It has never been easy to see the “real” price for General Services Administration (GSA) products/services. In large part, GSA has always had transparency in their pricing. They have always had published price lists for items and published hourly labor rates for services. The issue was that these published lists include the total cost of the item or the burdened rate for a service. So profit, administrative costs, and overhead were included.
Another issue with GSA pricing is what I call “peanut butter spreading” rates. When a contractor bids on a GSA RFP, they have to provide their bid based on a national scale. Their pricing is not geographically specific so they have to come up with a single cost or rate that will be used across the contiguous United States. The reality is the local businesses can often beat GSA pricing for just this reason because they can offer pricing based on regional economies.
A third concern has always been the variance in rates between different types of Federal Supply Schedule (FSS) and non-FSS contractual instruments. GSA 8ASTARS II is an FSS Government-wide Acquisition Contract (GWAC) for IT support services where all the awarded schedules are to 8(a) contractors (or they were when the schedule was awarded). Also within GSA, there are FSS IT support services schedules awarded to businesses of all sizes. Then you also have the non-FSS Air Force Network Centric Solutions (NETCENTS) IDIQ GWAC and CHESS (Computer Hardware Enterprise Software and Solutions), which is the Army’s designated Primary Source for commercial IT.
If you are trying to do a price comparison for the purposes of determining fair and reasonableness, you will find a wide variance in the pricing of each of these contractual instruments. It’s hard to understand why the same IT services would have this much variance.
On 4 Mar 15, the General Services Administration (GSA) announced its proposal to amend the General Services Administration Acquisition Regulation (GSAR) to include clauses requiring vendors to report transactional data from orders and prices paid by ordering activities. This would include orders against Federal Supply Schedule (FSS) and GSA’s non-FSS contract vehicles (Government-wide Acquisition Contracts (GWACs) and Government-wide Indefinite-Delivery, Indefinite-Quality (IDIQ) contracts). This proposed amendment would not apply to the Department of Veterans Affairs (VA) FSS contract holders.
At a public meeting held 17 Apr 15, GSA officials said the proposed change would help address several issues GSA faces with multiplying contracts, pricing variances between contracting vehicles, general transparency, and rules that are outdated.
Contractors are concerned that their pricing information would be compromised under this new process and want to know how their pricing information would be shared and accessed. GSA officials responded that competitive unit pricing information would be protected and GSA’s acquisition workforce would view the information via the Acquisition.gov gateway (an access-restricted site).
Contractors are also worried that it will be expensive and costly to provide these data and asked how much it might cost for the systems they would have to build to collect the information required under the proposed rule. While no specifics of what systems might be required or their cost to contractors was discussed, the contractors probably have a valid concern. It will require them to address costing in a very different way than they are now required to provide.
I have written a lot about my opinion that GSA is being driven into extinction by ever-changing federal government regulations relating to GSA processes (requiring small business considerations and additional price fair and reasonableness documentation). Now we have GSA attempting to respond to Better Buying Power initiatives (such as price transparency) by changing their own rules.
I think it is too early to tell how this will effect GSA contractors and schedule users. GSA officials say they will wait for comments from industry and interested Government parties before they finalize the new clauses and revise their regulations.