For new GSA Schedule contract holders, juggling the new task of managing sales from another larger purchaser like the government can be daunting. With the likelihood of increased sales or the search thereof in finding opportunities for future business, it’s important to be aware of GSA compliance requirements such as meeting the GSA minimum sales requirement.
The supply chain disruptions and the pandemic have caused a lot of concerns across the world as businesses ground to a halt and little of any industry was without some level of impact. GSA, and more broadly the federal government at large, were not without an impact of their own and issued relief to Schedule holders in the form of a moratorium on enforcement of the minimum sales criteria, but this ended in 2021. Now in 2023, the minimum sales requirement remains. This can be a common concern for contractors, so here’s what you need to know about the minimum sales requirement and practices you can put in place to meet it successfully.
What is the GSA Minimum Sales Requirement?
The minimum sales requirement is as follows:
The Contract Sales Criteria clause (I-FSS-639) states:(a) A contract will not be awarded unless anticipated sales are expected to exceed $25,000 within the first 24 months following contract award, and are expected to exceed $25,000 in sales each 12-month period thereafter. (b) The Government may cancel the contract in accordance with clause 552.238-79, Cancellation (MAY 2019) [formerly 552.238-73], unless reported sales are at the levels specified in paragraph (a) above.
In other words, GSA contractors must make $25,000 in GSA Schedule sales within the first 2 years of their contract, and then must make $25,000 every year after the initial 2-year period.
For any organization that has had business with the government in the past, we can quickly realize that the requirement of $25k in the first two years, and then annually thereafter is not necessarily insurmountable. If it was, then GSA would be cancelling contracts left and right.
There are places to look for business, and as a Schedule holder you will often time receive direct communication from government agencies under your NAICS Code and Special Item Number (SIN) requesting either a bid on a contract (i.e. RFQ - Request for Quote or RFP – Request for Proposal) or information from you as a vendor (i.e. an RFI – Request for Information).
Finding Business as a GSA Schedule Holder
While at times you may receive orders directly or receive RFIS, RFQs and RFPs, at other times you may need to be prepared to actively market your GSA Schedule products and services to the government. Arguably one of the first steps to take in marketing to the government, especially if you have held a GSA Schedule for several years, is to ensure you are making the most out of your existing contract.
The first thing you can do it verify your current catalog of products and services in GSA eLibrary is up to date, as this is published directly to GSA Advantage!. GSA Advantage! is the premier ordering platform for the federal government and authorized access purchasers for its ease of use and reduction of the administrative burden of providing individual contracts for Government Purchasing Card (GPC) holders to source products for their agency’s needs. What is more is that GPC holders have a micro-purchase threshold of individual purchases up to $10,000 in each procurement, nearly half of a contractor’s minimum sales requirement (that is if they place and order that large).
Another avenue of approach is to set yourself apart from the competition where possible. Determine if your business qualifies for any small business set-asides. The Small Business Association’s (SBA’s) set-asides apply to GSA Schedules and provide opportunities to become more competitive by certifying as one or more of the following: 8(a) Business Development, Women-Owned, Veteran Owned, Service-Disabled Veteran-Owned, or HUBZone.
Finally, you may submit bids directly on GSA eBuy and search for contracting opportunities on SAM.gov. You can use the "contract opportunities" section on SAM.gov and filter opportunities by keywords, notice type, dates, place of performance, etc. Each of the platforms provides countless opportunities for GSA Schedule holders to search their approved NAICS Code as well as the approved SINs that the government is advertising a need for.
These sites are crucial to your success as a contractor. Many of these opportunities are multi-year contracts that may satisfy the minimum sales requirement for a long time to come.
Becoming a Successful GSA Schedule Holder
There are several opportunities for success as a GSA Schedule contract holder, but you must maintain a proactive approach. Maintaining the minimum sales requirement means having continuous sales of $25k annually, after $25k during your first two years.
If you want to learn more about marketing your GSA contract and becoming a successful contractor, you can check out our other blogs on these topics:
- GSA Schedule Marketing 101
- How Government Contractors Can Stand Out from their Competition
- 5 Tips to Becoming a Successful GSA Contractor
If you have questions or need help managing your GSA contract, one of our consultants would be happy to help you.
