The GSA Multiple Award Schedule program has grown exponentially over the past ten years. Fueled by increased government spending during the wars in the Middle East, and then again by the American Recovery and Reinvestment Act (ARRA), contractors under the GSA Schedule program have certainly benefited from the extra funding. In the 2014 fiscal year, there were 22,176 contractors on the GSA Schedule who accounted for $32,842,659,165 in total sales. That is a significant market size, regardless of what industry you compare it against. However, where there is opportunity, there is also risk.
Too often, executives and business leaders chase federal sales opportunities without worrying about the contract requirements until afterwards. Consequently, many GSA Schedule contractors learning of the importance of compliance the hard way. After all, is it really “success” if you win a multi-million dollar contract, only to be forced to give the money back a few years later?
Be Aware
GSA Schedule contractors should be aware that the federal government has sharply increased the frequency of contractor audits and enforcement activity. GSA’s Office of Inspector General is conducting a record number of audits, and the Department of Justice (DOJ) continues to report multi-million dollar settlements from GSA Schedule contractors.
Iron Mountain settled for $44,500,000 in December for knowingly overcharging the government, which is a violation of GSA’s Price Reduction Clause (552.238-75) under their Schedule 36 contract. The DOJ recently intervened on cases involving Symantec Corp. and CA Technologies, both for violations of GSA’s Price Reduction Clause under their Schedule 70 contracts. In total, the government has received more than $540,000,000 in refunds, fines, and penalties from GSA Schedule contractors since 2011.
Be Proactive
I do not share these facts to scare away current or prospective GSA Schedule contractors, but rather to bring awareness to what is necessary to be a successful, and responsible, federal contractor. There are always two sides to a coin, and in order to protect your company from potential compliance violations, it is important to understand the areas that the federal government is starting to scrutinize more intensely.
Please join us for a complementary webinar on April 1st where I will reveal the Top 10 Compliance Risks and offer solutions to help GSA Schedule contractors understand and properly implement new compliance requirements. I will cover important topics such as Trade Agreement Act compliance, Most Favored Customer and GSA pricing, Human Resource Requirements, GSA Contractor Assistance Visits, and more.
Attending this webinar is a proactive first step in being able gain understanding and knowledge regarding this complex program. The next steps will be yours.
