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  • Jennifer Schaus #govcon

Why A GSA Schedule May NOT Be In Your Best Interest (04/09/2018)

April 9, 2018 - The GSA Schedule is a fairly popular and well known marketing tool / contract vehicle. It allows the government to purchase from you knowing that your prices have been pre-negotiated and are "equal to or better than" your Most Favored Customer (MFC). Your GSA rates are also compared to other vendors on the Schedule. How low can you go? Your awarded rates are a price ceiling or "not to exceed" rate, so as you bid through your Schedule, you will bid lower than these awarded rates. Lower rates typically equate to lower margins which will require high volume to stay alive. Do you have enough volume? Other important considerations.

(1) About 63% of the 20k GSA holders have ZERO sales. This is grounds for having your Schedule cancelled.

(2) Additionally, GSA Schedules are only used about 10-15% of the time in federal purchases.

(3) On top of that, your pricing [post-award] is impacted by your GSA rates. See "Price Reduction Clause (PRC)".

(4) There is a cost of doing business in working with GSA - including compliance, reporting, audits (CAV) and paying the IFF (.75% of your GSA sales).

(5) GSA will limit your price increases based on either your Commercial Price List or your Market Rates. Don't expect big increases. See "Economic Price Adjustment (EPA)".

** RECOMMENDATION: Understand who your customer is and their preferred method of procurement BEFORE hopping on the GSA bandwagon or letting some unethical firm sell you a liability.