2) Is It Time to Update the Pricing on Your GSA Schedule?

There is a very good chance that if you have had a GSA Schedule contract for 12 months or longer, your pricing on the Schedule is outdated. Indeed, some vendors find that their pricing requires updating nearly as soon as the contract is awarded.

The GSA Schedule program awards contracts to vendors for Commercial Off The Shelf products and services. Key to the government’s price evaluation for these products and services are two components: how the vendor sells in the commercial marketplace, and (to a lesser extent) pricing of similar products and services already available to the government.Each GSA Schedule contract award utilizes a Basis of Award Class of Customer and pricing relationship that must be maintained throughout the life of the contract.

Two mechanisms for updating pricing are the Economic Price Adjustment (EPA) and the Price Reduction clauses. While both of these clauses can be found in the Federal Acquisition Regulation (FAR) and are incorporated into the GSA Schedule contracts, both may be modified through negotiations at contract award.

The EPA clause contemplates increases to pricing. Increases for products are generally based on adjustments made by the vendor to the Basis of Award pricelist. However, each GSA Schedule solicitation differs as to how much and when the increases are allowable. With services, the EPA depends upon the specific solicitation and whether the services are professional or covered under the Service Contract Act. Generally, an EPA is feasible after a labor category has been under contract for 12 months. If a labor category is covered under the Service Contract Act, government alteration of the wage determination is cause for requests of appropriate adjustments. Price increases for services may be submitted 30 days in advance of the 12-month anniversary date.

The Price Reduction Clause, as its name suggests, lays out the triggers and procedures for lowering prices to the government. Price Reductions may be Permanent or Temporary. While Price Reductions become effective in coordination with the commercial pricing, they must be approved by your Procurement Contracting Officer (PCO) at GSA. In general, price reductions are triggered by changes in the commercial pricing to the Basis of Award Class of Customer, whether on the published pricelist or through commercial selling practices.

It is important to provide routine education to the sales and management teams monitoring the pricing of your products and services on the GSA Schedule and in the commercial marketplace. EZGSA recommends that all schedule holders perform an annual compliance review to ensure that the company’s practices are in accordance with the contract.

If you have any questions about pricing modifications or GSA Schedule compliance related issues, please contact Ms. Judith R. Nelson, Director of Government Contracts at jnelson@ezgsa.com or 301/913-5000 ext. 5010.