Just GSA

Sun and Senator Grassley

Per FCW article http://www.fcw.com/print/11_33/news/90256-1.html, it was determined during Sun's option to extend their GSA schedule for five-years that Sun had offered better discounts to some customers their GSA pricing. 

First, this is clearly acceptable behavior and occurs everyday with any large corporation like Sun.  Under the price monitoring clause of Sun's negotiated class(es) of customers in their Final Proposal Revision (Basis of Award), Sun is required to pass along any favorable pricing/concessions if the item is on their schedule and is sold during the same time as any GSA order.  While Sun can and likely indicated in the CSP's for their renewal that they have deviated from their stated business practices, all they needed to provide is  (1) a discussion of the situations that lead to deviations from standard practice, (2) an explanation of how often they occur, and (3) the controls you employ to assure the integrity of your pricing.

 

Sun refused to provide additional historical pricing/concessions to GSA and they became a deadlock.  I know two GSA CO's who refused to sign the Sun GSA extension and the third did so quickly that it was highly suspect.  Amazingly, the signing CO said she was under no pressure to sign the award but she no less was given a bonus for such (boy, that stinks) and she quickly transferred to another government office out of state.  The two non-signing CO's moved into other GSA schedule centers.

 

If GSA wasn't so concerned about losing a big chuck of their Industrial Funding Fee from Sun's GSA sales or if Sun wasn't a big fish, no GSA CO would have tolerated Sun's behavior.  Soon after Sun's GSA extension, they terminated their schedule for convenience but there's talk that their business practices may be investigated, which is allowable for up to three years after a GSA schedule expires/cancelled/terminated.

GSA's long reach overextended

In reference to this blog,

http://blogs.govexec.com/techinsider/archives/2007/11/gsas_long_reach.php.

 

CapITal Reps has been a GSA consulting practice since 1996.  We always require/provide/submit Commercial Sales Practices (CSP's) from any manufacturer being proposed to any GSA schedule, along with the CSP's of the schedule offeror/holder (dealer/reseller).  While we've had rare requests by GSA CO's over the years for the distributor's CSP's, we've always kindly stated that they're irreverent and that was the end of the request.

While GSA auditors are certainly non-standard in their GSA compliance reviews of our clients, they commonly focused on proper Industrial Funding Fee (IFF) capture and reporting, trade compliance, price reductions and occasionally if our client triggered their automatic price reduction clause (the auditor rarely is aware of which class(es) of customers was selected in our clients Final Proposal Revision (Basis of Award) and too often our clients have forgotten.

The cited DoD memo dated Nov 7, 2007 is way off base with requiring Ingram to provide their costs information, if it is the basis of a request by the GSA IG.

First, Ingram is rarely the "exclusive" distributor of any mfg product line.  Even if Ingram was an exclusive distributor, having CSP's from the mfg and offerer/reseller and quick market research always results in a fair and reasonable pricing determination.  In fact, since May 15th, 2007, the GSA Schedule 70 program requires all new mfg adds to include in the proposed pricing matrix the lowest GSA price.

Second, Ingram's GSA mfg Letter of Supply packages are the best offered by any distributor and they either include the mfg's CSP's or state that they are on file with a specific CO at GSA.

Third, the primary purpose of a mfg's CSP is for GSA to determine if the stated discounts and/or concessions stated for the given class of customer that my client/reseller is (Dealer/Reseller/VAR/SI) matches those indicated in my clients spreadsheet matrix.  We often catch this simply mistake.

The GSA IT Schedule 70 solicitation FCIS-JB-980001B, Refresh 21, clause E.6 states that cost and pricing data is not required and states that the CO "may" require additional supporting information, but only to the "extent necessary to determine whether the prices offered are fair and reasonable".  GSA can easily and always determine price reasonableness with CSP's from the mfg, the GSA resellers CSP's and market research and therefore it is unwarranted to request any cost information from Ingram. 

Also, armed with the mfg's CSP's, it's clear what Ingram's discount/cost is and not too hard to determine their markup to our clients (dealer cost/Ingram mfg discount).

The DoD memo states that FAR 15.402 requires CO's must obtain cost information, when there is no other basis for determining that the proposed prices are fair and reasonable (e.g. through market research and price analysis techniques).  While FAR 15.402 is not incorporated by reference into the schedule 70 solicitation, I fully agree that any CO should not award products/services to a GSA schedule without fair and reasonable price determination (e.g.  CSP's from the mfg and reseller and comparing the proposed pricing against other GSA resellers or the open market) and I'm not aware of any that have ever done so.

The memo states that the distributor/dealer is responsible for supporting all costs contained within its proposal.  Ingram is never the offeror/schedule holder of any GSA modification and/or proposal and therefore is not responsible for providing their costs, as the dealer provides their costs, as they are the offeror.

I do agree with the DoD memo when it states that any dealer who does not comply with the requirement to submit cost information for a contract or subcontract is ineligible for award.

 

So bottom line, I'm not certain what or to whom the DoD memo was directed at as it causes more confusion than clarity. 

Excellent GSA Sales History Tool

Not really a blog item but every GSA schedule holder should check out their reported GSA sales (and their competitors as well) by visiting this excellent web site - http://www.ffata.org/ffata/ (type in your GSA schedule # with no dashes)

The Federal Cotton Hammer Threat

I laughed when I saw the attached article/link "SBA plans to keep pressure on agencies"  @ http://www.fcw.com/online/news/150722-1.html, as there never has been and never will be a penalty for an agency for failing to meet their annual 23% subcontracting goal for small business concerns.

Likewise, there is no reward for achieving the 23% goal.  As an aggregate with a lot of fuzzy math, each year the feds report barely meeting (22.85%) or slightly exceeding the goal (23.15%), followed by much debate amongst the politicians.