by Brandon Graves, Partner
GSA, GSA Alerts, GSA Schedules
We wanted to let you know about some of the trends and changes we’ve observed at GSA over the last several months.
Continued SAM.gov Issues
We’ve written about issues with SAM.gov registration and renewal previously. We aren’t alone in tracking this, as this more recent article shows that Congress and GSA are both focused on this issue. But that is cold comfort if your organization can’t receive grants, get paid for work, or compete for new work. And there is no end in sight.
It appears that the problem is widespread enough that the standard responses, such as the Federal Service Desk and Ombudsman, are no longer effective.
The first way to deal with SAM.gov issues are to avoid them altogether. Organizations should review the databases that SAM.gov references and ensure their information is the same in all of them. Deviations as small as a period after an abbreviation can cause problems. They should also confirm that the person renewing their SAM.gov entry understands what they are doing and inputs the information correctly. Hopefully, these steps will permit SAM.gov registration and renewal to proceed smoothly.
But if avoiding the issues is not possible, organizations may need to consider litigation to address the situation. We’ve developed a potentially viable litigation strategy for companies that can no longer wait for relief.
Increased PRC and IFF Enforcement
We’ve seen an increase in GSA assessments. As a result, we’ve seen more instances of Price Reduction Clause and Industrial Funding Fee problems. Many of these issues are easy for GSA to catch because they are obvious. While some organizations may ignore these requirements and treat fines as the cost of doing business, others do not seem to realize that the obligations exist until GSA points out violations.
Most GSA Schedule holders have a Basis of Award customer or group of customers. The government looks to the Basis of Award customer—typically the Schedule holder’s most favored customer—to ensure that the government is getting a good price. If the Schedule holder offers a discount to the Basis of Award customer, it must offer a discount to the government, even if the government still has a lower price. This is a simplified version of a complicated compliance requirement, but it is enough to illustrate the problem.
GSA Schedule holders often offer a discount to a commercial customer and never report it to GSA. The GSA assessor looks at one month of sales data and immediately sees sales at a lower price point than the same good or service on the GSA Schedule. This leads to more questions and likely a conclusion that the Schedule holder overcharged the government by violating the Price Reduction Clause.
Similarly, an assessor will ask for a report on all government contracts and how the Schedule holder identifies GSA Schedule sales. If there is no good answer, the assessor can point to sales of any good or service on the GSA Schedule claim it is subject to the IFF. If it was not—say, the good was sold under a different vehicle—the Schedule holder needs to prove that was the case. This can be an uphill battle, and Schedule holders often end up paying the IFF out of pocket.
GSA Schedule holders need to know that these obligations (and others) exist and build compliance programs that address them. Many GSA Schedule holders are out of compliance and need to understand how much they could owe if GSA were to discover the issue.
Mixed EPA Awards
GSA has published two memorandums discussing a lower threshold for Economic Price Adjustments. GSA saw a number of companies cancel their GSA Schedule because they could not operate profitably at their GSA prices and price mods weren’t flexible enough to keep up with inflation and other market conditions. These were both welcomed by the contracting community. Unfortunately, these memorandums left a great deal of discretion in the hands of the contracting officers. Not all contracting officers are permitting significant price adjustments, creating inequalities among Schedule holders based on contracting officer.
A lot is going on at GSA right now, and that creates unprecedented uncertainty for present and future GSA Schedule holders. Our GSA consultants are available to assist in obtaining a GSA Schedule, establishing a compliance program, understanding potential risk from non-compliance, and working through a GSA assessment or audit.