We give the General Services Administration credit for creating an advisory panel to evaluate the relevance of the GSA schedule contracts’ price reduction clause.
We have been proponents of GSA schedule contracts because we believe that for many companies, they are an important entry point into the government market. That makes the schedules one of the best places for agency buyers to look for a broad and competitive marketplace of products and services.
But in recent years, the schedule contracts’ growth has slowed and perhaps dwindled in certain sectors. And a greater concern is that some significant vendors have decided the schedule contracts are more hassle than they are worth.
Sun Microsystems is the best known of these companies, but we hear of others that are reassessing the necessity of having a schedule contract.
One of the primary reasons for their dissatisfaction is the infamous price reduction clause. That provision requires companies with GSA schedule contracts to offer the government the best prices the company offers to commercial customers, and the schedule contracts put companies through an arduous process to ensure that the government gets the lowest prices.
A new Multiple Award Schedule Advisory Panel, which GSA announced earlier this month, will evaluate the relevance of the price reduction clause, among other tasks.
We have some concerns about the creation of yet another committee. Too often, such panels produce reports that end up as bookshelf fillers. But we’re also hopeful that there is broad recognition that language in the schedule contracts must be updated.
We continue to believe that agencies are best served when there is a broad and competitive marketplace for government work, and the GSA schedule contracts are the best means for companies to reach that government market. Anything that offers agencies access to a more diverse and competitive marketplace is good for government.
We applaud GSA officials for facing these issues head on, and we look forward to the panel’s findings.
