The email from your GSA Industrial Operations Analyst (IOA) to request a Contractor Assessment Visit (CAV) can cause even the most compliant contractor anxiety. Did we accurately report all our GSA sales? Were all of our employees qualified to perform under their labor categories? Is our pricelist still accurate? While the CAV is not an audit, your IOA will be assessing your adherence to the terms and conditions of your GSA Schedule, so you need to be prepared. You may be wondering what kinds of issues they can uncover. To make sure you are informed, we will go over some of the most frequent problems uncovered during Contractor Assessment Visits.
Since GSA is a self-funded agency, the Industrial Funding Fee, or IFF, is 0.75% that is remitted for all GSA sales. This fee is very important as it allows GSA to continue its operations. As you can imagine, this makes GSA quite adamant about ensuring GSA Schedule contractors are reporting sales fully and accurately in the Sales Reporting Portal (SRP).
Consequently, sales reporting and IFF payments are the most important focus during CAVs. Your IOA will ask for and review a report of all your company’s sales to ensure that you did not misreport your GSA sales over the review period and that your accounting system is capable of tracking GSA sales. There are two main types of errors in GSA sales reporting: underreporting and overreporting.
If you did not report GSA sales that should have been reported, or entered an amount that was less than the total amount for the reporting period, you have underreported your GSA sales. This is a major concern for GSA because this means that you have not remitted your IFF fully as required. There can be many reasons for underreporting, ranging from a simple transposition error, to a flaw in your accounting system, to uncertainty over whether or not an item counts as a GSA sale.
If you reported GSA sale items that shouldn’t been reported, or entered an amount that was greater than the total amount for the reporting period, you have overreported your GSA sales. Similar to underreporting, there can be many causes for this, from overcharging a GSA customer, to including open market items in your sales report, to assuming that a sale under a separate contract vehicle was a GSA sale.
If your IOA determines during their review of your company’s sales report that you have under- or over-reported your GSA sales, you will need to submit a sales adjustment through the Sales Reporting Portal.
If you have underreported, you will then need to remit the additional IFF that was missed. If you overreported, you will be issued a credit for the IFF of the overreported amount. You will also likely be asked to explain to the IOA the steps your company is taking to ensure that such mistakes don’t occur in the future.
To avoid sales reporting issues, make sure that you only report sales of offerings that are on your GSA Schedule, or under the OLM SIN. Make sure your accounting software has a flag to mark GSA sales as well. Make sure you familiarize employees with what constitutes a GSA sale.
When you are awarded a GSA Schedule, or modify it, you agree to provide certain discounts to customers who purchase through your GSA Schedule. The GSA price, with IFF, is the ceiling price you can charge a GSA customer for that item. If you do not uphold those terms as part of a sale to a GSA Schedule customer, you have violated your GSA pricing terms.
This is why, as part of a CAV, your IOA will take a look at sales documentation from a sample of orders from your sales report, including Purchase Orders, Quotes, and Invoices. If GSA determines that the pricing terms you are providing do not meet the terms you have agreed to with GSA, that raises significant concern, especially if it is part of a pattern. If your Schedule has any prompt payment or quantity/volume discounts, you must also provide those as applicable. Prompt payment discount terms in particular must be provided on all invoices for GSA sales.
If during a Contractor Assessment Visit your IOA discovers you charged above the GSA price for an item, you will likely be required to issue a refund or credit either to the affected agency or directly to GSA itself. You may also be required to send a sales adjustment through the Sales Reporting Portal to note the overreporting. To avoid these issues, ensure that your team is familiar with the terms and conditions of your GSA Schedule, where to find them in your GSA pricelist, and how to quote to government customers.
For GSA Schedule contractors who offer services under labor categories, your IOA will likely ask for resumes of employees who worked on projects that were awarded under your GSA Schedule. They do this to ensure that those employees meet the minimum education and experience requirements that you agreed to.
If your IOA determines that an employee who performed a labor category did not meet the minimum education or experience requirements, such as an individual with an Associate’s degree performing a labor category that requires a Bachelor's degree, they will see that you violated your GSA Schedule terms by providing underqualified labor, unless you have been awarded applicable education substitutions.
If violations are found as part of the CAV, you may be required to offer a refund to the customer. To avoid this, you must ensure that your GSA Schedule labor categories are only ever staffed by employees who meet the requirements and that you have provided information on any applicable education substitutions to GSA. Education and experience requirements should be in your GSA pricelist, so best practice is to consult that before assigning any employee to a labor category.
For those GSA Schedule holders who are not under Transactional Data Reporting (TDR), you must proactively monitor your discounting practices to ensure that you are not violating your disclosed Commercial Sales Practices.
If you offer a commercial customer greater than the discount disclosed to your Basis of Award customer for an item on your GSA Schedule, you may have violated the Price Reductions Clause. This means you will need to submit a Price Reduction Modification to increase your GSA discount for that item, proportionate to the increase in discount to the commercial customer. You may also be on the hook to refund the government for instances in which you overcharged a GSA customer after the initial incidence of the price reductions, since this is seen as overcharging the customer.
For this reason, it is important to train your sales team on the commercial sales disclosures you have made to GSA, to avoid accidental invocations of the Price Reduction Clause by undercharging commercial customers.
These are only some of the issues that may be uncovered during a CAV, not an exhaustive list. However, I hope they give you an idea of what you can expect during your next Contractor Assessment Visit. Keeping these concerns in mind will help you better understand where contractors often stumble in maintaining their GSA Schedule. Catching a mistake before your meeting with the IOA is always preferable to having a mistake uncovered during the review process.
As such, I always recommend that contractors conduct regular reviews of their sales reporting, discounting practices, education and experience qualifications, and pricing terms regularly, at least once a year.
With all this in mind though, navigating GSA Contractor Assessment Visits doesn't have to be daunting. At Winvale, we're here to support you every step of the way, offering expertise and guidance to help you succeed with your GSA Schedule. With our insights and guidance, you’ll be equipped to ace your next assessment and navigate GSA compliance with confidence, so feel free to reach out if you have any questions or concerns about your upcoming Contractor Assessment Visit.