On June 23, 2016, the General Services Administration (GSA) released a final rule that will result in the most significant change to the GSA Federal Supply Schedules (FSS) program in the last two decades. 81 FR 41103 (New Rule). The New Rule introduces a transactional data reporting element to the FSS program, effectively replacing the current requirements relating to Commercial Sales Practices (CSP) disclosures and the Price Reduction Clause (PRC).
Under current FSS regulations, contractors are required to submit CSP disclosures with their initial offer for an FSS contract, which includes a broad disclosure of discounts the contractor offers to commercial customers for similar products and services. The CSP disclosures are used to identify a "tracking customer," which consists of a customer or category of customers that will be tracked to identify pricing discounts to GSA customers. The PRC requires the contractor to monitor its ongoing commercial sales to ensure that the government receives the same price reductions given to the "tracking customer." Through the New Rule, GSA is replacing the CSP disclosures and PRC requirements with a different method of award monitoring: transactional data reporting.
Transactional Data Reporting
The New Rule identified two primary limitations in the current model of utilizing CSP disclosures and the PRC to make best value award decisions: (1) lack of ability to compare one vendor's prices to another vendor's, and (2) lack of visibility into prices paid to vendors by other government customers. GSA's analysis demonstrated that the system of using CSP disclosures for price analysis, which has been in place since the 1980s, had become less effective over time. In fact, GSA determined that government customers tend to receive voluntary price reductions from contractors due to competitive market conditions, unrelated to the "tracking customer" provisions of the PRC.
To continue reading the content in this article on the firm's Government Contracts & International Trade blog, please click here to view the post.
Bass, Berry & Sims' Government Contracts & International Trade blog features news, commentary and insight on the demanding and ever-changing regulatory environment of contracting with federal, state and local governments, and international trade issues when conducting a global business.