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Return to Article: GSA forms panel to review pricing policies

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  The panel must address the GSA contracting officers' and Office of Inspector General's misconceptions that fair and reasonable pricing can only be established by obtaining Most Favored Customer (MFC) prices. Many contract negotiations have been delayed and ultimately died as a result of the Government demanding that a contractor provide MFC pricing with no consideration given to the fact that GSA schedule prices are base prices and subject to further discounting through subsequent competition of orders and Blanket Purchase Agreements (BPA), temporary price reductions and guidance provided to buying agencies to seek further discounts pursuant to the Maximum Order Limitation (MOL) clause. This is just one of many potential areas in which pricing provisions within the schedule program can be amended to achieve the potential mutual benefits associated with Multiple Award, ID/IQ commercial item procurements

  Sajeev Malaveetil Posted April 23, 2008 10:48 PM
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  The MAS program model is/was based on selling products, then along came the idea of service schedules. The only problem, the model didn't change. As you know, the more product you produce, the cheaper each the product gets i.e. the last item produced costs less than the first. This is not the case with labor. Employees will not reduce there salary/wage for each additional hour worked. However, this is what is expected under the service schedules, because we are following the clause language/pricing model that was written for products.

  Gen X'r Posted April 22, 2008 11:12 AM
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  There are more reasons for the high price of oil. First everyone else in the world, like China, Inida, the Mid East is using it so much more than they used to, and that has drivien the price of crude up.

  The price of Diesl, has gone up because lack of available Refining capacity relative to demand. The refiners are not making any money on gas. They are selling it wholesale for not much more than the cost of Crude, and in some cases less. A big part of our gasoline comes from overseas, where they have excess gasoline production. We import enough Gasoline to keep it's price down, but not enough diesl to keep the price of diesl down. But wait, we are about to go into the summer blend season. That will require a change in formulations and the imported gasoline isn't going to help as much as it has. So gas prices and Diesl will be much closer in the future.

  And by the way, the oil buisness is like farming. When crop prices are high, farmers do well. When Prices are lower, they do less well. Same with oil companies and the price of oil.

  And but the way, in the last 25 years, the return on capital (the ratio of how much you earn to the amount of investments you've made) for the Oil Companies has exceeded the industrial average only 4 times. (That means for 21 years it was less than average).

  Old Geezer Paper Pusher Posted April 22, 2008 10:50 AM
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  I wonder if it wise to have a panel that is composed primary of GSA personnel look at the pricing policy of GSA customers. Pricers outside of GSA would make a better fit. In addition to missing some important elements that would be looked at carefully by someone outside of the agency, I believe that there could be undue pressure on internal personnel to agree with opinions of higher level officers.

  Alan Kartchner Posted April 21, 2008 1:22 PM
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  Taxpayer there is a simple answer to your question gov't regulation. The EPA and the greens required diesel fuel to be reformulated to ultra low sulfur emissions, that happened in 2006. The reason why oil is so high is the democrats refuse to allow any offshore drilling in my home state VA and Alaska. There is lots of new oil fields that would reduce our dependency on middle east oil, but your friends won't allow it.

  Dan ketter Posted April 21, 2008 11:59 AM
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  We keep hearing of all these studies, many of which generate excellent recommendations. My concern is that we never hear that the recommendations are being implemented.

  Sharon Posted April 21, 2008 11:56 AM
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  I was a Federal Senior Executive and as such was involved in many of the national procurement initiatives and reforms.

  It IS time that GSA take an objective look at its policies for the Federal Supply Schedules (FSS) and do something meaningful about the price reduction clause and its triggers, TAA, FOB Destination shipping charges (oil now at $117 a barrel),and determination of reasonableness of pricing. These issues are such a problem right now that it often becomes very difficult to negotiate and administer FSS contracts. We find that we often have to employ attorneys to help us through this morass of regs/policies and interpretations of them. We do not believe that is what was envisioned when GSA developed the FSS concept, which is supposed to mirror business practices in the commercial sector.

  Through a delegation of authority from GSA, the Dept of Veterans Affairs negotiates and administers medical FSS contracts for use by all Federal agencies. In FY 07, these contracts amounted to $8.9 Billion worth of sales. As such, we believe that VA should be represented on GSA's panel to examine FSS policies and practices.

  Nancy Darr Posted April 21, 2008 9:45 AM
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  When will Congress or GAO put restraints on the American Oil companies? They are awarded government funds yet their profit is in the BILLIONS while the American Taxpayer is suffering, not just at the gas pumps, home heating bills have jumped, food cost are up, medical care is expensive, and the Iraqi war is costing the American taxpayer millions daily plus the loss and maiming of our sons, daughters, fathers, mothers, and other family members. Explain how for years Diesel fuel was the same cost as low test gasoline and now during the energy crisis it has the highest cost of any fuel? Our national debt is out of control with no end in sight. These issues need to be corrected before the United States owes foreign countries our unborn children! Is the United States on the road to destruction? The United States does not need a Cold War to be destroyed; it's being done from within by abuse of power & greed.

  American Taxpayer Posted April 21, 2008 9:32 AM
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  This effort is to be applauded. Should the panel require any additional assistance, particularly as relates to the impact of the pricing policies on small business concerns, please let me know.

  I look forward to seeing the recommendations that come out of this panel.

  Amy Fadida Posted April 21, 2008 8:08 AM
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  Hopefully the panel will have access to the 25 or so reports issued by the GAO, IG, and Congress since 1983 on the pricing/negotiation policies of the MAS. GSA should not develop policies that take it back decades when the program was almost criticized out of existence because of its inability to get & maintain good prices. Strongly recommend that the panel add representatives from state/local government purchasing and purchasing executives of the Fortune 100. Right now, the panel is bringing marketing/sales reps only of corporate America; like letting the fox in the henhouse.

  Nick Economou Posted April 21, 2008 6:38 AM