Multiple Award Schedule (MAS) Contracts
The General Service Administration’s Federal Supply Service (FSS) operates the federal supply schedule program. The program leverages the purchasing power of the U.S. government to garner volume discounts for commercial supplies and services.
Overview of the Process
Under the program, Federal Supply Service (FSS) awards indefinite-delivery contracts and publishes catalogs reflecting these contracts. These published catalogs are commonly referred to as “federal supply schedules” or simply “schedules.” Using these, government buyers are allowed to place orders directly with vendors holding schedule contracts, and, in doing so, avoid traditional public bidding procedures.
Most Federal Supply Schedules are Multiple Award Schedules (MAS). Under MAS contracts, GSA awards contracts to multiple companies supplying comparable services and products at varying prices. The FSS operates over 100 different schedules covering most product and service categories.
GSA awards MAS contracts to companies for commercial items when it determines that the prices offered are “fair and reasonable.” Contracting officers make this determination by comparing the price or discounts that a company offers the government with the price or discounts that the company offers to its own commercial customers. To make this comparison, MAS solicitations request offerors to disclose information about their commercial pricing policies and practices. Contract prices are tied to commercial practice so that, in theory at least, GSA pricing remains competitive over time.
Government buyers select from MAS contract vendors using the ordering procedures at FAR 8.404. For orders under $2,500, buyers may order from any schedule vendor. For orders over $2,500, buyers may search for items using, GSA Advantage, http://www.gsaadvantage.gov, or by checking three pricelists. Buyers select a vendor by making a best value determination (price and other factors considered) and placing an order. There is no advertising or competitive bidding, making life easier for both buyer and seller.The following (which comes straight out of the FSS Contractor Guide, http://apps.fss.gsa.gov/vendorguide/) is an outline of the process to get a MAS contract:
- Acquisition Plan/Market Research is conducted.
- FedBizOpps notice is issued — for all solicitations.
- Solicitation is issued covering various Special Items Numbers.
- Offers are received and evaluated.
- Contracting officer provides vendors opportunities to submit additional information when deficiencies in offer exist.
- Contracting officer identifies best customer and prepares for negotiations.
- Negotiations are conducted.
- Proposal revisions are submitted.
- Contracts awarded for multi-year period or offer is rejected.
- Contractors are required to prepare and distribute an “Authorized Federal Supply Schedule Pricelist.”
- The contractor is given a mailing list of federal ordering activities to contact.
- GSA/FSS prints a Federal Supply Schedule document that is distributed through the Centralized Mailing List Service (CMLS).
- As part of the contract award requirements, contractors are required to submit their pricing information electronically on GSA Advantage.
- Contracting officer approves electronic submission.
Federal Supply Schedule Program for Medical Products and Services
The Veterans’ Administration (VA) has been delegated the authority to administer the Federal Supply Schedule Program for medical products and services. These schedules encompass such products as pharmaceuticals; medical equipment and supplies; dental supplies; x-ray equipment and supplies (including medical and dental x-ray film); patient mobility devices (including wheelchairs, scooters, walkers, etc.); antiseptic skin cleansers, detergents and soaps; invitro diagnostics, reagents, test kits and sets; and clinical analyzers, laboratory cost-per-test.
There are a total of over 1,200 contracts in place for the various commodity groups. Annual sales against these contracts exceed $2 billion. Like all federal supply schedule contracts, VA contracts are multiple award, indefinite delivery-indefinite quantity type, and are national in scope. These contracts are available for use by all federal agencies.
To find VA schedule solicitation documents go to http://www.va.gov/oa&mm/busopp/sols.htm. The schedule documents are shown first in the table with the issuing office designation “VA National Acquisition Center.” Then click on the RFP number in the left column.
Getting Your Products/Services on a GSA Schedule
Factors to consider:
Putting products/services on a GSA schedule is an arduous and troublesome undertaking for the uninitiated. Expert companies will lead you through the process for $12,000 to $28,000 depending on the type of schedule and product set. Small businesses with a limited number of products/services can expect costs on the lower end of this range. You should have substantial projected sales to justify the investment required (in-house or outsourced) to get and maintain a schedule contract.
On the other hand, what used to be “bid and proposal” costs can now be thought of as “obtaining GSA schedule” costs. As a result, your costs in the future will drop compared to preparing individual bids or proposals.
Schedules are not cost effective, though, unless you are serious about government business. Putting it another way: getting and maintaining a schedule contract will be a waste of money unless you have a dedicated, focused government sales program.
Complicated paperwork is the primary barrier to a small business obtaining a schedule. The paperwork is daunting and most of the terms and conditions appear onerous. Some terms and conditions are not legally and financially important while others are. The trick is to know which ones are important (e.g., pricing terms) and how to comply with them. Even finding the GSA solicitation document on the Internet for your product/service can be confusing and frustrating.
We know of small businesses that have obtained schedules, but they are usually experienced in selling to the government before they obtain a schedule, and they were tenacious enough to get through the mysterious and confusing GSA paperwork with in-house staff.
Through this email series we have stressed the need for a focused commitment before you enter the government market. A small company obtaining a GSA schedule on its own is a prime — and rare — example of such a commitment.
Here are a few more factors to consider:
- Schedules are a government-preferred source of supply for commercial products and selected services. See FAR 8.001.
- A schedule contract favors feature-rich, higher quality more expensive contractors because prices are based on your commercial prices and buys are based on “best value,” not lowest price.
- Schedule contract buys do not have to be advertised in the FedBizOpps (the official web site for advertising procurements over $25,000) or subject to “full and open” competitive procedures.
- Buyers like using schedules because the purchase process is lightening fast, simple and rarely subject to protest.
- Schedule contract buys no longer have an order size limitation. Multi-million dollar orders can be processed using the schedule contract ordering procedures.
- Schedule contracts provide the basis for blanket purchase agreements for multi-year, preferred agreements between contractor and ordering agency.
- Teaming arrangements allow two or more schedule contractors to propose and deliver multi-vendor solutions while using the GSA MAS ordering procedures.
- Credit cards and EFT may be used to simplify purchases and speed funds transfer.
How do you get your products or services on a schedule? The first step in the process is to identify which schedules cover your products or services. A list can be found at the following link.
The next step is to obtain a copy of Federal Supply Schedule solicitation for the products and services you want to offer. The Federal Supply Service has regional offices and each region specializes in serving certain industries. For instance, industrial and electrical equipment is handled by the Fort Worth, TX office, while computers and scientific equipment is handled by an office in the Washington, DC area.
Finding current GSA Schedule Solicitation Documents is a multi-step procedure. The procedures are as follows:
- Go to the following page for the current listing of all the schedule contacts and a brief summary of the products/services solicited by each of these.
- Clicking on a particular schedule shows you a list of SINs within that schedule. SINs are product categories that related to the Federal Supply Classification System. The trend within the Federal Supply Service is to aggregate more and more SINs under fewer schedule programs. This consolidation is happening all the time, so make sure you are looking at the most recent solicitation documents (including all the amendments).
To find the current solicitation (and related documents) for a particular schedule:
- Go to www.gsaelibrary.gsa.gov
- Click on the schedule which best describes the items you sell
- Click on “FedBizOpps Vendors” at http://www.fedbizopps.gov
- Click on “Find Business Opportunities”
- Type name of schedule program in “Full Text Search” Box. (TIP: cut and paste the first few words describing the schedule into the full text search box.)
- In Search by Office, click on “General Services Administration”
- Click on Show Offices for Selected Agencies
- Click on Federal Supply Service
- Start search
The Negotiation Process
Developing a proposal and negotiating a schedule contract is a complex process, far too detailed to discuss here. In broad terms, however, these are the steps you’ll have to take:
- Gather company information on your company’s financial condition, product/service prices, sales and discounting practices, and “most favored customers.” (Note: contracting officers possess the authority to examine your company’s records to check up on your pricing information.)
- Demonstrate how your proposed GSA prices are fair and reasonable in relation to your most favored customers. (Because the fundamental goal of the MAS program is to obtain discount pricing, the contracting officer must analyze the differences between the terms and prices offered to the government and your company’s commercial customers.)
- Define your commercial terms and conditions clearly to justify exceptions to GSA’s terms and conditions.
After the price analysis, the contracting officer will negotiate with your company, focusing on prices, discounts, warranties and any terms unique to your offer. The contracting officer can award a contract when he is convinced that the negotiated prices are fair and reasonable AND comes to an agreement with you on the basis of negotiation and award of the contract. The basis of the relationship between similarly-situated commercial customers and the government is one that must be maintained to assure the government that it is receiving competitive prices throughout the term of the agreement.
Pricing is the core of a GSA schedule contract — both in negotiating prices and maintaining them consistent with your ongoing discounting practices. Doing it right can make a significant difference on the bottom line. Download the following .pdf document to read 10 questions you should ask about GSA pricing: http://www.immixgroup.com/docs/audit_questions.pdf .
Now here’s something that might surprise you after all that work: getting a GSA schedule contract guarantees you nothing. You still have to find those individuals in government who need what you have, establish personal relationships with them, and sell them on your solution. Once again, you must make telephone and personal sales calls, using your GSA schedule as an extra inducement in making the sale.
Remember, a number of the big volume schedules are held by several thousand companies that will be competing against you. Your schedule is a valuable tool for closing the sale, but it is no substitute for making the sale itself.
The following are the primary steps in the sales process:
- Identify your schedule competitors and the differences, features, etc., of their competing products/services.
- Identify target agencies and make sales calls. Develop relationships and determine what the customer needs and wants. Convince them that you have the solution to their problem. As you are doing this, you have the opportunity to show them how to use your GSA schedule to obtain your product/service quickly with a minimum of hassle. Assure them that you have an “already negotiated” contract with GSA and GSA has determined that your prices are fair and reasonable.
- Emphasize price if your company’s products are priced low.
- If your prices are higher, then you need to give the buyer sufficient information to make a best value determination. Some examples:
- Fast delivery
- Specific features, warranties
- Quality considerations
- Compatibility with existing products/services
- Trade-in considerations
In short, you need to determine the agency’s precise needs and tailor your sales presentation to meet those needs. Low price is the easiest sell if you meet the agency’s needs, but you can still win with quality and unique features.
If your company is an IT vendor, chances are you’re already quite familiar with the importance of GSA’s information technology schedule. Here are a couple of factors indicative of its rapid growth:
- Approximately $13 to $14 billion in products will be procured through IT schedules this year. This is about one half of the overall federal IT market.
- Dell, the number one IT schedule holder, has about $1 billion in annual schedule sales.
But the action is not just in information technology. GSA schedule buying is increasingly becoming the preferred practice in government sales. GSA’s recent initiatives and future plans indicate that there is much more growth ahead:
- GSA has implemented the “Corporate Schedule,” in effect a “Schedule of Schedules” for those companies that offer products in many categories.
- GSA schedules are now “Evergreen” contracts, with a 5-year base and three 5-year option periods. (And why not? If the contractor keeps its pricing up-to-date at all times through the contract modification process, why should the contract ever end?)
Multiple award schedule contracts have found their way to the state level as well. The following major states have multiple award schedule programs that are modeled in varying degrees after GSA schedules: California, Ohio, New York, Pennsylvania, Texas, Kentucky and Florida.