GSA Contracts. Everything You Need To Know. Download this as an E-Book (with active links) at:
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1 GSA Contracts Everything You Need To Know Download this as an E-Book (with active links) at:
2 ABOUT ME: Josh Ladick Josh Ladick is President of GSA Focus, Inc. We are focused on getting companies onto GSA Schedules and Maintaining those Contracts once awarded. GSA Focus strives to be the best GSA Contract solution in the industry through efficient and adaptable processes, a strong knowledge of GSA Contracts, and uncompromising customer service. Follow Josh on Connect on LinkedIn: Follow Company Blog: gsascheduleservices.com/blog/
3 TABLE OF CONTENTS: 1. Definitions & Acronyms 2. What is a GSA Contract? 3. How to Get a GSA Contract 4. Maintaining Your GSA Contract 5. GSA Contract Compliance 6. The CAV Visit 7. Recent and Expected Changes
4 CHAPTER 1: Definition & Acronyms
5 GSA Contracts Definitions & Acronyms GSA General Services Administration Schedule (link) GSA Category - by industry or group of industries SIN Special Item Number - Subcategory of a Schedule FAR (link) Federal Acquisition Regulation GIANT Document Solicitation (link) GSA Document for each Schedule SAM (link) System for Award Management was ORCA/CCR MFC / BOA Most Favored Customer Basis of Award CO Contracting Officer, GSA Contact OR Fed Buyer
6 CHAPTER 2: What is a GSA Contract? 1. History of General Services Administration 2. GSA General Facts 3. Contractor s Point of View 4. Federal Buyer s Point of View
7 GSA Contracts What is a GSA Contract? History of the GSA Established by Harry Truman in Was originally a consolidation of six sub-agencies to streamline federal procurement. Since then, the GSA has taken on important directives such as: Emergency Preparedness Real Property Management Policy Oversight Government Charge Cards Electronic Initiatives (Updating Fed Procedures) Cloud Computing Green Procurement & Sustainability
8 GSA Contracts What is a GSA Contract? GSA General Facts Currently 40 GSA and VA/FSS Schedules Products: IT, Security, Hospitality, Office, Tools, Auto, Services: IT, Security, Facilities, Consulting, GSA s Web Solutions for Federal Buyers There are 11 Regional Centers Different Schedules The FAS organization has 10 program areas: Office of Administration Office of Acquisition Management Office of Assisted Acquisition Services Office of the Chief Information Officer Office of the Controller Office of Customer Accounts and Research Office of Integrated Technology Services Office of General Supplies and Services Office of Travel, Motor Vehicles, and Card Services Office of Strategy Management (Functional List:
9 GSA Contracts What is a GSA Contract? Contractor s Point of View As the acquisition arm of the federal government, the GSA streamlines the process of connecting Contractors to federal buyers through GSA Contracts to: 1. Eliminate redundancy in the buying process 2. Pre-approve contractors 3. Pre-negotiate prices Note: A GSA Contract is for 20 Years (5 year options x4) $25,000 Annual sales requirement IDIQ - No guaranteed sales, just a big advantage License to Hunt
10 GSA Contracts What is a GSA Contract? Federal Buyer s Point of View 1. Job Security Little to no Liability Retire & Keep Pension Personally Liable for Procurement Decisions Contractors Pre-Screened (Fraud) Contractor Ratings 2. Simpler Buying Solution Simplified Bidding Process Diminished Paper Trail Pre-Negotiated Pricing
11 CHAPTER 3: How to get a GSA Contract? 1 Prepare Offer 2 Submit & Wait for Review 3 Clarifications 4 Negotiations 5 Award 6 Post-Award
12 GSA Contracts How to get a GSA Contract 1. Prepare Offer Solicitation Schedule-specific Guidebook Between pages Instructions / T&C Heavily cites FAR Confusing / Contradictory Usually documents in an offer Commercial Sales Practices Commercial Price List Proposed Price List Summary of Offer Readiness Assessment Financials Digital Certificate Pathway to Success Open Ratings SAM Record Letters of Supply (products) Labor Category Descriptions (services) Invoices / Contracts / SOW s Crosswalks Agent Authorization Letter (consultant) Cover Letter (good practice) Factors 1-2 OR Sections 1-3 SCA Matrix Professional Compensation Plan Uncompensated Overtime
13 GSA Contracts How to get a GSA Contract 2. Submit & Wait for Review E-Offer System Required to submit electronically Must have Digital Certificate Review Time 3-6 months, sometimes longer Depends on which schedule Submit Offer Accepted Rejected Clarifications Rejection Around 75 90% of Offers Must resubmit with revisions/explanations Back of the Line (usually, but not always) Still Progress
14 GSA Contracts How to get a GSA Contract 3. Clarifications Normal part of the process, and occur when the CO determines that there are only minor deficiencies with your offer documents. GSA CO will always have questions Internal Due Diligence (Dig Deeper) Solicitation Refreshes Often several rounds (2-4) Advanced Financial Analysis P/L Statement has a Loss Debt - Current Ratio on Balance Sheet Takes about 2 Weeks Insufficient Revenue SBA Sign-off Mirrors SBA Loan Process
15 GSA Contracts How to get a GSA Contract 4. Negotiations One hour phone conference between GSA CO and your company to cover 3 main areas: 1. Assure your company understands primary Terms and Conditions of the Solicitation 2. Negotiate the Prices and/or General Discount Service Providers can Leverage Education/Experience 3. Negotiate other Concessions to the GSA Volume/Quantity Discount Prompt Pay Discount Freight Terms
16 GSA Contracts How to get a GSA Contract 5. Award Awarded your GSA Number Open for Business Celebrate!
17 GSA Contracts How to get a GSA Contract 6. Post-Award But there is still much to be done, you are now at a new starting point. 1. SIP Registration 2. SIP Upload GSAAdvantage! & E-Library Contract / Company Information Product uploads Text File 3. GSA e-buy Exclusive Bidding Area Notifications within your SIN(s) 4. Marketing Plan Bid Searching Proposal Writing Target Agency Selection Cold Calling & ing
18 CHAPTER 4: Maintaining Your GSA Contract Modifications If Acquiring a GSA Contract is a Marathon, then Modifications are a 5K. A Modification (Mod) is any revision to your GSA Contract after Award, Including: Adding Products/Services Deleting Products/Services Price Increases/Decreases Administrative Changes More The process involves the preparation of a small document package, usually 5-8 documents. Mods are submitted through E-Offer, and are reviewed by your GSA Contracting Officer After a Mod is approved, you must make changes on GSAAdvantage! shortly after.
19 CHAPTER 5: GSA Contract Compliance 1. Price Reductions Clause 2. Industrial Funding Fee (IFF) 3. Accounting for GSA Contracts 4. Trade Agreement Act 5. EPA Mechanisms
20 GSA Contracts GSA Contract Compliance 1. As your Commercial Rates change, you must adjust your GSA Contract Price Reductions Clause If the discount offered to your Basis of Award (BOA) changes, then your GSA Discount must adjust accordingly. BOA = Customer type that your negotiated GSA Price is hinged to Was called Most Favored Customer (MFC) before award. Contractor can always sale to the government below the negotiated GSA Prices (inside or outside of GSA Contract), without triggering the Price Reductions Clause.
21 GSA Contracts GSA Contract Compliance 1. As your Commercial Rates change, you must adjust your GSA Contract Scenario: Your BOA is All Commercial Customers a 2% discount from their prices offered to the GSA. After 6 months, you have an opportunity to land a huge commercial customer, but will need to offer a 4% discount. Problem: Your company is contractually obligated to offer the GSA a better discount than your BOA by 2%. Consequences: If you proceed, then the Price Reductions Clause is triggered, and the GSA considers this to mean that your GSA Discount was adjusted to 6% the day of the transaction (2% + discount offered to Commercial Customer). If the GSA discovers this, you may have to cut a check to each federal customer since the transaction date for the difference. What s the Point? Wrap your head around the Price Reductions Clause, and prepare for these scenarios. Learn your options in these situations.
22 GSA Contracts GSA Contract Compliance 2. Understanding the Industrial Funding Fee (IFF) The final negotiated price list will reflect a 0.75% increase to all products and services. You will charge federal buyers these prices, and pay the GSA 0.75% of all sales every quarter. This IFF is paid by the federal buyer, and passes through your company. Your Commercial Price: GSA Discount: Negotiated GSA Price: IFF Fee: GSA Price with IFF Fee: $100 5% $ % 95.72
23 GSA Contracts GSA Contract Compliance 2. Understanding the Industrial Funding Fee (IFF) Scenario Your only GSA sale of the quarter was a purchase by the Navy. They procured 2,000 items from you. It is the end of the quarter and your ACO automated arrived telling you it s time to report your GSA sales, and make your IFF Payment. Quarterly GSA Sales: IFF Calculation: Total IFF Fee: $191,440 x $1,435.80
24 GSA Contracts GSA Contract Compliance 3. Accounting for GSA Contract items Every quarter, you will be required to report your GSA sales. You will pay the GSA the IFF based on that reported total. You want to make sure that you pay ONLY on GSA sales, and Open Market sales do not sneak in there. Also, it is important to label GSA Items properly on Proposals and Invoices that are submitted.
25 GSA Contracts GSA Contract Compliance 3. Accounting for GSA Contract items Scenario: You won one project last quarter from the Army. They bought 2,000 items from you, as well as a years supply of specialized batteries (made in China) to power your products. The batteries were not listed on your GSA Contract. Here is a breakdown of pricing: 2,000 Items: $191,440 Batteries: $23,930 Total Order: $215,370 When you report GSA Sales, you will only report the $191,440 (sales of GSA Items). If you report the Total Order amount of $215,370 then you will have the following problems: 1. You ve Overpaid Why pay more than necessary? 2. All reported sale items are considered bound to the Terms and Conditions of your GSA Contract, and all cited FAR Clauses. This may seem like a small oversight, but since the batteries are made in China, you just broke the Trade Agreement Act, and could get in big trouble as a result.
26 GSA Contracts GSA Contract Compliance 3. Accounting for GSA Contract items Good Example PROPOSAL ABC Corp US Dept. of Navy 1234 Main Street 1234 Base Road San Diego, CA Coronado, CA Proposal Date: 10/17/2012 Proposal # Part No. Description Qty. Total Price GS-07F-4444T Large Red Widgets 100 $20, Large Blue Widgets 100 $10, Large Green Widgets 100 $30, Large Yellow Widgets 100 $40,000 Subtotal $100,000 Open Market Items Small Red Widgets 100 $2, Small Blue Widgets 100 $1, Small Green Widgets 100 $3, Small Yellow Widgets 100 $4,000 Subtotal $10,000 Total $110,000
27 GSA Contracts GSA Contract Compliance 3. Accounting for GSA Contract items Bad Example PROPOSAL ABC Corp US Dept. of Navy 1234 Main Street 1234 Base Road San Diego, CA Coronado, CA Proposal Date: 10/17/2012 Proposal # Part No. Description Qty. Total Price Large Red Widgets 100 $20, Large Blue Widgets 100 $10, Large Green Widgets 100 $30, Large Yellow Widgets 100 $40, Small Red Widgets 100 $2, Small Blue Widgets 100 $1, Small Green Widgets 100 $3, Small Yellow Widgets 100 $4,000 GS-07F-4444T Total $110,000
28 GSA Contracts GSA Contract Compliance 3. Accounting for GSA Contract items We went over how this relates to Proposals, How about your Accounting System? Tips: Input the Complete GSA Price List (Products AND Services). Adjust the Price List in the Accounting System when there are changes to the GSA Contract (New products added/deleted, price changes. If Annual Escalation was pre-negotiated, make sure systems are in place to assure prices are adjusted in the Accounting Software. Categorize these separately as GSA items so they can easily be pulled together into a report. Create a system to error-check the GSA Items Report make sure GSA Items are not entered as non-gsa Items. Make sure everyone that touches the Accounting Software knows the protocols on how to enter GSA items. If in doubt, ask an expert. Do not guess. Call the CO, or ACO if you do not have a clue.
29 GSA Contracts GSA Contract Compliance 4. TAA Compliance The Trade Agreement Act specifies the permissible countries of origin for GSA Contract products (and services). 1. How do I know which Countries are OK? FAR (a) 2 - Designated Countries 2. What if a product is assembled in a Designated Country, but the components are from a non-designated Country? a) Must go through a Substantial Transformation (Subjective: but criteria revolves around technicality of assembly) b) Designated Country components add up to >51% of total cost to manufacture the end-product.
30 GSA Contracts GSA Contract Compliance 4. TAA Compliance What if a product is assembled in a Designated Country, but the components are from a non-designated Country? a) Must go through a Substantial Transformation b) Designated Country components add up to >51% of total cost to manufacture the end-product.
31 GSA Contracts GSA Contract Compliance 4. TAA Compliance Scenario All 15 components of a Computer product is made in China, but the assembly process takes place in Mexico. The 15 point assembly process requires some technical equipment be used, and each point has an employee with specific and technical training required to carry out their task. In this scenario, there are multiple components assembled to make one product, the question would be if substantial transformation was achieved. 1 st Question: Is the prospective Country of Origin a Designated Country? 2 nd Question: Were any of the components functional items before assembly, and was that function resembling the function of the final product? 3 rd Question: Is the final assembly process very technical, were someone coming in off the street couldn t complete the assembly with minor training? This End product would most likely be considered Substantially Transformed
32 GSA Contracts GSA Contract Compliance 4. TAA Compliance Scenario There are 3 components that are assembled to make an end product in a Designated Country. Substantial Transformation is not achieved. Here is the cost breakdown of the components, their costs, and their COO s: Item 1: $400 Thailand Item 2: $200 USA Item 3: $100 USA 57% of the costs are from Thailand and 43% from the USA. Therefore, this would be considered a Thai End Product. Since Thailand is not a Designated Country, this is not a TAA Compliant product.
33 GSA Contracts GSA Contract Compliance 4. TAA Compliance What are your options if you do not know if your product is TAA Compliant? 1. Hire a specialist (Lawyer), and they will evaluate the manufacturing factors. 2. Customs Certification 3. Modify manufacturing process, location, parts, etc. to assure compliance. 4. Do not offer products through GSA Contract, only sale them Open Market. 5. List on GSA Contract, if anyone ever questions TAA Compliance, take up the issue through the review process at that time. Disclaimer: GSA Focus is not a TAA expert, we just know the basics. Consult an expert to assure compliance.
34 GSA Contracts GSA Contract Compliance 5. EPA Mechanisms The Economic Price Adjustment (EPA) is pre-negotiated prior to the award of a GSA Contract. These Terms govern the process involved in adjusting the GSA offered prices. Contractor must follow the terms of the EPA Mechanism otherwise they are at risk of triggering the Price Reduction Clause.
35 GSA Contracts GSA Contract Compliance 5. EPA Mechanisms Modification Process Clause Contractor maintains a price list of all services/products offered, available to the public in a published catalog. The Contractor acknowledges that economic price adjustments under their GSA Contract must go through the modification process to adjust their prices. If the most recently negotiated GSA prices are not followed the Price Reduction Clause is triggered.
36 GSA Contracts GSA Contract Compliance 5. EPA Mechanisms Annual Escalation Clause I-FSS-969, (b)(1) Contractor Maintains Commercial Market Pricing and Economic Price Adjustments are based on escalation rates negotiated prior to GSA Contract award. The requested annual escalation rate is _X_%. This percentage is capped by a GSA Calculation of historical pricing increases over the past 5 years in the appropriate sector, to be adjusted automatically at the time of each contract renewal (5 years). The Contractor must prepare and submit a pricing spreadsheet showing the requested annual escalation rates for the base contract period and all option years. The Contractor certifies that the annual escalation rate requested conforms to its historic pricing escalation practices and agrees to provide the Government additional supporting documentation to validate requested escalation rate, if required.
37 GSA Contracts GSA Contract Compliance 5. EPA Mechanisms Market Indicator Clause I-FSS-969, (b)(2) Contractor Maintains Commercial Market Pricing and Economic Price Adjustments are based on an agreed-upon publically available market indicator negotiated prior to GSA Contract award. Examples The Euro Steel Prices Gas Prices
38 CHAPTER 6: Contractors Assistance Visit 1. Purpose Two times every 5 years, an Industrial Operations Analyst (IOA) will come to the Contractors facilities to asses a number of contractual and compliance functions.
39 GSA Contracts Contractors Assistance Visit 2. Components Before the onsite visit, the IOA will request items from you: A report of your sales for the year (GSA and Total) Sampling of specific GSA Invoices Sampling of specific Commercial Invoices Signed SF1449 (from Award Docs) Final Proposal Revision (from Award Docs) CSP-1 (from Award Docs) All approved Modifications (SF30) Current approved GSA Price List, and all previous versions.
40 GSA Contracts Contractors Assistance Visit 2. Components During the onsite visit, the IOA will: Conduct an interview regarding the accounting processes focusing on the sales tracking system. Ask about safeguards in place to assure TAA compliance, and other relevant compliance issues. Make sure Contractor is staying within the scope of their GSA Contract. Talk about GSA Advantage! Upload, and inform of any discrepancies. Reconcile the samplings of GSA invoices to the negotiated GSA Prices. Reconcile the samplings of Commercial invoices to the negotiated BOA. Environmental Attributes (new) Assist in Business Development
41 GSA Contracts Contractors Assistance Visit 3. Results The end result of the CAV will be the generation of a Contractors Report Card to inform the contractor on their level of compliance with the MAS contract terms and conditions. Question Categories Category 1 - Critical Category 2 - Mandatory Category 3 - Above and Beyond Ratings Exceptional Very Good Satisfactory Marginal Serious Concerns Exist
42 GSA Contracts Contractors Assistance Visit 3. Results
43 CHAPTER 6: Recent and Expected Changes GSA has seen many changes to policies and processes over the past 6 months. There are also several speculative changes that the GSA will likely pursue.
44 CHAPTER 6: Recent and Expected Changes Recent Changes to GSA Policies Demand Based Model (DBM) Modernization of the Multiple Award Schedule (MAS) Canceling 8,000 obsolete Contracts Freezing 5 Schedules for 1-3 years (Starting February 2012) Negotiating Discounts Asking for Deeper Discounts Negotiating Volume/Quantity Discounts Negotiating Quick-Pay Discounts EPA Annual Escalation Too Low to be Beneficial UPC Codes Pilot Program Environmental Attributes Pilot Program
45 CHAPTER 6: Recent and Expected Changes Expected Changes to GSA Policies UPC Codes Growth expected Environmental Attributes Growth expected Adjusting IFF Fee lower Surplus $$$ 2012 Elections Government Contractor Friendliness Defense Cuts Sequestration
46 Are you looking to increase your Federal Sales through a GSA Contract? Get Started Today! Complete our Get Started web form Or call GSA Focus at (760) Download this as an E-Book at:
GSA Contracts Everything You Need To Know
GSA Contracts Everything You Need To Know View this as an E-Book at: http://goo.gl/pjbr2 ABOUT ME: Josh Ladick Josh Ladick is President of GSA Focus, Inc. We are focused on getting companies onto GSA Schedules
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