A Closer Look at GSA’s New Pricing 2.0 Algorithm for the MAS Program

If you offer products under the Multiple Award Schedule (MAS) program, especially Commercially Available Off-the-Shelf (COTS) items, you have probably seen the term “market threshold” before. You may have even experienced the dreaded scenario of being told that your proposed pricing exceeds the market threshold and cannot be accepted. However, you might not understand exactly what the “market threshold” is. That isn’t your fault, as how GSA calculates the market threshold has been fairly opaque. GSA uses an algorithm to calculate the market threshold, which serves as a marker of the upper limit on pricing that GSA is likely to accept for a specific item, at least without justification.

Recently, GSA announced they are introducing some changes to the market threshold algorithm on June 5, 2026, as part of a push called Pricing 2.0. These changes are intended to ensure the MAS program balances cost savings for purchasing agencies while still maintaining a competitive and profitable marketplace for industry.

How GSA Establishes their Market Threshold

GSA’s algorithm uses a combination of data intended to find a reasonable price limit they expect for an item, based primarily on median pricing data but with some leeway built in. The place you have most likely seen the term market threshold before is in the Compliance and Pricing Report generated by the FAS Catalog Platform (FCP). There is a column listing the Market Threshold in this report, which you receive as part of the process of submitting catalog actions in FCP.

The data used to determine this market threshold includes a mixture of:

• Existing pricing on the MAS program
• Transactional Data Reporting (TDR) order prices
• Pricing from major commercial catalogs
• Inflation adjustments
• Annual demand quantity

These data sources themselves are not changing, but the algorithm used to calculate the market threshold from them is changing in ways that GSA believes will save the government money and reduce price variability.

Why GSA’s Market Threshold Matters

The market threshold is used as a component in GSA’s reviews to determine whether your proposed pricing is “fair and reasonable.” If your pricing is above the market threshold, it is more difficult to get that pricing approved. Your Contracting Officer (CO) may ask you to remove that item from the offer/modification or to submit supporting documentation to justify why the pricing exceeds the market threshold. However, while it’s easier to add items when your pricing is below the market threshold, it’s not expressly forbidden to add items at above the market threshold pricing, as the CO ultimately has this discretion.

With the transition of the entire MAS program to TDR, market research data like the market threshold is more important than ever, though, since Commercial Sales Practice disclosures are going away and contractors don’t have to use their Most Favored Customer (MFC) and best discounts to guide their GSA Schedule pricing. As such, GSA will rely more on comparative data like the market threshold to determine whether pricing is “fair and reasonable.

Changes Included in GSA’s New Pricing 2.0 Algorithm

Starting on June 5^th, Pricing 2.0 will go into effect. This involves the aforementioned change to the algorithm used to calculate the market threshold. GSA has provided the updated steps they will use to calculate the market threshold. There are two significant changes:

1. The new model’s market baseline, the starting point from which calculations are completed to determine the market threshold, will now consist of the lesser of the following:
   1. The current model’s market baseline (an average calculated using catalog and TDR pricing data)
   2. The minimum observed commercial price, with certain outliers excluded
2. The price proportional premium will be cut in half to a maximum of 25% and will decrease proportionally by dollar value as the threshold increases to a flat 5% above a $5000 threshold. This reduction will decrease the probability of overpriced outliers and keep prices within a narrower band for the same item. (We’ll dive more into this below).

The first change is fairly straightforward. It caps the market baseline at the minimum available commercial price because there is no point in GSA accepting a rate significantly above the best commercially available rate. If this was the case, it would be more efficient for agencies to simply purchase commercially off the open market.

The second change may sound confusing and technical, but the main takeaway is that the reduction from a 50% premium to 25%, at most, gives less leeway, leading to lower market thresholds. In addition, lower priced items have more leeway than higher priced items, since the price proportional premium decreases as the price increases. With this change, contractors should expect the pricing range for high value items to be narrowed.

GSA has released a helpful example demonstrating how these changes fit into the overall process of determining the market threshold. The Compliance & Pricing Report will automatically calculate using this new algorithm starting on June 5th. GSA MAS holders are not required to take any action at this time, they should just be aware of this change when they submit modifications moving forward.

What is Staying the Same with GSA Pricing?

The overall model of calculating the market threshold is largely remaining the same other than the two changes mentioned above. GSA will continue to use the same data sources; the algorithm used on the data will just be the updated version.

Contracting Officers will continue to use the market threshold when reviewing a contractor’s proposed pricing. It is advisable to provide supporting documentation to justify your pricing when it exceeds the market threshold.

How Pricing 2.0 Impacts Your GSA MAS Contract

These changes will mostly impact contractors who resell COTS products. If you only offer services under the MAS program, or your GSA MAS contract only includes products your company manufactures, these changes will not have much or any impact.

If you do offer COTS products, you should be aware that these changes will likely reduce the pricing threshold for items on your Schedule. If you run into a greater portion of items exceeding the market threshold when you try to add new items or increase pricing despite maintaining the same discount structure, these changes will likely be the reason.

The good news is that, if you are in the FCP, you will automatically receive feedback on which items exceed the market threshold and can either reduce pricing as feasible or prepare justification before formally submitting your modification in eMod.

Navigating Changes to Your GSA Schedule

It’s not only difficult to keep up with these changes, but also apply them to the maintenance and care of your GSA Schedule. If you need any advice on how to price items on your Schedule or would like help crafting your next modification, please reach out to Winvale. One of our consultants would be happy to get you on the path to success under the MAS program.