The General Services Administration announced this week that it is considering changing the way vendors list their prices and share information with the government, in an effort to reduce the burden on contractors and increase transparency on a number of levels. The GSA unveiled the new proposed rule on March 3, and it will hold an industry day on April 17 to get feedback on the new proposal. The proposal will be open for comments until May 4.
The GSA noted that transparency is lacking when it comes to prices paid by government customers to contractors. It cited “significant price variation, sometimes 300 percent or more, for identical purchases by federal agencies from the same commercial vendor as well as the unnecessary duplication of contract vehicles,” as a motivating factor in its decision to propose reforms.
Under the new rules, “Contractors would have to report prices paid data for all General Services Administration contract vehicles,” according to the Federal Times. This would allow government customers to compare prices on products and services. The rules “would be implemented in all of GSA’s governmentwide contract vehicles, except for its Multiple Award Schedules contract vehicles, where the agency would phase in the new rules.” Federal News Radio continues:
“The rule would do several things, including requiring vendors to report transactional data back to GSA, including data elements such as unit measure, quantity of items sold, universal product code, if applicable, prices paid per unit, and total price.
The proposal would implement a pilot first with non-schedule contracts and then in phases on schedule contracts.
Under the plan, GSA would no longer track vendor pricing like it does now, but instead would establish price and quality metrics and identify commercial benchmarks prior to the launch of the pilot so that GSA could perform these analyses and measure the results and impact of the pilot.”
Price Reduction Clause
The new rules would also remove in part but not whole, the provision known as the price reduction clause. This provision “forces contractors to monitor their pricing and give government agencies the same price reductions they give to commercial customers.”
This can easily cause problems as it can be difficult for large contractors to track every price they offer to every buyer. If it is discovered that a contractor offered a lower price to a commercial customer without offering the same price to a government agency, the contractor can face a False Claims Act lawsuit. “In all [the Justice Department] won settlements of more than $24 billion for criminal and civil False Claims Act cases last year,” according to Federal News Radio.
Industry voices reacted positively to the proposed rule changes but said there is still more to be done, including the complete removal of the price reduction clause and modification of schedules.
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