ensure timely documentation of SAM’s active status at the two required moments.

When these processes sync, you stay compliant without wasting time chasing SAM status mid-evaluation. (ibid)

The Bottom Line

The new FAR rule delivers long-needed clarity. Instead of punishing contractors for brief, inconsequential lapses, the government now evaluates SAM eligibility at two meaningful points: submission and award. (ibid)

With basic internal controls, contractors of all sizes can easily meet these requirements, reduce protest risk, and keep their attention where it belongs — on winning and performing federal contracts. (ibid)

Do you have questions about lapses or whether you were active at submission and/or award? Give us a call.

Stop! Don’t Upload Your MAS Catalog Until You Get FCP Access

Effective immediately, newly awarded contractors must not use SIP or EDI-832 to upload catalogs to GSA Advantage!.

What to Do

  1. Use the required templates.
    Since MAS Refresh 29 (Aug 28, 2025), vendors must submit offers using:
  • FCP Product File
  • FCP Services Plus File
  • SIN-Specific Price Proposal Templates (limited SINs) (buy.gsa.gov 9.29.25)

If you used Products PPT or Services & Training PPT, convert your data to the FCP template. Templates live on the MAS Required Templates page. (ibid)

  1. Wait for your “Welcome to FCP” email before uploading data.
  • Awards Aug 28–Oct 7 → FCP access Oct 14, 2025
  • Awards Oct 7–Nov 5 → FCP access Nov 11, 2025
  • Awards after Nov 5 → Timeline coming soon
  • Awards before Aug 28 → Continue SIP/EDI-832 until bulk onboarding moves you to FCP (28-day notice). (ibid)
  1. Register your contract with the Vendor Support Center (VSC).
    Do this as soon as you win. Registration is required to use FCP and show your contract on eBuy. (ibid)

In the meantime, validate your Product and Services Plus Files. Clean data = fewer FCP errors later. (ibid)

If you’re a newly awarded MAS contractor and unsure how to handle catalog uploads or registration, give us a call.

What’s Next for Federal Acquisition? David Berteau’s Parting Insights for Government Contractors

As David Berteau steps down from his role as CEO of the Professional Services Council (PSC), federal contractors would be wise to pay close attention to the lessons he leaves behind. With over four decades in federal acquisition, from the Pentagon to PSC, Berteau has seen the full arc of government contracting’s evolution and knows exactly where the industry needs to go next. (Federal News Network April 29, 2025)

From Inputs to Outcomes: A Call for Smarter Procurement

“The government used to buy results. Now it buys labor hours and storage capacity,” Berteau said in a farewell conversation with Federal News Network’s Tom Temin. His message to contractors is clear: success in the coming era will depend on shifting the conversation with agencies back to mission outcomes—not just technical specs or cost ceilings. (ibid)

For firms competing in a crowded, compliance-heavy space, being outcome-focused is more than a strategy—it’s a differentiator. “We need to help the government define what success looks like, and tailor solutions to achieve that,” he emphasized. (ibid)

Tech Innovation Has Left the Building—and That’s an Opportunity

Gone are the days when the Pentagon seeded cutting-edge technology. Today, Berteau said, commercial markets drive innovation, and contractors must be fluent in adapting those tools for government use, securely, affordably, and at scale. (ibid)

“Most new technology now comes from the global commercial space. The government’s role is still critical, especially for defense but the dynamic has flipped,” he noted. (ibid)

Contractors that understand how to integrate commercial tech into mission-specific architectures, from cloud platforms to edge computing, are already outpacing those still anchored in legacy systems. (ibid)

The Competitive Edge: Culture and Mission Alignment

For government service providers, Berteau stressed that culture is the real competitive advantage. “You can’t sustain success in this market without a commitment to the mission,” he said. “The red tape is real. If your people aren’t motivated by public service, they won’t last.” (ibid)

This alignment is especially critical in today’s talent market, where attracting and retaining cleared, capable professionals remains a top challenge. Contractors who invest in a strong mission-driven culture, Berteau argued, will win, not just the next bid, but long-term relevance. (ibid)

Politics Matter, But Execution Wins

While policy shifts and partisan changes affect contracting conditions, Berteau reminded industry leaders to stay focused on execution. “The best companies in this space don’t get distracted by politics. They stay grounded in what matters: delivering value, staying compliant, and helping agencies succeed.” (ibid)

With a new wave of acquisition reform always around the corner, staying agile and compliant remains essential. “You can’t perform if you’re not compliant. And if you don’t perform, you won’t be around for long,” he said bluntly. (ibid)

Still in the Fight—Just Not Full Time

Though Berteau is stepping back from day-to-day operations, he made it clear he’s not exiting the federal contracting world entirely. “I’ve got a lot left to say and do. I’ll keep writing, advising, and staying connected.” (ibid)

For government contractors navigating increasing complexity, Berteau’s departure marks the end of an era, but not the loss of insight. His advice to the industry: stay competitive, stay compliant, and above all, stay aligned with the mission. (ibid)

Questions concerning the changing federal acquisition landscape? Give us a call.

OMB Issues First Governmentwide AI Acquisition Policy

The Office of Management and Budget (OMB) released new guidance today to improve how Federal agencies acquire artificial intelligence (AI) technologies. The guidance, outlined in the memo Advancing the Responsible Acquisition of AI in Government, directs agencies to boost cross-functional collaboration, manage AI risks and performance, and foster a competitive AI market. (MeriTalk October 3, 2024)

OMB’s Deputy Director for Management, Jason Miller, emphasized the need for responsible AI procurement, stating that Federal agencies will either have AI systems built by contractors or purchase them directly. “This new memo equips agencies with the tools to capture AI’s potential while managing its risks,” Miller said. (ibid)

A large portion of the memo focuses on managing AI risks, with OMB mandating early involvement from agency privacy officials in AI acquisition processes to identify privacy risks and ensure legal compliance. Agencies are also instructed to negotiate contracts that require vendors to provide detailed information for evaluating AI systems, assessing risks, and protecting government data. (ibid)

The guidance addresses generative AI specifically, calling for testing, red-teaming, and evaluation to ensure the safety and appropriateness of AI tools. It also promotes practices to avoid vendor lock-in, prioritize transparency, and ensure interoperability in AI systems. (ibid)

This guidance fulfills a key part of the Biden-Harris administration’s October 2023 AI executive order and reflects input gathered from public comments and industry roundtables. OMB’s Miller highlighted the Federal government’s significant purchasing power, noting that in 2023, it spent over $100 billion on IT products and services. He stressed that responsible procurement decisions can accelerate AI advancements while mitigating risks for government use. (ibid)

Questions concerning the new OMB issued AI guidance? Give us a call.