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3 Regulations Every GSA Schedule Contractor Should Know Blog Feature
Patrick Morgans

By: Patrick Morgans on October 7th, 2020

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3 Regulations Every GSA Schedule Contractor Should Know

Resources and Insight | 5 Min Read

The Federal Acquisition Regulation (FAR) and the General Services Acquisition Manual (GSAM) are the primary bodies of regulation used by GSA in the federal marketplace. Knowing the basics of these regulations is important to understanding the requirements of being a successfully compliant GSA Schedule contractor. During the course of contracting, if you find a reference to a FAR or GSAM clause that starts with an acronym you are unfamiliar with, you should check out Acquisition.gov and you will likely be able to find it. But trying to learn and remember all the clauses for GSA contractors is nearly impossible— no one has the time to muddle through all the fine print.

So what main clauses should you be familiar with as a GSA Schedule contractor? In this blog, we highlight and break down three regulations you should know and understand.

1. GSAM 552.238-113 Eligible Ordering Activities

This clause describes the “agencies and activities” that can procure products and services using GSA Schedules. It includes obvious government buyers such as federal agencies, but also explains that certain other entities that are able to purchase off a GSA Schedule.

This list of entities names a wide range of organizations from the American Red Cross and the United Nations, to the European Space Research Organization and the International Monetary Fund, so it’s important to make sure you are considering your options and exploring all your potential customers.

Eligible entities include executive agencies, government contractors with written authorization from a federal agency, government corporations, federal agencies, the District of Columbia, tribal governments, tribes or tribally designated housing entities, qualified nonprofit agencies, and more.

This clause establishes contractors must accept orders from the Executive branch of the federal government. It encourages contractors to accept orders from other eligible entities but does not require it. This clause also explains GSA Schedules can be used for domestic or overseas delivery. Contractors must decide whether they will do either overseas delivery, domestic delivery, or both.

It also touches on Cooperative Purchasing, a program that allows state and local governments to purchase IT- and law enforcement-related products and services, and the Disaster Purchasing Program, which allows state and local governments to purchase certain products and services off GSA Schedules when the President has declared a national emergency under the Stafford Act.

2. FAR 52.225-5 Trade Agreements

This FAR clause establishes that the products and services sold under GSA Schedules must be compliant with the Trade Agreements Act (TAA). The TAA is an act of legislation that determines whether foreign products and services can be sold through the federal marketplace.

There are four categories of countries considered acceptable for government procurement purposes. These are World Trade Organization Government Procurement Agreement (WTO GPA) countries, Free Trade Agreement (FTA) countries, least developed countries, and Caribbean Basin countries. The WTO GPA is an agreement by certain WTO members which creates an open government procurement market between parties to the agreement. If an end product, which is acquired under the contract, is made or “substantially transformed” in a designated country, it’s deemed compliant with the TAA.

According to this FAR clause, “substantially transformed” means that an item was made “into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed.”

You definitely want to make sure the country of origin for your products or services really is compliant without making assumptions, so you’ll want to refer to the list of TAA designated countries.

Major non-TAA compliant countries include but are not limited to:

  • Russia
  • India
  • China
  • Pakistan
  • Malaysia
  • Indonesia
  • Iraq
  • Iran
  • Sri Lanka
  • Brazil

Be aware that this list of countries can change depending on shifts in international affairs. TAA compliance can also be waived per this clause, as we have recently seen for certain categories of products because of the COVID-19 pandemic.

3. GSAM 552.238-80 Industrial Funding Fee and Sales Reporting

This clause describes how contractors must report their GSA sales and pay the Industrial Funding Fee (IFF), the fee that allows GSA to self-fund the GSA Multiple Award Schedule (MAS) program.

This clause is split so that it can describe procedures for both Transactional Data Reporting (TDR), which has extra reporting requirements, and non-TDR contracts. Sales must be reported by the month following the end of a quarter, for example April 30 for the quarter from January to March for non-TDR contracts and monthly, again by the following month, for TDR contracts.

Sales can be reported by your standard commercial accounting practices -- either receipt of order, shipment or delivery, issuance of an invoice, or payment. Contractors must simply remain consistent with the method of sales reporting that they choose. 

Sales must be reported by Schedule and SIN through the Federal Acquisition Sales Reporting Portal, even if there are no sales for the period, in which case the contractor will report their sales are zero dollars.

You must remember to only report sales off your GSA Schedule contract as opposed to any non-GSA contracts you may have with the federal government to avoid overpaying your Industrial Funding Fee (IFF). 

The IFF is what keeps the GSA Schedule system up and running. GSA Schedule contractors must remit this fixed percentage fee from their sales each reporting quarter, as it is based on a percentage of their sales. 

The IFF is 0.75% of a contractor’s GSA sales and is already included in the awarded pricing, so contractors must remit the IFF within 30 days of the end of each quarter. If you do not report your sales or remit the IFF, the federal government can terminate your contract or withhold payments.

Make Sure to Stay Updated on Changes to FAR and GSAM

Keep in mind that FAR and GSAM are not static lists of regulations but rather can change with legal, administrative, and policy changes. Check with these specific regulations and other relevant regulations to see if anything is updated before you make any major decisions. 

If you want to learn more about FAR and GSAM, reach out to one of our consultants who can help you understand how updates to these regulations may affect your business. To stay on top of any other important insights and updates for GSA contractors, check out our blog and our resource center which includes relevant webinars and our monthly GSA and government contracting newsletter.  

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About Patrick Morgans

Patrick Morgans is a Consultant for Winvale’s Government Contract Services Department. He is a native of Fredericksburg, Virginia and earned his Bachelor's of Arts in Government from the University of Virginia.