GSA Contracts · GSA Focus, Inc. | | 866-916-6484 Josh Ladick is President of GSA Focus, Inc. We are focused on getting companies onto GSA Schedules and Maintaining those Contracts

GSA ContractsEverything YouNeed To Know

Download this as an E-Book (with active links) at:http://goo.gl/WTRmH

GSA Focus, Inc. | www.gsafocus.com | 866-916-6484

Josh Ladick is President of GSA Focus, Inc. We are focusedon getting companies onto GSA Schedules and Maintainingthose Contracts once awarded. GSA Focus strives to be thebest GSA Contract solution in the industry through efficientand adaptable processes, a strong knowledge of GSAContracts, and uncompromising customer service.

Follow Josh on Twitter: @joshladickConnect on LinkedIn: www.linkedin.com/in/joshladickFollow Company Blog: gsascheduleservices.com/blog/

ABOUT ME:Josh Ladick


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

TABLE OF CONTENTS:


CHAPTER 1:Definition & Acronyms


GSAGeneral Services Administration

Schedule (link)

GSA Category - by industry or group of industries

SINSpecial 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 / BOAMost Favored Customer – Basis of Award

COContracting Officer, GSA Contact OR Fed Buyer

GSA Contracts – Definitions & Acronyms


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


History of the GSA

• Established by Harry Truman in 1949.

• Was originally a consolidation of six sub-agenciesto streamline federal procurement.

• Since then, the GSA has taken on importantdirectives such as:

• Emergency Preparedness• Real Property Management• Policy Oversight• Government Charge Cards• Electronic Initiatives (Updating Fed Procedures)• Cloud Computing• Green Procurement & Sustainability

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: http://gsa.gov/portal/content/105080)



Contractor’s Point of View

As the acquisition arm of the federalgovernment, the GSA streamlines the process ofconnecting Contractors to federal buyers throughGSA Contracts to:

1. Eliminate redundancy in the buying process2. Pre-approve contractors3. 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”



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



CHAPTER 3:How to get a GSA Contract?

Prepare Offer

Submit & Wait for Review

Clarifications

Negotiations

Award

Post-Award

1

2

3

4

5

6


GSA Contracts – How to get a GSA Contract

1. Prepare Offer

• Solicitation• Schedule-specific Guidebook• Between 100-200 pages• Instructions / T&C• Heavily cites FAR• Confusing / Contradictory

• Usually 19-25 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



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

• Rejection• Around 75 – 90% of Offers• Must resubmit with revisions/explanations• Back of the Line (usually, but not always)• Still Progress

Submit Offer

Accepted Rejected

Clarifications



3. Clarifications

Normal part of the process, and occur when theCO determines that there are only minordeficiencies 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



4. Negotiations

One hour phone conference between GSA COand your company to cover 3 main areas:

1. Assure your company understands primaryTerms 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



5. Award

• Awarded your GSA Number• Open for Business• Celebrate!



6. Post-Award

But there is still much to be done, you are nowat a new starting point.

1. SIP Registration2. SIP Upload GSAAdvantage! & E-Library

• Contract / Company Information• Product uploads• Text File

3. GSA e-Buy• Exclusive Bidding Area• Email Notifications within your SIN(s)

4. Marketing Plan• Bid Searching• Proposal Writing• Target Agency Selection• Cold Calling & Emailing


Modifications

• If Acquiring a GSA Contract is a Marathon,then Modifications are a 5K.

• A Modification (Mod) is any revision to yourGSA Contract after Award, Including:

• Adding Products/Services• Deleting Products/Services• Price Increases/Decreases• Administrative Changes• More …

• The process involves the preparation of asmall document package, usually 5-8documents.

• Mods are submitted through E-Offer, and arereviewed by your GSA Contracting Officer

• After a Mod is approved, you must makechanges on GSAAdvantage! shortly after.

CHAPTER 4:Maintaining Your GSA Contract


1. Price Reductions Clause

2. Industrial Funding Fee (IFF)

3. Accounting for GSA Contracts

4. Trade Agreement Act

5. EPA Mechanisms

CHAPTER 5:GSA Contract Compliance


1. As your Commercial Rates change, you mustadjust your GSA Contract

Price Reductions Clause – If the discount offered to yourBasis of Award (BOA) changes, then your GSA Discount mustadjust accordingly.

BOA = Customer type that your negotiated GSA Price ishinged to – Was called Most Favored Customer (MFC) beforeaward.

Contractor can always sale to the government below thenegotiated GSA Prices (inside or outside of GSA Contract),without triggering the Price Reductions Clause.

GSA Contracts – GSA Contract Compliance


1. As your Commercial Rates change, you mustadjust your GSA Contract

Scenario:Your BOA is “All Commercial Customers” a 2% discount from theirprices offered to the GSA. After 6 months, you have an opportunity toland a huge commercial customer, but will need to offer a 4%discount.

Problem:Your company is contractually obligated to offer the GSA a betterdiscount than your BOA by 2%.

Consequences:If you proceed, then the Price Reductions Clause is triggered, and theGSA considers this to mean that your GSA Discount was adjusted to6% the day of the transaction (2% + discount offered to CommercialCustomer). If the GSA discovers this, you may have to cut a check toeach federal customer since the transaction date for the difference.

What’s the Point?Wrap your head around the Price Reductions Clause, and prepare forthese scenarios. Learn your options in these situations.



2. Understanding the Industrial Funding Fee(IFF)

The final negotiated price list will reflect a 0.75% increase toall products and services. You will charge federal buyersthese prices, and pay the GSA 0.75% of all sales everyquarter. This IFF is paid by the federal buyer, and passesthrough your company.


Your Commercial Price:GSA Discount:

Negotiated GSA Price:IFF Fee:

GSA Price with IFF Fee:

$1005%$950.75%95.72


2. Understanding the Industrial Funding Fee(IFF)

ScenarioYour only GSA sale of the quarter was a purchase by theNavy. They procured 2,000 items from you. It is the end ofthe quarter and your ACO automated email arrived telling youit’s time to report your GSA sales, and make your IFFPayment.


Quarterly GSA Sales:IFF Calculation:

Total IFF Fee:

$191,440x 0.0075$1,435.80


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, andOpen Market sales do not sneak in there.

Also, it is important to label GSA Items properly on Proposalsand Invoices that are submitted.




Scenario:

You won one project last quarter from the Army. They bought2,000 items from you, as well as a years supply of specializedbatteries (made in China) to power your products. Thebatteries were not listed on your GSA Contract. Here is abreakdown 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 Orderamount of $215,370 then you will have the followingproblems:

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 FARClauses.

This may seem like a small oversight, but since the batteriesare made in China, you just broke the Trade Agreement Act,and could get in big trouble as a result.




Good Example

PROPOSAL

ABC Corp US Dept. of Navy1234 Main Street 1234 Base RoadSan Diego, CA 92111 Coronado, CA 92118

Proposal Date: 10/17/2012 Proposal # 445566

Part No. Description Qty. Total Price

GS-07F-4444T174855 Large Red Widgets 100 $20,000174840 Large Blue Widgets 100 $10,000174880 Large Green Widgets 100 $30,000174860 Large Yellow Widgets 100 $40,000

Subtotal $100,000

Open Market Items174755 Small Red Widgets 100 $2,000174740 Small Blue Widgets 100 $1,000174780 Small Green Widgets 100 $3,000174760 Small Yellow Widgets 100 $4,000

Subtotal $10,000

Total $110,000




Bad Example

PROPOSAL

ABC Corp US Dept. of Navy1234 Main Street 1234 Base RoadSan Diego, CA 92111 Coronado, CA 92118

Proposal Date: 10/17/2012 Proposal # 445566

Part No. Description Qty. Total Price

174855 Large Red Widgets 100 $20,000174840 Large Blue Widgets 100 $10,000174880 Large Green Widgets 100 $30,000174860 Large Yellow Widgets 100 $40,000174755 Small Red Widgets 100 $2,000174740 Small Blue Widgets 100 $1,000174780 Small Green Widgets 100 $3,000174760 Small Yellow Widgets 100 $4,000

GS-07F-4444T

Total $110,000




We went over how this relates to Proposals, How about yourAccounting System?

Tips:

• Input the Complete GSA Price List (Products AND Services).

• Adjust the Price List in the Accounting System when there arechanges to the GSA Contract (New products added/deleted, pricechanges.

• If Annual Escalation was pre-negotiated, make sure systems are inplace to assure prices are adjusted in the Accounting Software.

• Categorize these separately as GSA items so they can easily bepulled together into a report.

• Create a system to error-check the GSA Items Report – make sureGSA Items are not entered as non-GSA Items.

• Make sure everyone that touches the Accounting Software knowsthe protocols on how to enter GSA items.

• If in doubt, ask an expert. Do not guess. Call the CO, or ACO if youdo not have a clue.



4. TAA Compliance

The Trade Agreement Act specifies the permissible countriesof origin for GSA Contract products (and services).

1. How do I know which Countries are OK?

FAR 52.225-5 (a) 2 - Designated Countries

2. What if a product is assembled in a Designated Country,but the components are from a non-DesignatedCountry?

a) Must go through a Substantial Transformation(Subjective: but criteria revolves around technicality ofassembly)

b) Designated Country components add up to >51% oftotal cost to manufacture the end-product.



4. TAA Compliance

What if a product is assembled in a Designated Country, butthe components are from a non-Designated Country?

a) Must go through a Substantial Transformation

b) Designated Country components add up to >51% of totalcost to manufacture the end-product.



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 pointassembly process requires some technical equipment beused, and each point has an employee with specific andtechnical training required to carry out their task.

In this scenario, there are multiple components assembled tomake one product, the question would be if substantialtransformation was achieved.

1st Question: Is the prospective Country of Origin aDesignated Country?

2nd Question: Were any of the components functional itemsbefore assembly, and was that function resembling thefunction of the final product?

3rd Question: Is the final assembly process very technical,were someone coming in off the street couldn’t complete theassembly with minor training?

This End product would most likely be consideredSubstantially Transformed



4. TAA Compliance

Scenario

There are 3 components that are assembled to make an endproduct in a Designated Country. Substantial Transformationis not achieved. Here is the cost breakdown of thecomponents, their costs, and their COO’s:

Item 1: $400 ThailandItem 2: $200 USAItem 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 TAACompliant product.




4. TAA Compliance

What are your options if you do not know if your product isTAA Compliant?

1. Hire a specialist (Lawyer), and they will evaluate themanufacturing factors.

2. Customs Certification

3. Modify manufacturing process, location, parts, etc. toassure compliance.

4. Do not offer products through GSA Contract, only salethem Open Market.

5. List on GSA Contract, if anyone ever questions TAACompliance, take up the issue through the reviewprocess at that time.

Disclaimer: GSA Focus is not a TAA expert, we just know the basics. Consult anexpert to assure compliance.



5. EPA Mechanisms

The Economic Price Adjustment (EPA) is pre-negotiated priorto the award of a GSA Contract. These Terms govern theprocess 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 ReductionClause.



5. EPA Mechanisms

Modification Process

Clause 552.216-70

Contractor maintains a price list of all services/productsoffered, available to the public in a published catalog. TheContractor acknowledges that economic price adjustmentsunder their GSA Contract must go through the modificationprocess to adjust their prices. If the most recently negotiatedGSA prices are not followed – the Price Reduction Clause istriggered.



5. EPA Mechanisms

Annual Escalation

Clause I-FSS-969, (b)(1)

Contractor Maintains Commercial Market Pricing andEconomic Price Adjustments are based on escalation ratesnegotiated prior to GSA Contract award.

The requested annual escalation rate is _X_%. Thispercentage is capped by a GSA Calculation of historicalpricing increases over the past 5 years in the appropriatesector, to be adjusted automatically at the time of eachcontract renewal (5 years).

The Contractor must prepare and submit a pricingspreadsheet showing the requested annual escalation ratesfor the base contract period and all option years.

The Contractor certifies that the annual escalation raterequested conforms to its historic pricing escalation practicesand agrees to provide the Government additional supportingdocumentation to validate requested escalation rate, ifrequired.



5. EPA Mechanisms

Market Indicator

Clause I-FSS-969, (b)(2)

Contractor Maintains Commercial Market Pricing andEconomic Price Adjustments are based on an agreed-uponpublically available market indicator negotiated prior to GSAContract award.

Examples

• The Euro• Steel Prices• Gas Prices


1. Purpose

Two times every 5 years, an Industrial Operations Analyst(IOA) will come to the Contractors facilities to asses anumber of contractual and compliance functions.

CHAPTER 6: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 previousversions.

GSA Contracts – Contractors Assistance Visit


2. Components

During the onsite visit, the IOA will:

• Conduct an interview regarding the accountingprocesses – focusing on the sales tracking system.

• Ask about safeguards in place to assure TAAcompliance, and other relevant compliance issues.

• Make sure Contractor is staying within the scope oftheir GSA Contract.

• Talk about GSA Advantage! Upload, and inform ofany discrepancies.

• Reconcile the samplings of GSA invoices to thenegotiated GSA Prices.

• Reconcile the samplings of Commercial invoices tothe negotiated BOA.

• Environmental Attributes (new)

• Assist in Business Development



3. Results

The end result of the CAV will be the generation of aContractors Report Card to inform the contractor on theirlevel of compliance with the MAS contract terms andconditions.

Question Categories• Category 1 - Critical• Category 2 - Mandatory• Category 3 - Above and Beyond

Ratings• Exceptional• Very Good• Satisfactory• Marginal• Serious Concerns Exist



3. Results


https://vsc.gsa.gov/reportcard/reportcard.pdf


GSA has seen many changes to policies and processes overthe past 6 months. There are also several speculativechanges that the GSA will likely pursue.

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



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



Are you looking to increase your Federal Salesthrough a GSA Contract?

Get Started Today!

Complete our Get Started web formOr call GSA Focus at (760) 550-9320

Download this as an E-Book at:http://goo.gl/WTRmH

Documents

GSA Contracts · GSA Focus, Inc. | | 866-916-6484 Josh Ladick is President of GSA Focus, Inc. We are focused on getting companies onto GSA Schedules and Maintaining those Contracts