Operating in the Red? GSA and your Financial Statements
GSA Schedule | Resources and Insight | 2 Min Read
As a consultant to companies applying for a GSA Schedule contract, we work closely with our clients to gather the information that I know the solicitation (and contracting officers) requires. When we start talking about financial statements, a few of my clients ask me “what if we’ve operated in the red last year?” Knowing my client’s strengths are equally important as knowing any weakness, so we can prepare for and address issues beforehand. Demonstrating financial viability can certainly be a challenge.
Every company submitting a new Offer under a GSA Schedule will have to, and I’ll quote the Solicitation, “Provide a copy of offeror's most current, complete, audited (if available) two years of financial statements (at a minimum, balance sheets and income statements). GSA uses balance sheet and income statement information to determine financial responsibility. Provide an explanation for any negative financial information disclosed, including negative equity or income. You may be required to provide letters of credit or other documentation to demonstrate that adequate financial resources are available.”
This information will be reviewed by the contracting officer to determine financial solvency. If your company experienced a loss within the last 2 years, you are not alone! The rough economic climate will be taken under consideration by the folks who review financial statements at GSA’s Credit and Finance Department, however they will ask for an explanation around any loss or negative financial information shown, including negative equity or income. Consequently you will need to convey why a negative net income occurred, what changes your addressed, and why you’re optimistic for the current year. Don’t worry, they’re not asking for a 100 page business plan or personal tax returns, but they will want to make sure you’re addressing “the Red” and you have focus on turning your business around. Remember, once awarded a GSA Schedule your company has a potential 20 year term contract. The Government seeks long term relationships with vendors, meaning they endeavor to award GSA contracts with companies that actually… you know, will be around for 20 years.
In addition to the explanation for any negative financial information disclosed, GSA might also ask you to submit Bank References, an Irrevocable Letter of Credit, and a Certificate of Competency (administered by the Small Business Administration). So if you have any questions about your financial statements and other GSA requirements, please give us a call!
About Kevin Lancaster
Kevin Lancaster leads Winvale’s corporate growth strategies in both the commercial and government markets. He develops and drives solutions to meet Winvale’s business goals while enabling an operating model to help staff identify and respond to emerging trends that affect both Winvale and the clients it serves. He is integrally involved in all aspects of managing the firm’s operations and workforce, leading efforts to improve productivity, profitability, and customer satisfaction.
