Each year the Office of Inspector General conducts preaward audits on a number of current GSA Schedule holders that are coming up for their renewal/extension. The OIG recently released a report detailing their 2012 findings of these preaward audit. In 2012 the OIG audited 39 contract holders and uncovered some reoccurring compliance issues that were identified in previous preaward audits. These reoccurring issues are:

  • GSA Schedule Holders having inadequate Sales Tracking and Reporting Systems to correctly monitor their GSA sales and pricing policies
  • GSA Schedule Holders having outdated Commercial Sales Practices or not fully disclosing all Commercial Sales Practices to GSA
  • GSA Contracting Officers not renegotiating all the additional discounts that the OIG recommended

This report will place more pressure on GSA Contracting Officers to get it right for the next round of preaward OIG audits in order to prevent these reoccurring issues from continuing to pop up. Because of this, is it crucial to ensure your Sales Tracking and Reporting System is still effective, that the Commercial Sales Practices you have disclosed to GSA are still accurate, and you are prepared for possible renegotiations during your next Renewal. We recommend taking the following steps:

  1. Review your Sales Tracking and Reporting System to ensure you have the ability to: appropriately label GSA Orders as such, label any products/services not on your GSA Schedule as Open Market, ensure that you are always giving your GSA customers the agreed upon price/discount structure. It could be very helpful to have an outside, objective party evaluate your sales tracking and reporting procedures to ensure they are compliant with GSA’s requirements. If you need help establishing a Sales Tracking and Reporting system  reach out to an expert to help you establish a compliant system before problems occur.
  2. Ensure that you have fully disclosed your Commercial Sales Practices up front. If changes occur to your Commercial Sales Practices you should process modifications to your GSA Schedule pricelist (on a regular and timely basis) to keep your prices consistent with your Commercial Sales Practices. If any deviations from your standard Commercial Sales Practices occur, document and report these discounting deviations to the contracting officer; have an audit trail of all changes to your contract to demonstrate compliance. It is important to remain compliant throughout the term of your contract to ensure compliance problems won’t prevent renewal of your GSA Schedule and/or repayment of over-charges
  3. If you are coming up for your 5 year Renewal be prepared to renegotiate with GSA. It will be important to build a comprehensive Renewal package that includes full disclosure of Commercial Sales Practices and documented deviations that support a strong negotiating position. Having an expert assist you through the pre-award audit and completion and processing the renewal package could be very helpful.

Together with my clients I have helped to develop FAR complaint Sales and Reporting systems that have passed GSA audits with “Exceptional” Ratings. Prior to submitting a package to GSA my clients and I conduct a thorough evaluation of the Commercial versus Federal sales practices to ensure everything is appropriately disclosed to GSA. In addition, I am able to provide our clients insight during our pre-negotiation meetings so we develop a strategy that results in the best outcome for them.

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