The largest and most complex part of most GSA Schedule proposals is the pricing section. In this section, offerors must outline their proposed pricing in great detail, including rates, product or service descriptions, discounting policies, and more. One area of the pricing section that often trips contractors up is providing pricing support. GSA requires offerors to substantiate their proposed pricing, but the requirements can be confusing, especially for those proposing services. In this blog, we’ll break down exactly what the requirements and options for GSA pricing support are.
According to the GSA Multiple Award Schedule (MAS) solicitation, offerors must “Provide supporting documentation for EACH proposed product/service price. Supporting pricing documentation may consist of published or publicly-available commercial catalogs/price lists, copies of invoices, contracts, or quote sheets, and must be submitted with the offer.”
This may sound straightforward, but the reality is a bit more complex. In our years of experience engaging with Contracting Officers (COs), we here at Winvale have discovered that some forms of pricing support are preferable to others in the eyes of GSA. Generally, COs prefer to see invoices or rate cards, and are not always satisfied when offerors use other publicly available price lists to substantiate their prices.
We’ll discuss why this is in the next section, but first, you may be wondering how Transactional Data Reporting (TDR) affects pricing support requirements (if you opted in to TDR instead of Commercial Sales Practices).
Officially, the requirement for providing pricing support does not apply to offers which are subject to TDR. However, the solicitation does stipulate that while contractors are not required to submit pricing support with their offer, COs are allowed to ask for it during their review—and in our experience, they always do. This is why we recommend submitting pricing support even if you are a part of TDR, in order to anticipate the COs request.
To understand what types of pricing support are preferred, it helps to understand why GSA is asking for pricing support in the first place. The main purpose of pricing support is to prove that your pricing is fair and reasonable—essentially, that you haven’t just invented prices out of thin air. This is why pricing support documents that come from the offeror, like invoices and rate cards, are preferable to using others’ price lists. Invoices and rate cards demonstrate that you yourself have sold your offerings at that price, while publicly available pricelists only demonstrate that others have sold similar offerings at those prices.
Showing that you have sold your offerings at your proposed prices is a better demonstration of reasonableness, as there may be other factors which could cause other companies’ prices to be higher. In other words, a price might be reasonable for one company, but not another. Thus, while market research is technically an accepted form of pricing support, you will have a much easier time getting a contract awarded if you are able to provide pricing support in the form of invoices or rate cards.
Now that we’ve established that invoices are the preferred form of pricing support, let’s discuss what a good invoice looks like. When providing invoices as pricing support, the ideal option is a standard commercial invoice that was sent to a customer. The absolute most important thing to know about providing invoices as pricing support is that the prices on the invoice MUST be equal to or higher than your proposed GSA prices—they CANNOT be lower.
Providing invoices which show lower rates than your proposed GSA rates is doing the opposite of supporting your prices. If you submit invoices with prices lower than your proposed GSA prices, you will almost certainly be asked to lower your GSA rates to match those on the invoices.
The other important aspect of providing GSA invoices is making sure that there is a clear relationship between the invoice and the GSA price it is meant to support. For contractors offering products, this is usually simple, as most invoices for products display the product name next to the price, and product names don’t tend to change. For service offerors, however, things can be a little more complex.
Service offerors are required to propose hourly rates for labor categories, but many contractors don’t have invoices that reflect hourly rates. If you do have invoices that show labor category titles and corresponding hourly rates, that’s exactly what you need. If you only have “lump sum” invoices, which only show a total fee for all hours worked with no breakdown by labor category, don’t worry—you have options.
One option is to submit a timesheet that displays hours worked alongside the hourly rates for each employee along with the lump sum invoice. If you don’t have this timesheet data available, you can submit the rate card for the contract instead. If you don’t have rate cards, or if the rate cards are outdated, you can also submit a quote for a proposal that hasn’t been awarded yet. While invoices, rate cards, and quotes are all viable forms of pricing support, invoices are definitely the most preferred by contracting officers.
Pricing support for your GSA Schedule proposal can be a confusing topic—especially when the solicitation says one thing, and the actions of Contracting Officers may say another. If you have more questions about GSA pricing support, feel free to reach out to us, and one of our skilled consultants will be happy to help. Our decades of experience getting GSA Schedule proposals successfully awarded have taught us a thing or two about the intricacies of GSA pricing support, and we are here to help you navigate the process.