In the OIG’s Semiannual Report to the Congress for the period October 1, 2013 – March 31, 2014, 31 audit reports were issued with over $254M in recommendations for funds to be put to better use, and almost $1.6M noted in questioned costs. Some of the more significant and common findings within these audit reports includes: (1) commercial sales practices and cost buildup information was current and complete, but not accurate; (2) non-GSA schedule customers’ discounts were greater than those disclosed; (3) higher GSA schedule rates were negotiated than on a Blanket Purchase Agreement; (4) more favorable pricing was granted to largest customers and subcontractors were used at lower rates; (5) methodology for developing proposed rates was not accurate; (6) Price Reductions clause was ineffective.
In short, contractors continue to be successful selling off their GSA schedules; however, they don’t understand their Commercial Sales Practices and Basis of Award and the chance of an OIG audit is increasing! Contractors are now required to reaffirm that their current Commercial Sales Practices are current, accurate and complete or submit an update with modifications via eMod. The tendency is to state there have been no changes. Is this correct or would you fall into one of the findings above during an audit?
Contact Hope Lane for questions specific to your GSA Schedule contract and understanding compliance challenges.