Discounts to your pricing may have unintended legal and financial consequences. Did the 2009 economy lead you to offer discounts to your non-federal customers? For GSA Schedule contract holders, these discounts may have inadvertently impaired your GSA prices and may potentially result in refunding money to the government. Clause 552.238-75 Price Reductions in your GSA Schedule contract requires you to maintain a discount relationship, offering GSA the same or better discounts as your Most Favored Customer (MFC).
The economy has caused the price concerns we explained in last year’s resolutions to continue to encouraged businesses to become more streamlined and offer competitive pricing. As we discussed last year in our resolutions, the short of it is … if you offered lower pricing to your Most Favored Customer, or established a new Most Favored Customer as a result of new discounted pricing, you need to give GSA a comparable discount so as to not disturb your GSA price discount relationship.
At this time most people ask where all this price discount relationship information is documented. Here’s are some of the places where you may find it:
(1) Final Proposal Revision (FPR) – Clarification document provided to GSA prior to original contract award or option period renewal that outlines all negotiations.
(2) SF1449 – The original GSA contract award document
(3) SF30 – For those of you doing option period renewals it is often listed in the renewal modification
The best way to stay compliant is to make sure that everyone involved in the sales process understands that your company has a GSA contract and that they understand which customer or class of customers are linked to the contract.
Conduct a formal review of pricing offered to non-Federal customers at least once a year. It is always better for the contractor to find an issue and remedy it versus GSA finding it and having possible legal and financial ramifications. Make sure to put this review event on the Contracts/Accounting calendar so that it doesn’t get missed if there is any turnover in the staff responsible for the GSA Schedule contract.
Have a great year!
Contact Peter O’Neill email@example.com at 301.222.8226 if you have any concerns about potential price reduction violations related to your GSA Schedule contract(s).