One of the biggest reasons contractors choose to get a GSA Multiple Award Schedule (MAS) contract is the easy access it provides to the world’s largest buyer of goods and services, the U.S. government. With a GSA Schedule, contractors have already pre-negotiated their terms and pricing, giving them an advantage over other contract vehicles. Because of this, government buyers often choose to purchase from GSA Schedules.
However, a GSA Schedule is not the only way for prospective vendors to sell to the government. Businesses can also sell to government buyers through the open market which is generally completed outside the scope of the GSA Schedule and other contracts. If you’re looking to sell to the government, you might be wondering which path to go down. So, what are the differences between selling through GSA Schedules and the open market? Let’s break the options down.
What is a GSA Schedule?
First, let’s look at what the GSA Multiple Award Schedule (MAS) Program is exactly. The GSA Schedule is a long-term governmentwide, Indefinite Delivery, Indefinite Quantity (IDIQ) contract that provides federal government buyers with commercial products and services at volume discount pricing. Many businesses and organizations interested in selling products and services to government agencies do so using the MAS Program.
GSA Schedules are awarded for an initial period of 5 years with three additional 5-year option periods, totaling a potential of 20 years. With contracts lasting up to 20 years, you can think of the GSA Schedule as a long-term partnership with government agencies.
(H3) How Do Sales Work Through a GSA Schedule?
Government buyers can purchase products and services through a GSA Schedule by customer catalogs, GSA representatives, through official GSA sites like GSA Advantage!, and by contacting contractors directly if under a certain threshold.
Government buyers must follow ordering procedures outlined in Federal Acquisition Regulation (FAR) 8.4 when purchasing from GSA Schedule contracts. By using FAR 8.4, government agencies do NOT have to:
- Issue a solicitation for 30 days or any other pre-determined time
- Conduct a competition by looking for contractors outside the GSA Schedules Program
- Conduct formal briefings
- Use FAR subpart 15.3 concepts and procedures
What does this mean for GSA contractors? FAR 8.4 simplifies the acquisition procedures for both government agencies and contractors, making the process faster and more efficient.
What is the Open Market?
The open market refers to items for sale which are not available for purchase through a government contract vehicle, like the GSA Schedules Program. In other words, open market opportunities are generally not as frequent because the products and services can’t be available via a government contract vehicle.
When a government agency is completing a purchase on an open market item, it's not subject to the same terms that are associated with a GSA Schedule. These terms include an agreed upon ceiling price, delivery requirements, payment requirements, discounts, and so on. However, there are instances where open market procedures are used in the MAS program, which we’ll discuss below.
Open Market in GSA Schedules
There are several regulations which govern the relationship between items on the GSA Schedule and open market items. According to Federal Acquisition Regulation (FAR) Subpart 8.402(f), open market items can be added to a Schedule order for administrative convenience, provided that all open market procedures are followed for those items.
These solutions are generally Other Direct Costs (ODCs) but can be other items. ODCs are costs not previously identified as a direct material, labor, or indirect cost. Examples include special tooling and test equipment, computer services, consultant services, travel, and packaging costs.
Contractors must also be sure that all open market rules are followed for these items. There is no dollar or percentage limitation to open market Contract Line-Item Number (CLIN)s. You can quote the ODCs within quotes, but your order Contracting Officer will have to decide if they are approved.
In other words, open market still has its restrictions and is not always a viable option for government buyers or contractors.
While open market purchases may be ideal for buyers looking to purchase an item that cannot be sold on the GSA Schedule, the GSA Schedules Program is generally a more fruitful option for both government buyers and contractors.
GSA Schedules vs. Open Market
Truth be told, the government prefers to use pre-vetted IDIQ contracts such as the GSA Schedule whenever possible over open market procurement. There are several reasons for this. A major reason the government tends to avoid open market procurement when possible is efficiency.
Generally speaking, buying open market items takes more time, costs more money, and is less expedient since there are not pre-established terms and conditions. Unlike open-market procurement, GSA Schedules are required to have pre-established rates and terms and conditions, and benefit from acquisition regulations (such as FAR part 8.4) that help simplify procurement procedures. In many cases, open market procurement can take up to 6 months while procurement awarded through the GSA Schedule will generally take less than 30 days.
Small Businesses
Procurement through the GSA Schedule is especially advantageous for small businesses. Because government buying agencies are able to utilize small business set-asides to meet small business goals, purchases placed under GSA Schedule contracts can be counted toward the ordering activity’s small business goals. Open market procurement does not include pre-vetted small business partners, and additional vetting is usually required.
Marketing Opportunities
Additionally, the GSA Schedule provides excellent marketing tools for contract holders. For example, GSA Advantage! is an online shopping tool where your offerings can be posted and available for agency buyers to access. This is essentially the “Amazon” of GSA and allows contractors to upload products, product photos, product descriptions, and use key search words and main selling factors to optimize search results. This is also a great resource to scope out competitors and stay up to date on the offerors within your niche market.
Another useful tool that is available to GSA Schedule contractors is GSA eBuy. This is an acquisition tool agencies use to request information and quotes from GSA Schedule holders. GSA eBuy often houses high-dollar, high-profile contract opportunities not available anywhere else. GSA eBuy makes it easy to find business opportunities, respond to government requests and establish new business relationships.
These tools also offer cross agency use, which is not available on the open market.
However, there are some restrictions to purchasing through GSA Schedules. All contracts must be fixed price, so no cost-type contracts are allowed. The terms and conditions are also rigid as they must match those of GSA Schedule contracts. So, if a GSA Schedule doesn't fit an agency's needs, they may need to turn to the open market.
Are You Taking Advantage of the GSA Schedules Program?
Accessibility to a growing and consistent market is ideal for any business. While there are multiple ways to market and sell products and services to the government, a GSA Schedule contract is one of the most popular options and the most efficient. If you want to learn more about the GSA Schedules program, you can check out these resources:
- GSA Contractor Requirements: What You Need to Get a GSA Schedule
- The Do’s and Don’ts of Preparing a GSA Schedule Proposal
- Why You Should Get a GSA Schedule
If you have questions about getting a GSA Schedule, or need help with your current contract, we can assist you.
