United States: As GSA FAS Struggles To Reinvent Itself, Contractors Suffer

Note: The following post is adapted from the forthcoming 2015/2016 GSA Schedule Handbook, published by ThompsonWest, due out later this year.

The last year has been a tough one for the GSA Multiple Award Schedules ("MAS") program.  The Federal Acquisition Service ("FAS") – the agency charged with administering the MAS program – has struggled to re-invent itself and its contracting vehicles in order to ensure they both stay relevant in an increasingly competitive federal marketplace.  The byproduct of this struggle has been mostly negative for Schedule vendors.

In an effort to demonstrate the value its contracts bring to federal customers, FAS has pursued an unrelenting crusade aimed at reducing prices at all costs.  It is no longer enough for a vendor to give the Government a great deal vis-à-vis its commercial customers (a determination historically made through a "vertical pricing" analysis).  Now vendors also must charge less than their competitors – a determination made through a "horizontal pricing" analysis.  While FAS contracting officers are supposed to consider factors that may explain a price differential as part of their price evaluation, in practice, COs pay little heed to such "trifles."  The concept of value rarely enters into the equation any more.

Time and again, vendors are told to lower prices or remove products from their Schedule because another vendor offers the same product at a lower price.  So what that the other vendor offers no customer service, no phone support, no warranty, and is run by two guys out of a garage in Glenwood.  Price is king, and that's all FAS seems to care about nowadays.  (We mean no disrespect to the good people of Glenwood by the way.  We just couldn't resist the alliteration.)

This price infatuation, of course, comes with a cost.  That cost is value.  While we concede we like lower prices as much as the next guy (unless that next guy is Jonathan's dad who absolutely loves lower prices), we also appreciate value.  There is a reason not everyone flies Spirit Airlines, stays at an Econolodge, parks at the off-off-off airport lot (as Jonathan's dad does, by the way), or buys their computers from a no-name Internet site.  It's because, while price is important, it is not the be-all/end-all of every purchasing decision.  In short, value matters.

But, FAS seems to ignore that distinction at every turn.  As a result, vendors who offer greater value get punished, while those who focus only on price (often at the expense of value) get rewarded.

Why is FAS so price-focused, you ask?  Won't the market solve FAS's concerns?  Of course it will; even more so now that GSA has imposed additional obligations upon federal purchasers to ensure a greater level of competition at the order level.  If a vendor is not offering adequate value, it will not make sales.  And if it does not make sales, it will have to reduce its prices.  In short, the market will do, naturally, precisely what FAS is trying to do artificially – just without the unintended consequences.  But it seems FAS would rather tinker than let the market do its job.

FAS, of course, is not the only group worthy of blame in this new price-über-alles environment.  The Office of Inspector General ("OIG") has been enlisted in FAS's mission as an all-too-willing co-conspirator.  While the OIG's auditors always have helped COs evaluate fair and reasonable pricing (which we recognize is part of their job), auditors lately have been playing a more hands-on role.  Indeed, it is not uncommon to see OIG auditors intimately involved in negotiating contract pricing, a task far more suitable for a CO.  And make no mistake about it, an auditor's "advice" carries a lot of weight with a CO – especially after the OIG's recent report taking FAS COs to task for not adequately accepting and implementing OIG audit recommendations.

FAS's infatuation with price can be seen in other contexts as well.  A recently unveiled "pilot program," for example, now imposes upon select Schedule vendors the obligation of tracking and reporting "prices paid" data from federal sales regardless of contract vehicle.  Promoted as a means to provide additional market data to prospective federal purchasers, and, thus, to drive down prices further, the new rule imposes a significant administrative burden on Schedule vendors to do work the Government apparently is unwilling to do (or incapable of doing) itself – i.e., tracking and aggregating its purchasing data.  This new burden, of course, will translate, one way or another, into higher prices overall, as does every new compliance obligation.  Contract administration costs money, and contractors cannot – and should not be expected to – perform these extra services for free.

On the topic of contract administration, incidentally, FAS's focus on price has not in any way correlated to a reduction in burden upon MAS vendors or COs.  In other words, life has not gotten any easier for anyone.  The MAS program continues to be infused with countless complicated forms, certifications, and regulations, many of which continue unfairly (and, admittedly, sometimes fairly) to snare unwary contractors.  Which brings us to the purpose of this book.

While FAS struggles for continued relevance, and while contracting officers struggle to reduce prices, the MAS program continues to provide opportunity for commercial items vendors who understand the Program and are willing to do the work needed to avoid its pitfalls.  We can't deny the potential revenue stream the MAS program represents.  Nor are we blind to the doors the MAS program sometimes opens beyond the federal government itself, including, in some cases, state, local, and even commercial opportunities.  The key, of course, is, as it always has been, figuring out how to navigate GSA's regulatory maze to get to the cheese.  We developed this book to help vendors do just that.

You can use this book in a number of different ways.  First, if you're a true contracting die-hard (and you know who you are), you can read it from start to finish.  While such an approach certainly will help you find the cheese, we highly recommend a glass of wine (or two) at the outset.  It's not a short book and, if we do say so ourselves, it's packed with a lot of information.

Alternatively, you can use this book at a reference source, one that goes beyond the text of the regulations and tells you how things work in practice.  Considering submitting a new or revised CSPF?  Head to the relevant chapters, which walk you through the entire CSPF process and highlight the most common pitfalls among vendors.  On the receiving end of an GSA OIG audit?  Check out the corresponding chapter, which outlines the best practices to ensure that your audit is as painless as possible, including advice from the GSA OIG itself.  DOJ knocking at your door?  Turn to the appropriate chapter to read about the intersection between the MAS Program and the False Claims Act.

Into whichever camp you happen to fall, there should be something in this book for you.  We hope you read it in good health, and buy multiple copies for your colleagues, subcontractors, partners, and friends.  Don't let the price of the book dissuade you.  Remember, as with lawyers, it's all about value, not price!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
20 Feb 2019, Seminar, Orange, United States

The annual seminar addressing changes and developments in state and federal wage and hour laws is a unique one-day program and hundreds of California employers, personnel managers, controllers, attorneys, payroll managers, and supervisors attend each year.

21 Feb 2019, Seminar, Orange, United States

The seminar is designed to provide a guide to Human Resource Officials, Personnel Specialists, Consultants, Supervisors and other management officials through the ever-increasing maze of state and federal employment discrimination laws.

26 Feb 2019, Seminar, Pasadena, United States

The annual seminar addressing changes and developments in state and federal wage and hour laws is a unique one-day program and hundreds of California employers, personnel managers, controllers, attorneys, payroll managers, and supervisors attend each year.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions