GSA Unpriced Schedules – A Welcome Change Is Coming

By Jeff Ellinport, Division Counsel

The General Services Administration (GSA) might soon make a shift in federal procurement from contract-level pricing to order-level competition. That’s good for vendors because it could reduce the time it takes to get products on contract.

The Advanced Notice of Proposed Rulemaking for Section 876 of the 2019 National Defense Authorization Act (Pub. L. 115-232) was issued by GSA on August 19. It allows GSA to implement “unpriced schedules.” On Oct. 20, GSA kicked off the first of several industry “listening sessions” on how to best implement this authority.

Currently, before a GSA Schedule contract is awarded or new items added to an existing one, GSA contracting officers determine fair and reasonable prices of supplies or services (fixed price or hourly). Negotiation follows after offerors submit various data, information and documentation to support their pricing.

But is it reasonable to expect contractors to provide their best prices and discounts for a single item, and have that price published publicly, with no purchase commitment or defined opportunity?

The Federal Property and Administrative Services Act of 1949, which established the GSA, calls for GSA to obtain the “lowest available cost alternative” at both the contract and order level. For unpriced schedules to be allowed would require a change to GSA’s statutory authority.

Now, under Section 876, a CO need not consider price as an evaluation factor under certain circumstances. What’s more, the price to the government will be considered together with an issued task or delivery order that results from the solicitation.

There are three circumstances where this applies:

  1. An agency issues a solicitation for one or more contracts to be acquired on an hourly rate basis
  2. The agency intends to make a contract award to each qualifying offeror
  3. The contracts will feature individually competed task or delivery orders

So an unpriced schedule is one in which price is not considered in evaluating the award – and therefore, no prices are negotiated or published at the contract level. Instead, the award is made based on contractor qualifications and pricing is negotiated at the time of order. This move is good for the GSA, because it helps the agency ensure:

  1. Pre-screened contractors financially and otherwise capable of performing
  2. An up-to-date catalog of products
  3. Pre-negotiated terms and conditions
  4. A framework for order-level competition

Order-level competition drives prices down and keeps them low. After all, the task or delivery order is where the actual requirements are defined and the spending takes place.

GWACs like NASA’s SEWP already drive competition to the order level. While they still price products at the contract level, they also allow commercial MSRP (with some exceptions). With the schedules program, formerly evaluated and negotiated contract level prices could quickly be added at MSRP.

So with this change in its authority, GSA will be able to place items on contract swiftly and drive competition and negotiation to the order level where it belongs. That’s good for vendors, agencies and COs alike.

To learn more about immixGroup’s GSA MAS contracts, visit our webpage here.

Keep up with the latest in government IT. Subscribe to immixGroup’s Government Sales Insider blog now!

This blog was adapted from a commentary originally published in Washington Technology Daily newsletter. The original commentary can be found here

About Jeff Ellinport
Jeff Ellinport manages legal and compliance functions and oversees immixGroup’s 40+ contract vehicle programs. He is responsible for reviewing the ongoing engagements with original equipment manufacturers, software publishers, cloud service providers and their partners. He has deep knowledge and experience in government contract vehicles, federal procurement regulations, IT licensing, cloud services, subcontract agreements, government relations and federal contract claims. Prior to joining immixGroup, Ellinport held senior counsel positions with companies including Qwest Communications Corp. (Century Link), Inktomi (Yahoo!), and Siebel Systems (Oracle). Ellinport earned a bachelor’s degree in political science from Bates College and a JD from George Washington University.

Leave a Reply

%d bloggers like this: