Most GSA vendors assume that if the order doesn’t list their GSA Schedule number, then by default the order isn’t a GSA Schedule sale and they are free to negotiate a different price with those government customers.
However, be forewarned that during the past several years, we have seen some GSA Industrial Operations Analysts (IOA) and Contracting Officers (CO) taking a broader interpretation of what they consider to be a GSA Schedule sale.
During site visits, some IOAs are challenging vendors to “prove” that sales to Federal agencies where they do not include a GSA Schedule number are NOT GSA Schedule sales. The result: GSA vendors may be compelled to refund the government for “overcharging” non-GSA schedule customers.
In a recent case, a vendor, rightfully confused by the IOA’s conclusions that it had overcharged the government, asked the GSA CO for clear guidance on what constituted a GSA Schedule sale. In response, the CO deferred to the IOA who had stated that, written requirement or not, the spirit of the GSA Schedule is to offer all Government customers your GSA pricing even if the order does not explicitly identify the vendor’s GSA Schedule contract. In other words, some GSA IOAs consider all government orders to be GSA Schedule sales unless you can clearly demonstrate to the contrary. The burden of proof falls on you, not the government, to demonstrate that an order should or should not be a GSA Schedule order entitled to GSA Schedule pricing.
When pressed to provide more concrete regulatory references that could be consistently applied to a sales tracking system, the CO made veiled threats to cancel the vendor’s contract, then expanded the scope of his request and required the vendor to produce thousands more invoices dated back to the original award of its GSA Schedule.
Under the FAR, and specifically, GSA Price-Reduction Clause, there is no clause that supports GSA’s interpretation of having to provide GSA pricing to government customers who order through means other than the GSA Schedule.
Err On the Side of Caution
We advise our clients to error on the side of caution and follow the procedures below to help ensure that you have compliant sales tracking system in place and avoid the possibility of refunding the Government.
- During the order taking process, determine if the product or service is listed on your GSA Schedule; if so, then:
- Ask the government representative directly if the order is a GSA Schedule order and clearly document their response in your ordering system;
- Whether it is or is not a GSA Schedule order, sell the item at or below your approved GSA Schedule pricing and report it as a GSA Schedule sale unless the government representative specifically provides a Purchase Order number or contract number other than your GSA Schedule number;
- If the product or service is not listed on your GSA Schedule, then:
- In all cases:
- Document the appropriate Purchase Order or Contract number in your ordering system, on your quote, and on the invoice; and
- Document whether it is or is not a GSA Schedule sale in your ordering system. (we suggest a checkbox or code that clearly identifies the order as a GSA Schedule sale)
- Report and pay the Industrial Funding Fee for all orders that are clearly a GSA Schedule sale AND for all orders where the product or service is listed on your GSA Schedule but it isn’t clear whether it is a GSA Schedule sale; such as Government Purchase Card (GPC) purchases.
By implementing the procedures outlined above for all government orders, your sales tracking and reporting system will be compliant with GSA’s expectations and preclude paying the government any refunds for sales that an IOA may characterize as a GSA Schedule sale when your documentation is insufficient to prove otherwise. Remember that an IOA has the authority to make this determination.
Having a GSA Schedule can be lucrative, however compliance requirements for owning a GSA Schedule are stringent. If you are participating in government contracting and considering a GSA Schedule, do the research needed to determine if a market for your products and/or services is big enough to offset the cost of compliance.
Vice President for Coley GCS, LLC, a Government Contracts Consulting, Coaching and Training company. Daniel is a Certified Federal Contracts Manager (CFCM) and leads the day-to-day operations of Coley’s consulting practice. He has two decades of experience with the acquisition, management, and marketing of Federal, State, and Local government contracts. Daniel specializes in all aspects of GSA Schedules management and marketing and has helped hundreds of Coley clients remain compliant with the terms of their GSA contract while helping them expand their business.