WHAT YOU SHOULD KNOW ABOUT YOUR GSA SCHEDULE 70
There is so much more to understand about selling product into the Federal market than just getting your own GSA Schedule 70 contract. What is a GSA Schedule 70 contract/procurement vehicle?
The U.S. General Services Administration (GSA) provides companies the opportunity to sell to the Federal customer base through a contract called Schedule 70. Schedule 70 is an Indefinite Delivery Indefinite Quantity (IDIQ) Multiple Award Schedule (MAS) contract. I know that is a lot to comprehend.
But there is more…
Schedule 70 is just one of the 62 Schedule contracts that the GSA offers. The Schedule 70 contract is specifically for Information Technology. Examples of other GSA schedules are: Schedule 84 is for Security and Protection (Law enforcement and other), or Schedule 23V is for the automotive superstore.
What is an IDIQ? IDIQ is an abbreviation of the term indefinite delivery/indefinite quantity. This is a type of contract that provides for an indefinite quantity of supplies or services during a fixed period of time.
What is MAS? GSA Multiple Award Schedule (MAS) contracts, also referred to as GSA Schedule and Federal Supply Schedule contracts, are indefinite delivery, indefinite quantity (IDIQ) contracts that are available for use by federal agencies worldwide.
Now that you know what the GSA Schedule 70 contract is:
Why do you need it? Acquisitions through GSA Schedules are issued using full and open competition. Prices have already been deemed fair and reasonable, and Contracts comply with all applicable laws and regulations, reducing evaluation cycles. Purchases can be made directly from a contractor’s GSA Schedule Contract, eliminating time-consuming responses to complex RFPs and lengthy negotiations.
How do you use it?
- Just for your information: GSA is only one type of contract vehicle used in the Federal market. Many other department and agencies use their own pre-negotiated contracts. For example, Army Chess ITES, DHS First Source, Blanket Purchase Agreements with specific agencies, and many more.
- GSA Advantage: GSA Advantage is an online government purchasing service run by the GSA.
- Contracting Officers
- Your own company
How do you get your products and services on it?
This can be a long process for any company that has never dealt with the Federal government acquisition processes and procedures. This is a consolidated list of what a company needs to provide the GSA to obtain a Schedule 70 contract. First, you need to visit the new Sam.gov site to download the entire solicitation search under solicitation number FCIS-JB-980001-B. Then, you will need to provide the following:
- DUNS number (Dun and Bradstreet number)
- Obtain a digital certificate (approximately $120 for 2 years – renew every two years)
- System for Award Management (SAM) registration
- Prepare your offering
- Evaluation factors
- SF1449 filled out
- Vendor response document
- Commercial price list
- Production point
- Commercial Sales Practices Format (CSP-1)
- Labor category matrix (services only)
- Proposed Economic Price Adjustment (EPA) mechanism
- Proposed price list (Offered Pricing)
- Open Ratings Past Performance Evaluation
OR AN ALTERNATIVE APPROACH
- Find a Federal reseller that already has a GSA Schedule 70 and add your products and services to their contract. DONE!
Yeah, I am with you…. GO with the alternative approach!
Oh yes, let’s mention the one point someone will bring up – You will be giving away margin to a Federal reseller to have your products on their contract. I will answer the question below.
GREAT – NOW WHAT?
Having a mechanism or contract vehicle to sell your products and services is nice, but that is only one element to successfully sell into the Federal market.
- Federal Product Certifications
- Federal Marketing
- Federal Hiring
- Federal speak
- Understanding the Federal market
Now the BIG QUESTION
Should you hold your own GSA Schedule 70 contract vehicle?
In my opinion – NO! Why?
When your company enters into the process of obtaining your own GSA Schedule 70, your company will have to provide the Federal government with a Commercial Sales Practices Format (CSP-1). What is the CSP-1?
These are the rules that companies are audited and evaluated during your contract period. GSA expects your company to report on the following requirements for pricing discounts to your commercial customers so that the government gets the best price/discount for you.
Offerors are expected to disclose any non-standard or special discounts that have been offered to certain commercial customers. Although these instances may not be an everyday case, companies are still required to explain the situation to the GSA and why it is not feasible for your company to offer these prices full-time. The GSA’s goal is to obtain the lowest prices possible.
Sometimes companies offer non-standard discounts to their commercial customers. Using Federal resellers to the distributors or resellers of their products because they provide added value that other customers do not. Value-added resellers could provide services such as end-user support, advertising, and administrative tasks such as invoicing or guaranteed purchase minimums. Since GSA does not perform these types of added value services and their purchasing position is as the end-user, it makes sense that they would not receive the same price as this customer class. Providing an explanation of these value-added services, as well as disclosing the discounts offered to these customers, will simplify the pricing negotiation process with GSA.
Reason you do not want to hold your own GSA Schedule:
When you have your own GSA Schedule and have established your commercial sales practices with GSA, it is important to maintain contract compliance by disclosing any CSP updates and maintaining your GSA to the most favored customer (MFC) discount delta established at the award. This means that you may not offer any discount to your commercial customers that are higher than that of the GSA. GSA should always receive at least the established discount off the MFC price. If commercial customers received a lower price, you would be violating the Price Reductions Clause (PRC). It is important to ensure that your CSP disclosure is current, accurate, and complete to avoid compliance problems that can arise through Contractor Assessment Visits (CAVs) or Office of Inspector General (OIG) Audits. Violation of the Price Reductions Clause can result in fines and/or legal issues.
A company truly needs to understand its Federal sales plan before entering the Federal market. Many companies will sell you their services to help you in managing your Federal procurement needs like GSA Schedules, but the real question is – what is your go-to-market strategy? Do you have all your other Federal elements defined, developed, and understood to be successful? Yes, you may have this one element of the Federal market satisfied, but your focus should be on your revenue goal and addressable market, not this single focal point.