The General Services Administration (GSA) Multiple Awards Schedule (MAS) contract is a popular contract vehicle used by commercial companies to sell to government agencies and entities. The GSA Schedule requires companies to draft a 3-part proposal comprised of an administrative, technical, and pricing section. While all sections are equally important, the pricing section requires dedicated attention and diligent research to meet GSA’s pricing rules. As contract holders ourselves, we know how complex the requirements can be, so below are 5 tips that will help you structure your pricing section with ease.
1. Fair and Reasonable Pricing
Being pre-approved by the government is one of the many perks of having a GSA Schedule. Government agencies looking to procure products or services can utilize GSA sites with hundreds of thousands of GSA approved items and service providers. It is a Contracting Officer’s job to determine if the price you’re offering to GSA is “fair and reasonable.” There is a plethora of factors involved in the decision-making process. For example, the type of labor, level of training, products, and complexity of services are all considered.
Below is a detailed list of requirements that GSA pays close attention to:
- Labor
- Daily job functions
- Minimum education
- Minimum years of experience
- Education substitution
- Certifications or licenses
- Security clearances
- Wage determination
- Geographic region
- Training
- Course content
- Course length
- Minimum/ maximum number of participants
- Cost for additional participants
- Medium used to deliver training.
- Course materials covered.
- Consumer price index
- Geographic region
- Services
- Service description (function and quality)
- Consumer price index
- Wage determination
- Geographic region
- Products
- Product description (function and quality)
- Quantity or volume
- Delivery terms
- Warranty
- Return and restocking policy
- Consumer price index
- Producer price index
- Export price index
- Import price index.
The factors above play a vital role when it comes to negotiating pricing terms and conditions. Whether it’s level of education, daily job function, years of experience, etc., they all serve as justification for your competitive pricing.
To understand more about how your pricing compares to other GSA Schedule contractors, you can use sites like GSA Advantage! (for products) and the GSA Calc Tool (for services).
2. Price Increases
As the economy undergoes significant changes, it can greatly affect commercial companies and the value of their offerings. During the 20-year lifespan of a MAS contract, most contractors will inevitably alter their pricing. Therefore, GSA has created a few price increase EPA (Economic Price Adjustment) clauses for contractors to choose from:
- EPA 552.216.-70
EPA Clause 552.216-70 allows contractors to increase their prices based on commercial price increases. This means that you can request GSA price increases when your commercial prices increase. After the first 12 months, contractors can submit three price increase modifications per 12-month period, and they must provide invoicing support. This clause typically pertains to vendors who offer products as opposed to services.
- EPA I-FSS-969 (b)(1)
Under I-FSS-969(b)(1), price increases are based on a fixed escalation rate that is negotiated prior to contract award. Price increases are automatic and awarded on the 12-month anniversary of the GSA contract effective date. Therefore, no modifications are required.
- EPA I-FSS-969 (b)(2)
Under I-FSS-969 (b)(2), prices are based on an agreed-upon market indicator. This market indicator could be a public index, public survey, or another public based indicator, but it is typically connected to the Bureau of Labor Statistics Employment Cost Index. Both of the I-FSS-969 clauses are generally chosen by contractors offering services.
3. Price Reductions
If you opt into Commercial Sales Practices, this clause applies to you. Before a contract is awarded, the contractor will agree upon a customer or group of customers which will be the Basis of Award (BOA) and the government’s price or discount relationship to the identified customer or group of customers. Your Commercial Sales Practices will establish the discount relationship between your BOA and the government. If the discount relationship changes in any way, it will trigger the Price Reduction Clause 552.238.81. If the clause is triggered, you have 15 days to notify your GSA Contracting Officer.
4. Electronic Price List
If you’ve considered being a GSA MAS contract holder, maybe you’ve done some research by scrolling through GSA Advantage!. GSA Advantage! is an amazon-like site that contains contractors’ offerings and their awarded pricing, which includes the Industrial Funding Fee (IFF).
Contractors are required to publish their pricing electronically on GSA Advantage! 6 months after initial contract award. Once it’s published, it should continuously be updated (within 30 days after a modification) to accurately reflect any changes. If your pricelist is not consistent with your awarded terms and conditions, then it could get taken down, which would negatively impact your presence on the site and limit your opportunities for potential government sales.
5. Transactional Data Reporting
Contractors have the choice of opting into Commercial Sales Practices or Transactional Data Reporting. GSA is working towards allowing all contractors to have the opportunity to choose TDR, if desired. However, at this moment, only contractors under eligible Special Item Numbers (SINs) can opt into Transactional Data Reporting. GSA has plans in the future to open it up to all contractors, but they are on hold at the moment.
Not having to disclose Commercial Sales Practices, specifically your Basis of Award (BOA) and Most Favored Customer (MFC) and providing transactional data on a monthly basis are two of the major practices that distinguish TDR from CSP.
Meeting GSA Pricing Requirements
Pricing is arguably one of the most important parts of your company’s GSA Schedule. The layout of your pricing should follow the pricing rules discussed above. Fair and Reasonable Pricing, an EPA clause that aligns best with your company, awareness of the price reduction clause, frequent updates to your electronic pricelist (as needed), and abiding by CSP or TDR practices are all major components of pricing compliance.
We understand that creating a strategic and well-thought-out pricing structure can be difficult. If you need help constructing your pricing section or have any GSA related questions, our Winvale consultants would be happy to assist you.
