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Return to Article: From Nextgov.com: Advisory panel recommends GSA ax price reduction clause

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  Let us ponder this for a moment. A private industry panel does not want the GSA Schedule Program to use the "Price Reduction Clause".

  The notion that the US Government should not receive the lowest prices available is totally absurd. Why should we pay retail when we are spending billions and billions of dollars?

  The views of private industry have a lot to do with the recent settlement of a major case of fraud against one of the largest GSA Schedule contractors and very little to do with serving taxpayers.

  Earlier this year, one of the GSA contractors agreed to a $120+ Million settlement with the US Government in response to allegations that the contractor failed to comply with the "Price Reduction Clause" for 8 years, repeat 8 years.

  Govexec.com and Nextgov.com need to tell the whole story. Contractors who do not treat the US Government as their most favored customer can take their act someplace else.

  KO Posted June 30, 2009 4:54 PM
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  The Best Price Clause actually makes it easier for the contracting officer to make the "Fair and Reasonable" determination because it would be virtually impossible to review pricing on the tens of thousands of items that could be on a single schedule. Today many cardholders are being driven to use schedules to eliminate "maverick buying" (paying retail prices). If the best price clause is eliminated, what assurances are there that the cardholder is in fact getting the best price or even a price better than retail? Going a step further, what will the elimination of the clause do for agencies relying on the schedules to streamline their acquisition process for requirements over the micropurchase threshold? When coupled with eCommerce applications (i.e., GSA Advantage!, Defense Department EMall, etc.), these contracting vehicles become available to anyone who has authority to place orders against them. FAR 13.301 encourages agencies to use the purchase card above the micropurchase threshold to "place orders and to pay for purchases against contracts established under Part 8. The additional training these ordering officials require is minimal. However, even though a price comparison of three is required when exceeding the micropurchase threshold, who is to say that the prices are better than retail prices once the best price clause is removed. If the Best Price Clause is to be removed, it would be my recommendation to compete every schedule requirement and award ID/IQ type contracts based on price and other factors. I would also limit the number of awardees to maximize the competition results.

  Bruce E. Sullivan Posted June 30, 2009 9:07 AM